UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the quarterly period ended March 31, 2006
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from _________ to __________
Commission File Number 0-25844
TAITRON COMPONENTS INCORPORATED
(Exact name of small business issuer as specified in its charter)
California 95-4249240
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
28040 West Harrison Parkway, Valencia, California 91355-4162
(Address of principal executive offices)
(661) 257-6060
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. Yes [X] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [_] No [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Outstanding on April 30, 2006
----- -----------------------------
Class A common stock, $.001 par value 4,716,811
Class B common stock, $.001 par value 762,612
Transitional Small Business Disclosure Format (Check one): Yes [_] No [X]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TAITRON COMPONENTS INCORPORATED
Condensed Consolidated Balance Sheet
(Dollars in Thousands)
March 31,
2006
-----------
Assets (Unaudited)
Current assets:
Cash and cash equivalents $ 2,343
Trade accounts receivable, net 1,350
Inventory, net 16,367
Prepaid expenses and other current assets 168
-------
Total current assets 20,228
Property and equipment, net 4,402
Other assets 82
-------
Total assets $24,712
=======
Liabilities and Shareholders' Equity
Current liabilities:
Trade accounts payable $ 1,040
Accrued liabilities and other 551
-------
Total current liabilities 1,591
Total liabilities 1,591
-------
Commitments and contingencies (Note 3)
Shareholders' equity:
Preferred stock, $.001 par value.
Authorized 5,000,000 shares.
None issued or outstanding. --
Class A common stock, $.001 par value.
Authorized 20,000,000 shares;
issued and outstanding 4,716,811 shares. 5
Class B common stock, $.001 par value.
Authorized, issued and outstanding 762,612 shares. 1
Additional paid-in capital 10,440
Accumulated other comprehensive loss, net of tax (5)
Retained earnings 12,680
-------
Total shareholders' equity 23,121
-------
Total liabilities and shareholders' equity $24,712
=======
See accompanying notes to condensed consolidated financial statements.
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TAITRON COMPONENTS INCORPORATED
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Dollars in thousands, except per share amounts)
Three months ended March 31,
2006 2005
----------- -----------
(Unaudited) (Unaudited)
Net sales $ 1,989 $ 1,842
Cost of goods sold 1,509 1,341
----------- -----------
Gross profit 480 501
Selling, general and administrative expenses 636 618
----------- -----------
Loss from operations (156) (117)
Interest income(expense), net 15 (12)
Other expense, net (17) --
----------- -----------
Loss before income taxes (158) (129)
Income tax provision (4) --
----------- -----------
Net loss $ (162) $ (129)
=========== ===========
Other Comprehensive loss:
Foreign currency translation adjustment 12 (6)
----------- -----------
Comprehensive loss $ (150) $ (135)
=========== ===========
Loss per share
Basic and Diluted $ (0.03) $ (0.02)
=========== ===========
Weighted average common shares outstanding
Basic and Diluted 5,472,201 5,460,619
=========== ===========
See accompanying notes to condensed consolidated financial statements.
Page 3
TAITRON COMPONENTS INCORPORATED
Condensed Consolidated Statements of Cash Flow
(Dollars in thousands)
Three months ended March 31,
2006 2005
----------- -----------
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss $ (162) $ (129)
------- -------
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization 54 59
Provision for sales returns and doubtful accounts 15 17
Changes in assets and liabilities:
Trade accounts receivable 187 34
Inventory 314 308
Prepaid expenses and other current assets (17) 8
Other assets (4) (13)
Trade accounts payable 20 (57)
Accrued liabilities and other (34) (16)
------- -------
Total adjustments 535 340
------- -------
Net cash provided by operating activities 373 211
------- -------
Cash flows from investing activities:
Acquisitions of property and equipment (28) (4)
------- -------
Net cash used in investing activities (28) (4)
------- -------
Cash flows from financing activities:
Payments on notes payable -- (35)
Proceeds from exercise of stock options and issuance of stock 24 1
------- -------
Net cash provided by (used in) financing activities 24 (34)
------- -------
Impact of exchange rate changes on cash 12 (6)
------- -------
Net increase in cash and cash equivalents 381 167
Cash and cash equivalents, beginning of period 1,962 539
------- -------
Cash and cash equivalents, end of period $ 2,343 $ 706
======= =======
Supplemental disclosure of cash flow information:
Cash paid for interest $ -- $ 23
======= =======
Cash paid for income taxes $ 1 $ 1
======= =======
See accompanying notes to condensed consolidated financial statements.
