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Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0000891092-04-002547.txt : 20040517
<SEC-HEADER>0000891092-04-002547.hdr.sgml : 20040517
<ACCEPTANCE-DATETIME>20040517150129
ACCESSION NUMBER:		0000891092-04-002547
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20040331
FILED AS OF DATE:		20040517

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TAITRON COMPONENTS INC
		CENTRAL INDEX KEY:			0000942126
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065]
		IRS NUMBER:				954249240
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-25844
		FILM NUMBER:		04811808

	BUSINESS ADDRESS:	
		STREET 1:		25202 ANZA DR
		CITY:			SANTA CLARITA
		STATE:			CA
		ZIP:			91355
		BUSINESS PHONE:		8052576060

	MAIL ADDRESS:	
		STREET 1:		25202 ANZA DR
		CITY:			SANTA CLARITA
		STATE:			CA
		ZIP:			91355
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>e17944_10qsb.htm
<DESCRIPTION>FORM 10-QSB
<TEXT>

<html>
<head>
<title> </title>
</head>
<body>








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<p><table width=600><tr><td  align=center><FONT SIZE="4"><B>UNITED STATES <BR>
SECURITIES AND EXCHANGE COMMISSION  <BR>
<FONT SIZE="2">Washington, D.C. 20549</FONT></B></FONT></td></tr></table>

<p><table width=600><tr><td  align=center><font size=4><B>FORM 10-QSB</B></font></td></tr></table>


<P><table width=600><tr><td width=10% valign=top><font size="2">&nbsp;|X| </font></td><td width=90%><font size="2"> QUARTERLY
REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES  EXCHANGE ACT OF 1934</font></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">For
the quarterly period ended March 31, 2004</font></td></tr></table>


<P><table width=600><tr><td width=10% valign=top><font size="2">&nbsp;|_| </font></td><td width=90%><font size="2"> TRANSITION
REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES  EXCHANGE ACT OF 1934</font></td></tr></table>


<p><table width=600><tr><td  align=center><font size=2><B>Commission File Number 0-25844</B></font></td></tr></table>

<p><table width=600><tr><td  align=center><FONT SIZE="4"><B>TAITRON COMPONENTS INCORPORATED <BR>
<FONT SIZE="2"></FONT></B><FONT SIZE="2">(Exact name of small business issuer as specified in its charter)</FONT></FONT></td></tr></table>

<P>
<table width=600>
  <tr align="center">
    <td valign=top width=253><font size="2"><b>California</b> <br>
      (State or Other Jurisdiction of <br>
      Incorporation or Organization) </font></td>
    <td valign="top" width=54>&nbsp;</td>
    <td width=277><font size="2"> <b>95-4249240</b> <br>
      (I.R.S. Employer <br>
      Identification No.)</font></td>
  </tr></table>


<p><table width=600><tr><td  align=center><FONT SIZE="2"><B>28040 West Harrison Parkway <BR>
Valencia, California 91355-4162</B> <BR>
(Address Of Principal Executive Offices)</FONT></td></tr></table>

<p><table width=600><tr><td  align=center><FONT SIZE="2"><B>(661) 257-6060</B> <BR>
(Issuer&#146;s
Telephone Number)</FONT></td></tr></table>

<p><table width=600><tr><td  align=center><FONT SIZE="2"><B>NONE</B> <BR>
(Former Name, Address and
Fiscal Year, if Changed Since Last Report)</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>Indicate by check mark  whether  the
registrant:  (1) has filed all reports  required to be filed by Section 13 or  15(d) of
the 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.</font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2>Yes |X|&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
|_|</font></td></tr></table>



<p><table width=600><tr><td><font size=2>State the  number of  shares  outstanding  of
each of the  issuer&#146;s  classes  of  common  stock,  as of the  latest  practicable
date:</font></td></tr></table>

