UNITED
STATES SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM

 (Mark O ne)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2024

 TRANSITION
REPORT PURSUANT TO 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 registrant as specified in its charter)

 California

 95-4249240

 (State or other jurisdiction of
 incorporation or organization)

 (I.R.S. Employer

Identification No.)

 28040 West Harrison Parkway, Valencia, California

 91355

 (Address of principal executive offices)

 (Zip Code)

 Registrant's telephone number, including
area code: ( 661) 257-6060

 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 Class A common stock, $.001 par value

 TAIT

 NASDAQ Capital Market

 Securities registered pursuant to Section 12(g)
of the Act: None

 Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
 No

 Indicate by
check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
 No

 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. Yes
No

 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). Yes No

 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 "larger accelerated filer," "accelerated filer," "smaller reporting company," and "emerging
growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-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 has filed a report on
and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during
the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The aggregate market value of common stock held by non-affiliates of
the registrant, based upon the closing price of the common stock as reported by The Nasdaq Capital Market, was approximately $ 8.3 million
as of the last business day of the registrant's most recently completed second fiscal quarter ended June 30, 2024.

 Number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date:

 Class

 Outstanding on March 15, 2025

 Class A common stock, $.001 par value

 Class B common stock, $.001 par value

 DOCUMENTS INCORPORATED BY REFERENCE

 Portions of the registrant's definitive proxy statement pursuant
to Regulation 14A in connection with the 2025 annual meeting of shareholders are incorporated by reference into Part III of this Form
10-K. The proxy statement will be filed with the SEC not later than 120 days after the registrant's fiscal year ended December 31,
2024.

 Page

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity.

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships, Related Transactions and Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Item 15.

 Exhibits, Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 Signatures

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This Annual Report on Form
10-K contains statements which constitute "forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements represent our
expectations or beliefs concerning future events, including the following: any statements regarding future sales, costs and expenses and
gross profit percentages; any statements regarding the continuation of historical trends; any statements regarding expected capital expenditures;
and any statements regarding the sufficiency of our cash balances and cash generated from operating and financing activities for future
liquidity and capital resource needs, and are usually denoted by words or phrases such as "believes," "plans,"
"should," "expects," "thinks," "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, some
of which are discussed in this report in the Part I, Item 1A. Risk Factors and elsewhere in this report. Except as required by law, we
undertake no obligation to update forward-looking statements.

 References to "Taitron",
"the Company", "the company", "we," "our" and "us" refer to Taitron Components
Incorporated and its divisions, unless the context otherwise requires.

 ITEM 1. BUSINESS.

 General

 We are primarily a supplier
of original designed and manufactured (ODM) products that include value-added engineering and turn-key solutions. We focus on providing
original equipment manufacturers (OEMs) and contract electronic manufacturers (CEMs) with ODM products for their multi-year turn-key projects
("ODM Projects") and ODM electronic components ("ODM Components"). Our product offerings range from discrete semiconductors
through small electronic devices. 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 two (2) divisions, in Taiwan and China.

 Our Taiwan and China locations
provide support for inventory sourcing, purchases and coordinating the manufacture of our ODM Projects and ODM Components (collectively
we refer to these as "ODM Products"). In 2024 and 2023, we offered approximately 47 different ODM Products that are manufactured
to specifications developed as a result of our engineering support services. Our China location also serves as the engineering center
responsible for making component datasheets and test specifications, arranging pre-production and mass production at our manufacturer
partners, preparing samples, monitoring the quality of shipments, performing failure analysis reports, and designing circuits with partners
for ODM Projects.

 We have also developed a reputation
for stocking a large selection of electronic component inventories to meet the rapid delivery requirements of our customers. At December
31, 2024, our inventory consisted of approximately 12,000 different products manufactured by more than 100 different suppliers. However,
our core strategy has shifted to primarily focus on our ODM Products 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.

 ODM Projects

 Our ODM Projects are custom made and are marketed
in specific industries such as: wild animal feeders, timers for DC motors, public street light controllers, LED modules for swimming pools
and water fountain lights, LED headlamps for vacuum cleaners, battery testers, universal remote-control devices and battery chargers.

 Our distribution of ODM Projects
originates from our 50,000 square-foot facility located in Valencia, California. We utilize a computerized inventory control/tracking
system which enables us to quickly access inventory levels and trace product shipments. See Item 2 - "Properties."

 ODM Product Industry

 ODM product providers have
experienced rapid change and growth as an increasing number of OEMs outsource their manufacturing requirements. OEMs have continued to
turn to outsourcing in order to reduce product cost; achieve accelerated time-to-market and time-to-volume production; access advanced
design and manufacturing technologies; improve inventory management and purchasing power; and reduce their capital investment in manufacturing
resources. This enables OEMs to concentrate on what they believe to be their core strengths, such as new product definition, design, marketing
and sales. We believe further growth opportunities exist for ODM product providers to penetrate the worldwide market. By designing private
brand products for our domestic OEM customers, we are able to expand export sales to overseas CEM customers.

 ODM Products Strategy

 We offer value-added ODM products
to our existing OEM and CEM customers utilizing our engineering design center in Shanghai, China. The sales of our ODM Products were $4,124,000
and $6,049,000 in 2024 and 2023, respectively. Strategic allies such as Teamforce Co. Ltd., Grand Shine Management and Zowie Technology
Corporation (see Part II, Item 8: Note 5 – Other Assets) provide us with engineering support services in our ODM projects in order
to lower costs and to shorten the design cycle.

 - 4 -

 By offering application engineering
service to current customers, we are often involved in reviewing their bill of materials (BOMs) and circuit diagrams. Based upon their
credit history, type of products, production volume, profitability of the industry and circuit schematics, we offer different solutions
for quality improvement, additional functions and cost savings throughout the re-design processes such as component replacement, digital
circuit instead of analog circuit, microprocessor instead of logic circuit, integrated circuit instead of discrete components. Our preference
is to target low but increasing volume, high margin, stable demand, profitable and specialty products, and financially stable customers
who know how to market their products. Our strengths are in microprocessor programming, power supply, power management, LED message sign,
RF transmission and receiving, encoders and decoders, remote controllers, DC motor control and power amplifiers. In many cases, we have
been able to take advantage of our component distribution capability by using current stock to reduce lead time and choosing the low-cost
components we currently sell. We depend on our outsourcing partners in mold design, plastic injection, metal stamping, wire hardness and
final assembly. We ask between 15% to 30% down payment before accepting a purchase order and offer customers 30 to 60 days payment terms.
All purchasing orders must have a firm delivery schedule under a non-cancelable and non-returnable (NCNR) agreement. To reduce the manufacturing
and handling cost, we arrange production of the same model once a year and keep product in our warehouse to be released according to the
predetermined schedule.

 "Superstore" Marketing Strategy Change

 Since 1997, we have marketed
ourselves as the "discrete components superstore," with an in-depth focus on discrete semiconductors, passive and optoelectronic
components and extensive inventory of a wide variety of these products. Our "superstore" strategy consists of carrying a large
quantity and variety of components in inventory to meet the rapid delivery requirements of our customers. Our core strategy has shifted
to primarily focus on our ODM Products that require custom services 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. We will continue offering our existing wide variety of components for resale, but
these products will be more passively marketed and distributed online for clearance through our website shopping portal, instead of actively
through traditional sales agents and distributors.

 Customers

 We market our ODM products
to OEMs and our electronic components inventory to distributors, OEMs and CEMs. During each of 2024 and 2023, we distributed our products
to approximately 200 customers, however our 2 largest customers combined accounted for approximately 73% (individually by approximately
68% and 5%) of net sales during 2024 and approximately 66% (individually by approximately 52% and 14%) during 2023.

 We believe that exceptional
customer service and customer relations are key elements of our success, and train our sales force to provide prompt, efficient and courteous
service to all customers. See "Business - Sales and Marketing Channels." We have the ability to ship most orders the same
day they are placed and, historically, most of our customers' orders have been shipped within the requested delivery schedule.

 Sales and Marketing Channels

 As of March 15, 2025, our
sales and marketing department consisted of 6 employees. We have centralized our sales order processing and customer service department
into our headquarters at Valencia, California.

 As a result of our marketing
strategy change to focus primarily on ODM Products and away from our superstore inventory, we expect our remaining 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.

 Suppliers

 In connection with our ODM
products, we have built strong collaborative relationships with a few selected system integration companies in China. These strategic
relationships ensure the quality of the products and services and also provide a warranty on our finished products. Most of the projects
involve multiple years of cooperation among components suppliers, overseas partners and the end customers in the US, and therefore, increase
business stability and reduce the financial risk of excess inventory.

 We believe that it's
important to develop and maintain good relationships with our discrete electronic component suppliers, since we do not have long-term
supply, distribution or franchise agreements with any of our suppliers. Instead, we cultivate strong working relationships with each of
our suppliers.

 - 5 -

 Competition

 The ODM products we provide
are available from many independent sources as well as from the in-house manufacturing capabilities of current and potential customers.
Our competitors may be more established in the industry and have substantially greater financial, manufacturing, or marketing resources
than we do. In addition, in recent years, original design manufacturers that provide design and manufacturing services to OEMs have significantly
increased their share of outsourced manufacturing services provided to OEMs in the consumer electronic product market. Competition from
ODMs may increase if our business in these markets grows or if ODMs expand further into these markets. We believe that our principal competitive
advantages in our targeted markets are our engineering capabilities, product quality, flexibility, cost and timeliness in responding to
design and schedule changes, reliability in meeting product delivery schedules, pricing, technological sophistication and geographic location.

 We operate our discrete electronic
components business online in a highly competitive environment and face competition from numerous local, regional and national distributors
(both in purchasing and selling inventory) and electronic component manufacturers, including some of our own suppliers. Many of our competitors
are more established and have greater name recognition and financial and marketing resources than us.

 Management Information Systems

 We have made a significant
investment in computer hardware, software and personnel. The Management Information Systems (MIS) department is responsible for software
and hardware upgrades, maintenance of current software and related databases, and designing custom systems. We believe that our MIS department
is crucial to our success and believe in continually upgrading our hardware and software. We also developed a vendor management inventory
software program which allows participating customers to access and manage their own inventory through the internet. The web site also
provides users with other current information about us.

 Warehouse Management System

 We utilize a wireless, fully
bar-coded warehouse perpetual inventory tracking system that greatly enhances the processing speed, accuracy of product quantity and location
control within the warehouse. It also reduces potential errors and accelerates the delivery of components to our customers. We continuously
improve our warehouse management system with custom programming features.

 Foreign Trade Regulation

 A large portion of the products
we distribute are manufactured in Asia, including Taiwan, Hong Kong, Japan, China, South Korea, Thailand and the Philippines. The purchase
of goods manufactured in foreign countries is subject to a number of risks, including economic disruptions, transportation delays and
interruptions, foreign exchange rate fluctuations, imposition of tariffs and import and export controls, and changes in governmental policies,
any of which could have a material adverse effect on our business and results of operations.