Pge 4
TAITRON COMPONENTS INCORPORATED
Notes to Condensed Consolidated Financial Statements
March 31, 2006
(All amounts are unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of
Taitron Components Incorporated ("the Company") were prepared in
accordance with accounting principles generally accepted in the United
States of America and reflect all adjustments, consisting of normal
recurring accruals and adjustments, which are, in the opinion of
management, necessary for a fair presentation of the consolidated
financial position and results of operations at and for the periods
presented. Such financial statements do not include all the information or
footnotes necessary for a complete presentation and, accordingly, should
be read in conjunction with the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2005, and the notes thereto, which
include significant accounting policies and estimates. The results of
operations for the interim periods are not necessarily indicative of
results for the full year.
Note 2 - Summary of Significant Accounting Policies and Estimates
Principles of Consolidation
The unaudited condensed consolidated financial statements include the
accounts of the Company and its 60% majority-owned subsidiary, Taitron
Components Mexico SA de CV. All significant intercompany transactions and
balances have been eliminated in consolidation.
Revenue Recognition
Revenue is typically recognized upon shipment of merchandise and sales are
recorded net of discounts, rebates, and returns. Reserves for sales
allowances and customer returns are established based upon historical
experience and management's estimates as shipments are made. Sales returns
for the quarters ended March 31, 2006 and 2005 were $15,000 and $17,000,
respectively.
Allowance for Sales Returns and Doubtful Accounts
On a case-by-case basis, the Company accepts returns of products from its
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. The Company will, on a case-by-case basis, accept returns of
products upon payment of a restocking fee, which is generally 15% to 30%
of the net sales price. The Company will not accept returns of any
products that were special-ordered by a customer or that otherwise are not
generally included in inventory. The allowance for sales returns and
doubtful accounts at March 31, 2006 aggregated $64,000.
Inventory
Inventory, consisting principally of products held for resale, is recorded
at the lower of cost (determined using the first in-first out method) or
estimated market value. Inventory is presented net of valuation allowances
of $1,421,000 at March 31, 2006.
Income Taxes
The Company accounts 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. The Company has fully
reserved against its deferred income tax assets, as management could not
determine that it was more likely than not such assets would be realized.
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Loss Per Share
Basic loss per share is computed by dividing net loss available to common
shareholders by the weighted-average number of common shares outstanding
during the period. Common equivalent shares of approximately 447,000
shares for the three months ended March 31, 2006, are excluded from the
computation of diluted loss per share as their effect is anti-dilutive.
Reclassification
Certain amounts in the prior year condensed consolidated financial
statements have been reclassified to conform to the current year
presentation.
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 these condensed consolidated financial
statements in conformity with accounting principles generally accepted in
the United States. These estimates have a significant impact on the
Company's 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.
Stock-Based Compensation
In March 1995, the Company established the 1995 Stock Incentive Plan (the
Plan) that expired in March 2005. The Plan provided for the issuance of an
aggregate 1,080,000 incentive stock options, nonstatutory options or stock
appreciation rights (SAR's) to directors, officers and other employees of
the Company. Under the Plan, incentive stock options were granted at
prices equal to at least the fair market value of the Company's Class A
common stock at the date of grant. Nonstatutory options and stock
appreciation rights were granted at prices equal to at least 85% and 100%,
respectively, of the fair market value of the Company's Class A common
stock at the date of grant. Outstanding options and rights vest in three
equal annual installments beginning one year from the date of grant and
are subject to termination provisions as defined in the Plan. The Plan
also provided for automatic grants of nonstatutory options to purchase
5,000 shares of Class A common stock to all members of the committee
administering the Plan, upon their initial election to the committee and
each year thereafter. The exercise prices of these options are equal to
the fair market value of the Company's Class A common stock at the date of
grant. The fair value of options is the estimated present value at grant
date using the Black-Scholes option-pricing model with the following
weighted average assumptions used for 2006 and 2005: dividend yield of 0%;
expected volatility of 35%; a risk free interest rate of approximately 5%
and an expected holding period of five years.