<br>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"></TH>
    <TH width="255"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="center" WIDTH="223"><font size="2">Class</font>
      <hr noshade size="1">
    </TD>
    <TD ALIGN="LEFT" WIDTH="122"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="center" WIDTH="255"><font size="2">Outstanding on April 30, 2004</font>
      <hr noshade size="1" width="80%">
    </TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="223"><font size="2">Class A Common Stock, $.001 par
      value</font></TD>
    <TD ALIGN="LEFT" width="122"><font size="2"></font></TD>
    <TD ALIGN="center" width="255"><font size="2">4,695,979</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="223"><font size="2">Class B Common Stock, $.001 par
      value</font></TD>
    <TD ALIGN="LEFT" width="122"><font size="2"></font></TD>
    <TD ALIGN="center" width="255"><font size="2">&nbsp;&nbsp;&nbsp;762,612</font></TD>
  </TR>
</TABLE>


<p><table width=600><tr><td><font size=2>Transitional Small Business Disclosure Format
(check one):  Yes |_|&nbsp;&nbsp;&nbsp;&nbsp;No  |X|</font></td></tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<p><table width=600><tr><td><FONT SIZE="2">
PART I. FINANCIAL INFORMATION</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item  1. Financial
Statements</font></td></tr></table>

<p><table width=600><tr><td  align=center><FONT SIZE="3"><B>TAITRON COMPONENTS INCORPORATED <BR>
<FONT SIZE="2"></FONT></B><FONT SIZE="2">Condensed Consolidated Balance Sheet <BR>
(Dollars in Thousands) </FONT></FONT></td></tr></table>


<br>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="center"><font size="2"> <b>Assets</b> </font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2"><b>March 31, 2004</b></font>
      <hr noshade size="1">
      <font size="2"> (Unaudited) </font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Current assets:</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents</font></TD>
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;</font></TD>
    <TD ALIGN="right"><font size="2">$&nbsp;&nbsp;&nbsp;3,003</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts receivable,
      net</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">1,376</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Inventory, net</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">19,204</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and
      other current assets</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">220</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="right">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="left">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      current assets</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">23,803</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Property and equipment, net</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">4,818</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Other assets</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">168</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="right">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="left">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      assets</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">$&nbsp;28,789</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="center">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="right">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="left">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="center"><font size="2"><b>Liabilities and Shareholders&#146; Equity</b></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2"></font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Current liabilities:</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2"></font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts payable</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">$&nbsp;&nbsp;&nbsp;1,030</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities
      and other</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">147</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Current portion of
      long term debt</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">71</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="right">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="left">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      current liabilities</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">1,248</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Long-term debt, less current portion</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">3,828</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="right">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="left">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      liabilities</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">5,076</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="right">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="left">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Commitments and contingencies (Note 3)</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2"></font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Shareholders&#146; equity:</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2"></font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, $.001
      par value. Authorized 5,000,000 shares</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2"></font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None issued
      or outstanding</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">&#151;</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" rowspan="2"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class
      A common stock, $.001 par value. Authorized 20,000,000 shares; issued and</font><font size="2">
      <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;outstanding 4,695,979 shares</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right" rowspan="2"><font size="2"></font><font size="2">5</font></TD>
    <TD ALIGN="left" rowspan="2"><font size="2"></font><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" rowspan="2"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class
      B common stock, $.001 par value. Authorized, issued and outstanding</font><font size="2">
      <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;762,612 shares</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right" rowspan="2"><font size="2"></font><font size="2">1</font></TD>
    <TD ALIGN="left" rowspan="2"><font size="2"></font><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in
      capital</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">10,412</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other
      comprehensive loss, net of tax</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">(10</font></TD>
    <TD ALIGN="left"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">13,305</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="right">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="left">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      shareholders&#146; equity</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">23,713</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="right">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="left">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      liabilities and shareholders&#146; equity</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="right"><font size="2">$&nbsp;28,789</font></TD>
    <TD ALIGN="left"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="right">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="left">&nbsp;</TD>
  </TR>
</TABLE>


<p><table width=600><tr><td  align=center><font size=2>See accompanying notes to
condensed consolidated financial statements.</font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
Page
2</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<!-- MARKER PAGE="sheet: 3; page: 3" -->




