Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document Information Line Items | ||
Entity Registrant Name | TAITRON COMPONENTS INC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0000942126 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity Interactive Data Current | Yes | |
Common Class A [Member] | ||
Document Information Line Items | ||
Entity Common Stock, Shares Outstanding | 4,990,235 | |
Common Class B [Member] | ||
Document Information Line Items | ||
Entity Common Stock, Shares Outstanding | 762,612 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 4,098,000 | $ 4,494,000 |
Accounts receivable, less allowances of $40,000 and $38,000, respectively | 1,073,000 | 901,000 |
Inventories, less reserves for obsolescence of $7,274,000, and $7,189,000, respectively (Note 2) | 4,356,000 | 4,597,000 |
Prepaid expenses and other current assets | 110,000 | 67,000 |
Total current assets | 9,637,000 | 10,059,000 |
Property and equipment, net | 3,633,000 | 3,710,000 |
Other assets (Note 3) | 398,000 | 212,000 |
Total assets | 13,668,000 | 13,981,000 |
Current liabilities: | ||
Accounts payable | 453,000 | 972,000 |
Accrued liabilities | 271,000 | 311,000 |
Total current & total liabilities | 724,000 | 1,283,000 |
Commitments and contingencies (Note 6 ) | ||
Shareholders's equity: | ||
Preferred stock, $0.001 par value. Authorized 5,000,000 shares; None issued or outstanding | 0 | 0 |
Additional paid-in capital | 10,947,000 | 10,812,000 |
Accumulated other comprehensive income | 143,000 | 128,000 |
Retained earnings | 1,757,000 | 1,656,000 |
Total shareholders’ equity - Taitron Components Inc | 12,853,000 | 12,602,000 |
Noncontrolling interest in subsidiary | 91,000 | 96,000 |
Total equity | 12,944,000 | 12,698,000 |
Total liabilities and equity | 13,668,000 | 13,981,000 |
Common Class A [Member] | ||
Shareholders's equity: | ||
Common Stock, value, issued | 5,000 | 5,000 |
Common Class B [Member] | ||
Shareholders's equity: | ||
Common Stock, value, issued | $ 1,000 | $ 1,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts receivable, allowances (in Dollars) | $ 40,000 | $ 38,000 |
Inventories, reserves for obsolescence (in Dollars) | $ 7,274,000 | $ 7,189,000 |
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 | 4,990,235 | 4,867,235 |
Common stock, shares outstanding | 4,990,235 | 4,867,235 |
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 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net product revenue | $ 1,772,000 | $ 2,150,000 | $ 3,156,000 | $ 3,805,000 |
Cost of products sold | 937,000 | 1,171,000 | 1,638,000 | 2,172,000 |
Gross profit | 835,000 | 979,000 | 1,518,000 | 1,633,000 |
Selling, general and administrative expenses | 616,000 | 550,000 | 1,146,000 | 1,110,000 |
Operating income | 219,000 | 429,000 | 372,000 | 523,000 |
Interest income(expense), net | 7,000 | 2,000 | 14,000 | (4,000) |
Loss on investments | 0 | (60,000) | 0 | (135,000) |
Other income, net | 31,000 | 29,000 | 56,000 | 77,000 |
Income before income taxes | 257,000 | 400,000 | 442,000 | 461,000 |
Income tax provision | (1,000) | (1,000) | (2,000) | (3,000) |
Net income | 256,000 | 399,000 | 440,000 | 458,000 |
Net loss attributable to noncontrolling interest in subsidiary | (2,000) | (2,000) | (4,000) | (4,000) |
Net income attributable to Taitron Components Inc. | $ 258,000 | $ 401,000 | $ 444,000 | $ 462,000 |
Net income per share: Basic (in Dollars per share) | $ 0.05 | $ 0.07 | $ 0.08 | $ 0.08 |
Net income per share: Diluted (in Dollars per share) | 0.04 | 0.07 | 0.08 | 0.08 |
Cash dividends declared per common share (in Dollars per share) | $ 0.030 | $ 0.025 | $ 0.060 | $ 0.050 |
Weighted average common shares outstanding: Basic (in Shares) | 5,726,347 | 5,574,180 | 5,695,597 | 5,572,514 |
Weighted average common shares outstanding: Diluted (in Shares) | 5,827,347 | 5,665,847 | 5,807,597 | 5,669,181 |
Net income | $ 256,000 | $ 399,000 | $ 440,000 | $ 458,000 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | 2,000 | 9,000 | 15,000 | 2,000 |
