Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 31, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | TAITRON COMPONENTS INC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0000942126 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Common Class A [Member] | ||
Document Information Line Items | ||
Entity Common Stock, Shares Outstanding | 5,042,735 | |
Common Class B [Member] | ||
Document Information Line Items | ||
Entity Common Stock, Shares Outstanding | 762,612 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 6,377,000 | $ 5,313,000 |
Accounts receivable, less allowances of $7,000, and $19,000 respectively | 722,000 | 1,022,000 |
Inventories, less reserves for obsolescence of $6,144,000, and $5,893,000, respectively (Note 2) | 3,384,000 | 3,588,000 |
Prepaid expenses and other current assets | 86,000 | 85,000 |
Total current assets | 10,569,000 | 10,008,000 |
Property and equipment, net | 3,264,000 | 3,386,000 |
Other assets (Note 3) | 205,000 | 205,000 |
Total assets | 14,038,000 | 13,599,000 |
Current liabilities: | ||
Accounts payable | 501,000 | 462,000 |
Accrued liabilities | 441,000 | 322,000 |
Total current liabilities | 942,000 | 784,000 |
Long-term debt (Note 4) | 163,000 | 0 |
Total Liabilities | 1,105,000 | 784,000 |
Commitments and contingencies (Note 6) | ||
Shareholders' equity: | ||
Preferred stock, $0.001 par value. Authorized 5,000,000 shares; None issued or outstanding | 0 | 0 |
Additional paid-in capital | 11,037,000 | 10,959,000 |
Accumulated other comprehensive income | 33,000 | 38,000 |
Retained earnings | 1,757,000 | 1,712,000 |
Total shareholders’ equity - Taitron Components Inc | 12,833,000 | 12,715,000 |
Noncontrolling interest in subsidiary | 100,000 | 100,000 |
Total equity | 12,933,000 | 12,815,000 |
Total liabilities and equity | 14,038,000 | 13,599,000 |
Common Class A [Member] | ||
Shareholders' equity: | ||
Common stock | 5,000 | 5,000 |
Common Class B [Member] | ||
Shareholders' equity: | ||
Common stock | $ 1,000 | $ 1,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Accounts receivable, allowances (in Dollars) | $ 19,000 | $ 19,000 |
Inventories, reserves for obsolescence (in Dollars) | $ 6,144,000 | $ 5,893,000 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common Class A [Member] | ||
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 5,040,235 | 4,990,235 |
Common stock, shares outstanding | 5,040,235 | 4,990,235 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common Class B [Member] | ||
Common stock, shares authorized | 762,612 | 762,612 |
Common stock, shares issued | 762,612 | 762,612 |
Common stock, shares outstanding | 762,612 | 762,612 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net product revenue | $ 1,991,000 | $ 1,658,000 | $ 4,766,000 | $ 4,814,000 |
Cost of products sold | 1,024,000 | 770,000 | 2,509,000 | 2,408,000 |
Gross profit | 967,000 | 888,000 | 2,257,000 | 2,406,000 |
Selling, general and administrative expenses | 542,000 | 566,000 | 1,659,000 | 1,712,000 |
Operating income | 425,000 | 322,000 | 598,000 | 694,000 |
Interest income, net | 7,000 | 7,000 | 28,000 | 21,000 |
Other income, net | 12,000 | 188,000 | 29,000 | 244,000 |
Income before income taxes | 444,000 | 517,000 | 655,000 | 959,000 |
Income tax provision | (1,000) | (2,000) | (3,000) | (4,000) |
Net income | 443,000 | 515,000 | 652,000 | 955,000 |
Net loss attributable to noncontrolling interests | 0 | 37,000 | 0 | 33,000 |
Net income attributable to Taitron Components Inc. | $ 443,000 | $ 478,000 | $ 652,000 | $ 922,000 |
Net income per share: Basic (in Dollars per share) | $ 0.080 | $ 0.080 | $ 0.110 | $ 0.160 |
Diluted (in Dollars per share) | 0.080 | 0.080 | 0.110 | 0.160 |
Cash dividends declared per common share (in Dollars per share) | $ 0.035 | $ 0.030 | $ 0.105 | $ 0.090 |
Weighted average common shares outstanding: Basic (in Shares) | 5,802,847 | 5,752,847 | 5,787,014 | 5,714,680 |
Diluted (in Shares) | 5,845,847 | 5,825,847 | 5,840,014 | 5,826,680 |
Net income | $ 443,000 | $ 515,000 | $ 652,000 | $ 955,000 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (100,000) | (5,000) | (85,000) | |
