Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 15, 2021 | Jun. 30, 2020 | |
Document Information Line Items | |||
Entity Registrant Name | TAITRON COMPONENTS INC | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Public Float | $ 7,800,000 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0000942126 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
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 | 5,062,235 | ||
Common Class B [Member] | |||
Document Information Line Items | |||
Entity Common Stock, Shares Outstanding | 762,612 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 6,652,000 | $ 5,313,000 |
Accounts receivable, less allowances of $7,000, and $19,000 respectively | 639,000 | 1,022,000 |
Inventories, less reserves for obsolescence of $4,759,000, and $5,893,000, respectively (Note 2) | 3,518,000 | 3,588,000 |
Prepaid expenses and other current assets | 46,000 | 85,000 |
Total current assets | 10,855,000 | 10,008,000 |
Property and equipment, net | 3,217,000 | 3,386,000 |
Other assets (Note 3) | 189,000 | 205,000 |
Total assets | 14,261,000 | 13,599,000 |
Current liabilities: | ||
Accounts payable | 410,000 | 462,000 |
Accrued liabilities | 446,000 | 322,000 |
Total current liabilities | 856,000 | 784,000 |
Long-term debt (Note 4) | 163,000 | 0 |
Total liabilities | 1,019,000 | 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 | 11,071,000 | 10,959,000 |
Accumulated other comprehensive income | (66,000) | 38,000 |
Retained earnings | 2,231,000 | 1,712,000 |
Total shareholders’ equity - Taitron Components Inc. | 13,242,000 | 12,715,000 |
Noncontrolling interest in subsidiary | 0 | 100,000 |
Total equity | 13,242,000 | 12,815,000 |
Total liabilities and equity | 14,261,000 | 13,599,000 |
Common Class A [Member] | ||
Shareholders' equity: | ||
Common Stock, value, issued | 5,000 | 5,000 |
Common Class B [Member] | ||
Shareholders' equity: | ||
Common Stock, value, issued | $ 1,000 | $ 1,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts receivable, allowances (in Dollars) | $ 7,000 | $ 19,000 |
Inventories, reserves for obsolescence (in Dollars) | $ 4,759,000 | $ 5,893,000 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class A [Member] | ||
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common Stock, shares issued | 5,062,235 | 4,990,235 |
Common stock, shares outstanding | 5,062,235 | 4,990,235 |
Common Class B [Member] | ||
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 762,612 | 762,612 |
Common Stock, shares issued | 762,612 | 762,612 |
Common stock, shares outstanding | 762,612 | 762,612 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net product revenue | $ 6,696,000 | $ 6,783,000 |
Cost of products sold | 3,415,000 | 3,707,000 |
Gross profit | 3,281,000 | 3,076,000 |
Selling, general and administrative expenses | 2,227,000 | 2,378,000 |
Operating income | 1,054,000 | 698,000 |
Interest income, net | 37,000 | 28,000 |
Loss on investments | 0 | (193,000) |
Other income, net | 272,000 | 273,000 |
Income before income taxes | 1,363,000 | 806,000 |
Income tax provision | (4,000) | 0 |
Net income | 1,359,000 | 806,000 |
Other comprehensive income: | ||
Foreign currency translation adjustment | (104,000) | (90,000) |
Comprehensive income | 1,255,000 | 716,000 |
Comprehensive income(loss) attributable to noncontrolling interests | (100,000) | 4,000 |
Comprehensive income attributable to Taitron Components Inc. | 1,355,000 | 712,000 |
Net income attributable to noncontrolling interests | 0 | 33,000 |
Net income attributable to Taitron Components Inc. | $ 1,359,000 | $ 773,000 |
Weighted average shares outstanding: Basic (in Shares) | 5,797,889 | 5,724,222 |
Weighted average shares outstanding: Diluted (in Shares) | 5,853,889 | 5,840,222 |
Cash dividends declared per common share (in Dollars per share) | $ 0.145 | $ 0.125 |
Common Class A [Member] | ||
Other comprehensive income: | ||
Net income per share: Basic (in Dollars per share) | 0.23 | 0.14 |
Net income per share: Diluted (in Dollars per share) | $ 0.23 | $ 0.13 |
Weighted average shares outstanding: Basic (in Shares) | 5,035,277 | 4,961,610 |
Weighted average shares outstanding: Diluted (in Shares) | 5,091,277 | 5,077,610 |
Common Class B [Member] | ||
Other comprehensive income: | ||
Net income per share: Basic (in Dollars per share) | $ 0.23 | $ 0.14 |
Net income per share: Diluted (in Dollars per share) | $ 0.23 | $ 0.14 |
Weighted average shares outstanding: Basic (in Shares) | 762,612 | 762,612 |
Weighted average shares outstanding: Diluted (in Shares) | 762,612 | 762,612 |
Consolidated Statements of Shar
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] | Parent [Member] | Total |
Balance at Dec. 31, 2018 | $ 5,000 | $ 1,000 | $ 10,812,000 | $ 128,000 | $ 1,656,000 | $ 96,000 | $ 12,698,000 | $ 12,602,000 | ||
Balance (in Shares) at Dec. 31, 2018 | 4,867,235 | 762,612 | ||||||||
Consolidated net income (loss) | 773,000 | 4,000 | 777,000 | 773,000 | ||||||
Other comprehensive income (loss) | (90,000) | (90,000) | (90,000) | |||||||
Exercise stock options | 126,000 | 126,000 | $ 126,000 | |||||||
Exercise stock options (in Shares) | 123,000 | 123,000 | ||||||||
Amortization of stock based compensation | 21,000 | 21,000 | $ 21,000 | |||||||
Cash dividends | (717,000) | (717,000) | (717,000) | |||||||
Balance at Dec. 31, 2019 | $ 5,000 | $ 1,000 | 10,959,000 | 38,000 | 1,712,000 | 100,000 | 12,815,000 | 12,715,000 | ||
Balance (in Shares) at Dec. 31, 2019 | 4,990,235 | 4,990,235 | 762,612 | 762,612 | ||||||
Consolidated net income (loss) | 1,359,000 | $ (100,000) | 1,259,000 | 1,359,000 | ||||||
Other comprehensive income (loss) | (104,000) | (104,000) | (104,000) | |||||||
Exercise stock options | 85,000 | 85,000 | $ 85,000 | |||||||
Exercise stock options (in Shares) | 72,000 | 72,000 | ||||||||
Amortization of stock based compensation | 27,000 | 27,000 | $ 27,000 | |||||||
Cash dividends | (840,000) | (840,000) | (840,000) | |||||||
Balance at Dec. 31, 2020 | $ 5,000 | $ 1,000 | $ 11,071,000 | $ (66,000) | $ 2,231,000 | $ 13,242,000 | $ 13,242,000 | |||
Balance (in Shares) at Dec. 31, 2020 | 5,062,235 | 5,062,235 | 762,612 | 762,612 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities: | ||
Net income | $ 1,359,000 | $ 806,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 186,000 | 178,000 |
Provision for inventory reserves | 0 | 405,000 |
Reversal of inventory reserves | (1,134,000) | (1,701,000) |
Provision for sales returns and doubtful accounts | 5,000 | 5,000 |
Stock based compensation | 27,000 | 21,000 |
Loss on investments | 0 | 193,000 |
Gain on sale of assets | 0 | (160,000) |
Noncontrolling interest | (100,000) | 0 |
Changes in assets and liabilities: | ||
Accounts receivable | 378,000 | (126,000) |
Inventories | 1,204,000 | 2,305,000 |
Prepaid expenses and other current assets | 39,000 | (18,000) |
Accounts payable | (52,000) | (510,000) |
Accrued liabilities | 124,000 | 11,000 |
Other assets and liabilities | 16,000 | 4,000 |
Total adjustments | 693,000 | 607,000 |
Net cash provided by operating activities | 2,052,000 | 1,413,000 |
Investing activities: | ||
Acquisition of property and equipment | (17,000) | (17,000) |
Proceeds from sale of assets | 0 | 200,000 |
Payment for investment in convertible securities | 0 | (186,000) |
Net cash used for investing activities | (17,000) | (3,000) |
Financing activities: | ||
Borrowings on notes payable | 163,000 | 0 |
Dividend payments | (840,000) | (717,000) |
Proceeds from stock options exercised | 85,000 | 126,000 |
Net cash used for financing activities | (592,000) | (591,000) |
Impact of exchange rates on cash | (104,000) | 0 |
Net increase in cash and cash equivalents | 1,339,000 | 819,000 |
Cash and cash equivalents, beginning of period | 5,313,000 | 4,494,000 |
Cash and cash equivalents, end of period | 6,652,000 | 5,313,000 |
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 | 12 Months Ended |