Comprehensive income | 258,000 | 408,000 | 455,000 | 460,000 |
Comprehensive loss attributable to noncontrolling interests | (2,000) | (2,000) | (5,000) | (3,000) |
Comprehensive income attributable to Taitron Components Inc. | $ 260,000 | $ 410,000 | $ 460,000 | $ 463,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity - USD ($) | Common Stock [Member]Common Class A [Member] | Common Stock [Member]Common Class B [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Common Class A [Member] | Common Class B [Member] | Total |
Balance at Dec. 31, 2017 | $ 5,000 | $ 1,000 | $ 10,744,000 | $ 144,000 | $ 867,000 | $ 100,000 | $ 11,861,000 | ||
Balance (in Shares) at Dec. 31, 2017 | 4,808,235 | 762,612 | |||||||
Consolidated net income (loss) | 61,000 | (2,000) | 59,000 | ||||||
Other comprehensive income (loss) | (7,000) | 1,000 | (6,000) | ||||||
Amortization of stock based compensation | 1,000 | 1,000 | |||||||
Cash dividends | (139,000) | (139,000) | |||||||
Balance at Mar. 31, 2018 | $ 5,000 | $ 1,000 | 10,745,000 | 137,000 | 789,000 | 99,000 | 11,776,000 | ||
Balance (in Shares) at Mar. 31, 2018 | 4,808,235 | 762,612 | |||||||
Balance at Dec. 31, 2017 | $ 5,000 | $ 1,000 | 10,744,000 | 144,000 | 867,000 | 100,000 | 11,861,000 | ||
Balance (in Shares) at Dec. 31, 2017 | 4,808,235 | 762,612 | |||||||
Consolidated net income (loss) | 458,000 | ||||||||
Other comprehensive income (loss) | 2,000 | ||||||||
Balance at Jun. 30, 2018 | $ 5,000 | $ 1,000 | 10,764,000 | 146,000 | 1,051,000 | 97,000 | 12,064,000 | ||
Balance (in Shares) at Jun. 30, 2018 | 4,828,235 | 762,612 | |||||||
Balance at Mar. 31, 2018 | $ 5,000 | $ 1,000 | 10,745,000 | 137,000 | 789,000 | 99,000 | 11,776,000 | ||
Balance (in Shares) at Mar. 31, 2018 | 4,808,235 | 762,612 | |||||||
Consolidated net income (loss) | 401,000 | (2,000) | 399,000 | ||||||
Other comprehensive income (loss) | 9,000 | 9,000 | |||||||
Exercise stock options | 18,000 | 18,000 | |||||||
Exercise stock options (in Shares) | 20,000 | ||||||||
Amortization of stock based compensation | 1,000 | 1,000 | |||||||
Cash dividends | (139,000) | (139,000) | |||||||
Balance at Jun. 30, 2018 | $ 5,000 | $ 1,000 | 10,764,000 | 146,000 | 1,051,000 | 97,000 | 12,064,000 | ||
Balance (in Shares) at Jun. 30, 2018 | 4,828,235 | 762,612 | |||||||
Balance at Dec. 31, 2018 | $ 5,000 | $ 1,000 | 10,812,000 | 128,000 | 1,656,000 | 96,000 | 12,698,000 | ||
Balance (in Shares) at Dec. 31, 2018 | 4,867,235 | 762,612 | 4,867,235 | 762,612 | |||||
Consolidated net income (loss) | 186,000 | (2,000) | 184,000 | ||||||
Other comprehensive income (loss) | 13,000 | (1,000) | 12,000 | ||||||
Exercise stock options | 76,000 | 76,000 | |||||||
Exercise stock options (in Shares) | 70,000 | ||||||||
Amortization of stock based compensation | 4,000 | 4,000 | |||||||
Cash dividends | (171,000) | (171,000) | |||||||
Balance at Mar. 31, 2019 | $ 5,000 | $ 1,000 | 10,892,000 | 141,000 | 1,671,000 | 93,000 | 12,803,000 | ||
Balance (in Shares) at Mar. 31, 2019 | 4,937,235 | 762,612 | |||||||
Balance at Dec. 31, 2018 | $ 5,000 | $ 1,000 | 10,812,000 | 128,000 | 1,656,000 | 96,000 | 12,698,000 | ||
Balance (in Shares) at Dec. 31, 2018 | 4,867,235 | 762,612 | 4,867,235 | 762,612 | |||||
Consolidated net income (loss) | 440,000 | ||||||||
Other comprehensive income (loss) | $ 15,000 | ||||||||
Exercise stock options (in Shares) | 123,000 | ||||||||
Balance at Jun. 30, 2019 | $ 5,000 | $ 1,000 | 10,947,000 | 143,000 | 1,757,000 | 91,000 | $ 12,944,000 | ||
Balance (in Shares) at Jun. 30, 2019 | 4,990,235 | 762,612 | 4,990,235 | 762,612 | |||||
Balance at Mar. 31, 2019 | $ 5,000 | $ 1,000 | 10,892,000 | 141,000 | 1,671,000 | 93,000 | 12,803,000 | ||
Balance (in Shares) at Mar. 31, 2019 | 4,937,235 | 762,612 | |||||||
Consolidated net income (loss) | 258,000 | (2,000) | 256,000 | ||||||
Other comprehensive income (loss) | 2,000 | 2,000 | |||||||
Exercise stock options | 50,000 | 50,000 | |||||||