Comprehensive income | 443,000 | 415,000 | 647,000 | 870,000 |
Comprehensive loss attributable to noncontrolling interests | 0 | 9,000 | 0 | 4,000 |
Comprehensive income attributable to Taitron Components Inc. | $ 443,000 | $ 406,000 | $ 647,000 | $ 866,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity - USD ($) | Common Class A [Member]Common Stock [Member] | Common Class A [Member] | Common Class B [Member]Common Stock [Member] | Common Class B [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2018 | $ 5,000 | $ 1,000 | $ 10,812,000 | $ 128,000 | $ 1,656,000 | $ 96,000 | $ 12,698,000 | ||
Balance (in Shares) at Dec. 31, 2018 | 4,867,235 | 762,612 | |||||||
Consolidated net income (loss) | 186,000 | (2,000) | 184,000 | ||||||
Other comprehensive income (loss) | 13,000 | (1,000) | 12,000 | ||||||
Exercise stock options | 76,000 | 76,000 | |||||||
Exercise stock options (in Shares) | 70,000 | ||||||||
Amortization of stock based compensation | 4,000 | 4,000 | |||||||
Cash dividends | (171,000) | (171,000) | |||||||
Balance at Mar. 31, 2019 | $ 5,000 | $ 1,000 | 10,892,000 | 141,000 | 1,671,000 | 93,000 | 12,803,000 | ||
Balance (in Shares) at Mar. 31, 2019 | 4,937,235 | 762,612 | |||||||
Balance at Dec. 31, 2018 | $ 5,000 | $ 1,000 | 10,812,000 | 128,000 | 1,656,000 | 96,000 | 12,698,000 | ||
Balance (in Shares) at Dec. 31, 2018 | 4,867,235 | 762,612 | |||||||
Consolidated net income (loss) | 955,000 | ||||||||
Balance at Sep. 30, 2019 | $ 5,000 | $ 1,000 | 10,952,000 | 43,000 | 2,062,000 | 100,000 | 13,163,000 | ||
Balance (in Shares) at Sep. 30, 2019 | 4,990,235 | 762,612 | |||||||
Balance at Mar. 31, 2019 | $ 5,000 | $ 1,000 | 10,892,000 | 141,000 | 1,671,000 | 93,000 | 12,803,000 | ||
Balance (in Shares) at Mar. 31, 2019 | 4,937,235 | 762,612 | |||||||
Consolidated net income (loss) | 258,000 | (2,000) | 256,000 | ||||||
Other comprehensive income (loss) | 2,000 | 2,000 | |||||||
Exercise stock options | 50,000 | 50,000 | |||||||
Exercise stock options (in Shares) | 53,000 | ||||||||
Amortization of stock based compensation | 5,000 | 5,000 | |||||||
Cash dividends | (172,000) | (172,000) | |||||||
Balance at Jun. 30, 2019 | $ 5,000 | $ 1,000 | 10,947,000 | 143,000 | 1,757,000 | 91,000 | 12,944,000 | ||
Balance (in Shares) at Jun. 30, 2019 | 4,990,235 | 762,612 | |||||||
Consolidated net income (loss) | 478,000 | 37,000 | 515,000 | ||||||
Other comprehensive income (loss) | (100,000) | (28,000) | (128,000) | ||||||
Amortization of stock based compensation | 5,000 | 5,000 | |||||||
Cash dividends | (173,000) | (173,000) | |||||||
Balance at Sep. 30, 2019 | $ 5,000 | $ 1,000 | 10,952,000 | 43,000 | 2,062,000 | 100,000 | 13,163,000 | ||
Balance (in Shares) at Sep. 30, 2019 | 4,990,235 | 762,612 | |||||||
Balance at Dec. 31, 2019 | $ 5,000 | $ 1,000 | 10,959,000 | 38,000 | 1,712,000 | 100,000 | 12,815,000 | ||
Balance (in Shares) at Dec. 31, 2019 | 4,990,235 | 4,990,235 | 762,612 | 762,612 | |||||
Consolidated net income (loss) | 90,000 | 90,000 | |||||||
Exercise stock options | 54,000 | 54,000 | |||||||
Exercise stock options (in Shares) | 45,000 | ||||||||
Amortization of stock based compensation | 6,000 | 6,000 | |||||||
Cash dividends | (201,000) | (201,000) | |||||||
Balance at Mar. 31, 2020 | $ 5,000 | $ 1,000 | 11,019,000 | 38,000 | 1,601,000 | 100,000 | 12,764,000 | ||
Balance (in Shares) at Mar. 31, 2020 | 5,035,235 | 762,612 | |||||||
Balance at Dec. 31, 2019 | $ 5,000 | $ 1,000 | 10,959,000 | 38,000 | 1,712,000 | 100,000 | 12,815,000 | ||
Balance (in Shares) at Dec. 31, 2019 | 4,990,235 | 4,990,235 | 762,612 | 762,612 | |||||
Consolidated net income (loss) | $ 652,000 | ||||||||
Exercise stock options (in Shares) | 50,000 | ||||||||
Balance at Sep. 30, 2020 | $ 5,000 | $ 1,000 | 11,037,000 | 33,000 | 1,757,000 | 100,000 | $ 12,933,000 | ||
Balance (in Shares) at Sep. 30, 2020 | 5,040,235 | 5,040,235 | 762,612 | 762,612 | |||||
Balance at Mar. 31, 2020 | $ 5,000 | $ 1,000 | 11,019,000 | 38,000 | 1,601,000 | 100,000 | 12,764,000 | ||
Balance (in Shares) at Mar. 31, 2020 | 5,035,235 | 762,612 | |||||||
Consolidated net income (loss) | 119,000 | 119,000 | |||||||
Other comprehensive income (loss) | (5,000) | (5,000) | |||||||
