UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly
period ended
or
For the transition period from __________ to __________
Commission File
Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the
registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes ☐
No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
| Classes of common stock | Outstanding on April 30, 2025 | |
| Class A | ||
| Class B |
TAITRON COMPONENTS INCORPORATED
INDEX
| Page | ||
| PART I - FINANCIAL INFORMATION | ||
| Item 1. | Condensed Financial Statements (Unaudited) | |
| Condensed Consolidated Balance Sheets | 1 | |
| Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | 2 | |
| Condensed Consolidated Statements of Shareholders’ Equity | 3 | |
| Condensed Consolidated Statements of Cash Flows | 4 | |
| Notes to Condensed Consolidated Financial Statements | 5 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 9 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 11 |
| Item 4. | Controls and Procedures | 11 |
| PART II - OTHER INFORMATION | ||
| Item 1. | Legal proceedings | 12 |
| Item 1A. | Risk Factors | 12 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 12 |
| Item 3. | Defaults Upon Senior Securities | 12 |
| Item 4. | Mine Safety Disclosures | 12 |
| Item 5. | Other Information | 12 |
| Item 6. | Exhibits | 13 |
| Signatures | 14 | |
PART I - FINANCIAL INFORMATION
Item 1. Condensed Financial Statements (Unaudited)
TAITRON COMPONENTS INCORPORATED
Condensed Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, less allowances of $ | ||||||||
| Short-term investments (Note 2) | ||||||||
| Inventories, less reserves for obsolescence of $ | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Deferred taxes | ||||||||
| Other assets (Note 4) | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Total current liabilities | ||||||||
| Commitments and contingencies (Note 6) | ||||||||
| Equity: | ||||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, $ | ||||||||
| Class A common stock, $ | ||||||||
| Class B common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Retained earnings | ||||||||
| Total equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements (unaudited).
1
TAITRON COMPONENTS INCORPORATED
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net product revenue | $ | $ | ||||||
| Cost of products sold | ||||||||
| Gross profit | ||||||||
| Selling, general and administrative expenses | ||||||||
| Operating income (loss) | ( | ) | ||||||
| Interest income, net | ||||||||
| Other income (expense), net | ( | ) | ||||||
| Income (loss) before income taxes | ( | ) | ||||||
| Income tax provision | ( | ) | ( | ) | ||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Net income (loss) per share:Basic | $ | ( | ) | $ | ||||
| Diluted | $ | ( | ) | $ | ||||
| Weighted average shares outstanding:Basic | ||||||||
| Diluted | ||||||||
| Cash dividends declared per common share | $ | $ | ||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Comprehensive income (loss) | ( | ) | ||||||
See accompanying notes to condensed consolidated financial statements (unaudited).
2
TAITRON COMPONENTS INCORPORATED
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited)
| Accumulated | ||||||||||||||||||||||||||||||||
| Common Stock | Additional | Other | ||||||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Comprehensive | Retained | Total | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | Loss | Earnings | Equity | |||||||||||||||||||||||||
| Three months ending March 31, 2025 | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
| Consolidated net loss | - | - | - | - | - | - | ( | ) | $ | ( | ) | |||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | - | ( | ) | - | $ | ( | ) | |||||||||||||||||||||
| Stock based compensation expense | - | - | - | - | - | - | $ | |||||||||||||||||||||||||
| Cash dividends | - | - | - | - | - | - | ( | ) | $ | ( | ) | |||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
| Three months ending March 31, 2024 | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
| Consolidated net income | - | - | - | - | - | - | $ | |||||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | - | - | $ | |||||||||||||||||||||||||
| Stock based compensation expense | - | - | - | - | - | - | $ | |||||||||||||||||||||||||
| Cash dividends | - | - | - | - | - | - | ( | ) | $ | ( | ) | |||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements (unaudited).
3
TAITRON COMPONENTS INCORPORATED
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating activities: | ||||||||
| Net income (loss) | $ | ( | $ | |||||
| Adjustments to reconcile net income to net cash (used for) provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock based compensation | ||||||||
| Deferred income taxes | ( | ) | ( | ) | ||||
| Changes in values of marketable securities | ( | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued liabilities | ( | ) | ( | ) | ||||
| Other assets and liabilities | ||||||||
| Total adjustments | ( | ) | ||||||
| Net cash provided by (used for) operating activities | ( | ) | ||||||
| Investing activities: | ||||||||
| Acquisition of property and equipment | ( | ) | ( | ) | ||||
| Proceeds from investment in securities | ||||||||
| Net cash provided by (used for) investing activities | ( | ) | ||||||
| Financing activities: | ||||||||
| Dividend payments | ( | ) | ( | ) | ||||
| Net cash used for financing activities | ( | ) | ( | ) | ||||
| Impact of exchange rates on cash | ( | ) | ||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for income taxes, net | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements (unaudited).