Exercise stock options (in Shares) | 53,000 | ||||||||
Amortization of stock based compensation | 5,000 | 5,000 | |||||||
Cash dividends | (172,000) | (172,000) | |||||||
Balance at Jun. 30, 2019 | $ 5,000 | $ 1,000 | $ 10,947,000 | $ 143,000 | $ 1,757,000 | $ 91,000 | $ 12,944,000 | ||
Balance (in Shares) at Jun. 30, 2019 | 4,990,235 | 762,612 | 4,990,235 | 762,612 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities: | ||
Net income | $ 440,000 | $ 458,000 |
Adjustments to reconcile net income to net cash (used for) provided by operating activities: | ||
Depreciation and amortization | 82,000 | 76,000 |
Provision for sales returns and doubtful accounts | 4,000 | 3,000 |
Stock based compensation | 9,000 | 2,000 |
Loss on investments | 0 | 135,000 |
Changes in assets and liabilities: | ||
Accounts receivable | (176,000) | (384,000) |
Inventories | 241,000 | 444,000 |
Prepaid expenses and other current assets | (43,000) | (30,000) |
Accounts payable | (519,000) | 138,000 |
Accrued liabilities | (40,000) | (68,000) |
Other assets and liabilities | (1,000) | 11,000 |
Total adjustments | (443,000) | 327,000 |
Net cash (used for) provided by operating activities | (3,000) | 785,000 |
Investing activities: | ||
Acquisition of property and equipment | (5,000) | 0 |
Payment for investment in convertible securities | (186,000) | 0 |
Net cash used for investing activities | (191,000) | 0 |
Financing activities: | ||
Payments on notes payable | 0 | (500,000) |
Dividend payments | (343,000) | (278,000) |
Proceeds from stock options exercised | 126,000 | 18,000 |
Net cash used for financing activities | (217,000) | (760,000) |
Impact of exchange rates on cash | 15,000 | 2,000 |
Net (decrease) increase in cash and cash equivalents | (396,000) | 27,000 |
Cash and cash equivalents, beginning of period | 4,494,000 | 3,250,000 |
Cash and cash equivalents, end of period | 4,098,000 | 3,277,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 0 | 9,000 |
Cash paid for income taxes, net | $ 3,000 | $ 3,000 |
1 - SUMMARY OF SIGNIFICANT ACCO
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview of B usiness In 1989, we were formed and incorporated in California. We maintain a majority-owned subsidiary in Mexico (since 1998) and two divisions in each of Taiwan (since 1997) and China (since 2005). Our Mexico location closed all operations in May 2013 (final closure is pending sale of our local 15,000 sq. ft. office and warehouse facility) and our Taiwan and China locations are for supporting overseas customers, inventory sourcing, purchases and coordinating the manufacture of our products. Our China location also serves as the engineering design support center responsible for arranging pre-production scheduling and mass production runs with joint venture partners for our projects, making component datasheets and test specifications, preparing samples, monitoring quality of shipments and performing failure analysis reports. Basis of Presentation The unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including its 60% majority-owned subsidiary, Taitron Components Mexico, S.A. de C.V. All significant intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair presentation of its financial condition and results of operations for the interim periods presented in this Quarterly Report on Form 10-Q have been included. Operating results for the interim periods are not necessarily indicative of financial results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in the Company’s condensed consolidated financial statements relate to the allowance for sales returns, doubtful accounts, inventory reserves, accrued liabilities and deferred income taxes. New Accounting Pronouncements In February 2016, the FASB issued a new accounting standard on leasing. The new standard will require companies to record most leased assets and liabilities on the balance sheet, and also proposes a dual model for recognizing expense. This guidance was effective in our first quarter of 2019. We have evaluated the impact of adopting this guidance and the adoption of these accounting changes have not impacted our assets and liabilities nor our net income or equity, as we currently do not lease any assets. In May 2017, the FASB issued a new accounting standard which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC Topic 718. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. This guidance was effective in our first quarter of 2019. The adoption of this guidance has not had a material effect on our consolidated financial statements. 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 June 30, 2019 and December 31, 2018. Nature of products We are primarily a supplier of original designed and manufactured (ODM) products that include value-added engineering and turn-key solutions. The following is a description of major products lines from which we generate our revenue: ODM Projects ODM Components Distribution Components Disaggregation of revenue In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Primary geographical markets: United States $ 1,544,000 $ 1,940,000 $ 2,663,000 $ 3,386,000 Asia 220,000 179,000 479,000 365,000 Other 8,000 31,000 14,000 54,000 1,772,000 2,150,000 3,156,000 3,805,000 Major product lines: ODM projects $ 991,000 $ 1,231,000 $ 1,588,000 $ 2,075,000 ODM components 749,000 713,000 1,492,000 1,424,000 Distribution components 32,000 206,000 76,000 306,000 1,772,000 2,150,000 3,156,000 3,805,000 Timing of revenue recognition: Products transferred at a point in time $ 1,772,000 $ 2,150,000 $ 3,156,000 $ 3,805,000 |
2 - INVENTORY
2 - INVENTORY | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | 2 – INVENTORY Inventory, consisting principally of products held for resale, is recorded at the lower of cost (determined using the first in-first out method) or net realizable value. We had inventory balances in the amount of $4,356,000 and $4,597,000 at June 30, 2019 and December 31, 2018, respectively, which is presented net of valuation allowances of $7,274,000 and $7,189,000, respectively. We evaluate inventories to identify excess, high-cost, slow-moving or other factors rendering inventories as unmarketable at normal profit margins. Due to the complexity of managing and maintaining a large inventory of product offerings, estimates are made regarding adjustments to the carrying values of inventories. Based on our assumptions about future demand and market conditions, inventories are carried at the lower of cost or net realizable value. If our assumptions about future demand change, or market conditions are less favorable than those projected, additional write-downs of inventories or valuation allowances may be required. In any case, actual amounts could be different from those estimated. |
3 - OTHER ASSETS
3 - OTHER ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Text Block Supplement [Abstract] | |
Other Assets Disclosure [Text Block] | 3 – OTHER ASSETS Investment in securities - Zowie Technology Other Other Assets Total Balance at December 31, 2018 $ 193,000 $ 19,000 $ 212,000 Investment 186,000 - 186,000 Balance at June 30, 2019 $ 379,000 $ 19,000 $ 398,000 Our $379,000 investment in securities as of June 30, 2019 relates to the following investments in Zowie Technology (“ZT”), a supplier of electronic component products located in Taipei City, Taiwan R.O.C.: (a) $193,000 relates to 1,322,552 common shares of ZT and represents approximately 9% of their total outstanding shares although we do not have significant influence or control. (b) $186,000 relates to 317,428 shares of preferred convertible shares of ZT with our option after 3 (three) years to convert the investment into common stock or refundable bearing 7% annual interest rate. Both investments in ZT are accounted for under the cost (plus impairment) basis of accounting. |
4 - RELATED PARTY TRANSACTIONS