 Sales to Asian customers were
6.2% and 5.2% of our total sales in 2024 and 2023, respectively.

 From time to time, protectionist
pressures have influenced U.S. trade policy concerning the imposition of significant duties or other trade restrictions upon foreign products.
We cannot predict whether additional U.S. customs quotas, duties, taxes or other charges or restrictions will be imposed upon the importation
of foreign components in the future or what effect any of these actions would have on our business, financial condition or results of
operations. D uring 2024, we remained impacted by tariff costs on certain products
imported from China, which went into effect as of July 6, 2018. However, we also have been able to pass along a portion of these costs
to our customers to mitigate these costs.

 - 6 -

 Our ability to remain competitive
with respect to the pricing of imported components could be adversely affected by increases in tariffs or duties, changes in trade treaties,
strikes in air or sea transportation, and possible future U.S. legislation with respect to pricing and import quotas on products from
foreign countries. For example, it is possible that political or economic developments in China, or with respect to the United States'
relationship with China, could have an adverse effect on our business. Our ability to remain competitive also could be affected by other
governmental actions related to, among other things, anti-dumping legislation and international currency fluctuations. While we do not
believe that any of these factors adversely impact our business at present, we cannot assure that these factors will not materially adversely
affect us in the future. Any significant disruption in the delivery of merchandise from our suppliers, substantially all of whom are foreign,
could have a material adverse impact on our business and results of operations.

 Employees

 As of March 15, 2024, we had
15 employees, all of whom are employed on a full-time basis. None of our employees are covered by a collective bargaining agreement and
we consider our relations with employees to be good.

 Website Availability of Our Reports Filed with the Securities and
Exchange Commission

 We maintain a website (
but we are not including the information contained on this website as a part of, or incorporating it by reference into, this annual report
on Form 10-K. We make available free of charge through this website our annual reports, quarterly reports and current reports on Form
8-K, and amendments to these reports, as soon as reasonably practicable after we electronically file that material with, or furnish the
material to, the Securities and Exchange Commission.

 ITEM 1A. RISK FACTORS.

 Certain factors may have a material adverse
effect on our business, prospects, financial condition and results of operations. You should carefully consider the risks and uncertainties
described below together with all of the other information contained in this Annual Report on Form 10-K, including our consolidated financial
statements and the related notes, before deciding to invest in our common shares. The risks and uncertainties described below are not
the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may
also adversely affect our business. If any of the following risks actually occurs, our business, financial condition, results of operations
and future prospects could be materially and adversely affected.

 If our suppliers fail to meet our component
and manufacturing needs, it could delay our production and our product shipments to customers and negatively affect our operations.

 Our ODM Products comprise many components and
subassemblies produced by outside suppliers. We depend greatly on these suppliers for items that are essential to the manufacture of our
products, including printed circuit boards and integrated circuits. For certain items, we qualify only a single source, which magnifies
the risk of shortages and decreases our ability to negotiate with that supplier on the basis of price. From time to time, we have been
unable to obtain sufficient components that we have needed due to shortages or quality issues from some of our suppliers. If our suppliers
fail to meet our manufacturing needs, it would delay our production and our product shipments to customers and negatively affect our operations.

 Our primary suppliers are located in Asia. If
a manufacturer should be unable to deliver products to us on a timely basis or at all, our business could be adversely affected. Though
we have had many years of favorable experience with these suppliers, there can be no assurance that circumstances might not change and
compel one or more of these suppliers to curtail or terminate deliveries to us. Moreover, the use of contract manufacturers to provide
components typically requires that we place production orders several months in advance of our expected need for the products. This in
turn leads to risks that we may lack sufficient inventory to sell to our customers where our expectations were conservative, or that we
may order excess product inventory where our expectations were optimistic. We have in the past, experienced shortages of some parts needed
to manufacture our ODM Products.

 In addition, since a significant number of the
products we distribute are manufactured in Taiwan, Hong Kong, China, South Korea and the Philippines, we are subject to a number of risks
associated with foreign operations, including economic disruptions, transportation delays and interruptions, foreign exchange rate fluctuations,
imposition of tariffs and import and export controls and changes in governmental policies, any of which could have a material adverse
effect on our business and results of operations.

 - 7 -

 The company's lack of long-term sales
contracts may have a material adverse effect on its business.

 Most of the company's sales are made on
an order-by-order basis, rather than through long-term sales contracts. The company generally works with its customers to develop non-binding
forecasts for future orders. Based on such non-binding forecasts, the company makes commitments regarding the level of business that it
will seek and accept, the inventory that it purchases, and the levels of utilization of personnel and other resources. A variety of conditions,
both specific to each customer and generally affecting each customer's industry may cause customers to cancel, reduce, or delay
orders that were either previously made or anticipated, file for bankruptcy protection, or default on their payments. Generally, customers
may cancel, reduce, or delay purchase orders and commitments without penalty. The company seeks to mitigate these risks, in some cases,
by entering into noncancelable/nonreturnable sales agreements, but there is no guarantee that such agreements will adequately protect
the company. Significant or numerous cancellations, reductions, delays in orders by customers, loss of customers, and/or customer defaults
on payments could materially adversely affect the company's business.

 Changes in demand or downturns in the markets
we serve could affect our business and operating results.

 The industries into which we market and sell our
products are cyclical and may experience downturns. These industries also experience volatility, and future volatility as well as downturns,
or any failure of these industries to recover from downturns, could materially harm our business and operating results. In addition, our
business and financial position may be adversely affected by current and future economic conditions that cause a decline in business and
consumer spending in the markets served by our or our customers' products.

 The competitive pressures the company faces,
such as pricing and margin reductions, could have a material adverse effect on the company's business.

 The company operates in a highly competitive international
environment. The company competes with other large multinational and national electronic components and enterprise computing solutions
distributors, as well as numerous other smaller, specialized competitors who generally focus on narrower market sectors, products, or
industries. The company also competes for customers with its suppliers. The size of the company's competitors varies across market
sectors, as do the resources the company has allocated to the sectors in which it does business. Therefore, some of the company's
competitors may have a more extensive customer and/or supplier base than the company in one or more of its market sectors. There is significant
competition within each market sector and geography that creates pricing and margin pressure and the need for constant attention to improve
service and product offerings and increase market share. Other competitive factors include rapid technological changes, product availability,
credit availability, speed of delivery, ability to tailor solutions to changing customer needs, and quality and depth of product lines
and training, as well as service and support provided to the customer. The company also faces competition from companies in the logistics
and product fulfillment, catalog distribution, and e-commerce supply chain services markets. The company expects to encounter increased
competition from its current and/or new competitors, making it more difficult for the company to retain its market share. There is no
guarantee that the company's response to competition will be successful. The company's failure to maintain and enhance its
competitive position could have a material adverse effect on its business.

 A small number of suppliers and customers
account for a significant portion of the company's business.

 Grand
Shine Electronics and Zowie Technology (see also Item 8 - Note 5 – Other Assets) together
accounted for approximately 43.3% and 61.2% of our net purchases for each of the fiscal years 2024 and 2023, respectively. We do not regard
any one supplier as essential to our operations, since equivalent replacements for most of our products are available from one or more
of our other suppliers or are available from various other sources at competitive prices. However, a change in supplier may delay the
delivery of our inventory and adversely impact our results of operations.

 In 2024, we had one (1) customer accounting for
more than 10% of our net sales, for approximately 68%. In 2023, we had three (3) customers accounting for more than 10% of our net sales,
for approximately 52%, 14% and 12%. As of December 31, 2024, we had one (1) customer accounting for more than 10% of our trade accounts
receivable, net of allowances, of approximately 86% and as of December 31, 2023 we had one (1) customer of approximately 40%. In the event
our largest customers were to decrease their demand for our products or in the event such customers ceased to purchase products from us,
our operations would be materially and adversely impacted.

 - 8 -

 The company may not be able to adequately
anticipate, prevent, or mitigate damage resulting from criminal and other illegal or fraudulent activities committed against it.

 Global businesses are facing increasing risks
of criminal, illegal, and other fraudulent acts. The evolving nature of such threats, considering new and sophisticated methods used by
criminals, including phishing, misrepresentation, social engineering and forgery, is making it increasingly difficult for the company
to anticipate and adequately mitigate these risks. In addition, designing and implementing measures to defend against, prevent, and detect
these types of activities are increasingly costly and invasive into the operations of the business. As a result, the company could experience
a material loss in the future to the extent that controls and other measures implemented to address these threats fail to prevent or detect
such acts.

 Products sold by the company may be found
to be defective and, as a result, warranty and/or product liability claims may be asserted against the company, which may have a material
adverse effect on the company.

 The company's business could be materially
adversely affected as a result of a significant quality or performance issue in the products or components sold by the company. Despite
our efforts to revise and update our manufacturing and test processes, we may not be able to control and eliminate manufacturing flaws
adequately. These flaws may include undetected software or hardware defects associated with new products, existing products or products
that haves been integrated into a system or apparatus with the products of other vendors. If we fail to adequately monitor, develop and
implement appropriate test and manufacturing processes we could experience a rate of product failure that results in substantial shipment
delays, warranty costs or damage to our reputation. Product flaws may also consume our limited engineering resources and interrupt our
development efforts. Significant product failures would increase our costs and result in the loss of future sales and be harmful to our
business.

 Declines in value of the company's
inventory could materially adversely affect its business.

 The market for the company's products and
services is subject to rapid technological change, evolving industry standards, changes in end-market demand, evolving customer expectations,
oversupply of product, and regulatory requirements, which can contribute to the decline in value or potential obsolescence of inventory.
Many of the company's suppliers will not allow products to be returned after they have been held in inventory beyond a certain amount
of time, and, in most instances, the return rights are limited to a certain percentage of the amount of product the company purchased
in a particular time frame. As we continue to shift our primary focus to our ODM Products 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,
we expect the value of our existing inventory to decline. We had inventory balances in the amount of $2,949,000 and $2,597,000 at December
31, 2024 and 2023, respectively, which is presented net of valuation allowances of $5,152,000 and $5,141,000 at December 31, 2024 and
2023, respectively. Further declines in the value of the company's inventory could have a material adverse effect on the company's
business.

 Tariffs may result in increased prices and
could adversely affect the company's business and results of operations.

 Recently, the U.S. government imposed tariffs
on certain products imported into the U.S. and the Chinese government imposed tariffs on certain products imported into China, which have
increased the prices of many of the products that the company purchases from its suppliers. The tariffs, along with any additional tariffs
or trade restrictions that may be implemented by the U.S., China or other countries, could result in further increased prices. While the
company intends to pass price increases on to its customers, the effect of tariffs on prices may impact sales and results of operations.
Retaliatory tariffs imposed by other countries on U.S. goods have not yet had a significant impact, but the company cannot predict further
developments. The tariffs and the additional operational costs incurred in minimizing the number of products subject to the tariffs could
adversely affect the operating profits of the company and customer demand for certain products which could have an adverse effect on the
company's business and results of operations.