Effective January 1, 2006, the Company adopted SFAS No. 123 (revised
2004), "Share-Based Payment" (SFAS 123R). SFAS 123R requires that the
Company account for all stock-based compensation using a fair-value method
and recognize the fair value of each award as an expense over the service
period. For the year ended December 31, 2005 and earlier years, the
Company accounted for stock-based compensation using the intrinsic value
method of APB Opinion No. 25 and followed the disclosure requirements of
SFAS No. 123, as amended by SFAS 148.
The Company elected to adopt SFAS 123R using the "modified prospective
application." Under that method, compensation expense includes the fair
value of new awards, modified awards and any unvested awards outstanding
at January 1, 2006. However, the consolidated financial statements for
periods prior to the adoption of SFAS 123R have not been restated to
reflect the fair value method of accounting for stock-based compensation,
but rather disclosed the cost in accordance with APB 25.
The following table illustrates the effect on net loss and net loss per
share as if compensation expense for all awards of stock-based employee
compensation had been determined under the fair value-based method
prescribed by SFAS 123 for periods prior to the adoption of SFAS 123R:
Page 6
Three months ended
March 31, 2005
------------------
Net loss, as reported (129,000)
Net loss, pro forma (137,000)
Diluted loss, as reported (0.02)
Diluted loss, pro forma (0.03)
Stock option activity during the periods indicated is as follows:
Number Weighted Average
of Shares Exercise Price
---------- ----------------
Balance at December 31, 2005 526,166 $1.78
Exercised (16,666) 1.41
Balance at March 31, 2006 509,500 $1.80
==================
The weighted average fair value of options granted in the three months
period ended March 31, 2006 and 2005 was $0, as there were no options
granted during either period.
At March 31, 2006, the range of individual weighted average exercise
prices was $1.29 to $2.17. The remaining contractual life of outstanding
options is 90 days after termination of employment of option holder.
At March 31, 2006, the approximate number of options exercisable was
413,000 and the weighted average exercise prices of those exercisable
options were $1.87.
Note 3 - Commitments and Contingencies
On July 9, 2005, the Company renewed its revolving line of credit facility
providing up to $3 million for operating purposes. The agreement governing
this credit facility expires on June 17, 2006 and contains security
agreements covering essentially all assets of the Company and financial
covenants requiring compliance with certain financial ratios. As of the
date of this report, the Company has not yet used this credit facility.
Effective July 1, 2006, the European Union ("EU") will begin restricting
the distribution of products within the EU containing certain substances,
including lead. At the present time, much of the Company's inventory
contains substances prohibited by the RoHS directive and management
believes it is likely that the Company will not be able to distribute
non-RoHS compliant products to most customers who intend to sell their
finished goods in the EU after the effective date. Upon effectiveness of
the RoHS legislation, some of the Company's inventory may become obsolete
and unsaleable and, as a result, have to be written off. See Item 2 -
"Management's Discussion and Analysis - Critical Accounting Policies and
Estimates - Impact of Governmental Regulation.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion should be read in conjunction with the condensed
consolidated financial statements, including the related notes, appearing in
Item 1 of this report as well as our most recent annual report on Form 10-KSB
for the year ended December 31, 2005. Also, several of the matters discussed in
this document contain forward-looking statements that involve risks and
uncertainties. 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. Factors associated with the forward looking statements that
could cause the forward looking statements to be inaccurate and could otherwise
impact our future results are set forth in detail in our most recent annual
report on Form 10-KSB. In addition to the other information contained in this
document, readers should carefully consider the information contained in our
most recent annual report on Form 10-KSB under the heading "Cautionary
Statements and Risk Factors."
References to "Taitron," "the Company," "we," "our" and "us" refer to
Taitron Components Incorporated and its majority-owned subsidiary, 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 its condensed
consolidated financial statements in conformity with accounting principles
generally accepted in the United States. These estimates have a significant
impact on the Company's 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.