4 - RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 4 – RELATED PARTY TRANSACTIONS We made payments to K.S. Best International Co. Ltd., a company controlled by the brother of our Chief Executive Officer of approximately $0 and $6,000 for three months ended June 30, 2019 and 2018, respectively and $0 and $12,000 for the six months ended June 30, 2019 and 2018. These payments were for professional fees related to the operational management of our Taiwan office. In addition, we also made interest expense payments on our credit facility of approximately $0 and $3,000 for the three months ended June 30, 2019 and 2018, respectively and $0 and $9,000 for the six months ended June 30, 2018, respectively. |
5 - SHARE BASED COMPENSATION
5 - SHARE BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement [Text Block] | 5 – SHARE BASED COMPENSATION Accounting for stock options issued to employees measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. Outstanding options to purchase Class A common stock (“the Options”) vest in three equal annual installments beginning one year from the date of grant and are subject to termination provisions as defined in our 2005 Stock Incentive Plan and 2018 Omnibus Incentive Plan (collectively referred to as “the Plans”). The Options activity during the six months ended June 30, 2019 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 Exercised (123,000 ) 1.03 - - Forfeited (1,000 ) 0.84 - - Outstanding at June 30, 2019 329,000 $ 1.47 5.7 $ 535,500 Exercisable at June 30, 2019 114,000 $ 1.05 3.5 $ 234,000 At June 30, 2019, the range of individual outstanding weighted average exercise prices was $1.02 to $1.78. |
6 - COMMITMENTS AND CONTINGENCI
6 - COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 6 – COMMITMENTS AND CONTINGENCIES Inventory Purchasing Outstanding commitments to purchase inventory from suppliers aggregated $1,240,000 as of June 30, 2019. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including its 60% majority-owned subsidiary, Taitron Components Mexico, S.A. de C.V. All significant intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair presentation of its financial condition and results of operations for the interim periods presented in this Quarterly Report on Form 10-Q have been included. Operating results for the interim periods are not necessarily indicative of financial results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in the Company’s condensed consolidated financial statements relate to the allowance for sales returns, doubtful accounts, inventory reserves, accrued liabilities and deferred income taxes. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In February 2016, the FASB issued a new accounting standard on leasing. The new standard will require companies to record most leased assets and liabilities on the balance sheet, and also proposes a dual model for recognizing expense. This guidance was effective in our first quarter of 2019. We have evaluated the impact of adopting this guidance and the adoption of these accounting changes have not impacted our assets and liabilities nor our net income or equity, as we currently do not lease any assets. In May 2017, the FASB issued a new accounting standard which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC Topic 718. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. This guidance was effective in our first quarter of 2019. The adoption of this guidance has not had a material effect on our consolidated financial statements. |
