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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION On May 11, 2011, the board of directors of the Company adopted the Pioneer Power Solutions, Inc. 2011 Long-Term Incentive Plan (the “2011 Plan”) which was subsequently approved by stockholders of the Company on May 31, 2011. The 2011 Plan replaced and superseded the 2009 Plan. The Company’s outside directors and employees, including the Company’s principal executive officer, principal financial officer and other named executive officers, and certain contractors were all eligible to participate in the 2011 Plan. The 2011 Plan allowed for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which were granted singly, in combination, or in tandem, and upon such terms as determined by the Board or a committee of the Board that was designated to administer the Plan. Subject to certain adjustments, the maximum number of shares of the Company’s common stock that were available to be delivered pursuant to awards under the 2011 Plan was 700,000 shares. As of December 31, 2022, there were no shares available for future grants under the Company’s 2011 Long-Term Incentive Plan. The Company’s 2011 Long-Term Incentive Plan expired during the second quarter of 2021. On October 13, 2021, our board of directors adopted the 2021 Long-Term Incentive Plan (the “2021 Plan”), subject to stockholder approval, which was obtained on November 11, 2021. Our outside directors and our employees, including the principal executive officer, principal financial officer and other named executive officers, and certain contractors are all eligible to participate in the 2021 Plan. The 2021 Plan allows for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination, or in tandem, and upon such terms as are determined by the Board or a committee of the board that is designated to administer the 2021 Plan. Subject to certain adjustments, the maximum number of shares of the Company’s common stock that may be delivered pursuant to awards under the 2021 Plan is 900,000 shares. As of December 31, 2022, there were 498,000 shares available for future grants under the Company’s 2021 Plan. The 2021 Plan was initially administered by our board of directors, but it has been administered by the compensation committee following the creation of such committee in the first quarter of 2022. Stock-based compensation expense recorded for the year ended December 31, 2022 and 2021 was approximately $1.0 million and $186, respectively. All of the stock-based compensation expense is included in selling, general and administrative expenses in the accompanying consolidated statements of operations. At December 31, 2022, the Company had total stock-based compensation expense remaining to be recognized in the consolidated statements of operations of approximately $735, which will be recognized over a weighted average period of 1.3 years. The fair value of the stock options granted was measured using the Black-Scholes valuation model with the following assumptions: SCHEDULE OF STOCK OPTION GRANTED MEASURED USING BLACK SCHOLES VALUATION
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Expected volatility |  |  | 31.1 | % |  |  | 31.1 | %
Expected life in years |  |  | 5.5 |  |  |  | 5.5 |
Risk-free interest rate |  |  | 2.9 | % |  |  | 2.1 | %
Expected dividend yield |  |  | 0 | % |  |  | 0 | %
A summary of stock option activity for the year ended December 31, 2022 is presented below: SUMMARY OF STOCK OPTION ACTIVITY
|  | Stock Options |  |  | Weighted average exercise price |  |  | Weighted average remaining contractual term |  |  | Aggregate intrinsic value |
Outstanding as of January 1, 2022 |  |  | 647,667 |  |  | $ | 5.53 |  |  |  |  |  |  |  |  |
Granted |  |  | 27,000 |  |  |  | 3.17 |  |  |  |  |  |  |  |  |
Exercised |  |  | (4,000 | ) |  |  | 4.11 |  |  |  |  |  |  |  |  |
Forfeited |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Outstanding as of December 31, 2022 |  |  | 670,667 |  |  | $ | 5.45 |  |  |  | 5.60 |  |  | $ | 50 |
Exercisable as of December 31, 2022 |  |  | 643,667 |  |  | $ | 5.54 |  |  |  | 5.50 |  |  | $ | 50 |
Intrinsic value is the difference between the market value of the stock at December 31, 2022 and the exercise price which is aggregated for all options outstanding and exercisable. A summary of the weighted-average grant-date fair value of options, total intrinsic value of options exercised, and cash receipts from options exercised is shown below: SCHEDULE OF WEIGHTED AVERAGE GRANT DATE FAIR VALUE OF OPTIONS
|  | 2022 |  |  | 2021 |
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Weighted-average fair value of options granted (per share) |  | $ | 1.09 |  |  | $ | 0.97 |
Intrinsic value (loss) gain of options exercised |  |  | (6 | ) |  |  | 137 |
Cash receipts from exercise of options |  |  | 17 |  |  |  | 58 |
The following table presents information related to stock options as of December 31, 2022: SCHEDULE OF INFORMATION RELATED TO OPTIONS OUTSTANDING AND EXERCISABLE
Options outstanding |  |  | Options exercisable |
|  |  | Outstanding |  |  | Weighted average |  |  | Exercisable |
|  |  | number of |  |  | remaining life |  |  | number of |
Exercise price |  |  | options |  |  | in years |  |  | options |
$ | 1.68 |  |  |  | 50,000 |  |  |  | 7.25 |  |  |  | 50,000 |
$ | 3.17 |  |  |  | 27,000 |  |  |  | - |  |  |  | - |
$ | 3.31 |  |  |  | 236,667 |  |  |  | 8.37 |  |  |  | 236,667 |
$ | 3.68 |  |  |  | 5,000 |  |  |  | 3.19 |  |  |  | 5,000 |
$ | 5.60 |  |  |  | 35,000 |  |  |  | 0.01 |  |  |  | 35,000 |
$ | 5.60 |  |  |  | 6,000 |  |  |  | 5.26 |  |  |  | 6,000 |
$ | 7.30 |  |  |  | 246,000 |  |  |  | 4.25 |  |  |  | 246,000 |
$ | 8.98 |  |  |  | 6,000 |  |  |  | 2.25 |  |  |  | 6,000 |
$ | 10.21 |  |  |  | 59,000 |  |  |  | 1.18 |  |  |  | 59,000 |
|  |  |  |  | 670,667 |  |  |  |  |  |  |  | 643,667 |
On April 25, 2022, the Company awarded 375,000 shares of restricted stock units (“RSU”) to the Company’s Chief Financial Officer with the following vesting terms: (i) 125,000 units on May 1, 2022, which are included in the calculation of basic EPS as of the vesting date, (ii) an additional 125,000 units on May 1, 2023, and (iii) the remaining 125,000 units on May 1, 2024, provided that the executive has remained continuously employed by the Company through each applicable vesting date. The vested RSUs will be converted into shares of the Company’s common stock no later than March 15 of the calendar year following the calendar year in which such RSUs vested. The fair value of the RSU award at the date of grant was $1.6 million, which will be recognized over the vesting period. Subsequent to December 31, 2022, the Company issued 125,000 of common stock to the holder in connection with the RSUs that vested on May 1, 2022. A summary of RSU activity during the year ended December 31, 2022 is as follows: SCHEDULE OF RESTRICTED STOCK UNITS
|  |  |  |  | Weighted-average |  |  | Weighted-average |
|  |  |  |  | grant-date |  |  | grant-date |
|  | Number of units |  |  | fair value per share |  |  | fair value |
Unvested restricted stock units as of January 1, 2022 |  |  | - |  |  | $ | - |  |  | $ | - |
Units granted |  |  | 375,000 |  |  |  | 4.35 |  |  |  | 1,631 |
Units vested |  |  | (125,000 | ) |  |  | 4.35 |  |  |  | (544 | )
Units forfeited |  |  | - |  |  |  | - |  |  |  | - |
Unvested restricted stock units as of December 31, 2022 |  |  | 250,000 |  |  | $ | 4.35 |  |  | $ | 1,087 |

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