Dec. 31, 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 (CEMs) and original equipment manufacturers (OEMs) 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 divisions in Taiwan and China which were established in 1996 and 2005, respectively. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America. Principles of Consolidation Our consolidated financial statements include the accounts of Taitron Components and its two divisions. Concentration of Risk A significant number of the products we distribute are manufactured in Taiwan, Hong Kong, China, South Korea and the Philippines. The purchase of goods manufactured in foreign countries is subject to a number of risks, including economic disruptions, transportation delays and interruptions, foreign exchange rate fluctuations, imposition of tariffs and import and export controls and changes in governmental policies, any of which could have a material adverse effect on our business and results of operations. The ability to remain competitive with respect to the pricing of imported components could be adversely affected by increases in tariffs or duties, changes in trade treaties, strikes in air or sea transportation, and possible future U.S. legislation with respect to pricing and import quotas on products from foreign countries. For example, it is possible that political or economic developments in China, or with respect to the relationship of the United States with China, could have an adverse effect on our business. Our ability to remain competitive could also be affected by other government actions related to, among other things, anti-dumping legislation and international currency fluctuations. While we do not believe that any of these factors adversely impact our business at present, we cannot provide assurance that these factors will not materially adversely affect us in the future. Any significant disruption in the delivery of merchandise from our suppliers, substantially all of whom are foreign, could also have a material adverse impact on our business and results of operations. Management estimates that over 90% of our products purchased were produced in Asia. Grand Shine Electronics and Zowie Technology (see also Note 4 – Other Assets) accounted for approximately 35% and 15% of our net purchases for each of the fiscal years 2020 and 2019, respectively. However, we do not regard any one supplier as essential to our operations, since equivalent replacements for most of our products are either available from one or more of our other suppliers or are available from various other sources at competitive prices. We believe that, even if we lose our direct relationship with a supplier, there exist alternative sources for a supplier’s products. We had customers accounting for more than 10% of our net sales. In 2020, we had two customers each for approximately 45% and 14%, and in 2019, we had two customers each for approximately 42% and 17%. We had customers accounting for more than 10% of our trade accounts receivable, net of allowances. As of December 31, 2020, we had two customers each of approximately 50% and 25% and as of December 31, 2019 we had two customers each of approximately 63% and 25%. Risks and Uncertainties In 2020, the spread of COVID-19 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, we are unable to determine if it will have a material impact to our operations and cash flows. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. Our cash equivalents are comprised primarily of money market investments. Our deposit accounts are not insured, however, we do not believe there is a significant credit risk with respect to the non-performance of these institutions based on their respective creditworthiness and liquidity. Revenue Recognition We recognize revenue from contracts with customers in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). 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. Reserves for sales allowances and customer returns are established based upon historical experience and management’s estimates of future returns. Sales returns for each of the years ended December 31, 2020 and 2019 amounted to $5,000. Business Segments We operate in one industry, the business of supplying ODM products and electronic components. Management designates the internal reporting used by the chief executive officer for making decisions and assessing performance as the source of our reportable segments. See Note 13 to the consolidated financial statements Geographic Information, for additional information. 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. Twelve Months Ended December 31, 2020 2019 Primary geographical markets: United States $ 5,955,000 $ 5,809,000 Asia 722,000 950,000 Other 19,000 24,000 6,696,000 6,783,000 Major product lines: ODM projects $ 3,936,000 $ 4,012,000 ODM components 2,552,000 2,586,000 Distribution components 208,000 185,000 6,696,000 6,783,000 Timing of revenue recognition: Products transferred at a point in time $ 6,696,000 $ 6,783,000 Allowances for Sales Returns and Doubtful Accounts Sales Returns - We may, on a case-by-case basis, accept returns of products from our customers, without restocking charges, when they can demonstrate an acceptable cause for the return. Requests by a distributor to return products purchased for its own inventory generally are not included under this policy. We may, on a case-by-case basis, accept returns of products upon payment of a restocking fee, which is generally 10% to 30% of the net sales price. We will not accept returns of any products that were special-ordered by a customer or that otherwise are not generally included in our inventory. Doubtful Accounts - Accounts receivable are recorded at net realizable value or the amount we expect to collect on gross customer trade receivables. We evaluate the collectability of our accounts receivable based on a combination of factors. If we become aware of a customer’s inability to meet its financial obligations after a sale has occurred, we record an allowance to reduce the net receivable to the amount we reasonably believe we will be able to collect from the customer. For all other customers, we recognize allowances for doubtful accounts based on the length of time the receivables are past due, the current business environment and historical experience. If the financial condition of our customers were to deteriorate or if economic conditions worsen, additional allowances may be required in the future. All of our accounts receivables are trade-related receivables. The allowances for sales returns and doubtful accounts at December 31, 2020 and 2019 amounted to $7,000 and $19,000, respectively. Inventory Inventory, consisting principally of products held for resale, is stated at the lower of cost, using the first-in, first-out method, and net realizable value. The amount presented in the accompanying consolidated balance sheet is net of valuation allowances of 4,759,000 and $5,893,000 at December 31, 2020 and 2019, respectively. Based upon regular evaluations of inventory to identify costs in excess of the lower of cost and net realizable value, slow-moving inventory and potential obsolescence, we increased our reserves by $0 and $405,000 during the years ended December 31, 2020 and 2019, respectively, while also applying $1,134,000 and $1,701,000 of our existing reserves to the underlying inventory values during the years ended December 31, 2020 and 2019, respectively (see Note 2 – Inventory). Property and Equipment Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment are computed principally using accelerated and straight-line methods using lives from 5 to 7 years for furniture, equipment, computer software and hardware and 31.5 years for building and building improvements. Property and equipment amortized using an accelerated method does not result in a material difference over the straight-line method. Renewals and betterments, which extend the life of an existing asset, are capitalized while normal repairs and maintenance costs are expensed as incurred. Investments Investments are accounted for using the equity method if the investment provides us the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if we have an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee's Board of Directors, are considered in determining whether the equity method is appropriate. All other equity investments, which consist of investments for which we do not possess the ability to exercise significant influence, are accounted for under the cost method. Under the cost method of accounting, investments are carried at cost and are adjusted only for other-than-temporary declines in realizable value and additional investments. Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of In accordance with ASC 360, we evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, we compare the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. We currently believe there is no impairment of our long-lived assets. There can be no assurance, however, that market conditions will not change or demand for our products under development will continue. Either of these could result in future impairment of long-lived assets. Marketing Marketing costs consist primarily of payroll and related expenses for personnel engaged in marketing, business development, and selling activities. Advertising, including other promotional costs, are expensed as incurred, and were $3,000 and $4,000 for the years ended December 31, 2020 and 2019, respectively. Shipping Activities Outbound shipping charges to customers are included in “Net sales”. Outbound shipping-related costs are included in “Cost of goods sold”. Stock-Based Compensation We account for all share-based compensation in accordance ASC 718-20. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite vesting period. Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax positions, as defined, seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 as of January 1, 2007, and have analysed filing positions in each of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the U.S. federal and California as our "major" tax jurisdictions. With limited exceptions, we remain subject to Internal Revenue Service (“IRS”) examination of our income tax returns filed within the last three (3) years, and to California Franchise Tax Board examination of our income tax returns filed within the last four (4) years. However, we have certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. Fair Value Measurements When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. We use the following three levels of inputs in determining the fair value of our assets and liabilities, focusing on the most observable inputs when available: ● Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2 - Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. ● Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement. Net Income Per Share Basic income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income per share includes potentially dilutive securities such as outstanding options and warrants, using the treasury stock method in the determination of dilutive shares outstanding during each reporting period. Foreign Currency Translation The financial statements of our divisions in Taiwan and China are translated from the Taiwanese Dollar and the Chinese Yuan, respectively, into U.S. dollars for financial reporting purposes. Balance sheet accounts are translated at year-end or historical rates while income and expenses are translated at weighted-average exchange rates for the year. Translation gains or losses related to net assets are shown as a separate component of shareholders’ equity as accumulated other comprehensive income. Gains and losses resulting from realized foreign currency transactions (transactions denominated in a currency other than the entities’ functional currency) are included in operations. The transactional gains and losses are not significant to the consolidated financial statements. Use of Estimates Our management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These estimates have a significant impact on our valuation and reserve accounts relating to income taxes, the allowance for sales returns and allowances, doubtful accounts and inventory reserves. Actual results could differ from these estimates. New Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments Credit Losses, Topic 815, Derivatives and Hedging Financial Instruments In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, “ Simplifying the Accounting for Income Taxes Income Taxes In October 2020, the FASB issued ASU No. 2020-10 Codification Improvements Management does not believe any other recently issued, but not yet effective accounting pronouncements would have a material effect on our present or future consolidated financial statements. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | 2 - INVENTORY Inventory, consisting principally of products held for resale, is stated at the lower of cost, using the first-in, first-out method, and net realizable value. The amount presented in the accompanying consolidated balance sheets is net of valuation allowances of $4,759,000 and $5,893,000 at December 31, 2020 and 2019, respectively. Based upon regular evaluations of inventory to identify costs in excess of the lower of cost and net realizable value and slow-moving inventory, we increased our reserves by $0 and $405,000 for the years ended December 31, 2020 and 2019, respectively, while also applying $1,134,000 and $1,701,000 of our existing reserves to the underlying inventory values during the years ended December 31, 2020 and 2019, respectively. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 3 - PROPERTY AND EQUIPMENT Property and equipment, at cost, is summarized as follows: December 31, 2020 2019 Land $ 1,284,000 $ 1,284,000 Buildings and improvements 4,867,000 4,867,000 Furniture and equipment 797,000 794,000 Computer software and hardware 577,000 563,000 Total Property and Equipment 7,525,000 7,508,000 Less: Accumulated depreciation and amortization (4,308,000 ) (4,122,000 ) Property and Equipment, net $ 3,217,000 $ 3,386,000 Depreciation expense for the years ended December 31, 2020 and 2019 was $186,000 and $178,000, respectively. During 2019, we sold our 15,000 square foot of office and distribution space in Mexico for gross proceeds of $200,000. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Other Assets Disclosure [Text Block] | 4 - OTHER ASSETS The following table presents a summary roll-forward of other assets: Investment in securities - Zowie Technology Other Other Assets Total Balance at December 31, 2018 $ 193,000 $ 19,000 $ 212,000 Investment 186,000 - 186,000 Net investment losses during the year (193,000 ) - (193,000 ) Balance at December 31, 2019 186,000 19,000 205,000 Other changes - (16,000 ) (16,000 ) Balance at December 31, 2020 $ 186,000 $ 3,000 $ 189,000 Our $186,000 investment in securities as of December 31, 2020 relates to 317,428 shares of preferred convertible debt of Zowie Technology Corporation (Taipei Hsien, Taiwan), a supplier of electronic component products (see Part I: Item 1 – Business – Suppliers) with our option after 3 (three) years to convert the investment 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 2019, due to our estimated valuation assessment, we recognized an impairment loss of $193,000. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt [Text Block] | 5 - 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 conditional upon loan proceeds used for eligible purposes, including payroll, benefits, rent and utilities, and we maintain our 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 believe our use of the proceeds were consistent with purposes of 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 6 - RELATED PARTY TRANSACTIONS We purchase electronic component products from Princeton Technology Corporation (“PTC”), a company controlled by Mr. Richard Chiang, one of the directors on our board. During the years ended December 31, 2020 and 2019, we purchased products in the amount of $61,000 and $100,000, respectively, from PTC. All of these purchases were for products we carry in inventory and we consider these purchases to be in the normal course of business and negotiated on an arm’s length basis. We have also entered into a distributor agreement with PTC, and accordingly, we expect to continue purchasing from PTC in the future. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement [Text Block] | 7 - SHARE BASED COMPENSATION Our 2018 Stock Incentive Plan (the “Plan”) authorizes the issuance of up to 1,000,000 shares pursuant to options or awards granted under the Plan. Under the Plan, incentive stock and nonstatutory options were granted at prices equal to at least the fair market value of our Class A common stock at the date of grant. Outstanding 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 the Plan. The fair values of options was estimated using the Black-Scholes option-pricing model at their respective grant date using the following assumptions: Year Ended December 31, 2020 2019 Weighted-average grant date fair value per share $0.17 - $0.19 $0.40 - $0.48 Risk-free interest rate 0.78% 1.47% Dividend yield 5.8% 4.7% Expected term (in years) 10 10 Volatility 25% 31% Stock option activity during the periods indicated is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Years Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2018 453,000 $ 1.35 5.0 $ 182,400 Grants 52,500 2.78 8.0 $ - Exercised (123,000 ) 1.03 - - Forfeited (1,000 ) 0.84 - - Outstanding at December 31, 2019 381,500 1.65 5.6 $ 429,000 Grants 41,000 $ 2.29 7.5 - Exercised (72,000 ) 1.18 - - Forfeited (55,000 ) 1.36 - - Outstanding at December 31, 2020 295,500 $ 1.92 5.4 $ 359,000 Exercisable at December 31, 2020 156,000 $ 1.72 4.9 $ 186,000 At December 31, 2020, the range of individual weighted average exercise prices was $1.02 to $2.55 and the unamortized compensation expense was approximately $34,000. |