Exercise stock options | 5,000 | 5,000 | |||||||
Exercise stock options (in Shares) | 5,000 | ||||||||
Amortization of stock based compensation | 7,000 | 7,000 | |||||||
Cash dividends | (203,000) | (203,000) | |||||||
Balance at Jun. 30, 2020 | $ 5,000 | $ 1,000 | 11,031,000 | 33,000 | 1,517,000 | 100,000 | 12,687,000 | ||
Balance (in Shares) at Jun. 30, 2020 | 5,040,235 | 762,612 | |||||||
Consolidated net income (loss) | 443,000 | 443,000 | |||||||
Amortization of stock based compensation | 6,000 | 6,000 | |||||||
Cash dividends | (203,000) | (203,000) | |||||||
Balance at Sep. 30, 2020 | $ 5,000 | $ 1,000 | $ 11,037,000 | $ 33,000 | $ 1,757,000 | $ 100,000 | $ 12,933,000 | ||
Balance (in Shares) at Sep. 30, 2020 | 5,040,235 | 5,040,235 | 762,612 | 762,612 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities: | ||
Net income | $ 652,000 | $ 955,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 135,000 | 124,000 |
Provision for sales returns and doubtful accounts | 5,000 | 4,000 |
Stock based compensation | 19,000 | 14,000 |
Gain on sale of assets | 0 | (160,000) |
Changes in assets and liabilities: | ||
Accounts receivable | 295,000 | 147,000 |
Inventories | 204,000 | 390,000 |
Prepaid expenses and other current assets | (1,000) | (23,000) |
Accounts payable | 39,000 | (584,000) |
Accrued liabilities | 119,000 | (13,000) |
Other assets and liabilities | 0 | 4,000 |
Total adjustments | 815,000 | (97,000) |
Net cash provided by operating activities | 1,467,000 | 858,000 |
Investing activities: | ||
Acquisition of property and equipment | (13,000) | (12,000) |
Proceeds from sale of assets | 0 | 200,000 |
Payment for investment in convertible securities | 0 | (186,000) |
Net cash (used for) provided by investing activities | (13,000) | 2,000 |
Financing activities: | ||
Proceeds from notes payable to bank | 163,000 | 0 |
Dividend payments | (607,000) | (516,000) |
Proceeds from stock options exercised | 59,000 | 126,000 |
Net cash used for financing activities | (385,000) | (390,000) |
Impact of exchange rates on cash | (5,000) | 5,000 |
Net increase in cash and cash equivalents | 1,064,000 | 475,000 |
Cash and cash equivalents, beginning of period | 5,313,000 | 4,494,000 |
Cash and cash equivalents, end of period | 6,377,000 | 4,969,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes, net | $ 3,000 | $ 3,000 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview of Business We are primarily a supplier of original designed and manufactured (“ODM”) electronic components (“ODM Components”) with our product offerings ranging from discrete semiconductors through small electronic devices. Our products include value-added engineering and turn-key solutions, focusing on providing contract electronic manufacturers (“CEM”s) and original equipment manufacturers (“OEM”s) with ODM products for their multi-year turn-key projects (“ODM Projects”). We also distribute brand name electronic components with a vast inventory available on hand. We are incorporated in California and were originally formed in 1989. We maintain a majority-owned subsidiary in Mexico (our Mexico sales and distribution operations closed in May 2013 and final Mexico entity closure planned for the fourth quarter of 2020) and divisions in Taiwan and China which were established in 1998, 1996 and 2005, respectively. Basis of Presentation The unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including its 60% majority-owned subsidiary, Taitron Components Mexico, S.A. de C.V. All significant intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair presentation of its financial condition and results of operations for the interim periods presented in this Quarterly Report on Form 10-Q have been included. Operating results for the interim periods are not necessarily indicative of financial results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in the Company’s condensed consolidated financial statements relate to the allowance for sales returns, doubtful accounts, inventory reserves, accrued liabilities and deferred income taxes. New Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes” “Income Taxes” Revenue recognition Revenue