STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

15. STOCK-BASED COMPENSATION

On December 2, 2009, the Company adopted the 2009 Equity Incentive Plan (the “2009 Plan”) for the purpose of issuing incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, non-qualified stock options, restricted stock, stock appreciation rights, performance unit awards and stock bonus awards to employees, directors, consultants and other service providers. A total of 320,000 shares of common stock are reserved for issuance under the 2009 Plan. Options may be granted under the 2009 Plan on terms and at prices as determined by the board of directors or by the plan administrators appointed by the board of directors.

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 replaces and supersedes 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 are all eligible to participate in the 2011 Plan. The 2011 Plan allows 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 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 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 2011 Plan is 700,000 shares. As of December 31, 2020, 440,400 stock options had been granted and are considered outstanding, consisting of 21,000 incentive stock options and 419,400 non-qualified stock options.

Expense for stock-based compensation recorded for the years ended December 31, 2020 and 2019 was approximately $3 and $12, respectively. All of the stock-based compensation expense is included in selling, general and administrative expenses in the accompanying consolidated statements of operations. As of December 31, 2020, the Company had total stock-based compensation expense remaining to be recognized in the consolidated statements of operations that was insignificant.

The fair value of the stock options granted was measured using the Black-Scholes valuation model with the following assumptions:

	Year Ended December 31,
	2020			2019
Expected volatility		31.1	%		—
Expected life in years		5.5			—
Risk-free interest rate		0.5	%		—

A summary of stock option activity for the years ended December 31, 2020 and 2019, and changes during the years then ended is presented below:

	Stock Options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate intrinsic value
Outstanding as of January 1, 2019		424,800		$	8.30		6.50	$	22
Granted		—			—		—		—
Exercised		—			—
Forfeited		(45,000	)		14.75		—
Outstanding as of January 1, 2020		379,800		$	7.54		6.10	$	—
Granted		70,000			1.68
Exercised		—			—
Forfeited		(9,400	)		8.55
Outstanding as of December 31, 2020		440,400		$	6.58		5.80	$	155
Exercisable as of December 31, 2020		370,400		$	7.51		5.20	$	1

The total number of shares reserved for the plan is 700,000, leaving a balance of 233,267 available for future grants.

Intrinsic value is the difference between the market value of the stock at December 31, 2020 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:

	Year Ended December 31,
	2020		2019
Weighted-average fair value of options granted (per share)	$	0.49	$	—
Intrinsic value gain of options exercised		—		—
Cash receipts from exercise of options		—		—