SHAREHOLDER'S EQUITY
SHAREHOLDER'S EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | 8 - SHAREHOLDER S EQUITY Preferred Stock - There are 5,000,000 shares of authorized preferred stock, par value $0.001 per share, with no shares of preferred stock issued or outstanding. The terms of the shares are subject to the discretion of the Board of Directors. Class A Common Stock - There are 20,000,000 shares of authorized Class A common stock, par value $0.001 per share, with 5,062,235 and 4,990,235 issued and outstanding as of December 31, 2020 and 2019, respectively. Each holder of Class A common stock is entitled to one (1) vote for each share held. During 2020 and 2019, we issued 72,000 and 123,000 shares of our Class A common stock, respectively. Class B Common Stock - There are 762,612 shares of authorized Class B common stock, par value $0.001 per share, with 762,612 shares issued and outstanding since 1995. Each holder of Class B common stock is entitled to ten (10) votes for each share held. The shares of Class B common stock are convertible at any time at the election of the shareholder into one (1) share of Class A common stock, subject to certain adjustments. Our Chief Executive Officer is the sole beneficial owner of the outstanding shares of Class B common stock. Dividends – During the nine months ended September 30, 2019, we declared and paid quarterly dividends of $.03 per share. For the quarter ended December 31, 2019 and for the nine months ended September 30, 2020, we paid quarterly dividends of $0.035 per share. For the quarter ended December 31, 2020, we declared and paid quarterly dividends of $.04 per share. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 9 INCOME TAXES Income tax provision is summarized as follows: Year Ended December 31, 2020 2019 Current: Federal $ - $ - State 4,000 - 4,000 - Deferred: Federal 310,000 97,000 State 160,000 7,000 Decrease in valuation allowance (470,000 ) (104,000 ) - - Income tax provision $ 4,000 $ - The actual income tax provision differs from the “expected” tax computed by applying the Federal corporate tax rate of 21% to the income before income taxes as follows: Year Ended December 31, 2020 2019 “Expected” income tax benefit $ 286,000 $ 204,000 State tax expense, net of Federal benefit 3,000 - Foreign loss - (30,000 ) Decrease in valuation allowance (470,000 ) (104,000 ) Other 185,000 (70,000 ) Income tax provision $ 4,000 $ - The tax effects of temporary differences which give rise to significant portions of the deferred taxes are summarized as follows: December 31, 2020 2019 Deferred tax assets: Inventory reserves $ 1,420,000 $ 1,758,000 Allowances for bad debts and returns 2,000 5,000 Accrued expenses 21,000 21,000 Asset valuation reserve 539,000 539,000 Net operating loss carry forwards 213,000 283,000 Other 72,000 160,000 Total deferred tax assets 2,267,000 2,766,000 Valuation allowance (2,121,000 ) (2,587,000 ) 146,000 179,000 Deferred tax liabilities: Deferred state taxes (146,000 ) (179,000 ) Total deferred tax liabilities (146,000 ) (179,000 ) Net deferred tax assets $ - $ - As of December 31, 2020, we had approximately $660,000 and $842,000 in net operating loss carryforwards for federal and state income tax purposes, respectively. In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We consider the scheduled reversal of deferred tax assets, the level of historical taxable income and tax planning strategies in making the assessment of the realizability of deferred tax assets. We have identified the U.S. federal and California as our "major" tax jurisdiction. With limited exceptions, we remain subject to IRS examination of our income tax returns filed within the last three (3) years, and to California Franchise Tax Board examination of our income tax returns filed within the last four (4) years. As a result of the implementation of ASC 740, we recognized no material adjustment to unrecognized tax benefits. At the adoption date of January 1, 2007, we had $795,000 of unrecognized tax benefits, all of which would affect our effective tax rate if recognized. At December 31, 2020 and 2019, we have $2,121,000 and $2,587,000 of unrecognized tax benefits, respectively. We will continue to classify income tax penalties and interest, if any, as part of interest and other expenses in our statements of operations. We have incurred no interest or penalties as of December 31, 2020 and 2019. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 10 - NET INCOME PER SHARE Year ended December 31, 2020 2019 Numerator for basic and diluted net income per Class A common stock and Class B common stock share: Net income attributable to Taitron Components Inc. $ 1,359,000 $ 773,000 Less cash dividends: Class A common stock $ 730,000 $ 620,000 Class B common stock $ 111,000 $ 95,000 Total undistributed earnings $ 518,000 $ 58,000 Class A common stock undistributed earnings - basic and diluted $ 450,000 $ 50,000 Class B common stock undistributed earnings - basic and diluted $ 68,000 $ 8,000 Total undistributed earnings - basic and diluted $ 518,000 $ 58,000 Numerator for basic and diluted net income per share: Class A common stock $ 1,180,000 $ 670,000 Class B common stock $ 179,000 $ 103,000 $ 1,359,000 $ 773,000 Year ended December 31, 2020 2019 Denominator for basic and diluted net income per Class A common stock and Class B common stock share: Weighted average number of common shares used in basic income per share (Class A common stock ) 5,035,277 4,961,610 Weighted average number of common shares used in basic income per share (Class B common stock ) 762,612 762,612 5,797,889 5,724,222 Weighted average number of common shares used in diluted income per share (Class A common stock ) 5,091,277 5,077,610 Weighted average number of common shares used in diluted income per share (Class B common stock ) 762,612 762,612 5,853,889 5,840,222 Basic net income per share: Class A common stock $ 0.23 $ 0.14 Class B common stock $ 0.23 $ 0.14 Diluted net income per share: Class A common stock $ 0.23 $ 0.13 Class B common stock $ 0.23 $ 0.14 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | 11 - EMPLOYEE BENEFIT PLANS We have a defined contribution profit sharing plan pursuant to Section 401(k) of the Internal Revenue Code (“the Plan”) covering only our U.S. based employees. Participants once eligible, as defined by the Plan, may contribute up to the maximum allowed under the Internal Revenue Code. The Plan also provides for safe harbor matching contributions, vesting immediately, at our discretion. For each year ended December 31, 2020 and 2019, employer matching contributions were approximately $34,000 and $28,000, respectively. Participants in the Plan, through self-directed brokerage accounts, held 487,159 shares in our Class A common stock as of December 31, 2020 and 2019. The Plan does not offer new issues of our common stock as an investment option. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 12 - COMMITMENTS AND CONTINGENCIES Legal and Regulatory Proceedings We are engaged in various legal and regulatory proceedings incidental to our normal business activities, none of which, individually or in the aggregate, are deemed to be a material risk to our financial condition. Inventory Purchasing Outstanding commitments to purchase inventory from suppliers aggregated $1,972,000 and $780,000 as of December 31, 2020 and December 31, 2019, respectively. |
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 13 - GEOGRAPHIC INFORMATION The following table presents summary geographic information about revenues and long-lived assets (land and property, net of accumulated depreciation) attributed to countries based upon location of our customers or assets: Year ended December 31, December 31, 2020 2019 2020 2019 Long-lived Long-lived Revenues Revenues Assets Assets United States $ 5,955,000 $ 5,809,000 $ 2,306,000 $ 2,411,000 South Korea 460,000 650,000 - - China 135,000 228,000 747,000 789,000 Taiwan 11,000 45,000 164,000 186,000 Other foreign countries 135,000 51,000 - - Total $ 6,696,000 $ 6,783,000 $ 3,217,000 $ 3,386,000 |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation Our consolidated financial statements include the accounts of Taitron Components and its two divisions. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. Our cash equivalents are comprised primarily of money market investments. Our deposit accounts are not insured, however, we do not believe there is a significant credit risk with respect to the non-performance of these institutions based on their respective creditworthiness and liquidity. |