<p><table width=600><tr>
    <td  align=center><FONT SIZE="3"><B>TAITRON COMPONENTS INCORPORATED<BR>
<FONT SIZE="2"></FONT></B><FONT SIZE="2">Condensed Consolidated Statements of Operations <BR>
(Dollars in thousands, except per share amounts) </FONT></FONT></td></tr></table>



<br>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="380"><font size="2"></font></TD>
    <TD ALIGN="LEFT" WIDTH="30"><font size="2"></font></TD>
    <TD ALIGN="center" colspan="4"><font size="2"><b>Three months ended March
      31, </b></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="380"><font size="2"></font></TD>
    <TD ALIGN="LEFT" WIDTH="30"><font size="2"></font></TD>
    <TD ALIGN="center" WIDTH="79"><font size="2"><b>2004</b></font>
      <hr noshade size="1">
      <font size="2"> </font></TD>
    <TD ALIGN="center" WIDTH="21"><font size="2"></font></TD>
    <TD ALIGN="center" WIDTH="81"><font size="2"><b>2003</b></font>
      <hr noshade size="1">
    </TD>
    <TD ALIGN="LEFT" WIDTH="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="380"><font size="2"></font></TD>
    <TD ALIGN="LEFT" WIDTH="30"><font size="2"></font></TD>
    <TD ALIGN="center" WIDTH="79"><font size="2">(Unaudited)</font></TD>
    <TD ALIGN="center" WIDTH="21"><font size="2"></font></TD>
    <TD ALIGN="center" WIDTH="81"><font size="2">(Unaudited)</font></TD>
    <TD ALIGN="LEFT" WIDTH="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="380">&nbsp;</TD>
    <TD ALIGN="LEFT" WIDTH="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" WIDTH="79">&nbsp;</TD>
    <TD ALIGN="LEFT" WIDTH="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" WIDTH="81">&nbsp;</TD>
    <TD ALIGN="LEFT" WIDTH="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="380"><font size="2">Net sales</font></TD>
    <TD ALIGN="LEFT" WIDTH="30"><font size="2">&nbsp;&nbsp;&nbsp;</font></TD>
    <TD ALIGN="RIGHT" WIDTH="79"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,491</font></TD>
    <TD ALIGN="LEFT" WIDTH="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" WIDTH="81"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,155</font></TD>
    <TD ALIGN="LEFT" WIDTH="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">&nbsp;</TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">&nbsp;</TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">Cost of goods sold</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">1,842</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">2,188</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">&nbsp;</TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">&nbsp;</TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
      profit</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">649</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">967</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">&nbsp;</TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">&nbsp;</TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">Selling, general and administrative
      expenses</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">609</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">849</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">&nbsp;</TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">&nbsp;</TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
      income</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">40</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">118</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">&nbsp;</TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">&nbsp;</TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">Interest expense, net</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">(62</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2">)</font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">(108</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">Other income (expense), net</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">32</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">(4</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">&nbsp;</TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">&nbsp;</TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
      before income taxes</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">10</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">6</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79"></TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81"></TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">Income tax provision (benefit)</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">&#151;</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">&#151;</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      income</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">Net income per share</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">Weighted average common shares
      outstanding</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">5,479,708</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">5,659,683</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</font></TD>
    <TD ALIGN="LEFT" width="30"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="79"><font size="2">6,014,708</font></TD>
    <TD ALIGN="LEFT" width="21"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="81"><font size="2">6,190,683</font></TD>
    <TD ALIGN="LEFT" width="9"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="380">&nbsp;</TD>
    <TD ALIGN="LEFT" width="30">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="79">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="21">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="81">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="9">&nbsp;</TD>
  </TR>
</TABLE>




<p><table width=600><tr><td  align=center><font size=2>See accompanying notes to
condensed consolidated financial statements.</font></td></tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
Page
3</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;








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<p><table width=600><tr>
    <td  align=center><FONT SIZE="3"><B>TAITRON COMPONENTS INCORPORATED <BR>
      <FONT SIZE="2"></FONT></B><FONT SIZE="2">Condensed Consolidated Statements
      of Cash Flows <BR>
      (Dollars in thousands) </FONT></FONT></td>
  </tr></table>