 The company is subject to U.S. and certain
foreign export and import controls, sanctions, embargoes, anti-corruption laws, and anti-money laundering laws and regulations. In the
event of non-compliance, the company can face serious consequences, which can harm its business.

 The company is subject to export control and import
laws and regulations, including the U.S. Export Administration Regulations ("EAR"), U.S. Customs regulations, various economic
and trade sanctions regulations administered by the U.S. Treasury Department's Office of Foreign Assets Controls ("OFAC").
Products the company sells which are either manufactured in the United States or based on U.S. technology ("U.S. Products")
are subject to the EAR when exported and re-exported to and from all international jurisdictions, in addition to the local jurisdiction's
export regulations applicable to individual shipments. Licenses or proper license exemptions may be required by local jurisdictions'
export regulations, including EAR, for the shipment of certain U.S. Products to certain countries, including China, and other countries
in which the company operates. Non-compliance with the EAR, OFAC regulations, or other applicable export regulations can result in a wide
range of penalties including the denial of export privileges, fines, criminal penalties, and the seizure of inventories. In the event
that any export regulatory body determines that any shipments made by the company violate the applicable export regulations, the company
could be fined significant sums and/or its export capabilities could be restricted, which could have a material adverse effect on the
company's business.

 Further, the company is also subject to the U.S.
Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, and other state
and national anti-bribery and anti-money laundering laws in the countries in which it conducts business. Anti-corruption laws are interpreted
broadly and prohibit companies and their employees, agents, contractors, and other collaborators from authorizing, promising, offering,
or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. The company
engages third parties to provide services. The company can be held liable for the corrupt or other illegal activities of its employees,
agents, and contractors, even if it does not explicitly authorize or have actual knowledge of such activities. Any violations of the laws
and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, litigation, reputational
harm, and other consequences to the company.

 - 9 -

 The company is subject to environmental
laws and regulations that could materially adversely affect its business.

 A number of jurisdictions in which the company's
products are sold have enacted laws addressing environmental and other impacts from product disposal, use of hazardous materials in products,
use of chemicals in manufacturing, recycling of products at the end of their useful life, and other related matters. These laws prohibit
the use of certain substances in the manufacture of the company's products and impose a variety of requirements for modification
of manufacturing processes, registration, chemical testing, labeling, and other matters. Failure to comply with these laws or any other
applicable environmental regulations could result in fines or suspension of sales. Additionally, these directives and regulations may
result in the company having non-compliant inventory that may be less readily salable or have to be written off. Some environmental laws
impose liability, sometimes without fault, for investigating or cleaning up contamination on or emanating from the company's currently
or formerly owned, leased, or operated property, as well as for damages to property or natural resources and for personal injury arising
out of such contamination. The presence of environmental contamination could also interfere with ongoing operations or adversely affect
the company's ability to sell or lease its properties. The discovery of contamination for which the company is responsible, the
enactment of new laws and regulations, or changes in how existing regulations are enforced, could require the company to incur costs for
compliance or subject it to unexpected liabilities, which could be material.

 The company may not have adequate or cost-effective
liquidity or capital resources.

 The company requires cash for general corporate
purposes, such as funding its ongoing working capital, acquisitions, and capital expenditure needs. At December 31, 2024, the company
had cash and cash equivalents of approximately $4.2 million. The company believes that funds generated from operations, existing cash
balances and, if necessary, related party short-term loans, are likely to be sufficient to finance its working capital and capital expenditure
requirements for the foreseeable future. If these funds are not sufficient, the company may need to secure new sources of asset-based
lending on accounts receivables or issue debt or equity securities. In the event the company requires additional capital to meet its business
needs, there can be no assurance that additional funding will be available when needed or, if available, that it can be obtained on commercially
reasonable terms.

 The company's revenues and operating
results may fluctuate unexpectedly from quarter to quarter, which may in turn affect its stock price.

 The company's quarterly revenues and operating
results have fluctuated in the past, and are likely to vary in the future due to the various factors, including:

 General economic conditions affecting spending and the rates
of growth or decline in the markets the company services; including changes caused by rising inflation, and the ongoing war in Europe.

 Variations in product order backlogs, and reductions in the
size, delays in the timing, or cancellation of significant customer orders;

 The timing of introductions and marketplace acceptance of
new or enhanced products by the company or its competitors;

 Expansions or reductions in the company's relationships
with its OEM customers;

 Unforeseen warranty costs that exceed established reserves;

 Timing and levels of the company's operating expenses;
or

 Emerging new technologies that change the nature of or need
for the company's products and components held in inventory.

 We believe that period-to-period comparisons of
our operating results may not necessarily be reliable indicators of our future performance. It is likely that in some future period our
operating results will not meet your expectations or those of public market analysts. Any unanticipated change in revenues or operating
results is likely to cause the company's stock price to fluctuate since such changes reflect new information available to investors
and analysts. New information may cause investors and analysts to revalue the company's stock and this, in the aggregate, may cause
fluctuations in the company's stock price.

 If the company fails to maintain an effective
system of internal controls or discovers material weaknesses in its internal controls over financial reporting, it may not be able to
report its financial results accurately or timely or detect fraud, which could have a material adverse effect on its business.

 An effective internal control environment is necessary
for the company to produce reliable financial reports, safeguard assets, and is an important part of its effort to prevent financial fraud.
The company is required to annually evaluate the effectiveness of the design and operation of its internal controls over financial reporting.
Based on these evaluations, the company may conclude that enhancements, modifications, or changes to internal controls are necessary or
desirable. While management evaluates the effectiveness of the company's internal controls on a regular basis, these controls may
not always be effective. There are inherent limitations on the effectiveness of internal controls, including collusion, management override,
and failure in human judgment. In addition, control procedures are designed to reduce rather than eliminate financial statement risk.
If the company fails to maintain an effective system of internal controls, or if management or the company's independent registered
public accounting firm discovers material weaknesses in the company's internal controls, it may be unable to produce reliable financial
reports or prevent fraud, which could have a material adverse effect on the company's business. In addition, the company may be
subject to sanctions or investigation by regulatory authorities, such as the SEC or NASDAQ. Any such actions could result in an adverse
reaction in the financial markets due to a loss of confidence in the reliability of the company's financial statements, which could
cause the market price of its common stock to decline or limit the company's access to capital.

 - 10 -

 The company's success depends upon
its key executives.

 Any failure to attract and retain necessary talent
may materially and adversely affect the company's business, prospects, financial condition, and results of operations. The company's
success depends, to a significant extent, on the capability, expertise, and continued services of its senior management team. The company
relies on the expertise and experience of certain key executives in developing business strategies, business operations, and maintaining
relationships with customers and suppliers. If the company were to lose any of its key executives, it may not be able to find a suitable
replacement with comparable knowledge and experience. The company may also need to offer better remuneration and other benefits to attract
and retain key executives and therefore cannot be assured that costs and expenses will not increase significantly as a result of increased
talent acquisition and retention cost.

 Cyber security and privacy breaches may
hurt the company's business, damage its reputation, increase its costs, and cause losses.

 The company's information technology systems
could be subject to invasion, cyber-attack, or data privacy breaches by employees, others with authorized access, and unauthorized persons.
Such attacks could result in disruption to the company's operations and/or loss or disclosure of, or damage to, the company's
or any of its customer's or supplier's data, confidential information, or reputation. The company's information technology
systems security measures may also be breached due to employee error, malfeasance, or otherwise. Additionally, outside parties may attempt
to fraudulently induce employees, customers, or suppliers to disclose sensitive information in order to gain access to the company's
data and information technology systems. Any such breach could result in significant legal and financial exposure, damage to the company's
reputation, loss of competitive advantage, and a loss of confidence in the security of the company's information technology systems
that could potentially have an impact on the company's business. Because the techniques used to obtain unauthorized access, disable
or degrade, or sabotage the company's information technology systems change frequently and often are not recognized until launched,
the company may be unable to anticipate these techniques or to implement adequate preventive measures. Further, third parties, such as
hosted solution providers, that provide services for the company's operations, could also be a source of security risk in the event
of a failure of their own security systems and infrastructure.

 The company makes investments seeking to address
risks and vulnerabilities, including ongoing monitoring, updating networks and systems, and personnel awareness training of potential
cybersecurity threats to help ensure employees remain diligent in identifying potential risks. In addition, the company has deployed monitoring
capabilities to support early detection, internal and external escalation, and effective responses to potential anomalies. As part of
the company's review of potential risks, the company analyzes emerging cyber security threats as well as the company's plan
and strategies to address them. Although the company has developed systems and processes that are designed to protect information and
prevent data loss and other security breaches, including systems and processes designed to reduce the impact of a security breach, such
measures cannot provide absolute security. Such breaches, whether successful or unsuccessful, could result in the company incurring costs
related to, for example, rebuilding internal systems, defending against litigation, including litigation brought by governmental authorities,
responding to regulatory inquiries or actions, paying damages, or taking other remedial steps. Also, global privacy legislation, enforcement,
and policy activity are rapidly expanding and creating a complex compliance environment. The company's failure to comply with federal,
state, or international privacy related or data protection laws and regulations could result in proceedings against the company by governmental
entities or others and other fines or penalties that could have a material adverse effect on the company's business.

 The company relies heavily on its internal
information systems, which, if not properly functioning, could materially adversely affect the company's business.

 The company's current global operations
reside on multiple technology platforms. The size and complexity of the company's computer systems make them potentially vulnerable
to breakdown, malicious intrusion, and random attack. To date, the company has not experienced any identifiable significant issues. Failure
to properly or adequately address any unaccounted for or unforeseen issues could impact the company's ability to perform necessary
business operations, which could materially adversely affect the company's business.

 The company may be subject to intellectual
property rights claims, which are costly to defend, could require payment of damages or licensing fees and could limit the company's
ability to use certain technologies in the future.

 Certain of the company's products and services
include intellectual property owned primarily by the company's third party suppliers and, to a lesser extent, the company itself.
Substantial litigation and threats of litigation regarding intellectual property rights exist in the business in which the company operates.
From time to time, third parties (including certain companies in the business of acquiring patents not for the purpose of developing technology
but with the intention of aggressively seeking licensing revenue from purported infringers) may assert patent, copyright and/or other
intellectual property rights to technologies that are important to the company's business. In some cases, depending on the nature
of the claim, the company may be able to seek indemnification from its suppliers for itself and its customers against such claims, but
there is no assurance that it will be successful in obtaining such indemnification or that the company is fully protected against such
claims. In addition, the company is exposed to potential liability for technology that it develops itself or when it combines multiple
technologies of its suppliers for which it may have limited or no indemnification protections. In any dispute involving products or services
that incorporate intellectual property from multiple sources or is developed, licensed by the company, or obtained through acquisition,
the company's customers could also become the targets of litigation. The company may be obligated in certain instances to indemnify
and defend its customers if the products or services the company sells are alleged to infringe any third party's intellectual property
rights. Any infringement claim brought against the company, regardless of the duration, outcome, or size of damage award, could result
in substantial cost to the company; divert management's attention and resources, be time consuming to defend, result in substantial
damages or awards or cause product shipment delays.