is recognized at the point at which control of the underlying products are transferred to the customer. Satisfaction of our performance obligations occur upon the transfer of control of products, either from our facilities or directly from suppliers to customers. We consider customer purchase orders to be the contracts with a customer. All revenue is generated from contracts with customers. In determining the transaction price, we evaluate whether the price is subject to refund or adjustment to determine the net consideration to which we expect to receive. Taxes assessed by a governmental authority on revenue-producing transactions are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of products sold. Based upon the nature of our contracts with customers and our performance obligations within those contracts, we have no contract assets or liabilities as of September 30, 2020 and December 31, 2019. Nature of products We are primarily a supplier of original designed and manufactured (“ODM”) products that include value-added engineering and turn-key solutions. The following is a description of major products lines from which we generate our revenue: ODM Projects ODM Components Distribution Components Disaggregation of revenue In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Primary geographical markets: United States $ 1,809,000 $ 1,509,000 $ 4,308,000 $ 4,186,000 Asia 176,000 145,000 442,000 610,000 Other 6,000 4,000 16,000 18,000 1,991,000 1,658,000 4,766,000 4,814,000 Major product lines: ODM projects $ 1,196,000 $ 1,103,000 $ 2,765,000 $ 2,705,000 ODM components 772,000 539,000 1,915,000 2,018,000 Distribution components 23,000 16,000 86,000 91,000 1,991,000 1,658,000 4,766,000 4,814,000 Timing of revenue recognition: Products transferred at a point in time $ 1,991,000 $ 1,658,000 $ 4,766,000 $ 4,814,000 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | 2 – INVENTORY Inventory, consisting principally of products held for resale, is recorded at the lower of cost (determined using the first in-first out method) and net realizable value. We had inventory balances in the amount of $3,384,000 and $3,588,000 at September 30, 2020 and December 31, 2019, respectively, which is presented net of valuation allowances of $6,144,000 and $5,893,000, respectively. We evaluate inventories to identify excess, high-cost, slow-moving or other factors rendering inventories as unmarketable at normal profit margins. Due to the complexity of managing and maintaining a large inventory of product offerings, estimates are made regarding adjustments to the carrying values of inventories. Based on our assumptions about future demand and market conditions, inventories are carried at the lower of cost and net realizable value. If our assumptions about future demand change, or market conditions are less favorable than those projected, additional write-downs of inventories or valuation allowances may be required. In any case, actual amounts could be different from those estimated. |
OTHER ASSETS
OTHER ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Other Assets Disclosure [Text Block] | 3 – OTHER ASSETS Investment in securities - Zowie Technology Other Other Assets Total Balance at December 31, 2019 $ 186,000 $ 19,000 $ 205,000 Other changes - - - Balance at September 30, 2020 $ 186,000 $ 19,000 $ 205,000 Our $186,000 investment in securities as of September 30, 2020 relates to 317,428 shares of preferred convertible debt of Zowie Technology Corporation (Taipei Hsien, Taiwan), a supplier of electronic component products, with our option after three (3) years to convert into common stock or refundable bearing 7% annual interest rate. Our investment represents approximately 7.9% of their total outstanding shares, although we do not have significant influence or control. This investment is accounted for under the cost (plus impairment) basis of accounting, however when facts and circumstances indicate that the carrying value of this asset may not be recoverable, we recognize an impairment loss. The impairment loss recognized is the amount by which the carrying amount exceeds the estimated fair value. In the fourth quarter ending December 31, 2019, based on our estimated valuation assessment, we recognized an impairment loss of $193,000. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt [Text Block] | 4 – LONG-TERM DEBT On April 27, 2020, we received loan proceeds in the amount of $163,200 from the Small Business Administration (“SBA”) under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after twenty-four (24) weeks as long as the loan proceeds are used for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness may be reduced if we terminate, lay-off or furlough employees or reduce salaries during the period. Any unforgiven portion of the PPP loan is payable over two (2) years at an interest rate of 1%, with a deferral of payments to the date that SBA remits our loan forgiveness amount to our lender. We intend to use the proceeds for purposes consistent with the PPP. While we currently believe that our use of the loan proceeds will meet the conditions for forgiveness of the loan, we cannot ensure that we will receive forgiveness of the loan, in whole or in part. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement [Text Block] | 5 – SHARE BASED COMPENSATION Accounting for stock options issued to employees measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. Outstanding options to purchase Class A common stock (“the Options”) vest in three (3) equal annual installments beginning one (1) year from the date of grant and are subject to termination provisions as defined in our 2005 Stock Incentive Plan and 2018 Omnibus Incentive Plan (collectively referred to as “the Plans”). The Options activity during the nine months ended September 30, 2020 is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Years Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2019 381,500 $ 1.65 5.6 $ 429,000 Exercised (50,000 ) 1.18 Forfeited (55,000 ) 1.36 Outstanding at September 30, 2020 276,500 $ 1.80 5.2 $ 178,000 Exercisable at September 30, 2020 111,500 $ 1.63 4.5 $ 112,000 At September 30, 2020, the range of individual outstanding weighted average exercise prices was $1.02 to $2.68 and the unamortized compensation expense was approximately $33,000. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 6 – COMMITMENTS AND CONTINGENCIES Inventory Purchasing Outstanding commitments to purchase inventory from suppliers aggregated approximately $1,800,000 as of September 30, 2020. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 7 – SUBSEQUENT EVENTS We have evaluated subsequent events through November 16, 2020, the date on which the accompanying condensed consolidated financial statements were available to be issued. Based upon its evaluation, management has determined that no subsequent events have occurred that would require recognition in the accompanying condensed consolidated financial statements or disclosures in the notes thereto, except as follows: During the first, second and third quarters of 2020, we experienced increased costs associated with our logistics operations, and shipping delays. Our suppliers and customers were also negatively impacted, including delays in the production and export of products. The impact to our customers may also result in an increase in past due accounts receivable. To mitigate the impact of novel coronavirus 2019 (“COVID-19”), we have taken measures to promote the safety and security of our employees while complying with various government mandates, including work-from-home arrangements and social-distancing initiatives to reduce the transmission of COVID-19. The COVID-19 pandemic has had a negative impact on our results of operations and financial performance for the first, second and third quarters of 2020, and we expect it will continue to have a negative impact on our revenue, earnings and cash flows in the fourth quarter of 2020 and possibly into 2021. Accordingly, current results and financial condition discussed herein may not be indicative of future operating results and trends. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including its 60% majority-owned subsidiary, Taitron Components Mexico, S.A. de C.V. All significant intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair presentation of its financial condition and results of operations for the interim periods presented in this Quarterly Report on Form 10-Q have been included. Operating results for the interim periods are not necessarily indicative of financial results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in the Company’s condensed consolidated financial statements relate to the allowance for sales returns, doubtful accounts, inventory reserves, accrued liabilities and deferred income taxes. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes” “Income Taxes” |