<br>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="center" colspan="4"><font size="2"><b>Three months ended March
      31,</b></font><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2"><b>2004</b></font>
      <hr noshade size="1">
      <font size="2"> (Unaudited) </font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2"><b>2003</b></font>
      <hr noshade size="1">
      <font size="2"> (Unaudited) </font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Cash flows from operating activities: </font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Net income</font></TD>
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="RIGHT"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60%" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile
      net income to net cash provided by <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;operating activities: </font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">66</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">106</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt
      discount related to options issued <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;with notes payable</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">4</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">3</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Provision for sales
      returns and doubtful accounts</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">21</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">69</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Changes in assets
      and liabilities:</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade
      accounts receivable</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(181</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
    <TD ALIGN="RIGHT"><font size="2">(47</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">512</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">1,290</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid
      expenses and other current assets</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(25</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
    <TD ALIGN="RIGHT"><font size="2">38</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
      assets</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">&#151;</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">4</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade
      accounts payable</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">195</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(493</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued
      liabilities and other</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(102</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
    <TD ALIGN="RIGHT"><font size="2">(43</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      adjustments</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">490</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">927</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      cash provided by operating activities</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">500</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">933</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Cash flows from investing activities:</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions
      of property and equipment</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(24</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
    <TD ALIGN="RIGHT"><font size="2">(1</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      cash used in investing activities</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(24</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
    <TD ALIGN="RIGHT"><font size="2">(1</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Cash flows from financing activities:</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Payments on revolving
      line of credit</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">&#151;</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(1,735</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Borrowings on notes
      payable</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">&#151;</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">978</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Payments on notes
      payable</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(139</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
    <TD ALIGN="RIGHT"><font size="2">&#151;</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from exercise
      of stock options</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">25</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">&#151;</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Repurchase of Class
      A Common Stock</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(323</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
    <TD ALIGN="RIGHT"><font size="2">(62</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      cash used in financing activities</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(437</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
    <TD ALIGN="RIGHT"><font size="2">(819</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Impact of exchange rate changes on cash</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">11</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">(1</font></TD>
    <TD ALIGN="LEFT"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      increase in cash and cash equivalents</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">50</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">112</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Cash and cash equivalents, beginning of period</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">2,953</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">326</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Cash and cash equivalents, end of period</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">$&nbsp;3,003</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;438</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Supplemental disclosure of cash flow information:</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2"></font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;61</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;123</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income
      taxes</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
    <TD ALIGN="RIGHT"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;</font></TD>
    <TD ALIGN="LEFT"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
</TABLE>


<p><table width=600><tr><td  align=center><font size=2>See accompanying notes to
condensed consolidated financial statements.</font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
Page
4</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<p><table width=600><tr>
    <td  align=center><font size=3><b>TAITRON COMPONENTS INCORPORATED</b></font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2>Notes to Condensed Consolidated
Financial Statements <BR>
March 31, 2004 <BR>
(All amounts are unaudited) </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Note 1 - Basis of Presentation</B></font></td></tr></table>


<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">The
accompanying unaudited condensed consolidated financial statements of Taitron Components
Incorporated  (&#147;the Company&#148;) were prepared in accordance with accounting
principles generally accepted in the United  States of America and reflect all
adjustments, consisting of normal recurring accruals and adjustments,  which are, in the
opinion of management, necessary for a fair presentation of the consolidated financial
position and results of operations at and for the periods presented.  Such financial
statements do not  include all the information or footnotes necessary for a complete
presentation and, accordingly, should be  read in conjunction with the Company&#146;s
Annual Report on Form 10-KSB for the fiscal year ended December 31,  2003, and the notes
thereto, which include significant accounting policies and estimates.  The results of
operations for the interim periods are not necessarily indicative of results for the full
year.</font></td></tr></table>