 - 11 -

 Additionally, if an infringement claim is successful,
the company may be required to pay damages or seek royalty or license arrangements, which may not be available on commercially reasonable
terms. The payment of any such damages or royalties may significantly increase the company's operating expenses and harm the company's
operating results and financial condition. Also, royalty or license arrangements may not be available at all. The company may have to
stop selling certain products or using technologies, which could affect the company's ability to compete effectively.

 Trading in the company's stock has
historically been limited and the company's stock price has been volatile, which may affect your ability to sell your shares.

 The average trading volume in the company's
stock has been historically low, with little or no trading at all on some days. This, as well as other factors, has caused the price of
the company's stock to be volatile. Consequently, it may be difficult to sell your shares of the company's stock at the price
you paid for them or at a price equal to that quoted on the NASDAQ Stock Market. In addition, stock markets have experienced extreme price
and volume volatility recently. This volatility has had a substantial effect on the market prices of securities of many smaller public
companies for reasons frequently unrelated or disproportionate to the operating performance of the specific companies. These market fluctuations
may adversely affect the market price of our common stock.

 ITEM
1B. UNRESOLVED STAFF COMMENTS. Not applicable.

 ITEM
1C. CYBERSECURITY.

 We
have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability
of our critical systems and information. Our cybersecurity risk management program is integrated into our overall enterprise
risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise
risk management program to other legal, compliance, strategic, operational, and financial risk areas.

 Key
elements of our cybersecurity risk management program include but are not limited to,

 risk
 assessments designed to help identify material risks from cybersecurity threats to our critical
 systems, information, services, and our broader enterprise IT environment;

 individuals, including employees and external third-party service providers, who are responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents; and

 a
 cybersecurity incident response plan that includes procedures for responding to cybersecurity
 incidents

 Our
management team is responsible for assessing and managing our material risks from cybersecurity threats. The team has
primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel
and our retained external cybersecurity consultants. Members of our management team have prior work experience in supervising and implementing
cybersecurity risk mitigation efforts. Our internal cybersecurity personnel and retained external cybersecurity consultants also
have a breadth of expertise across core cybersecurity disciplines including governance, risk, compliance, and security architecture.

 Our management team
takes steps to stay informed and monitors efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through
various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from
governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools
deployed in the IT environment.

 Our
 Board considers cybersecurity risk as part of its risk oversight function and receives regular updates from the management team on our
cybersecurity risks and in addition, management updates the Board where it deems appropriate, regarding any cybersecurity incidents it
considers to be significant or potentially significant.

 ITEM 2. PROPERTIES.

 We own our headquarters and
main distribution facility located in Valencia, California. This facility is approximately 50,000 total square feet, of which 40,000 square
feet is warehouse space and 10,000 square feet is general office space. We also occasionally sublease approximately 3,500 square feet
of our unused office space as rental property to others. We believe this facility is adequately covered by insurance (except earthquake
coverage).

 We also have the following
properties: (1) we own 4,500 square feet of office space in Shanghai, China - this property is being used as our project design and engineering
center and partially as rental property for lease to others and (2) we own 2,500 square feet of office space in Taipei, Taiwan. We believe
these existing facilities are adequate for the foreseeable future and have no plans to renovate or expand them.

 ITEM 3. 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
4. MINE SAFETY DISCLOSURES. Not applicable.

 - 12 -

 ITEM 5. MARKET FOR REGISTRANT'S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 Market Information. Our Class A common stock is listed on the
Nasdaq Capital Market (trading symbol: "TAIT").

 Number of Shareholders of Record. As of
March 15, 2024, there were 13 registered holders of record of our Class A common stock and 1 holder of record of our Class B common stock,
which is not traded. W e are unable to estimate the total number of shareholders
represented by these Class A holders of record, b ecause many of these
shares are held by brokers beneficially on behalf of shareholders.

 Dividends and Dividend Policy. The declaration
and payment of future dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition,
results of operations, capital requirements, and other factors they deem relevant. We are not aware of any contractual or similar restrictions
that limit our ability to pay dividends, currently or in the future. See "Management's Discussion and Analysis - Results of
Operations; Liquidity and Capital Resources."

 For the years ended December 31, 2023 and 2024
we paid quarterly dividends of $0.05 per share.

 Securities authorized for issuance under equity
compensation plans.

 Equity Compensation Plan
Information

 Number of

 securities to

 be issued

 upon

 exercise of

 outstanding

 options,

 warrants

 and rights

 Weighted

 -average

 exercise

 price of

 outstanding

 options,

 warrants and

 rights

 Number of

 securities

 remaining

 available for

 future

 under equity

 compensation

 plans

 (excluding

 securities

 reflected in

 column (a))

 Plan Category

 (a)

 (b)

 (c)

 Equity compensation plans approved by security holders

 201,567

 $
 3.22

 522,767

 Equity compensation plans not approved by security holders

 -

 -

 -

 Total

 201,567

 $
 3.22

 522,767

 Recent Sales of Unregistered Sales of Equity Securities. None.

 Purchases of Equity Securities by the Issuer and Affiliated Purchasers. None.

 ITEM 6. [Reserved].

 - 13 -

 ITEM 7. MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 This discussion contains forward-looking statements
that involve risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by
such forward-looking statements as a result of many important factors, including those set forth in Part I of this Annual Report on Form
10-K under the caption "Risk Factors." Please see "Cautionary Note Regarding Forward-Looking Statements" in Part
I above. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the
date of this Annual Report. The following discussion should be read in conjunction with the consolidated financial statements, including
the related notes, appearing in Item 8 of this Annual Report on Form 10-K.

 Critical Accounting Policies and Estimates

 Use of Estimates – We
have 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 consolidated financial statements included in Item 8 of this Annual Report on Form 10-K in accordance with
generally accepted accounting principles in the United States. These estimates have a significant impact on our valuation and reserve
accounts relating to the allowance for sales returns and allowances, credit losses, inventory reserves and deferred income taxes. Actual
results could differ from these estimates.

 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. Reserves for sales
allowances and customer returns are established based upon historical experience and our estimates of future returns. Sales returns for
the years ended December 31, 2024 and 2023 were $0. The allowance for sales returns and allowances and credit losses at December 31, 2024
and 2023 aggregated $7,000. We review the actual sales returns and bad debts for our customers and establish an estimate of future returns
and an allowance for credit losses.

 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 $2,949,000 and $2,597,000 at December 31, 2024 and 2023, respectively, which is presented
net of valuation allowances of $5,152,000 and $5,141,000 at December 31, 2024 and 2023, respectively. We increased our reserves by $11,000
and $74,000 during the years ended December 31, 2024 and 2023, respectively, while also applying $0 and $2,000 of our existing reserves
to the underlying inventory values during the years ended December 31, 2024 and 2023, 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.

 - 14 -

 In accordance with generally
accepted accounting principles, we have classified inventory as a current asset in our December 31, 2024, consolidated financial statements
representing approximately 22.9% of current assets and 16.7% 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, the relative strength of the U.S. dollar, provisions for inventory reserves,
our ability to purchase inventory at favorable prices and our sales product mix.

 Results of Operations

 The Year Ended December 31, 2024 Compared to
the Year Ended December 31, 2023

 Net sales were $4,141,000
and $6,108,000 in 2024 and 2023, respectively, representing a decrease of $1,967,000 or 32.2%. The decrease was primarily in ODM Projects
and owing to lower demand. Key customers of our ODM Projects have variable life
cycles and production demands. As some projects are accelerating and others approach end of life, the timing of new production creates
a fluctuation in sales.

 Gross profit was $2,118,000
and $3,448,000 in 2024 and 2023, respectively, which represented 51.1% and 56.5% of net sales for those periods. D uring
2024, we remained impacted by tariff costs on certain products imported from China, which went into effect as of July 6, 2018. However,
we continue to pass along a portion of these costs to our customers to mitigate these costs.

 Selling, general and administrative
expenses were $2,222,000 and $2,248,000 in 2024 and 2023, respectively, which represented 53.7% and 36.8% of net sales for those periods.
The year-over-year decrease of $26,000 was primarily due to personnel costs.

 Operating (loss)income was
($104,000) and $1,200,000 in 2024 and 2023, respectively, which represented -2.5% and 19.6% of net sales for those periods.

 Other income was $1,234,000 and $836,000 in 2024
and 2023, respectively, which represented 29.7% and 19.6% of 13.7% of net sales for those periods. Other income primarily relates to recording
net gains of $1,200,000 and $800,000 during the years ended December 31, 2024 and 2023, respectively, for short-term investments.

 Net interest income, primarily
earned from certificates of deposits in banks was $289,000 and $221,000 in 2024 and 2023, respectively.

 Income tax provision was $513,000
and $412,000 in 2024 and 2023, respectively.

 As result of the foregoing,
we recognized net income of $902,000 and $1,845,000 in 2024 and 2023, respectively, which represented 21.8% and 30.2% of net sales for
those periods.

 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. A summary of our cash flows resulting from our operating, investing and financing activities
for the years ended December 31, 2024 and 2023 were as follows:

 Twelve Months Ended

 2024

 2023

 Operating activities

 $
 (258,000
)

 $
 3,150,000

 Investing activities

 $
 (547,000
)

 $
 (1,011,000
)

 Financing activities

 $
 (1,204,000
)

 $
 (1,148,000
)

 - 15 -

 Cash used in operating activities
decreased to ($258,000) during 2024, as compared to provided by $3,150,000 in the prior year. The $3,408,000 decrease was primarily due
to changes in inventory, accounts receivable, values of marketable securities, deferred income taxes, accounts payable and net income.

 Cash used for investing activities
was $547,000 during 2024, as compared to $1,011,000 in the prior year. The decrease was from purchase of short-term investments (see also
Item 8 - Note 1 – Short-term Investments).

 Cash used in financing activities
was $1,204,000 during 2024, as compared to $1,148,000 in the prior year. In 2024, we made dividend payments of $1,204,000. In 2023, we
made dividend payments of $1,202,000 and received proceeds from the exercise of stock options of $54,000.

 We believe that funds generated
from operations, existing cash balances and 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 December 31, 2024, inventory represented approximately 22.9% of current assets and 16.7% 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 a one (1)
year time frame. Hence, inventory would not be as readily marketable or liquid as other items included in current assets, such as cash.