Revenue from Contract with Customer [Policy Text Block] | Revenue Recognition We recognize revenue from contracts with customers in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). 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. Reserves for sales allowances and customer returns are established based upon historical experience and management’s estimates of future returns. Sales returns for each of the years ended December 31, 2020 and 2019 amounted to $5,000. |
Segment Reporting, Policy [Policy Text Block] | Business Segments We operate in one industry, the business of supplying ODM products and electronic components. Management designates the internal reporting used by the chief executive officer for making decisions and assessing performance as the source of our reportable segments. See Note 13 to the consolidated financial statements Geographic Information, for additional information. |
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. Twelve Months Ended December 31, 2020 2019 Primary geographical markets: United States $ 5,955,000 $ 5,809,000 Asia 722,000 950,000 Other 19,000 24,000 6,696,000 6,783,000 Major product lines: ODM projects $ 3,936,000 $ 4,012,000 ODM components 2,552,000 2,586,000 Distribution components 208,000 185,000 6,696,000 6,783,000 Timing of revenue recognition: Products transferred at a point in time $ 6,696,000 $ 6,783,000 |
Receivable [Policy Text Block] | Allowances for Sales Returns and Doubtful Accounts Sales Returns - We may, on a case-by-case basis, accept returns of products from our customers, without restocking charges, when they can demonstrate an acceptable cause for the return. Requests by a distributor to return products purchased for its own inventory generally are not included under this policy. We may, on a case-by-case basis, accept returns of products upon payment of a restocking fee, which is generally 10% to 30% of the net sales price. We will not accept returns of any products that were special-ordered by a customer or that otherwise are not generally included in our inventory. Doubtful Accounts - Accounts receivable are recorded at net realizable value or the amount we expect to collect on gross customer trade receivables. We evaluate the collectability of our accounts receivable based on a combination of factors. If we become aware of a customer’s inability to meet its financial obligations after a sale has occurred, we record an allowance to reduce the net receivable to the amount we reasonably believe we will be able to collect from the customer. For all other customers, we recognize allowances for doubtful accounts based on the length of time the receivables are past due, the current business environment and historical experience. If the financial condition of our customers were to deteriorate or if economic conditions worsen, additional allowances may be required in the future. All of our accounts receivables are trade-related receivables. The allowances for sales returns and doubtful accounts at December 31, 2020 and 2019 amounted to $7,000 and $19,000, respectively |
Inventory, Policy [Policy Text Block] | Inventory Inventory, consisting principally of products held for resale, is stated at the lower of cost, using the first-in, first-out method, and net realizable value. The amount presented in the accompanying consolidated balance sheet is net of valuation allowances of 4,759,000 and $5,893,000 at December 31, 2020 and 2019, respectively. Based upon regular evaluations of inventory to identify costs in excess of the lower of cost and net realizable value, slow-moving inventory and potential obsolescence, we increased our reserves by $0 and $405,000 during the years ended December 31, 2020 and 2019, respectively, while also applying $1,134,000 and $1,701,000 of our existing reserves to the underlying inventory values during the years ended December 31, 2020 and 2019, respectively (see Note 2 – Inventory). |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment are computed principally using accelerated and straight-line methods using lives from 5 to 7 years for furniture, equipment, computer software and hardware and 31.5 years for building and building improvements. Property and equipment amortized using an accelerated method does not result in a material difference over the straight-line method. Renewals and betterments, which extend the life of an existing asset, are capitalized while normal repairs and maintenance costs are expensed as incurred. |
Investment, Policy [Policy Text Block] | Investments Investments are accounted for using the equity method if the investment provides us the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if we have an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee's Board of Directors, are considered in determining whether the equity method is appropriate. All other equity investments, which consist of investments for which we do not possess the ability to exercise significant influence, are accounted for under the cost method. Under the cost method of accounting, investments are carried at cost and are adjusted only for other-than-temporary declines in realizable value and additional investments. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of In accordance with ASC 360, we evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, we compare the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. We currently believe there is no impairment of our long-lived assets. There can be no assurance, however, that market conditions will not change or demand for our products under development will continue. Either of these could result in future impairment of long-lived assets |
Advertising Cost [Policy Text Block] | Marketing Marketing costs consist primarily of payroll and related expenses for personnel engaged in marketing, business development, and selling activities. Advertising, including other promotional costs, are expensed as incurred, and were $3,000 and $4,000 for the years ended December 31, 2020 and 2019, respectively. |
Cost of Goods and Service [Policy Text Block] | Shipping Activities Outbound shipping charges to customers are included in “Net sales”. Outbound shipping-related costs are included in “Cost of goods sold”. |
Share-based Payment Arrangement [Policy Text Block] | Stock-Based Compensation We account for all share-based compensation in accordance ASC 718-20. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite vesting period. |
Income Tax, Policy [Policy Text Block] | Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax positions, as defined, seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 as of January 1, 2007, and have analysed filing positions in each of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the U.S. federal and California as our "major" tax jurisdictions. With limited exceptions, we remain subject to Internal Revenue Service (“IRS”) examination of our income tax returns filed within the last three (3) years, and to California Franchise Tax Board examination of our income tax returns filed within the last four (4) years. However, we have certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. We use the following three levels of inputs in determining the fair value of our assets and liabilities, focusing on the most observable inputs when available: ● Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2 - Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. ● Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement. |