4
TAITRON COMPONENTS INCORPORATED
Notes to Condensed Consolidated Financial Statements (Unaudited)
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 unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions. All significant intercompany accounts and transactions have been eliminated in consolidation.
These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair statement of its financial condition and results of operations for the interim periods presented in this Quarterly Report on Form 10-Q have been included. Operating results for the interim periods are not necessarily indicative of financial results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Use of Estimates
In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amount reported as revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates and assumptions included in the Company’s condensed consolidated financial statements relate to the allowance for sales returns, doubtful accounts, inventory reserves, accrued liabilities and deferred income taxes.
Recently Adopted Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts. This guidance is effective for annual periods beginning after December 15, 2024, which will be the Company’s fiscal year 2025, with early adoption permitted. The adoption is expected to enhance the Company’s Notes to the Consolidated Financial Statements. The Company is currently evaluating the impact of the ASU on its Annual Report.
In November 2024, the FASB issued ASU 2024-03 “Disaggregation of Income Statement Expenses,” which requires the Company to disaggregate key expense categories such as employee compensation, depreciation and intangible asset amortization within its financial statements. ASU 2024-03 is effective for annuals periods beginning with the Company’s fiscal year 2027, and interim periods within the Company’s fiscal year 2028, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its Notes to the Consolidated Financial Statements.
5
Revenue recognition
Revenue is recognized at the point at which control of the underlying products are transferred to the customer. Satisfaction of our performance obligations occur upon the transfer of control of products, either from our facilities or directly from suppliers to customers. We consider customer purchase orders to be the contracts with a customer. All revenue is generated from contracts with customers.
In determining the transaction price, we evaluate whether the price is subject to refund or adjustment to determine the net consideration to which we expect to receive.
Taxes assessed by a governmental authority on revenue-producing transactions are excluded from revenue.
Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of products sold.
Based upon the nature of our contracts with customers and our performance obligations within those contracts, we have no contract assets or liabilities as of March 31, 2025 and December 31, 2024.
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 - Our custom made small devices for original equipment manufacturers (“OEMs”) and contract electronic manufacturers (CEMs) in their multi-year turn-key projects and marketed in specific industries such as: wild animal feeders, timers for DC motors, public street light controllers, and battery chargers.
ODM Components - Our private labeled electronic components.
Distribution Components - Our name brand electronic components.
Disaggregation of revenue
In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Primary geographical markets: | ||||||||
| United States | $ | $ | ||||||
| Asia | ||||||||
| Other | ||||||||
| Major product lines: | ||||||||
| ODM projects | $ | $ | ||||||
| ODM components | ||||||||
| Distribution components | ||||||||
| Timing of revenue recognition: | ||||||||
| Products transferred at a point in time | $ | $ | ||||||
6
2 – SHORT-TERM INVESTMENTS
Short-term investments, consisting principally of marketable U.S. equity securities, are classified as short-term based on the nature of the securities and their availability for use in current operations. Measurement is based on fair value with gains and losses recognized in other income/(expense), net.
3 – INVENTORY
Inventory – Inventory, consisting principally
of products held for resale, is recorded at the lower of cost (determined using the first in-first out method) and net realizable value.
We had inventory balances in the amount of $
4 – OTHER ASSETS
| Investment in securities - Zowie Technology | Other | Other Assets Total | ||||||||||
| Balance at December 31, 2024 | $ | $ | $ | |||||||||
| Other changes | ( | ) | ( | ) | ||||||||
| Balance at March 31, 2025 | $ | $ | $ | |||||||||
Our $
In 2024, we requested the full refund and return of our investment.