 Recent Accounting Pronouncements

 Refer to Note 1 of our consolidated
financial statements for recent accounting pronouncements.

 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 8 - Note 12 – Commitments and Contingencies).

 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable.

 - 16 -

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA.

 INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID 820)

 Consolidated Balance Sheets

 Consolidated Statements of Operations and Comprehensive Income

 Consolidated Statements of Shareholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 - 17 -

 18012 Sky Park Circle, Suite 200

 Irvine, California 92614

 tel 949-852-1600

 fax 949-852-1606

 www.rjicpas.com

 Report of Independent Registered Public Accounting
Firm

 To the Board of Directors and

 Shareholders of Taitron
Components Incorporated

 Opinion on the Consolidated Financial Statements

 We have audited the accompanying consolidated
balance sheets of Taitron Components Incorporated (the "Company") as of December 31, 2024 and 2023 and the related consolidated
statements of operations and comprehensive income, shareholders' equity and cash flows for the years then ended and the related
notes to consolidated financial statements (collectively, the "consolidated financial statements").

 In our opinion, the consolidated financial statements
present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023 and the
results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted
in the United States of America.

 Basis for Opinion

 These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Security and Exchange Commission and the PCAOB.

 We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audit included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error fraud, and performing procedures that
respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provides a reasonable
basis for our opinion.

 Critical audit matters

 The critical audit matter communicated below is
a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated
to the Audit Committee of the Board of Directors and that: (1) relate to accounts or disclosures that are material to the consolidated
financial statements and (2) involved challenging, subjective, or complex judgments. The communication of critical audit matters does
not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

 - 18 -

 Assessment
of reserves for slow-moving or potential obsolescence

 As discussed in Notes 1 and 3 to the consolidated
financial statements, the Company assesses the valuation of its inventories, which principally consists of products held for resale, each
reporting period. Slow-moving inventory or inventory with potential obsolescence is written down to its estimated net realizable value
if less than cost. Estimates of slow-moving or potential obsolescence include the Company's analysis of anticipated demand, possible
alternative uses of its inventory, as well as other qualitative factors. As of December 31, 2024, the Company's inventories totaled
$2,949,000, net of reserves for slow-moving or potential obsolescence of $5,152,000.

 We identified the assessment of the value of the
reserves for slow-moving or potential obsolescence as a critical audit matter. Subjective auditor judgment was required to evaluate the
Company's estimates of anticipated demand and possible alternative uses of its inventory, which are affected by market and economic
conditions outside the Company's control.

 The primary procedures we performed to address
the critical audit matter included, among other things, the following: 1) review and test the process used by management to develop the
estimate; 2) develop an independent expectation of the estimate to corroborate the reasonableness of management's estimate; 3) review
subsequent events or transactions occurring prior to the date of the auditors' report; 4) review gross profit margin analysis; and
5) perform other analytical procedures.

 We have served as the Company's auditor since 2020.

 /s/ Ramirez Jimenez International CPAs

 Irvine, California

 - 19 -

 Taitron Components
Incorporated AND DIVISIONS

 Consolidated Balance Sheets

 2024

 2023

 Assets

 Current assets:

 Cash and cash equivalents

 $
 4,208,000

 $
 6,205,000

 Accounts receivable, less allowances of $ 7,000

 421,000

 92,000

 Short-term investments (Note 2)

 3,630,000

 Inventories, less reserves for obsolescence of $ 5,152,000, and $ 5,141,000, respectively (Note 3)

 2,949,000

 2,597,000

 Prepaid expenses and other current assets

 122,000

 283,000

 Total current assets

 12,879,000

 12,807,000

 Property and equipment, net

 3,029,000

 2,970,000

 Deferred taxes

 1,542,000

 2,043,000

 Other assets (Note 5)

 Total assets

 $
 17,636,000

 $
 18,006,000

 Liabilities and Equity

 Current liabilities:

 Accounts payable

 $
 251,000

 $
 194,000

 Accrued liabilities

 822,000

 969,000

 Total current and total liabilities

 1,073,000

 1,163,000

 Commitments and contingencies (Note 12)

 Equity:

 Shareholders' equity:

 Preferred stock, $ 0.001 par value. Authorized 5,000,000 shares; None issued or outstanding

 -

 -

 Class A common stock, $ 0.001 par value. Authorized 20,000,000 shares; 5,258,568 shares issued and outstanding

 5,000

 5,000

 Class B common stock, $ 0.001 par value. Authorized, issued and outstanding 762,612 shares

 1,000

 1,000

 Additional paid-in capital

 11,484,000

 11,474,000

 Accumulated other comprehensive loss

 ( 49,000
)

 ( 61,000
)

 Retained earnings

 5,122,000

 5,424,000

 Total shareholders' equity

 16,563,000

 16,843,000

 Total liabilities and equity

 $
 17,636,000

 $
 18,006,000

 See accompanying notes to consolidated financial
statements.

 - 20 -

 Taitron Components
Incorporated AND DIVISIONS

 Consolidated Statements of Operations and Comprehensive
Income

 Twelve Months Ended

 2024

 2023

 Net product revenue

 $

 $

 Cost of products sold

 2,023,000

 2,660,000

 Gross profit

 2,118,000

 3,448,000

 Selling, general and administrative expenses

 2,222,000

 2,248,000

 Operating (loss)income

 ( 104,000
)

 1,200,000

 Interest income, net

 289,000

 221,000

 Other income, net

 1,230,000

 836,000

 Income before income taxes

 1,415,000

 2,257,000

 Income tax provision

 ( 513,000
)

 ( 412,000
)

 Net income

 $

 $

 Net income per share: Basic - Class A

 $
 0.15

 $
 0.31

 Basic - Class B

 $
 0.15

 $
 0.31

 Diluted - Class A

 $
 0.15

 $
 0.31

 Diluted - Class B

 $
 0.15

 $
 0.31

 Weighted average shares outstanding: Basic - Class A

 5,242,665

 Basic - Class B

 Diluted - Class A

 5,267,665

 Diluted - Class B

 Cash dividends declared per common share

 $
 0.200

 $
 0.200

 Net income

 $

 $

 Other comprehensive income:

 Foreign currency translation adjustment

)

 Comprehensive income

 914,000

 1,842,000

 See accompanying notes to consolidated financial
statements.

 - 21 -

 Taitron Components
Incorporated AND DIVISIONS

 Consolidated Statements of Shareholders'
Equity

 For the years ended December 31, 2024 and December
31, 2023

 Accumulated

 Common Stock

 Additional

 Other

 Class A

 Class B

 Paid-in

 Comprehensive

 Retained

 Total

 Shares

 Amount

 Shares

 Amount

 capital

 Income (Loss)

 Earnings

 Equity

 Balances at December 31, 2022

 5,233,568

 $
 5,000

 $
 1,000

 $
 11,407,000

 $
 ( 58,000
)

 $
 4,781,000

 $
 16,136,000

 Consolidated net income

 -

 -

 -

 -

 -

 -

 Other comprehensive loss

 -

 -

 -

 -

 -

)

 -

)

 Exercise stock options

 25,000

 -

 -

 -

 54,000

 -

 -

 54,000

 Amortization of stock based compensation

 -

 -

 -

 -

 13,000

 -

 -

 13,000

 Cash dividends

 -

 -

 -

 -

 -

 -

 ( 1,202,000
)

 ( 1,202,000
)

 Balances at December 31, 2023

 $
 5,000

 $
 1,000

 $
 11,474,000

 $
 ( 61,000
)

 $
 5,424,000

 $
 16,843,000

 Consolidated net income

 -

 -

 -

 -

 -

 -

 Other comprehensive income

 -

 -

 -

 -

 -

 -

 Amortization of stock based compensation

 -

 -

 -

 -

 10,000

 -

 -

 10,000

 Cash dividends

 -

 -

 -

 -

 -

 -

 ( 1,204,000
)

 ( 1,204,000
)

 Balances at December 31, 2024

 $
 5,000

 $
 1,000

 $
 11,484,000

 $
 ( 49,000
)

 $
 5,122,000

 $
 16,563,000

 See accompanying notes to consolidated financial
statements.

 - 22 -

 Taitron
Components Incorporated AND DIVISIONS

 Consolidated Statements of Cash Flows

 Twelve Months Ended

 2024

 2023

 Operating activities:

 Net income

 $

 $

 Adjustments to reconcile net income to net cash (used for) provided by operating activities:

 Depreciation and amortization

 173,000

 167,000

 Provision for inventory reserves

 11,000

 74,000

 Reversal of inventory reserves

 -

 ( 2,000
)

 Stock based compensation

 10,000

 13,000

 Deferred income taxes

 501,000

 4,000

 Changes in values of marketable securities

 ( 1,234,000
)

 ( 800,000
)

 Changes in assets and liabilities:

 Accounts receivable

 ( 329,000
)

 591,000

 Inventories

 ( 363,000
)

 1,231,000

 Prepaid expenses and other current assets

 161,000

 ( 135,000
)

 Accounts payable

 57,000

 ( 17,000
)

 Accrued liabilities

 ( 147,000
)

 179,000

 Total adjustments

 ( 1,160,000
)

 1,305,000

 Net cash (used for) provided by operating activities

 ( 258,000
)

 3,150,000

 Investing activities:

 Acquisition of property and equipment

 ( 232,000
)

 ( 215,000
)

 Purchase of marketable securitites

 ( 3,296,000
)

 ( 7,835,000
)

 Sales of marketable securities

 2,981,000

 7,039,000

 Net cash used for investing activities

 ( 547,000
)

 ( 1,011,000
)

 Financing activities:

 Dividend payments

 ( 1,204,000
)

 ( 1,202,000
)

 Proceeds from stock options exercised

 -

 54,000

 Net cash used for financing activities

 ( 1,204,000
)

 ( 1,148,000
)

 Impact of exchange rates on cash

)

 Net (decrease)increase in cash and cash equivalents

 ( 1,997,000
)

 988,000

 Cash and cash equivalents, beginning of period

 6,205,000

 5,217,000

 Cash and cash equivalents, end of period

 $
 4,208,000

 $
 6,205,000

 Supplemental disclosures of cash flow information:

 Cash paid for income taxes, net

 $
 203,000

 $
 559,000

 See accompanying notes to consolidated
financial statements.

 - 23 -

 Taitron
Components Incorporated AND DIVISIONS

 Notes to Consolidated Financial Statements

 1 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES

 Overview of Business

 We are primarily a supplier of original designed
and manufactured (ODM) electronic components ("ODM Components") with our product offerings ranging from discrete semiconductors
through small electronic devices. Our products include value-added engineering and turn-key solutions, focusing on providing contract
electronic manufacturers (CEMs) and original equipment manufacturers (OEMs) with ODM products for their multi-year turn-key projects ("ODM
Projects"). We also distribute brand name electronic components with a vast inventory available on hand. We are incorporated in
California, and were originally formed in 1989. We maintain divisions in Taiwan and China which were established in 1996 and 2005, respectively.

