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BASIS OF PRESENTATION | 12 Months Ended
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Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION Pioneer Power Solutions, Inc. and its wholly owned subsidiaries (referred to herein as the “Company,” “Pioneer,” “we,” “our” and “us”) manufacture, sell and service a broad range of specialty electrical transmission, distribution and on-site power generation equipment for applications in the utility, industrial, commercial and backup power markets. The Company is headquartered in Fort Lee, New Jersey and operates from eleven (11) additional locations in the U.S., Canada and Mexico for manufacturing, centralized distribution, engineering, sales and administration. NASDAQ Listing On September 24, 2013, the Company completed an underwritten public offering of 1,265,000 shares of its common stock at a gross sales price of $7.00 per share, resulting in net proceeds to the Company of approximately $7.9 million, after deducting underwriting discounts and commissions and other offering expenses. In connection with the public offering, the Company’s common stock began trading on the Nasdaq Capital Market under the symbol PPSI. Segments In determining operating and reportable segments in accordance with ASC 280, Segment Reporting (“ASC 280”), the Company concluded that it has two reportable segments, which are also our operating segments: Transmission & Distribution Solutions (“T&D Solutions”) and Critical Power Solutions. Financial information about the Company’s segments is presented in Note 16 – Business Segment, Geographic and Customer Information. Reversal of Discontinued Operations During the fourth quarter of 2017, as part of its review of strategic alternatives, the Company made the decision to sell its switchgear business operated by Pioneer Custom Electric Products, Inc., which is part of T&D Solutions segment. On May 2, 2018, Pioneer Custom Electric Products, Inc, a wholly owned subsidiary of Pioneer Power Solutions, Inc., entered into an Asset Purchase Agreement with CleanSpark, Inc. (“CleanSpark”), pursuant to which PCEP was to sell certain assets comprising the PCEP business to CleanSpark. The Company had agreed to extend the closing of the sale through December 31, 2018 to allow all parties additional time to satisfy all closing conditions. On December 27, 2018, each of PCEP and CleanSpark signed a third letter agreement (the “Letter Agreement”) which further extended the Termination Date to January 16, 2019. On January 22, 2019, the Company and CleanSpark executed a merger agreement whereby Pioneer Critical Power, Inc., a wholly owned subsidiary of the Company, was sold to CleanSpark. On January 22, 2019, PCEP and CleanSpark terminated the Asset Purchase Agreement by mutual written agreement. The Company had previously presented the operations of PCEP as discontinued operations for all periods presented in its annual report on Form 10-K for the year ended December 31, 2017. Due to the change of the circumstances as described above, the Company is presenting the results of PCEP within continuing operations and including results of the switchgear reporting unit in the T&D Solutions Segment for all periods presented in the financial statements as of December 31, 2018. As circumstances allow, the Company will pursue the sale of PCEP. Liquidity The accompanying financial statements have been prepared on a basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements during year ended December 31, 2018, the Company incurred net losses of $5.7 million, has an accumulated deficit of $6.2 million, and has a working capital deficit of $5.5 million. At December 31, 2018, we had total debt of $26.3 million and $0.2 million of cash and cash equivalents on hand. We have historically met our cash needs through a combination of cash flows from operating activities and bank borrowings under our revolving credit facilities. Our cash requirements are generally for operating activities, debt repayment, capital improvements and acquisitions. In addition, as further discussed in Note 10 our credit facilities maturity dates have been extended until April 1, 2020. The financial statements included in this annual report have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity, capital requirements and that our credit facilities with our lender will remain available to us and will not need to be replaced. Management believes that its capital resources are adequate to fund operations through the first quarter of 2020, but the Company is dependent on its agreement with BMO to meet its working capital obligations. The Company has certain credit arrangements with its lender that contain subjective acceleration clauses and the Company has had several instances of non-compliance with certain of the covenants included in such facilities. Management has historically been able to obtain from its lender waivers of any non-compliance and management believes that it will be able to continue to obtain necessary waivers in the event of future non-compliance, however there can be no guarantees and should the lender not provide a waiver in the future, the debt could become due immediately. Additionally, operations of the Company are subject to certain risks and uncertainties, including, among others, uncertainty of commercial manufacturing at acceptable margins, marketing or sales acceptance, and dependence on key personnel. Rounding All dollar amounts (except share and per share data) presented are stated in thousands of dollars, unless otherwise noted. Amounts may not foot due to rounding.

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