On January 15, 2025, we received $
7
5 – SHARE BASED COMPENSATION
Accounting for stock options issued to employees
measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the
award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award.
| Number of Shares | Weighted Average Exercise Price | Weighted Average Years Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2024 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Forfeited | ||||||||||||||||
| Outstanding at March 31, 2025 | $ | $ | ||||||||||||||
| Exercisable at March 31, 2025 | $ | $ | ||||||||||||||
At March 31, 2025, the range of individual outstanding
weighted average exercise prices was $
6 – COMMITMENTS AND CONTINGENCIES
Inventory Purchasing
Outstanding commitments to purchase inventory
from suppliers aggregated $
8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the condensed consolidated financial statements, including the related notes, appearing in Item 1 of Part 1 of this quarterly report on Form 10-Q, as well as our most recent annual report on Form 10-K for the year ended December 31, 2024.
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) with respect to the financial condition, results of operations and business of the Company. Forward-looking statements usually are denoted by words or phrases such as “believes,” “expects,” “projects,” “estimates,” “anticipates,” “will likely result” or similar expressions. We wish to caution readers that all forward-looking statements are necessarily speculative and not to place undue reliance on forward-looking statements, which speak only as of the date made, and to advise readers that actual results could vary due to a variety of risks and uncertainties, including the risks described in our Annual Report on Form 10-K for the year ended December 31, 2024 and other reports we file with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update forward-looking statements.
References to “Taitron,” the “Company,” “we,” “our” and “us” refer to Taitron Components Incorporated and its wholly owned divisions, unless the context otherwise requires.
Critical Accounting Policies and Estimates
Use of Estimates - 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 our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States. These estimates have a significant impact on our valuation and reserve accounts relating to the allowance for sales returns, doubtful accounts, inventory reserves and deferred income taxes. Actual results could differ from these estimates.
Revenue Recognition – Revenue is recognized upon shipment of the products, which is when legal transfer of title occurs and control of the product is transferred to the customer. Reserves for sales allowances and customer returns are established based upon historical experience and our estimates of future returns. Sales returns for each of the three months ended March 31, 2025 and 2024 were $0. The allowance for sales returns and doubtful accounts at March 31, 2025 and December 31, 2024 aggregated $7,000.
Inventory – Inventory, consisting principally of products held for resale, is recorded at the lower of cost (determined using the first in-first out method) and net realizable value. We had inventory balances in the amount of $2,867,000 and $2,949,000 at March 31, 2025 and December 31, 2024, respectively, which is presented net of valuation allowances of $5,155,000 and $5,152,000, respectively. We evaluate inventories to identify excess, high-cost, slow-moving or other factors rendering inventories as unmarketable at normal profit margins. Due to the large number of transactions and the complexity of managing and maintaining a large inventory of product offerings, estimates are made regarding adjustments to the cost of inventories. If our assumptions about future demand change, or market conditions are less favorable than those projected, additional write-downs of inventories may be required. In any case, actual amounts could be different from those estimated.
Deferred Taxes – If determined that it is more likely than not that we will not realize all or part of our net deferred tax assets in the future, we record a valuation allowance against the deferred tax assets, which allowance will be charged to income tax expense in the period of such determination. We also consider the scheduled reversal of deferred tax liabilities, tax planning strategies and future taxable income in assessing if deferred tax assets could be realized. We also consider the weight of both positive and negative evidence in determining whether a valuation allowance is needed.
Overview
We are primarily focused on supplying ODM products for our OEM customer’s multi-year turn-key projects. We also distribute discrete semiconductors, commodity Integrated Circuits (ICs), optoelectronic devices and passive components to other electronic distributors, CEMs and OEMs, who incorporate them in their products.
Our core strategy has shifted to primarily focus on higher margin ODM Projects that require custom products designed for specific applications to OEM customers, and away from actively marketing our superstore strategy of maintaining a vast quantity of electronic components to fill customer orders immediately from available stock held in inventory. As a result, we expect our components inventory will be more passively marketed and distributed online for clearance through our internet sales portal, however at potentially lower rates due to the pricing pressures normally attributed with online shopping.
9
In accordance with generally accepted accounting principles, we have classified inventory as a current asset in our March 31, 2025, condensed consolidated financial statements representing approximately 24% of current assets and 17% of total assets. However, if all or a substantial portion of the inventory was required to be immediately liquidated, the inventory would not be as readily marketable or liquid as other items included or classified as a current asset, such as cash. We cannot assure you that demand in the discrete semiconductor market will increase and that market conditions will improve. Therefore, it is possible that further declines in our carrying values of inventory may result.