 Basis of Presentation

 The accompanying consolidated financial statements
have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States.

 Reclassifications

 Certain amounts in the prior period consolidated
financial statements have been reclassified to conform to the presentation of the current period consolidated financial statements. These
reclassifications had no effect on the previously reported net income. Prior period results reflect reclassifications, for comparative
purposes, related to the change in the purchase of marketable securities, sales of marketable securities, and changes in values of marketable
securities.

 Principles of Consolidation

 Our consolidated financial statements include
the accounts of Taitron Components and its two divisions. All intercompany accounts have been eliminated in consolidation.

 Concentration of Risk

 A significant number of the products we distribute
are manufactured in Taiwan, Hong Kong, China, South Korea and the Philippines. The purchase of goods manufactured in foreign countries
is subject to a number of risks, including economic disruptions, transportation delays and interruptions, foreign exchange rate fluctuations,
imposition of tariffs and import and export controls and changes in governmental policies, any of which could have a material adverse
effect on our business and results of operations.

 The ability to remain competitive with respect
to the pricing of imported components could be adversely affected by increases in tariffs or duties, changes in trade treaties, strikes
in air or sea transportation, and possible future U.S. legislation with respect to pricing and import quotas on products from foreign
countries. For example, it is possible that political or economic developments in China, or with respect to the relationship of the United
States with China, could have an adverse effect on our business. Our ability to remain competitive could also be affected by other government
actions related to, among other things, anti-dumping legislation and international currency fluctuations. While we do not believe that
any of these factors adversely impact our business at present, we cannot provide assurance that these factors will not materially adversely
affect us in the future. Any significant disruption in the delivery of merchandise from our suppliers, substantially all of whom are foreign,
could also have a material adverse impact on our business and results of operations. Management estimates that over 90 % of our products
purchased were produced in Asia.

 Grand Shine Electronics and Zowie Technology (see
also Note 5 – Other Assets) together accounted for approximately 43.3 % and 61.2 % of our net purchases for each of the fiscal years
2024 and 2023, respectively. However, we do not regard any one supplier as essential to our operations, since equivalent replacements
for most of our products are either available from one or more of our other suppliers or are available from various other sources at competitive
prices. We believe that, even if we lose our direct relationship with a supplier, there exist alternative sources for a supplier's
products.

 We had customers accounting for more than 10%
of our net sales. In 2024, we had one (1) customer for approximately 68 %, and in 2023, we had three (3) customers each for approximately
 52 %, 14 % and 12 %.

 We had customers accounting for more than 10%
of our trade accounts receivable, net of allowances. As of December 31, 2024, we had one (1) customer of approximately 86 % and as of December
31, 2023 we had one (1) customer of approximately 40 %.

 - 24 -

 Cash and Cash Equivalents

 Cash and
cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with
original maturities of 90 days or less. Our cash equivalents are comprised primarily of money market investments. Our deposit accounts
are not insured, however, we do not believe there is a significant credit risk with respect to the non-performance of these institutions
based on their respective creditworthiness and liquidity.

 Certificates of Deposit

 Certificates
of deposit are included in cash equivalents and consist of restricted cash invested in bank time deposits. They are valued at amortized
cost, which approximates fair value and included as a Level 2 measurement in the following Fair Value Measurements table
below.

 Short-term Investments

 Short-term investments consist of equity securities in publicly-traded
companies and 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 both realized and unrealized gains and losses recorded in other income (expense), net on the consolidated
statements of operations and comprehensive income.

 Revenue Recognition

 We recognize revenue from contracts with customers
in accordance with Financial Accounting Standards Board ("FASB") ASC Topic 606, "Revenue from Contracts with Customers"
("ASC 606"). Revenue is recognized at the point at which control
of the underlying products are transferred to the customer. Satisfaction of our performance obligations occur upon the transfer of control
of products, either from our facilities or directly from suppliers to customers. We consider customer purchase orders to be the contracts
with a customer. All revenue is generated from contracts with customers with 30 days net payment terms. Reserves for sales allowances
and customer returns are established based upon historical experience and management's estimates of future returns. Sales returns
for each of the years ended December 31, 2024 and 2023 amounted to $ 0.

 Business Segments

 Operating segments are defined as components of
an enterprise for which separate financial segment is regularly evaluated by the chief operating decision maker ("CODM"),
which is our Chief Executive Officer, in deciding how to allocate resources and performance. Our CODM evaluates our financial information
including budge-versus-actual results and cash projections on an aggregate basis when assessing performance for allocating financial and
personnel resources. Our CODM allocates resources based upon our net income, which is utilized to monitor budget-to-actual variances monthly.
The measure of segment assets is reported on the balance sheets as total assets.

 We are not organized by market and managed and
operated as one business, the business of supplying ODM products and electronic components. See Note 13 to the consolidated financial
statements Geographic Information, for additional information.

 Nature of products

 We are primarily a supplier of original designed and manufactured (ODM)
products that include value-added engineering and turn-key solutions. The following is a description of major products lines from which
we generate our revenue:

 ODM Projects - 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.

 - 25 -

 Disaggregation of revenue

 In the following table, revenue is disaggregated by primary geographical
market, major product line, and timing of revenue recognition.

 Twelve Months Ended

 2024

 2023

 Primary geographical markets:

 United States

 $
 3,867,000

 $
 5,753,000

 Asia

 261,000

 327,000

 Other

 13,000

 28,000

 Major product lines:

 ODM projects

 $
 3,090,000

 $
 3,900,000

 ODM components

 1,034,000

 2,149,000

 Distribution components

 17,000

 59,000

 Timing of revenue recognition:

 Products transferred at a point in time

 $

 $

 Allowances for Sales Returns and Credit Losses

 Sales Returns - We may, on a case-by-case basis,
accept returns of products from our customers, without restocking charges, when they can demonstrate an acceptable cause for the return.
Requests by a distributor to return products purchased for its own inventory generally are not included under this policy. We may, on
a case-by-case basis, accept returns of products upon payment of a restocking fee, which is generally 10% to 30% of the net sales price.
We will not accept returns of any products that were special-ordered by a customer or that otherwise are not generally included in our
inventory.

 Credit Losses – Trade accounts receivable
are recorded net of reserves for expected credit losses. Estimates for allowances for credit losses are determined based on existing contractual
obligations, historical payment patterns and individual customer circumstances. All of our accounts receivables are trade-related receivables.
Our evaluation of past events, current conditions, and reasonable and supportable forecasts about the future resulted in an expectation
of immaterial credit losses.

 The allowances for sales returns and credit losses
at December 31, 2024 and 2023 amounted to $ 7,000.

 Inventory

 Inventory, consisting principally of products
held for resale, is stated at the lower of cost, using the first-in, first-out method, and net realizable value. The amount presented
in the accompanying consolidated balance sheets is net of valuation allowances of 5,152,000 and $ 5,141,000 at December 31, 2024 and 2023,
respectively.

 Based upon regular evaluations of inventory to
identify costs in excess of the lower of cost and net realizable value, slow-moving inventory and potential obsolescence, we increased
our reserves by $ 11,000 and $ 74,000 during the years ended December 31, 2024 and 2023, respectively, while also applying $ 0 and $ 2,000
of our existing reserves to the underlying inventory values during the years ended December 31, 2024 and 2023, respectively (see Note
3 – Inventory).

 Property and Equipment

 Property and equipment are carried at cost less
accumulated depreciation and amortization. Depreciation and amortization of property and equipment are computed principally using accelerated
and straight-line methods using lives from 5 to 7 years for furniture, equipment, computer software and hardware and 31.5 years for building
and building improvements. Property and equipment amortized using an accelerated method does not result in a material difference over
the straight-line method. Renewals and betterments, which extend the life of an existing asset, are capitalized while normal repairs and
maintenance costs are expensed as incurred.

 - 26 -

 Investments

 Investments are accounted for using the equity
method if the investment provides us the ability to exercise significant influence, but not control, over an investee. Significant influence
is generally deemed to exist if we have an ownership interest in the voting stock of the investee between 20% and 50%, although other
factors, such as representation on the investee's Board of Directors, are considered in determining whether the equity method is
appropriate.

 All other equity investments, which consist of
investments for which we do not possess the ability to exercise significant influence, are accounted for under the cost method. Under
the cost method of accounting, investments are carried at cost and are adjusted only for other-than-temporary declines in realizable value
and additional investments.

 Impairment of Long-Lived Assets and Long-Lived
Assets to Be Disposed Of

 In accordance with ASC 360, we evaluate long-lived
assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such
factors and circumstances exist, we compare the projected undiscounted future cash flows associated with the related asset or group of
assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying
amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in
the period in which the determination is made. We currently believe there is no impairment of our long-lived assets. There can be no assurance,
however, that market conditions will not change or demand for our products under development will continue. Either of these could result
in future impairment of long-lived assets.

 Shipping Activities

 Outbound shipping charges to customers are included in "Net sales".
Outbound shipping-related costs are included in "Cost of products sold".

 Stock-Based Compensation

 We account for all share-based compensation in
accordance ASC 718-20. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and
is recognized as expense over the requisite vesting period.

 Income Taxes

 We account for income taxes under the asset and
liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount
expected to be realized.

 ASC 740, Income Taxes ("ASC 740"),
which clarifies the accounting and disclosure for uncertainty in tax positions, as defined, seeks to reduce the diversity in practice
associated with certain aspects of the recognition and measurement related to accounting for income taxes. We have identified the U.S.
federal and California as our "major" tax jurisdictions. With limited exceptions, we remain subject to Internal Revenue Service
("IRS") examination of our income tax returns filed within the last three (3) years, and to California Franchise Tax Board
examination of our income tax returns filed within the last four (4) years. However, we have certain tax attribute carryforwards which
will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the
year in which such attributes are utilized.

 We believe that our income tax filing positions
and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial
position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. Our policy for recording interest
and penalties associated with income-based tax audits is to record such items as a component of income taxes.

 - 27 -

 Fair Value Measurements

 When determining the fair value measurements for
assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which
we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk,
transfer restrictions, and risk of nonperformance. We use the following three levels of inputs in determining the fair value of our assets
and liabilities, focusing on the most observable inputs when available:

 Level
 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date
 for identical, unrestricted assets or liabilities.

 Level
 2 - Quoted prices in markets that are not active; or other inputs that are observable, either
 directly or indirectly, for substantially the full term of the asset or liability.

 Level
 3 - Prices or valuation techniques that require inputs that are both significant to the fair
 value measurement and unobservable.