Earnings Per Share, Policy [Policy Text Block] | Net Income Per Share Basic income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income per share includes potentially dilutive securities such as outstanding options and warrants, using the treasury stock method in the determination of dilutive shares outstanding during each reporting period. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation The financial statements of our divisions in Taiwan and China are translated from the Taiwanese Dollar and the Chinese Yuan, respectively, into U.S. dollars for financial reporting purposes. Balance sheet accounts are translated at year-end or historical rates while income and expenses are translated at weighted-average exchange rates for the year. Translation gains or losses related to net assets are shown as a separate component of shareholders’ equity as accumulated other comprehensive income. Gains and losses resulting from realized foreign currency transactions (transactions denominated in a currency other than the entities’ functional currency) are included in operations. The transactional gains and losses are not significant to the consolidated financial statements. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates Our management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These estimates have a significant impact on our valuation and reserve accounts relating to income taxes, the allowance for sales returns and allowances, doubtful accounts and inventory reserves. Actual results could differ from these estimates. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of Risk A significant number of the products we distribute are manufactured in Taiwan, Hong Kong, China, South Korea and the Philippines. The purchase of goods manufactured in foreign countries is subject to a number of risks, including economic disruptions, transportation delays and interruptions, foreign exchange rate fluctuations, imposition of tariffs and import and export controls and changes in governmental policies, any of which could have a material adverse effect on our business and results of operations. The ability to remain competitive with respect to the pricing of imported components could be adversely affected by increases in tariffs or duties, changes in trade treaties, strikes in air or sea transportation, and possible future U.S. legislation with respect to pricing and import quotas on products from foreign countries. For example, it is possible that political or economic developments in China, or with respect to the relationship of the United States with China, could have an adverse effect on our business. Our ability to remain competitive could also be affected by other government actions related to, among other things, anti-dumping legislation and international currency fluctuations. While we do not believe that any of these factors adversely impact our business at present, we cannot provide assurance that these factors will not materially adversely affect us in the future. Any significant disruption in the delivery of merchandise from our suppliers, substantially all of whom are foreign, could also have a material adverse impact on our business and results of operations. Management estimates that over 90% of our products purchased were produced in Asia. Grand Shine Electronics and Zowie Technology (see also Note 4 – Other Assets) accounted for approximately 35% and 15% of our net purchases for each of the fiscal years 2020 and 2019, respectively. However, we do not regard any one supplier as essential to our operations, since equivalent replacements for most of our products are either available from one or more of our other suppliers or are available from various other sources at competitive prices. We believe that, even if we lose our direct relationship with a supplier, there exist alternative sources for a supplier’s products. We had customers accounting for more than 10% of our net sales. In 2020, we had two customers each for approximately 45% and 14%, and in 2019, we had two customers each for approximately 42% and 17%. We had customers accounting for more than 10% of our trade accounts receivable, net of allowances. As of December 31, 2020, we had two customers each of approximately 50% and 25% and as of December 31, 2019 we had two customers each of approximately 63% and 25%. |
Risks and Uncertainties, Policy [Policy Text Block] | Risks and Uncertainties In 2020, the spread of COVID-19 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, we are unable to determine if it will have a material impact to our operations and cash flows. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments Credit Losses, Topic 815, Derivatives and Hedging Financial Instruments In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, “ Simplifying the Accounting for Income Taxes Income Taxes In October 2020, the FASB issued ASU No. 2020-10 Codification Improvements Management does not believe any other recently issued, but not yet effective accounting pronouncements would have a material effect on our present or future consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 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. Twelve Months Ended December 31, 2020 2019 Primary geographical markets: United States $ 5,955,000 $ 5,809,000 Asia 722,000 950,000 Other 19,000 24,000 6,696,000 6,783,000 Major product lines: ODM projects $ 3,936,000 $ 4,012,000 ODM components 2,552,000 2,586,000 Distribution components 208,000 185,000 6,696,000 6,783,000 Timing of revenue recognition: Products transferred at a point in time $ 6,696,000 $ 6,783,000 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment, at cost, is summarized as follows: December 31, 2020 2019 Land $ 1,284,000 $ 1,284,000 Buildings and improvements 4,867,000 4,867,000 Furniture and equipment 797,000 794,000 Computer software and hardware 577,000 563,000 Total Property and Equipment 7,525,000 7,508,000 Less: Accumulated depreciation and amortization (4,308,000 ) (4,122,000 ) Property and Equipment, net $ 3,217,000 $ 3,386,000 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Other Assets [Table Text Block] | The following table presents a summary roll-forward of other assets: Investment in securities - Zowie Technology Other Other Assets Total Balance at December 31, 2018 $ 193,000 $ 19,000 $ 212,000 Investment 186,000 - 186,000 Net investment losses during the year (193,000 ) - (193,000 ) Balance at December 31, 2019 186,000 19,000 205,000 Other changes - (16,000 ) (16,000 ) Balance at December 31, 2020 $ 186,000 $ 3,000 $ 189,000 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Our 2018 Stock Incentive Plan (the “Plan”) authorizes the issuance of up to 1,000,000 shares pursuant to options or awards granted under the Plan. Under the Plan, incentive stock and nonstatutory options were granted at prices equal to at least the fair market value of our Class A common stock at the date of grant. Outstanding 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 the Plan. The fair values of options was estimated using the Black-Scholes option-pricing model at their respective grant date using the following assumptions: Year Ended December 31, 2020 2019 Weighted-average grant date fair value per share $0.17 - $0.19 $0.40 - $0.48 Risk-free interest rate 0.78% 1.47% Dividend yield 5.8% 4.7% Expected term (in years) 10 10 Volatility 25% 31% |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | Stock option activity during the periods indicated is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Years Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2018 453,000 $ 1.35 5.0 $ 182,400 Grants 52,500 2.78 8.0 $ - Exercised (123,000 ) 1.03 - - Forfeited (1,000 ) 0.84 - - Outstanding at December 31, 2019 381,500 1.65 5.6 $ 429,000 Grants 41,000 $ 2.29 7.5 - Exercised (72,000 ) 1.18 - - Forfeited (55,000 ) 1.36 - - Outstanding at December 31, 2020 295,500 $ 1.92 5.4 $ 359,000 Exercisable at December 31, 2020 156,000 $ 1.72 4.9 $ 186,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax provision is summarized as follows: Year Ended December 31, 2020 2019 Current: Federal $ - $ - State 4,000 - 4,000 - Deferred: Federal 310,000 97,000 State 160,000 7,000 Decrease in valuation allowance (470,000 ) (104,000 ) - - Income tax provision $ 4,000 $ - |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The actual income tax provision differs from the “expected” tax computed by applying the Federal corporate tax rate of 21% to the income before income taxes as follows: Year Ended December 31, 2020 2019 “Expected” income tax benefit $ 286,000 $ 204,000 State tax expense, net of Federal benefit 3,000 - Foreign loss - (30,000 ) Decrease in valuation allowance (470,000 ) (104,000 ) Other 185,000 (70,000 ) Income tax provision $ 4,000 $ - |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The tax effects of temporary differences which give rise to significant portions of the deferred taxes are summarized as follows: December 31, 2020 2019 Deferred tax assets: Inventory reserves $ 1,420,000 $ 1,758,000 Allowances for bad debts and returns 2,000 5,000 Accrued expenses 21,000 21,000 Asset valuation reserve 539,000 539,000 Net operating loss carry forwards 213,000 283,000 Other 72,000 160,000 Total deferred tax assets 2,267,000 2,766,000 Valuation allowance (2,121,000 ) (2,587,000 ) 146,000 179,000 Deferred tax liabilities: Deferred state taxes (146,000 ) (179,000 ) Total deferred tax liabilities (146,000 ) (179,000 ) Net deferred tax assets $ - $ - |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Year ended December 31, 2020 2019 Numerator for basic and diluted net income per Class A common stock and Class B common stock share: Net income attributable to Taitron Components Inc. $ 1,359,000 $ 773,000 Less cash dividends: Class A common stock $ 730,000 $ 620,000 Class B common stock $ 111,000 $ 95,000 Total undistributed earnings $ 518,000 $ 58,000 Class A common stock undistributed earnings - basic and diluted $ 450,000 $ 50,000 Class B common stock undistributed earnings - basic and diluted $ 68,000 $ 8,000 Total undistributed earnings - basic and diluted $ 518,000 $ 58,000 Numerator for basic and diluted net income per share: Class A common stock $ 1,180,000 $ 670,000 Class B common stock $ 179,000 $ 103,000 $ 1,359,000 $ 773,000 Year ended December 31, 2020 2019 Denominator for basic and diluted net income per Class A common stock and Class B common stock share: Weighted average number of common shares used in basic income per share (Class A common stock ) 5,035,277 4,961,610 Weighted average number of common shares used in basic income per share (Class B common stock ) 762,612 762,612 5,797,889 5,724,222 Weighted average number of common shares used in diluted income per share (Class A common stock ) 5,091,277 5,077,610 Weighted average number of common shares used in diluted income per share (Class B common stock ) 762,612 762,612 5,853,889 5,840,222 Basic net income per share: Class A common stock $ 0.23 $ 0.14 Class B common stock $ 0.23 $ 0.14 Diluted net income per share: Class A common stock $ 0.23 $ 0.13 Class B common stock $ 0.23 $ 0.14 |
GEOGRAPHIC INFORMATION (Tables)
GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | The following table presents summary geographic information about revenues and long-lived assets (land and property, net of accumulated depreciation) attributed to countries based upon location of our customers or assets: Year ended December 31, December 31, 2020 2019 2020 2019 Long-lived Long-lived Revenues Revenues Assets Assets United States $ 5,955,000 $ 5,809,000 $ 2,306,000 $ 2,411,000 South Korea 460,000 650,000 - - China 135,000 228,000 747,000 789,000 Taiwan 11,000 45,000 164,000 186,000 Other foreign countries 135,000 51,000 - - Total $ 6,696,000 $ 6,783,000 $ 3,217,000 $ 3,386,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Revenue Recognition, Sales Returns, Reserve for Sales Returns | $ 5,000 | |
Allowance for sales returns, restocking fee, description | 10% to 30% of the net sales price | |
Accounts Receivable, Allowance for Credit Loss | $ 7,000 | $ 19,000 |
Inventory Valuation Reserves | 4,759,000 | 5,893,000 |
Provision for Other Losses | 0 | 405,000 |
Reversal of Inventory Reserves | $ 1,134,000 | 1,701,000 |
Property, Plant and Equipment, Useful Life | 31 years 6 months | |
Advertising Expense | $ 3,000 | $ 4,000 |
Geographic Concentration Risk [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 90.00% | |
Supplier2 [Member] | Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 35.00% | 15.00% |
Customer1 [Member] | Credit Concentration Risk [Member] | Sales [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 45.00% | 42.00% |
Customer1 [Member] | Credit Concentration Risk [Member] | Accounts Receivable [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 63.00% | 25.00% |
Customer2 [Member] | Credit Concentration Risk [Member] | Sales [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 14.00% | |
Customer2 [Member] | Credit Concentration Risk [Member] | Accounts Receivable [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 25.00% | |
Customer2 [Member] | Customer Concentration Risk [Member] | Sales [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 17.00% | |
Furniture Machinery and Equipment [Member] | Minimum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Furniture Machinery and Equipment [Member] | Maximum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Disaggregation of Revenue - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 6,696,000 | $ 6,783,000 |
ODM Projects [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,936,000 | 4,012,000 |
ODM Components [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,552,000 | 2,586,000 |
Distribution Components [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 208,000 | 185,000 |
UNITED STATES | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,955,000 | 5,809,000 |
Asia [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 722,000 | 950,000 |
Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 19,000 | 24,000 |
Products Transferred at a Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 6,696,000 | $ 6,783,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | ||
Inventory Valuation Reserves | $ 4,759,000 | $ 5,893,000 |
Provision for Other Losses | 0 | 405,000 |
Reversal of Inventory Reserves | $ 1,134,000 | $ 1,701,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)ft² | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 186,000 | $ 178,000 |
Area of Real Estate Property (in Square Feet) | ft² | 15,000 | |
Proceeds from Sale of Property, Plant, and Equipment | $ 200,000 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details) - Property, Plant and Equipment - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 7,525,000 | $ 7,508,000 |
Less: Accumulated depreciation and amortization | (4,308,000) | (4,122,000) |
Property and Equipment, net | 3,217,000 | 3,386,000 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 1,284,000 | 1,284,000 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 4,867,000 | 4,867,000 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 797,000 | 794,000 |
Computer Software and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 577,000 | $ 563,000 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - Zowie Technology [Member] | 12 Months Ended |
Dec. 31, 2020USD ($)shares | |
OTHER ASSETS (Details) [Line Items] | |
Equity Method Investments | $ 186,000 |
Investment Owned, Balance, Shares (in Shares) | 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 ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | |||
Investments Balance | $ 189,000 | $ 205,000 | $ 212,000 |
Other changes | (16,000) | ||
Investment | 0 | 186,000 | |
Net investment losses during the year | 0 | (193,000) | |
Zowie Technology [Member] | |||
OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | |||
Investments Balance | 186,000 | 186,000 | 193,000 |
Other changes | 0 | ||
Investment | 186,000 | ||
Net investment losses during the year | (193,000) | ||
Other Investments [Member] | |||
OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | |||
Investments Balance | 3,000 | 19,000 | $ 19,000 |
Other changes | $ (16,000) | ||
Investment | 0 | ||
Net investment losses during the year | $ 0 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | Apr. 27, 2020 | Dec. 31, 2020 | Dec. 31, 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 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Immediate Family Member of Management or Principal Owner [Member] | ||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||
Related Party Transaction, Amounts of Transaction | $ 61,000 | $ 100,000 |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details) | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
SHARE BASED COMPENSATION (Details) [Line Items] | |
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount (in Dollars) | $ | $ 34,000 |
2018 Stock Incentive Plan [Member] | |
SHARE BASED COMPENSATION (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | shares | 1,000,000 |
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 the Plan. |
Minimum [Member] | |
SHARE BASED COMPENSATION (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 1.02 |
Maximum [Member] | |
SHARE BASED COMPENSATION (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 2.55 |
SHARE BASED COMPENSATION (Det_2
SHARE BASED COMPENSATION (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
SHARE BASED COMPENSATION (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Line Items] | ||
Risk-free interest rate | 0.78% | 1.47% |
Dividend yield | 5.80% | 4.70% |
Expected term (in years) | 10 years | 10 years |
Volatility | 25.00% | 31.00% |
Minimum [Member] | ||
SHARE BASED COMPENSATION (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Line Items] | ||
Weighted-average grant date fair value per share (in Dollars per share) | $ 0.17 | $ 0.40 |
Maximum [Member] | ||