Our gross profit margins are subject to a number of factors, including product demand, provisions for inventory reserves, our ability to purchase inventory at favorable prices, our sales product mix, the imposition of tariffs, import and export controls, changes in governmental policies and the relative strength of the U.S. dollar.
Results of Operations
Significant Risks and Uncertainties
See the Risk Factors included in our Annual report on Form 10-K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission as well as the additional Risk Factor included in Part II—Item 1A of this quarterly report.
First quarter of 2025 versus 2024.
Net sales in the first quarter of 2025 totaled $1,082,000 versus $963,000 in the comparable period for 2024, an increase of $119,000 or 12.4% over the same period last year. The increase was primarily driven by an increase of ODM project sales volume.
Gross profit for the first quarter of 2025 was $625,000 versus $496,000 in the comparable period for 2024, and gross margin percentage of net sales was 57.8% in the first quarter of 2025 versus 51.5% in the comparable period for 2024. The approximately 6.3% gross margin percentage increase was driven by margins on ODM project sales.
Selling, general and administrative expenses in the first quarter of 2025 totaled $560,000 versus $570,000 in the comparable period for 2024. The $10,000 decrease was primarily driven by lower personnel benefits.
Other income(expense), net, in the first quarter of 2025 was ($395,000) versus $556,000 in the comparable period for 2024. Other income(expense) was primarily from short-term investment income(losses).
Income tax provision was $6,000 for the first quarter of 2025 and $8,000 for the comparable period for 2024.
Net loss was ($286,000) for the first quarter of 2025 versus income of $552,000 in the comparable period for 2024, a decrease of $838,000 resulting from the reasons discussed above.
Liquidity and Capital Resources
We historically have satisfied our liquidity requirements through cash generated from operations, short-term commercial loans, subordinated related party promissory notes and issuance of equity securities.
Cash flows provided by operating activities were $94,000 as opposed to used for of ($328,000) in the three months ended March 31, 2025 and 2024, respectively. The increase of $422,000 in cash flows provided by operations compared with the prior period resulted from changes in operating assets and liabilities, primarily from accounts payable, accounts receivable and marketable securities.
10
Cash flows provided by investing activities were $50,000 as opposed to used for of ($37,000) for the three months ended March 31, 2025 and 2024, respectively.
Cash flows used for financing activities were $301,000 for both the three months ended March 31, 2025 and 2024.
We believe that funds generated from operations, existing cash balances, short term investments and, if necessary, related party short-term loans, are likely to be sufficient to finance our working capital and capital expenditure requirements for the foreseeable future. If these funds are not sufficient, we may secure new sources of asset-based lending on accounts receivables or issue debt or equity securities. Otherwise, we may need to liquidate assets to generate the necessary working capital.
Inventory is included and classified as a current asset. As of March 31, 2025, inventory represented approximately 24% of current assets and 17% of total assets. However, it is likely to take over one (1) year for the inventory to turn and therefore is likely not saleable within this time frame. Hence, inventory would not be as readily marketable or liquid as other items included in current assets, such as cash.
Off-Balance Sheet Arrangements
We had no material off-balance sheet arrangements that have, or are likely to have, a current or future material effect on our operations other than our outstanding commitments to purchase inventory (see Item 1 - Note 6 – Commitments and Contingencies).
Item 3. Quantitative and Qualitative Disclosures About Market Risk. - Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management has evaluated, under the supervision and with the participation of our principal executive and principal financial officers, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, our principal executive and principal financial officers concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
In the ordinary course of business, we may become involved in legal proceedings from time to time. As of the date of this report, we are not aware of any material pending legal proceedings.
Item 1A. Risk Factors.
The discussion of our business and operations should be read together with the risk factor set forth below and the risk factors contained in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, which describe various risks and uncertainties to which we are or may become subject. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies or prospects in a material and adverse manner. As of May 15, 2025, there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
12
Item 6. Exhibits.
| Exhibit Number |
Description of Document | |
| 31.1 * | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2 * | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32 ** | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 USC. Section 1350) | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| * | Filed herewith. |
| ** | Furnished herewith. |
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| TAITRON COMPONENTS INCORPORATED | |
| Date: May 15, 2025 | /s/ Stewart Wang |
| Stewart Wang, | |
| Chief Executive Officer and President | |
| (Principal Executive Officer) | |
| /s/ David Vanderhorst | |
| David Vanderhorst | |
| Chief Financial Officer and Secretary | |
| (Principal Financial Officer) |
14