Revenue from Contract with Customer [Policy Text Block] | Revenue recognition Revenue is recognized at the point at which control of the underlying products are transferred to the customer. Satisfaction of our performance obligations occur upon the transfer of control of products, either from our facilities or directly from suppliers to customers. We consider customer purchase orders to be the contracts with a customer. All revenue is generated from contracts with customers. In determining the transaction price, we evaluate whether the price is subject to refund or adjustment to determine the net consideration to which we expect to receive. Taxes assessed by a governmental authority on revenue-producing transactions are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of products sold. Based upon the nature of our contracts with customers and our performance obligations within those contracts, we have no contract assets or liabilities as of September 30, 2020 and December 31, 2019. |
Revenue [Policy Text Block] | Nature of products We are primarily a supplier of original designed and manufactured (“ODM”) products that include value-added engineering and turn-key solutions. The following is a description of major products lines from which we generate our revenue: ODM Projects ODM Components Distribution Components Disaggregation of revenue In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Primary geographical markets: United States $ 1,809,000 $ 1,509,000 $ 4,308,000 $ 4,186,000 Asia 176,000 145,000 442,000 610,000 Other 6,000 4,000 16,000 18,000 1,991,000 1,658,000 4,766,000 4,814,000 Major product lines: ODM projects $ 1,196,000 $ 1,103,000 $ 2,765,000 $ 2,705,000 ODM components 772,000 539,000 1,915,000 2,018,000 Distribution components 23,000 16,000 86,000 91,000 1,991,000 1,658,000 4,766,000 4,814,000 Timing of revenue recognition: Products transferred at a point in time $ 1,991,000 $ 1,658,000 $ 4,766,000 $ 4,814,000 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue [Table Text Block] | In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Primary geographical markets: United States $ 1,809,000 $ 1,509,000 $ 4,308,000 $ 4,186,000 Asia 176,000 145,000 442,000 610,000 Other 6,000 4,000 16,000 18,000 1,991,000 1,658,000 4,766,000 4,814,000 Major product lines: ODM projects $ 1,196,000 $ 1,103,000 $ 2,765,000 $ 2,705,000 ODM components 772,000 539,000 1,915,000 2,018,000 Distribution components 23,000 16,000 86,000 91,000 1,991,000 1,658,000 4,766,000 4,814,000 Timing of revenue recognition: Products transferred at a point in time $ 1,991,000 $ 1,658,000 $ 4,766,000 $ 4,814,000 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Other Assets [Table Text Block] | Investment in securities - Zowie Technology Other Other Assets Total Balance at December 31, 2019 $ 186,000 $ 19,000 $ 205,000 Other changes - - - Balance at September 30, 2020 $ 186,000 $ 19,000 $ 205,000 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | The Options activity during the nine months ended September 30, 2020 is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Years Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2019 381,500 $ 1.65 5.6 $ 429,000 Exercised (50,000 ) 1.18 Forfeited (55,000 ) 1.36 Outstanding at September 30, 2020 276,500 $ 1.80 5.2 $ 178,000 Exercisable at September 30, 2020 111,500 $ 1.63 4.5 $ 112,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Disaggregation of Revenue - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,991,000 | $ 1,658,000 | $ 4,766,000 | $ 4,814,000 |