 To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases,
the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes,
the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input
that is significant to the fair value measurement. The carrying amounts reported as of December 31, 2024 and 2023 for cash and cash equivalents,
trade receivables, and accounts payable approximate their fair values due to the short-term nature of these instruments

 The following tables presents assets (liabilities)
measured at fair value on a recurring basis:

 As of December 31, 2024

 Level 1

 Level 2

 Level 3

 Total

 Marketable securities

 -

 -

 $

 $
 -

 $
 -

 $

 As of December 31, 2023

 Level 1

 Level 2

 Level 3

 Total

 Certificates of deposit

 199,000

 199,000

 U.S. Treasury securities

 197,000

 197,000

 Mortgage-backed securities

 50,000

 50,000

 Corporate debt securities

 198,000

 198,000

 Marketable securities

 2,986,000

 -

 -

 2,986,000

 $
 2,986,000

 $
 644,000

 $
 -

 $
 3,630,000

 Net Income Per Share

 Basic income per share is computed by dividing
net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income
per share includes potentially dilutive securities such as outstanding options and warrants, using the treasury stock method in the determination
of dilutive shares outstanding during each reporting period.

 Foreign Currency Translation

 The financial statements of our divisions in Taiwan
and China are translated from the Taiwanese Dollar and the Chinese Yuan, respectively, into U.S. dollars for financial reporting purposes.
Balance sheet accounts are translated at year-end or historical rates while income and expenses are translated at weighted-average exchange
rates for the year. Translation gains or losses related to net assets are shown as a separate component of shareholders' equity
as accumulated other comprehensive loss. Gains and losses resulting from realized foreign currency transactions (transactions denominated
in a currency other than the entities' functional currency) are included in operations. The transactional gains and losses are not
significant to the consolidated financial statements.

 Use of Estimates

 Our management has made a number of estimates
and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare
these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These
estimates have a significant impact on our valuation and reserve accounts relating to income taxes, the allowance for sales returns and
credit losses and inventory reserves. Actual results could differ from these estimates.

 - 28 -

 Recently Adopted Accounting Pronouncements

 In November 2023, the FASB issued ASU 2023-07,
 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU enhances the disclosures related to segment
reporting for public entities. It requires entities to disclose significant segment expenses for each reportable segment, providing greater
transparency in segment performance. The ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods
within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted the amendments to this update
during the current year and the adoption did not have a material impact on its consolidated financial statements.

 In December 2023, the FASB issued ASU 2023-09,
 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU enhances the transparency and decision usefulness of
income tax disclosures. It is designed to provide more detailed information about an entity's income tax expenses, liabilities,
and deferred tax items, potentially affecting how companies report and disclose their income tax-related information. The ASU is effective
for public business entities for annual periods beginning after December 15, 2024, including interim periods within those fiscal years.
The Company is currently evaluating how this ASU will impact its consolidated financial statements and disclosures.

 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.

 Management does not believe any other recently
issued, but not yet effective accounting pronouncements would have a material effect on our present or future consolidated financial statements.

 2 – SHORT-TERM INVESTMENTS

 During the years ended December 31, 2024 and 2023, respectively, we recorded
net gains of $ 1,234,000 and $ 800,000 within our other income, net on the consolidated statements of operations and comprehensive income
for short-term investments.

 3 - INVENTORY

 Inventory, consisting principally of products
held for resale, is stated at the lower of cost, using the first-in, first-out method, and net realizable value. The amount presented
in the accompanying consolidated balance sheets is net of valuation allowances of $ 5,152,000 and $ 5,141,000 at December 31, 2024 and 2023,
respectively.

 Based upon regular evaluations of inventory to
identify costs in excess of the lower of cost and net realizable value and slow-moving inventory, we increased our reserves by $ 11,000
and $ 74,000 for the years ended December 31, 2024 and 2023, respectively, while also applying $ 0 and $ 2,000 of our existing reserves to
the underlying inventory values during the years ended December 31, 2024 and 2023, respectively.

 4 - PROPERTY AND EQUIPMENT

 Property and equipment, at cost, is summarized
as follows:

 2024

 2023

 Land

 $
 1,284,000

 $
 1,284,000

 Buildings and improvements

 5,267,000

 5,075,000

 Furniture and equipment

 799,000

 801,000

 Computer software and hardware

 642,000

 600,000

 Total Property and Equipment

 7,992,000

 7,760,000

 Less: Accumulated depreciation and amortization

 ( 4,963,000
)

 ( 4,790,000
)

 Property and Equipment, net

 $
 3,029,000

 $
 2,970,000

 Depreciation expense for the years ended December
31, 2024 and 2023 was $ 173,000 and $ 167,000, respectively.

 - 29 -

 5 - OTHER ASSETS

 The following table presents a summary roll-forward
of other assets:

 2024

 2023

 Investment in securities - Zowie Technology

 $

 $

 Other Assets Total

 $

 $

 Our $ 186,000 investment in securities as of December
31, 2024 relates to 317,428 shares of preferred convertible debt of Zowie Technology Corporation (Taipei Hsien, Taiwan), a supplier of
electronic component products (see Part I: Item 1 – Business – Suppliers) with our option after three (3) years to convert
the investment into common stock or refundable bearing 7 % annual interest rate. Our investment represents approximately 6 % of their total
outstanding shares although we do not have significant influence or control. This investment is accounted for under the cost (plus impairment)
basis of accounting, however when facts and circumstances indicate that the carrying value of this asset may not be recoverable, we recognize
an impairment loss. The impairment loss recognized is the amount by which the carrying amount exceeds the estimated fair value.

 In 2024, we requested the full refund and return
of our investment (see Note 13 – Subsequent Events).

 6 - RELATED PARTY TRANSACTIONS

 We purchase electronic component products from Princeton Technology
Corporation ("PTC"), a company controlled by Mr. Richard Chiang, one of the directors on our board. During the years ended
December 31, 2024 and 2023, we purchased products in the amount of $ 4,000 and $ 5,000, respectively, from PTC. All of these purchases were
for products we carry in inventory and we consider these purchases to be in the normal course of business and negotiated on an arm's
length basis. We also have entered into a distributor agreement with PTC and accordingly, we expect to continue purchasing from PTC in
the future.

 7 - SHARE BASED COMPENSATION

 Our 2018 Stock Incentive Plan (the "Plan")
authorizes the issuance of up to 1,000,000 shares pursuant to options or awards granted under the Plan. Under the Plan, incentive stock
and nonstatutory options were granted at prices equal to at least the fair market value of our Class A common stock at the date of grant.
Outstanding options vest in three (3) equal annual installments beginning one (1) year from the date of grant and are subject to termination
provisions as defined in the Plan. There was no options granted in 2023. The fair values of options in 2024 were estimated using the Black-Scholes
option-pricing model at their respective grant date using the following assumptions:

 Year Ended

 2024

 Weighted-average grant date fair value per share

 $ 0.14 - $ 0.19

 Risk-free interest rate

 4.2
 %

 Dividend yield

 5.9
 %

 Expected term (in years)

 Volatility

 %

 - 30 -

 Stock option activity during the periods indicated
is as follows:

 Number of
 Shares

 Weighted
 Average
 Exercise
 Price

 Weighted
 Average
 Years Remaining
 Contractual
 Term

 Aggregate
 Intrinsic
 Value

 Outstanding at December 31, 2022

 224,600

 $
 2.45

 5.0

 $
 492,000

 Exercised

 ( 25,000
)

 2.14

 -

 -

 Forfeited

)

 0.96

 -

 -

 Outstanding at December 31, 2023

 196,600

 $
 3.25

 5.5

 $
 112,000

 Granted

 20,000

 2.69

 7.0

 -

 Forfeited

 ( 15,000
)

 2.95

 -

 -

 Outstanding at December 31, 2024

 201,600

 $
 3.22

 5.2

 $
 30,000

 Exercisable at December 31, 2024

 161,400

 $
 3.24

 4.7

 $
 30,000

 At December 31, 2024, the range of individual
weighted average exercise prices was $ 2.63 to $ 3.95 and the unamortized compensation expense was approximately $ 4,000.

 8 - SHAREHOLDER'S EQUITY

 Preferred Stock - There are 5,000,000 shares of
authorized preferred stock, par value $ 0.001 per share, with no shares of preferred stock issued or outstanding. The terms of the shares
are subject to the discretion of the Board of Directors.

 Class A Common Stock - There are 20,000,000 shares
of authorized Class A common stock, par value $ 0.001 per share, with 5,258,568 issued and outstanding as of December 31, 2024 and 2023.
Each holder of Class A common stock is entitled to one (1) vote for each share held. During 2024 and 2023, we issued 0 and 25,000 shares
of our Class A common stock, respectively.

 Class B Common Stock - There are 762,612 shares
of authorized Class B common stock, par value $ 0.001 per share, with 762,612 shares issued and outstanding since 1995. Each holder of
Class B common stock is entitled to ten (10) votes for each share held. The shares of Class B common stock are convertible at any time
at the election of the shareholder into one (1) share of Class A common stock, subject to certain adjustments. Our Chief Executive Officer
is the sole beneficial owner of the outstanding shares of Class B common stock.

 Dividends – During the years ended December 31, 2024 and 2023,
we paid quarterly dividends of $ 0.05 per share.

 9 – INCOME TAXES

 Income tax provision is summarized as follows:

 Year Ended December 31,

 2024

 2023

 Current:

 Federal

 $
 -

 $
 339,000

 State

 11,000

 62,000

 11,000

 401,000

 Deferred:

 Federal

 318,000

 State

 184,000

 ( 1,000
)

 Decrease in valuation allowance

 -

 -

 502,000

 11,000

 Income tax provision

 $
 513,000

 $
 412,000

 The actual income tax provision differs from the
"expected" tax computed by applying the Federal corporate tax rate of 21 % to the income before income taxes as follows:

 Year Ended December 31,

 2024

 2023

 "Expected" income tax benefit

 $

 297,000

 $

 474,000

 State tax expense, net of Federal benefit

 8,000

 49,000

 Permanent differences

 ( 21,000)

 -

 State deferred asset effect

 ( 98,000)

 -

 Unrealized gain

 236,000

 -

 Other

 91,000

 ( 111,000

)

 Income tax provision

 $

 513,000

 $

 412,000

 - 31 -

 The tax effects of temporary differences which give rise to significant
portions of the deferred taxes are summarized as follows:

 2024

 2023

 Deferred tax assets:

 Inventory reserves

 $
 1,537,000

 $
 1,534,000

 Allowances for bad debts and returns

 2,000

 2,000

 Accrued expenses

 26,000

 26,000

 Asset valuation reserve

 188,000

 539,000

 Other

 289,000

 79,000

 Total deferred tax assets

 2,042,000

 2,180,000

 Valuation allowance

 -

 -

 2,042,000

 2,180,000

 Deferred tax liabilities:

 Unrealized investment gains

 ( 336,000
)

 -

 Deferred state taxes

 ( 98,000
)

 ( 137,000
)

 Other

 ( 66,000
)

 -

 Total deferred tax liabilities

 ( 500,000
)

 ( 137,000
)

 Net deferred tax assets

 $
 1,542,000

 $
 2,043,000

 As of December 31, 2024, we
have $ 0 in net operating loss carryforwards for federal and state income tax purposes. In assessing the realizability of the deferred
tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.
We consider the scheduled reversal of deferred tax assets, the level of historical taxable income and tax planning strategies in making
the assessment of the realizability of deferred tax assets. We have identified the U.S. federal and California as our "major"
tax jurisdiction. With limited exceptions, we remain subject to IRS examination of our income tax returns filed within the last three
(3) years, and to California Franchise Tax Board examination of our income tax returns filed within the last four (4) years.