Revenue [Policy Text Block] | Revenue recognition Revenue is recognized at the point at which control of the underlying products are transferred to the customer. Satisfaction of our performance obligations occur upon the transfer of control of products, either from our facilities or directly from suppliers to customers. We consider customer purchase orders to be the contracts with a customer. All revenue is generated from contracts with customers. In determining the transaction price, we evaluate whether the price is subject to refund or adjustment to determine the net consideration to which we expect to receive. Taxes assessed by a governmental authority on revenue-producing transactions are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of products sold. Based upon the nature of our contracts with customers and our performance obligations within those contracts, we have no contract assets or liabilities as of June 30, 2019 and December 31, 2018. Nature of products We are primarily a supplier of original designed and manufactured (ODM) products that include value-added engineering and turn-key solutions. The following is a description of major products lines from which we generate our revenue: ODM Projects ODM Components Distribution Components Disaggregation of revenue In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Primary geographical markets: United States $ 1,544,000 $ 1,940,000 $ 2,663,000 $ 3,386,000 Asia 220,000 179,000 479,000 365,000 Other 8,000 31,000 14,000 54,000 1,772,000 2,150,000 3,156,000 3,805,000 Major product lines: ODM projects $ 991,000 $ 1,231,000 $ 1,588,000 $ 2,075,000 ODM components 749,000 713,000 1,492,000 1,424,000 Distribution components 32,000 206,000 76,000 306,000 1,772,000 2,150,000 3,156,000 3,805,000 Timing of revenue recognition: Products transferred at a point in time $ 1,772,000 $ 2,150,000 $ 3,156,000 $ 3,805,000 |
1 - SUMMARY OF SIGNIFICANT AC_2
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue [Table Text Block] | In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Primary geographical markets: United States $ 1,544,000 $ 1,940,000 $ 2,663,000 $ 3,386,000 Asia 220,000 179,000 479,000 365,000 Other 8,000 31,000 14,000 54,000 1,772,000 2,150,000 3,156,000 3,805,000 Major product lines: ODM projects $ 991,000 $ 1,231,000 $ 1,588,000 $ 2,075,000 ODM components 749,000 713,000 1,492,000 1,424,000 Distribution components 32,000 206,000 76,000 306,000 1,772,000 2,150,000 3,156,000 3,805,000 Timing of revenue recognition: Products transferred at a point in time $ 1,772,000 $ 2,150,000 $ 3,156,000 $ 3,805,000 |
3 - OTHER ASSETS (Tables)
3 - OTHER ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Other Assets [Table Text Block] | Investment in securities - Zowie Technology Other Other Assets Total Balance at December 31, 2018 $ 193,000 $ 19,000 $ 212,000 Investment 186,000 - 186,000 Balance at June 30, 2019 $ 379,000 $ 19,000 $ 398,000 |
5 - SHARE BASED COMPENSATION (T
5 - SHARE BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | The Options activity during the six months ended June 30, 2019 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 Exercised (123,000 ) 1.03 - - Forfeited (1,000 ) 0.84 - - Outstanding at June 30, 2019 329,000 $ 1.47 5.7 $ 535,500 Exercisable at June 30, 2019 114,000 $ 1.05 3.5 $ 234,000 |
1 - SUMMARY OF SIGNIFICANT AC_3
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended |
Jun. 30, 2019ft² | |
Accounting Policies [Abstract] | |
Number of Operating Segments | 2 |
Area of Real Estate Property | 15,000 |
1 - SUMMARY OF SIGNIFICANT AC
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Disaggregation of Revenue - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,772,000 | $ 2,150,000 | $ 3,156,000 | $ 3,805,000 |
ODM Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 991,000 | 1,231,000 | 1,588,000 | 2,075,000 |
ODM Components [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 749,000 | 713,000 | 1,492,000 | 1,424,000 |
Distribution Components [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 32,000 | 206,000 | 76,000 | 306,000 |
UNITED STATES | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,544,000 | 1,940,000 | 2,663,000 | 3,386,000 |
Asia [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 220,000 | 179,000 | 479,000 | 365,000 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 8,000 | 31,000 | 14,000 | 54,000 |
Products Transferred at a Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,772,000 | $ 2,150,000 | $ 3,156,000 | $ 3,805,000 |