<p><table width=600><tr><td><font size=2><B>Note 2 - Summary of Significant Accounting
Policies and Estimates</B></font></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><FONT SIZE="2"><B>Principles
of Consolidation</B></FONT></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">The
unaudited condensed consolidated financial statements include the accounts of the Company
and its  majority-owned subsidiary.  All significant intercompany transactions have been
eliminated in  consolidation.</font></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><FONT SIZE="2"><B>Revenue
Recognition</B></FONT></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">Revenue
is typically recognized upon shipment of merchandise and sales are recorded net of
discounts,  rebates, and returns.  Reserves for sales allowances and customer returns are
established based upon  historical experience and management&#146;s estimates as
shipments are made.  Sales returns for the quarters  ended March 31, 2004 and 2003 were
$47,000 and $46,000, respectively.</font></td></tr></table>


<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><FONT SIZE="2"><B>Allowance
for Sales Returns and Doubtful Accounts</B></FONT></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">On
a case-by-case basis, the Company accepts returns of products from its customers, without
restocking  charges, when they can demonstrate an acceptable cause for the return.
Requests by a distributor to  return products purchased for its own inventory generally
are not included under this policy.  The Company  will, on a case-by-case basis, accept
returns of products upon payment of a restocking fee, which is  generally 15% to 30% of
the net sales price.  The Company will not accept returns of any products that  were
special-ordered by a customer or that otherwise are not generally included in our
inventory.  The  allowance for sales returns and doubtful accounts at March 31, 2004
aggregated $160,000.</font></td></tr></table>


<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><FONT SIZE="2"><B>Inventory</B></FONT></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">Inventory,
consisting principally of products held for resale, is recorded at the lower of cost
(determined using the first in-first out method) or estimated market value.  Inventory is
presented net of  valuation allowances of $861,000 at March 31, 2004.</font></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><FONT SIZE="2"><B>Income
Taxes</B></FONT></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">The
Company accounts for income taxes under the asset and liability method.  Deferred tax
assets and  liabilities are recognized for future tax consequences attributable to
differences between the financial  statement carrying amounts of existing assets and
liabilities and their respective tax bases.  Deferred  tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the  years in
which the temporary differences are expected to be recovered or settled.  The effect on
deferred  tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes  the enactment date.  Valuation allowances are recorded, when
necessary, to reduce deferred tax assets to  the amount expected to be realized.  The
Company has fully reserved against its deferred income tax  assets, as management could
not determine that it was more likely than not such assets would be realized.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
Page
5</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><FONT SIZE="2"><B>Net
Income Per Share</B></FONT></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">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 reflects  the potential dilution that could occur if securities or other
contracts to issue common stock were  exercised or converted into common stock or
resulted in the issuance of common stock that then shared in  the earnings of the Company.</font></td></tr></table>


<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><FONT SIZE="2"><B>Stock
Option Plan</B></FONT></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">The
Company has adopted the disclosure requirements of SFAS No. 148, &#147;Accounting for
Stock-Based  Compensation--Transition and Disclosure&#148; and SFAS No. 123.  SFAS No.
123 allows companies to choose whether  to account for employee stock-based compensation
on a fair value method, or to continue to account for  stock-based compensation under the
current intrinsic value method as prescribed by APB Opinion No. 25,  &#147;Accounting for
Stock Issued to Employees.&#148; The Company has elected to continue to follow the
provisions  of APB Opinion No. 25.  SFAS No. 123, as amended by SFAS No. 148, requires
interim disclosures regarding  the pro forma effects of compensation expense had the
Company&#146;s 1995 Stock Incentive Plan been determined  based on the fair value at the
grant date consistent with SFAS No. 123.</font></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">Accordingly,
under SFAS No. 123, the Company&#146;s net income and diluted income per share for the
three  months ended March 31, 2004 and March 31, 2003, would have been changed to the pro
forma amounts indicated  below:</font></td></tr></table>