 10 - NET INCOME PER SHARE

 Year ended December 31,

 2024

 2023

 Numerator for basic and diluted net income per Class A common stock and Class B common stock share:

 Net income attributable to shareholders

 $

 $

 Less cash dividends:

 Class A common stock

 $
 1,052,000

 $
 1,049,000

 Class B common stock

 $
 152,000

 $
 152,000

 Total undistributed (losses)earnings

 $
 ( 302,000
)

 $
 644,000

 Class A common stock undistributed (losses)earnings - basic and diluted

 $
 151,000

 $
 562,000

 Class B common stock undistributed earnings - basic and diluted

 $
 22,000

 $
 82,000

 Total undistributed earnings - basic and diluted

 $
 173,000

 $
 644,000

 Numerator for basic and diluted net income per share:

 Class A common stock

 $
 1,203,000

 $
 1,611,000

 Class B common stock

 $
 174,000

 $
 234,000

 $
 1,377,000

 $

 Year ended December 31,

 2024

 2023

 Denominator for basic and diluted net income per Class A common stock and Class B common stock share:

 Weighted average number of common shares used in basic income per share (Class A common stock)

 5,242,665

 Weighted average number of common shares used in basic income per share (Class B common stock)

 6,021,180

 6,005,277

 Weighted average number of common shares used in diluted income per share (Class A common stock)

 5,267,665

 Weighted average number of common shares used in diluted income per share (Class B common stock)

 6,021,180

 6,030,277

 Basic net income per share:

 Class A common stock

 $
 0.15

 $
 0.31

 Class B common stock

 $
 0.15

 $
 0.31

 Diluted net income per share:

 Class A common stock

 $
 0.15

 $
 0.31

 Class B common stock

 $
 0.15

 $
 0.31

 - 32 -

 11 - EMPLOYEE BENEFIT PLANS

 We have a defined contribution
profit sharing plan pursuant to Section 401(k) of the Internal Revenue Code ("the Plan") covering only our U.S. based employees.
Participants once eligible, as defined by the Plan, may contribute up to the maximum allowed under the Internal Revenue Code. The Plan
also provides for safe harbor matching contributions, vesting immediately, at our discretion. For each year ended December 31, 2024 and
2023, employer matching contributions were approximately $ 47,000 and $ 44,000, respectively.

 Participants in the Plan, through self-directed brokerage accounts,
held 16,772 shares in our Class A common stock as of December 31, 2024 and 2023. The Plan does not offer new issues of our common stock
as an investment option.

 12 - COMMITMENTS AND CONTINGENCIES

 Legal and Regulatory Proceedings

 We are engaged in various legal and regulatory
proceedings incidental to our normal business activities, none of which, individually or in the aggregate, are deemed to be a material
risk to our financial condition.

 Inventory Purchasing

 Outstanding commitments to purchase inventory
from suppliers aggregated $ 400,000 and $ 415,000 as of December 31, 2024 and December 31, 2023, respectively. Of our outstanding purchase
commitment as of December 31, 2024, approximately $ 40,000 is due in the next twelve months. The remainder is due in the year ended December
31, 2026 or later, which the timing is dependent on additional customer orders. For each year ended December 31, 2024 and 2023,
the commitments due and purchased within the following twelve months were $ 39,000 and $ 35,000, respectively.

 13 - GEOGRAPHIC INFORMATION

 The following table presents summary geographic
information about revenues and long-lived assets (land and property, net of accumulated depreciation) attributed to countries based upon
location of our customers or assets:

 Year ended December 31,

 2024

 2023

 2024

 2023

 Long-lived

 Long-lived

 Revenues

 Revenues

 Assets

 Assets

 United States

 $

 3,867,000

 $

 5,753,000

 $

 2,318,000

 $

 2,224,000

 South Korea

 194,000

 256,000

 -

 -

 China

 58,000

 62,000

 551,000

 592,000

 Taiwan

 7,000

 10,000

 160,000

 154,000

 Other foreign countries

 15,000

 27,000

 -

 -

 Total

 $

 $

 $

 3,029,000

 $

 2,970,000

 14 – SUBSEQUENT EVENTS

 On January 15, 2025, we received $ 62,000 as an
initial and partial refund of our investment in Zowie Technology Corporation (Note 5 – Other Assets).

 - 33 -

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 None.

 ITEM 9A. CONTROLS AND
PROCEDURES.

 Evaluation of Disclosure Controls and
Procedures.

 Our management, with the participation
of our principal executive and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant
to Rule 13a-15(b) of the Securities Exchange Act of 1934 ("Exchange Act") as of the end of the period covered by this report.
Based on that evaluation, our principal executive and principal financial officers concluded that our disclosure controls and procedures
as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports
filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's
rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers,
as appropriate to allow timely decisions regarding required disclosure.

 Internal Control over Financial Reporting.

 a)
Management's Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and
maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) for the Company.
Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted
in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent nor detect misstatements.
Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

 Our internal controls framework is based
on the criteria set forth in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) and includes those policies and procedures that: (i) Pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) Provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) Provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could
have a material effect on the financial statements.

 Based on such criteria, our management,
with the participation of our principal executive and principal financial officer, evaluated the effectiveness of our internal control
over financial reporting and concluded that it was effective as of December 31, 2024.

 As a smaller reporting company, management's
assessment of our internal control over financial reporting is not subject to attestation by our independent registered public accounting
firm and as such, no attestation was performed by our independent registered public accounting firm.

 b)
Changes in Internal Control over Financial Reporting. There has been no change in our internal control over financial reporting
that occurred in our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

 ITEM
9B. OTHER INFORMATION.

 None.

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

 None.

 - 34 -

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.

 The information required by this item will appear
in our definitive proxy statement to be filed within 120 days after the close of the fiscal year-end in connection with our 2025 Annual
Meeting of Shareholders ("the Proxy Statement"), and is incorporated herein by reference.

 ITEM 11. EXECUTIVE COMPENSATION.

 The information required by
this item will appear in our Proxy Statement and is incorporated herein by reference.

 ITEM 12. SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 The information required by
this item will appear in our Proxy Statement and is incorporated herein by reference.

 ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 The information required by
this item will appear in our Proxy Statement and is incorporated herein by reference.

 ITEM 14. PRINCIPAL ACCOUNTING
FEES AND SERVICES.

 The information required by
this item will appear in our Proxy Statement and is incorporated herein by reference.

 - 35 -

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

 a) The following documents are filed as a part of this Annual Report:

 (1) Financial Statements

 The list of consolidated financial statements
and notes required by this Item 15(a)(1) is set forth in the "Index to Financial Statements" within this Annual
Report.

 (2) Financial Statement Schedules

 All schedules have been omitted because the required information
is included in the financial statements or notes thereto.

 (b) Exhibits

 The exhibits listed on the Exhibit Index below are filed as part of
this Annual Report.

 Exhibits No.

 Description

 3.1

 Amended and Restated Articles of Incorporation. Incorporated by reference from Exhibit 3.1 to the registrant's Registration
 Statement on Form S-8 filed with the Securities and Exchange Commission on April 10, 2020.

 3.2

 Bylaws. Incorporated by reference from Exhibit 3.2 to the registrant's Registration Statement on Form S-8 filed with the
 Securities and Exchange Commission on April 10, 2020.

 10.1+

 2018 Omnibus Incentive Plan. Incorporated by reference from Appendix A to the registrant's Definitive Proxy Statement on
 Schedule 14A filed with the Securities and Exchange Commission on April 30, 2018.

 21.1*

 List of Subsidiaries. Incorporated by reference from Exhibit 21.1 to the registrant's Annual Report on Form 10-K for the
 year ended December 31, 2009 filed with the Securities and Exchange Commission on March 31, 2010.

 23.1*

 Consent of Independent Registered Public Accounting Firm – Ramirez Jimenez International CPAs

 24.1*

 Power of Attorney (contained on the signature page hereof)

 31.1*

 Principal Executive Officer - Section 302 Certification

 31.2*

 Principal Financial Officer - Section 302 Certification

 32**

 Principal Executive and Principal Financial Officers - Section 906 Certification

 101.INS*

 101.SCH*

 101.CAL*

 101.DEF*

 101.LAB*

 101.PRE*

in Exhibit 101)

 *
 Filed herewith.

 **
 The information in this exhibit is furnished and deemed not
filed with the Securities and Exchange Commission for purposes of section 18 of the Exchange Act of 1934, as amended, and is not to be
incorporated by reference into any filing of Taitron Components Incorporated under the Securities Act of 1933, as amended, or the Exchange
Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 +
 Each
a management contract or compensatory plan or arrangement.

 ITEM
16. FORM 10-K SUMMARY.

 None

 - 36 -

 SIGNATURES

 Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

 TAITRON COMPONENTS INCORPORATED

 Dated: March 31, 2025

 By:

 /s/ Stewart Wang

 Stewart Wang

 Chief Executive Officer

 Dated: March 31, 2025

 By:

 /s/ David Vanderhorst

 David Vanderhorst

 Chief Financial Officer

 POWER OF ATTORNEY

 KNOW ALL MEN BY THESE PRESENTS,
that each person whose signature appears below constitutes and appoints Stewart Wang and David Vanderhorst and each of them singly, as
attorneys-in-fact and agents, with full power of substitution, for him in any and all capacities, to sign any amendments to this Annual
Report, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorneys-in-fact, or his substitutes, may do or cause to be done by virtue hereof.

 Pursuant to the requirements
of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/ Johnson Ku

 Chairman of the Board

 Johnson Ku

 /s/ Stewart Wang

 Director, Chief Executive Officer and President

 Stewart Wang

 (Principal Executive Officer)

 /s/ Richard Chiang

 Director

 Richard Chiang

 /s/ Chi-Lin Chung

 Director

 Chi-Lin Chung

 /s/ Dubravka. Pineda

 Director

 Dubravka. Pineda

 /s/ David Vanderhorst

 Chief Financial Officer

 David Vanderhorst

 (Principal Financial and Accounting Officer)

 - 37 -

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