2 - INVENTORY (Details)
2 - INVENTORY (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Inventory, Net | $ 4,356,000 | $ 4,597,000 |
Inventory Valuation Reserves | $ 7,274,000 | $ 7,189,000 |
3 - OTHER ASSETS (Details)
3 - OTHER ASSETS (Details) - Zowie Technology [Member] | 6 Months Ended |
Jun. 30, 2019USD ($)shares | |
3 - OTHER ASSETS (Details) [Line Items] | |
Equity Method Investments | $ 379,000 |
Common Stock [Member] | |
3 - OTHER ASSETS (Details) [Line Items] | |
Equity Method Investments | $ 193,000 |
Investment Owned, Balance, Shares (in Shares) | shares | 1,322,552 |
Equity Method Investment, Ownership Percentage | 9.00% |
Preferred Stock [Member] | |
3 - OTHER ASSETS (Details) [Line Items] | |
Equity Method Investments | $ 186,000 |
Investment Owned, Balance, Shares (in Shares) | shares | 317,428 |
Equity Method Investment, Description of Principal Activities | preferred convertible shares of ZT with our option after 3 (three) years to convert the investment into common stock or refundable bearing 7% annual interest rate |
3 - OTHER ASSETS (Details) -
3 - OTHER ASSETS (Details) - Schedule of Other Assets - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
3 - OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | ||
Investments Balance | $ 212,000 | |
Investment | 186,000 | $ 0 |
Investments Balance | 398,000 | |
Zowie Technology [Member] | ||
3 - OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | ||
Investments Balance | 193,000 | |
Investment | 186,000 | |
Investments Balance | 379,000 | |
Other Investments [Member] | ||
3 - OTHER ASSETS (Details) - Schedule of Other Assets [Line Items] | ||
Investments Balance | 19,000 | |
Investment | 0 | |
Investments Balance | $ 19,000 |
4 - RELATED PARTY TRANSACTIONS
4 - RELATED PARTY TRANSACTIONS (Details) - Immediate Family Member of Management or Principal Owner [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
4 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||
Related Party Transaction, Amounts of Transaction | $ 0 | $ 6,000 | $ 0 | $ 12,000 |
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 0 | $ 3,000 | $ 0 | $ 9,000 |
5 - SHARE BASED COMPENSATION (D
5 - SHARE BASED COMPENSATION (Details) - 2018 Stock Incentive Plan [Member] | 6 Months Ended |
Jun. 30, 2019$ / shares | |
5 - SHARE BASED COMPENSATION (Details) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | vest in three equal annual installments beginning one year from the date of grant and are subject to termination provisions as defined in our 2005 Stock Incentive Plan and 2018 Omnibus Incentive Plan (collectively referred to as “the Plans”). |
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit | $ 1.02 |
Share-based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit | $ 1.78 |
5 - SHARE BASED COMPENSATION
5 - SHARE BASED COMPENSATION (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | ||
Options Outstanding, Number of Shares | 453,000 | |
Options Outstanding, Weighted Average Exercise Price | $ 1.35 | |
Options Outstanding, Weighted Average Years Remaining Contractual Term | 5 years 255 days | 5 years |
Options Outstanding, Aggregate Intrinsic Value | $ 182,400 | |
Options Exercisable, Number of Shares | 114,000 | |
Options Exercisable, Weighted Average Exercise Price | $ 1.05 | |
Options Exercisable, Weighted Average Years Remaining Contractual Term | 3 years 6 months | |
Options Exercisable, Aggregate Intrinsic Value | $ 234,000 | |
Options Exercised, Number of Shares | (123,000) | |
Options Exercised, Weighted Average Exercise Price | $ 1.03 | |
Forfeited, Number of Shares | (1,000) | |
Forfeited, Weighted Average Exercise Price | $ 0.84 | |
Options Outstanding, Number of Shares | 329,000 | |
Options Outstanding, Weighted Average Exercise Price | $ 1.47 | |
Options Outstanding, Aggregate Intrinsic Value | $ 535,500 |
6 - COMMITMENTS AND CONTINGEN_2
6 - COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Commitment, Remaining Minimum Amount Committed | $ 1,240,000 |