Page 7
Revenue Recognition - Revenue is recognized upon shipment of the
merchandise, which is when legal transfer of title occurs. Reserves for sales
allowances and customer returns are established based upon historical experience
and our estimates of future returns. Sales returns for the quarter ended March
31, 2006 and 2005 were $15,000 and $17,000, respectively. The allowance for
sales returns and doubtful accounts at March 31, 2006 aggregated $64,000.
Inventory - Inventory, consisting principally of products held for resale,
is recorded at the lower of cost (determined using the first in-first out
method) or estimated market value. We had inventory balances in the amount of
$16,367,000 at March 31, 2006, which is presented net of valuation allowances of
$1,421,000. 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. Based on our assumptions about future
demand and market conditions, inventories are carried at the lower of cost or
estimated market value. 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.
Impact of Governmental Regulation - Our worldwide operations are subject
to local laws and regulations. As such, of particular interest is the European
Union ("EU") directive relating to the Restriction of Certain Hazardous
Substance ("RoHS"). Effective July 1, 2006, this directive restricts the
distribution of products within the EU containing certain substances, including
lead. While the enabling legislation of a number of EU member countries has not
yet been adopted, we believe it is likely that we will not be able to distribute
non-RoHS compliant products to most customers who intend to sell their finished
goods in the EU after the effective date. At the present time, much of our
inventory contains substances prohibited by the RoHS directive. Further, many of
our suppliers are not yet supplying RoHS compliant products. Upon effectiveness
of the RoHS legislation, some of our inventory may become obsolete and
unsaleable and, as a result, have to be written off. While we are working
closely with our customers and suppliers to minimize this impact, at this time,
it is difficult to quantify the financial impact, if any, of such obsolete
inventory.
Deferred Taxes - We review the nature of each component of our deferred
income taxes for reasonableness. 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 the
realizability of deferred tax assets. We also consider the weight of both
positive and negative evidence in determining whether a valuation allowance is
needed. Based upon recent operating results and the difficulty of estimating
future market conditions, we have fully reserved a $721,000 allowance against
our net deferred tax assets.
Selected Recent Accounting Policies
In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections," which replaces APB Opinion No. 20 "Accounting Changes," and FASB
Statement No. 3 "Reporting Accounting Changes in Interim Financial Statements,"
and changes the requirements for the accounting for and reporting of a change in
accounting principle. This Statement requires retrospective application to prior
periods' financial statements of changes in accounting principle, unless it is
impracticable to determine either the period-specific effects or the cumulative
effect of the change. This Statement shall be effective for accounting changes
and corrections of errors made in fiscal years beginning after December 15,
2005. We do not believe that adoption of SFAS 154 will have a material impact on
our financial statements.
Overview
We are a national distributor of electronic components, primarily focused
on transistors, diodes and other discrete semiconductors, optoelectronic devices
and passive components with a reputation of in-depth inventories and knowledge
of the products we sell. Our customers consist of other electronic distributors,
contract electronic manufacturers (CEMs) and original equipment manufacturers
(OEMs).
Page 8
We believe that demand for discrete semiconductors in the U.S. market has
drastically declined since 2000. This declining demand has resulted from the
accelerated trend of moving the production capacity of OEM/CEM customers abroad
and the consolidation of CEM customers domestically. In response, we are
refocusing our business strategy beyond the traditional role of electronic
components fulfillment to the additional role of engineering and turn-key
services for our existing OEM and CEM customers by outsourcing their product
design and manufacturing work offshore. We formed some strategic business
partnerships with a few customers and are providing them with original design
and manufacturing (ODM) services for their multi-year turn-key projects. We
expect to see more opportunities and results from these additional services
during 2006.
Our core strategy of electronic components fulfillment, however, consists
of carrying a substantial quantity and variety of products in inventory to meet
the rapid delivery requirements of our customers. This strategy allows us to
fill customer orders immediately from stock on hand. Although we believe better
market conditions may return, we are focused on lowering our inventory balances
and increasing our cash holdings. Our long-term strategy is to rely not only on
our core strategy of component fulfillment service, but also the value-added
engineering and turn-key services. In accordance with Generally Accepted
Accounting Principles, we classify inventory as a current asset. 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.