SHARE BASED COMPENSATION (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Line Items] | ||
Weighted-average grant date fair value per share (in Dollars per share) | $ 0.19 | $ 0.48 |
SHARE BASED COMPENSATION (Det_3
SHARE BASED COMPENSATION (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($) | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | |||
Options Outstanding, Number of Shares | 453,000 | 381,500 | |
Options Outstanding, Weighted Average Exercise Price | $ 1.35 | $ 1.65 | |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 5 years | 5 years 146 days | 5 years 219 days |
Options Outstanding, Aggregate Intrinsic Value | $ 182,400 | $ 429,000 | |
Options Exercisable, Number of Shares | 156,000 | ||
Options Exercisable, Weighted Average Exercise Price | $ 1.72 | ||
Options Exercisable, Weighted Average Years Remaining Contractual Term | 4 years 328 days | ||
Options Exercisable, Aggregate Intrinsic Value | $ 186,000 | ||
Options Granted, Number of Shares | 41,000 | 52,500 | |
Options Granted, Weighted Average Exercise Price | $ 2.29 | $ 2.78 | |
Options Granted, Weighted Average Years Remaining Contractual Term | 7 years 6 months | 8 years | |
Options Exercised, Number of Shares | (72,000) | (123,000) | |
Options Exercised, Weighted Average Exercise Price | $ 1.18 | $ 1.03 | |
Options Forfeited, Number of Shares | (55,000) | (1,000) | |
Options Forfeited, Weighted Average Exercise Price | $ 1.36 | $ 0.84 | |
Options Outstanding, Number of Shares | 295,500 | 381,500 | |
Options Outstanding, Weighted Average Exercise Price | $ 1.92 | $ 1.65 | |
Options Outstanding, Aggregate Intrinsic Value | $ 359,000 | $ 429,000 |
SHAREHOLDER'S EQUITY (Details)
SHAREHOLDER'S EQUITY (Details) - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
SHAREHOLDER'S EQUITY (Details) [Line Items] | |||||
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Common Stock, Voting Rights | ten (10) votes for each share held | ||||
Convertible Common Stock Terms of Conversion | convertible at any time at the election of the shareholder into one (1) share of Class A common stock | ||||
Common Stock, Dividends, Per Share, Cash Paid (in Dollars per share) | $ 0.04 | $ 0.035 | $ 0.035 | ||
Common Class A [Member] | |||||
SHAREHOLDER'S EQUITY (Details) [Line Items] | |||||
Common Stock, Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Common Stock, Shares, Outstanding | 5,062,235 | 4,990,235 | 5,062,235 | 4,990,235 | |
Common Stock, Shares, Issued | 5,062,235 | 4,990,235 | 5,062,235 | 4,990,235 | |
Common Stock, Voting Rights | one (1) vote for each share held | ||||
Stock Issued During Period, Shares, New Issues | 72,000 | 123,000 | |||
Common Class B [Member] | |||||
SHAREHOLDER'S EQUITY (Details) [Line Items] | |||||
Common Stock, Shares Authorized | 762,612 | 762,612 | 762,612 | 762,612 | |
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Common Stock, Shares, Outstanding | 762,612 | 762,612 | 762,612 | 762,612 | |
Common Stock, Shares, Issued | 762,612 | 762,612 | 762,612 | 762,612 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2007 | |
INCOME TAXES (Details) [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 795,000 | ||
Unrecognized Tax Benefits | $ 2,587,000 | $ 2,121,000 | |
Domestic Tax Authority [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Operating Loss Carryforwards | 660,000 | ||
State and Local Jurisdiction [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Operating Loss Carryforwards | $ 842,000 |
INCOME TAXES (Details) - Schedu
INCOME TAXES (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 4,000 | 0 |
4,000 | 0 | |
Deferred: | ||
Federal | 310,000 | 97,000 |
State | 160,000 | 7,000 |
Increase in valuation allowance | (470,000) | (104,000) |
0 | 0 | |
Income tax provision | $ 4,000 | $ 0 |
INCOME TAXES (Details) - Sche_2
INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
“Expected” income tax benefit | $ 286,000 | $ 204,000 |
State tax expense, net of Federal benefit | 3,000 | 0 |
Foreign tax expense | 0 | (30,000) |
Increase in valuation allowance | (470,000) | (104,000) |
Other | 185,000 | (70,000) |
Income tax provision | $ 4,000 | $ 0 |
INCOME TAXES (Details) - Sche_3
INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Inventory reserves | $ 1,420,000 | $ 1,758,000 |
Allowances for bad debts and returns | 2,000 | 5,000 |
Accrued expenses | 21,000 | 21,000 |
Asset valuation reserve | 539,000 | 539,000 |
Net operating loss carry forwards | 213,000 | 283,000 |
Other | 72,000 | 160,000 |
Total deferred tax assets | 2,267,000 | 2,766,000 |
Valuation allowance | (2,121,000) | (2,587,000) |
146,000 | 179,000 | |
Deferred tax liabilities: | ||
Deferred state taxes | (146,000) | (179,000) |
Total deferred tax liabilities | (146,000) | (179,000) |
Net deferred tax assets | $ 0 | $ 0 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator for basic and diluted net income per Class A common stock and Class B common stock share: | ||
Net income available to common shareholders used in basic and diluted income per share | $ 1,359,000 | $ 773,000 |
Less cash dividends: | ||
Total undistributed earnings | 518,000 | 58,000 |
Total undistributed earnings - basic and diluted | 518,000 | 58,000 |
Numerator for basic and diluted net income per share: | ||
Common stock | $ 1,359,000 | $ 773,000 |
Denominator for basic and diluted net income per Class A common stock and Class B common stock share: | ||
Weighted average number of common shares used in basic income per share (in Shares) | 5,797,889 | 5,724,222 |
Weighted average number of common shares and dilutive potential common shares used in diluted income per share (in Shares) | 5,853,889 | 5,840,222 |
Common Class A [Member] | ||
Less cash dividends: | ||
Dividends | $ 730,000 | $ 620,000 |
Total undistributed earnings - basic and diluted | 450,000 | 50,000 |
Numerator for basic and diluted net income per share: | ||
Common stock | $ 1,180,000 | $ 670,000 |
Denominator for basic and diluted net income per Class A common stock and Class B common stock share: | ||
Weighted average number of common shares used in basic income per share (in Shares) | 5,035,277 | 4,961,610 |
Weighted average number of common shares and dilutive potential common shares used in diluted income per share (in Shares) | 5,091,277 | 5,077,610 |
Basic net income per share: | ||
Basic income per share (in Dollars per share) | $ 0.23 | $ 0.14 |
Diluted net income per share: | ||
Diluted income per share (in Dollars per share) | $ 0.23 | $ 0.13 |
Common Class B [Member] | ||
Less cash dividends: | ||
Dividends | $ 111,000 | $ 95,000 |
Total undistributed earnings - basic and diluted | 68,000 | 8,000 |
Numerator for basic and diluted net income per share: | ||
Common stock | $ 179,000 | $ 103,000 |
Denominator for basic and diluted net income per Class A common stock and Class B common stock share: | ||
Weighted average number of common shares used in basic income per share (in Shares) | 762,612 | 762,612 |
Weighted average number of common shares and dilutive potential common shares used in diluted income per share (in Shares) | 762,612 | 762,612 |
Basic net income per share: | ||
Basic income per share (in Dollars per share) | $ 0.23 | $ 0.14 |
Diluted net income per share: | ||
Diluted income per share (in Dollars per share) | $ 0.23 | $ 0.14 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS (Details) [Line Items] | ||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 34,000 | $ 28,000 |
Common Class A [Member] | Defined Contribution Profit Sharing Plan [Member] | ||
EMPLOYEE BENEFIT PLANS (Details) [Line Items] | ||
Defined Benefit Plan, Plan Assets, Employer, Related Party, Number of Shares (in Shares) | 487,159 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase Commitment, Remaining Minimum Amount Committed | $ 1,972,000 | $ 780,000 |
GEOGRAPHIC INFORMATION (Details
GEOGRAPHIC INFORMATION (Details) - Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 6,696,000 | $ 6,783,000 |
Long-lived Assets | 3,217,000 | 3,386,000 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 5,955,000 | 5,809,000 |
Long-lived Assets | 2,306,000 | 2,411,000 |
KOREA, REPUBLIC OF | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 460,000 | 650,000 |
Long-lived Assets | 0 | 0 |
CHINA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 135,000 | 228,000 |
Long-lived Assets | 747,000 | 789,000 |
TAIWAN, PROVINCE OF CHINA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 11,000 | 45,000 |
Long-lived Assets | 164,000 | 186,000 |
Other Foreign Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 135,000 | 51,000 |
Long-lived Assets | $ 0 | $ 0 |