ODM Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,196,000 | 1,103,000 | 2,765,000 | 2,705,000 |
ODM Components [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 772,000 | 539,000 | 1,915,000 | 2,018,000 |
Distribution Components [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 23,000 | 16,000 | 86,000 | 91,000 |
UNITED STATES | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,809,000 | 1,509,000 | 4,308,000 | 4,186,000 |
Asia [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 176,000 | 145,000 | 442,000 | 610,000 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,000 | 4,000 | 16,000 | 18,000 |
Products Transferred at a Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,991,000 | $ 1,658,000 | $ 4,766,000 | $ 4,814,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | ||
Inventory, Net | $ 3,384,000 | $ 3,588,000 |
Provision for Other Losses | $ 6,144,000 | $ 5,893,000 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - Zowie Technology [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Sep. 30, 2020 | |
OTHER ASSETS (Details) [Line Items] | ||
Equity Method Investments | $ 186,000 | |
Investment Owned, Balance, Shares (in Shares) | 317,428 | |
Equity Method Investment, Ownership Percentage | 7.90% | |
Other than Temporary Impairment Losses, Investments | $ 193,000 |
OTHER ASSETS (Details) - Schedu
OTHER ASSETS (Details) - Schedule of Other Assets - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Zowie Technology [Member] | ||
OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | ||
Investments Balance | $ 186,000 | $ 186,000 |
Other changes | 0 | |
Grand Shine Mgmt [Member] | ||
OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | ||
Investments Balance | 19,000 | 19,000 |
Other changes | 0 | |
Other Investments [Member] | ||
OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | ||
Investments Balance | 205,000 | $ 205,000 |
Other changes | $ 0 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | Apr. 27, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Debt Disclosure [Abstract] | |||
Proceeds from Notes Payable | $ 163,200 | $ 163,000 | $ 0 |
Debt Instrument, Term | 2 years | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | ||
Debt Instrument, Payment Terms | deferral of payments to the date that SBA remits our loan forgiveness amount |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details) | 9 Months Ended |
Sep. 30, 2020USD ($)$ / shares | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | vest in three (3) equal annual installments beginning one (1) year from the date of grant and are subject to termination provisions as defined in our 2005 Stock Incentive Plan and 2018 Omnibus Incentive Plan (collectively referred to as “the Plans”). |
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit | $ 1.02 |
Share-based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit | $ 2.68 |
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount (in Dollars) | $ | $ 33,000 |
SHARE BASED COMPENSATION (Det_2
SHARE BASED COMPENSATION (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | ||
Options Outstanding, Number of Shares | 381,500 | |
Options Outstanding, Weighted Average Exercise Price | $ 1.65 | |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 5 years 73 days | 5 years 219 days |
Options Outstanding, Aggregate Intrinsic Value | $ 429,000 | |
Options Exercisable, Number of Shares | 111,500 | |
Options Exercisable, Weighted Average Exercise Price | $ 1.63 | |
Options Exercisable, Weighted Average Years Remaining Contractual Term | 4 years 6 months | |
Options Exercisable, Aggregate Intrinsic Value | $ 112,000 | |
Options Exercised, Number of Shares | (50,000) | |
Options Exercised, Weighted Average Exercise Price | $ 1.18 | |
Options Forfeited, Number of Shares | (55,000) | |
Options Forfeited, Weighted Average Exercise Price | $ 1.36 | |
Options Outstanding, Number of Shares | 276,500 | |
Options Outstanding, Weighted Average Exercise Price | $ 1.80 | |
Options Outstanding, Aggregate Intrinsic Value | $ 178,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Sep. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Commitment, Remaining Minimum Amount Committed | $ 1,800,000 |