Results of Operations
Three month Period Ended March 31, 2006 Compared To The Three month Period Ended
March 31, 2005.
Net sales for the quarter ended March 31, 2006 increased by 8% to
$1,989,000 from $1,842,000 in the prior year period. The overall increase
primarily came from our original design manufactured products in the amount of
$124,000, compared with the prior year period.
Gross margins were 24.1% for the quarter ended March 31, 2006, compared to
27.2% for the prior year period. The decrease can be primarily attributed to
pricing pressures for our Samsung brand components sold in the domestic market
and higher sales levels of non-RoHS compliant products sold in the overseas
market.
Selling, general and administrative expenses increased by $18,000 for the
quarter ended March 31, 2006 as compared to the prior year period, primarily
related to higher professional fees.
Operating loss was $156,000 or 7.8% of net sales for quarter ended March
31, 2006, as compared to $117,000 in the prior year period. Operating loss
increased primarily as a result of lower gross margins discussed above.
Interest expense was $0 for quarter ended March 31, 2006 as compared to
$21,000 in the prior year period. The decrease is due to lowered borrowing
levels related to repayment of our long-term debt obligations.
Income tax provision was $4,000 for the quarter ended March 31, 2006, as
compared to $0 for the prior year period. Our tax provision is primarily based
upon our state income tax liabilities.
We incurred net losses of $162,000 for the quarter ended March 31, 2006 as
compared with net losses of $129,000 for the prior year period, an increase of
$33,000 or 25.6%. Net loss as a percentage of net sales increased to 8.1% from
7%.
Effective January 1, 2006, we adopted SFAS 123(R) and such had a minimal
financial impact for the three month period ended March 31, 2006.
Liquidity and Capital Resources
We have satisfied our liquidity requirements principally through cash
generated from operations, short-term commercial loans, subordinated promissory
notes and issuance of equity securities. A summary of our cash flows resulting
from our operating, investing and financing activities for the quarter ended
March 31, 2006 and 2005 are as follows:
Page 9
Three months ended March 31,
---------------------------
(Dollars in thousands) 2006 2005
----------- -----------
(Unaudited) (Unaudited)
Operating activities ..................... $ 373 $ 211
Investing activities ..................... (28) (4)
Financing activities ..................... 24 (34)
Cash flows provided by operating activities increased to $373,000 during
the quarter ended March 31, 2006, as compared to $211,000 during the same period
last year.
Cash flows used in investing activities was $28,000 during the quarter
ended March 31, 2006 compared with $4,000 during the same period last year.
Cash flows provided by financing activities increased to $24,000 during
the quarter ended March 31, 2006, from $34,000 used in during the same period
last year.
Inventory is included in current assets; however, it will take over one
year for the inventory to turn. Hence, inventory would not be as readily
marketable or liquid as other items included in current assets, such as cash.
We believe that funds generated from operations, in addition to existing
cash balances, and the revolving line of credit facility is 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.
As of the date of this Report, we had no commitments for other equity or
debt financing or other capital expenditures.
Item 3. Controls and Procedures.
The Company's management, including its Chief Executive Officer and Chief
Financial Officer, have evaluated the effectiveness of the Company's disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the
reporting period covered by this quarterly report. Based on such evaluation, the
Chief Executive Officer and Chief Financial Officer have concluded that, as of
the end of the period covered by this quarterly report, the Company's disclosure
controls and procedures are effective such that material information required to
be disclosed by the Company (including its consolidated subsidiary) in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified by the Securities and
Exchange Commission's rules and forms relating to the Company.
During the quarterly period covered by this report, there have been no
changes to the Company's internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
There were no issuances or sales of our securities by us during the first
quarter of 2006 that were not registered under the Securities Act.
Item 3. Defaults Upon Senior Securities.
None.
Page 10
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
a. Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
b. Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Page 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TAITRON COMPONENTS INCORPORATED
Date: May 15, 2006 By: /s/ Stewart Wang
---------------------------
Stewart Wang
Chief Executive Officer, President,
Chief Financial Officer and Director
(Principal Executive, Financial
and Accounting Officer)
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