<br>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="3"></TH>
    <TH width="127"></TH>
    <TH COLSPAN="3"></TH>
    <TH width="17"></TH>
    <TH width="26"></TH>
    <TH width="58"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="59"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="LEFT" WIDTH="161">&nbsp;</TD>
    <TD ALIGN="LEFT" WIDTH="11"><font size="2"></font></TD>
    <TD ALIGN="LEFT" WIDTH="127"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" WIDTH="55"><font size="2"></font></TD>
    <TD ALIGN="center" colspan="5"><font size="2"><b>Three Months Ended March
      31,</b></font>
      <hr noshade size="1">
    </TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="59"><font size="2"></font></TD>
    <TD ALIGN="LEFT" WIDTH="161"><font size="2"></font></TD>
    <TD ALIGN="LEFT" WIDTH="11"><font size="2"></font></TD>
    <TD ALIGN="LEFT" WIDTH="127"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" WIDTH="55"><font size="2"></font></TD>
    <TD ALIGN="center" colspan="2"><b><font size="2">2004</font></b>
      <hr noshade size="1">
    </TD>
    <TD ALIGN="LEFT" WIDTH="17">&nbsp;</TD>
    <TD ALIGN="center" colspan="2"><b><font size="2">2003</font></b>
      <hr noshade size="1">
    </TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="59"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="161"><font size="2">Net income</font></TD>
    <TD ALIGN="LEFT" width="11"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="LEFT" width="127"><font size="2">As reported</font></TD>
    <TD ALIGN="RIGHT" width="55">&nbsp;&nbsp;</TD>
    <TD ALIGN="right" width="31"><font size="2">$</font></TD>
    <TD ALIGN="LEFT" width="55"><font size="2">10,000</font></TD>
    <TD ALIGN="LEFT" width="17"><font size="2">&nbsp;&nbsp;&nbsp;</font></TD>
    <TD ALIGN="right" valign="bottom" width="26"><font size="2">$</font></TD>
    <TD ALIGN="LEFT" width="58"><font size="2"> &nbsp;&nbsp;6,000</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="59"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="161"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD ALIGN="LEFT" width="11"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="127"><font size="2">Pro forma</font></TD>
    <TD ALIGN="RIGHT" width="55"><font size="2"></font></TD>
    <TD ALIGN="right" width="31"><font size="2">$</font></TD>
    <TD ALIGN="LEFT" width="55"><font size="2">20,000</font></TD>
    <TD ALIGN="LEFT" width="17"><font size="2"></font></TD>
    <TD ALIGN="right" valign="bottom" width="26"><font size="2">$</font></TD>
    <TD ALIGN="LEFT" width="58"><font size="2"> 15,000</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="59">&nbsp;</TD>
    <TD ALIGN="LEFT" width="161">&nbsp;</TD>
    <TD ALIGN="LEFT" width="11">&nbsp;</TD>
    <TD ALIGN="LEFT" width="127">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="55">&nbsp;</TD>
    <TD ALIGN="right" width="31">&nbsp;</TD>
    <TD ALIGN="center" width="55">&nbsp;</TD>
    <TD ALIGN="LEFT" width="17">&nbsp;</TD>
    <TD ALIGN="right" valign="bottom" width="26">&nbsp;</TD>
    <TD ALIGN="center" width="58">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="59"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="161"><font size="2">Diluted income</font></TD>
    <TD ALIGN="LEFT" width="11"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="127"><font size="2">As reported</font></TD>
    <TD ALIGN="RIGHT" width="55"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD ALIGN="right" width="31"><font size="2">$</font></TD>
    <TD ALIGN="center" width="55"><font size="2">&#151;</font></TD>
    <TD ALIGN="LEFT" width="17"><font size="2"></font></TD>
    <TD ALIGN="right" valign="bottom" width="26"><font size="2">$</font></TD>
    <TD ALIGN="center" width="58"><font size="2">&#151;</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="59"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="161"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
      share</font></TD>
    <TD ALIGN="LEFT" width="11"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="127"><font size="2">Pro forma</font></TD>
    <TD ALIGN="RIGHT" width="55"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD ALIGN="right" width="31"><font size="2">$</font></TD>
    <TD ALIGN="center" width="55"><font size="2">&#151;</font></TD>
    <TD ALIGN="LEFT" width="17"><font size="2"></font></TD>
    <TD ALIGN="right" valign="bottom" width="26"><font size="2">$</font></TD>
    <TD ALIGN="center" width="58"><font size="2">&#151;</font></TD>
  </TR>
</TABLE>


<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">The
total fair value of options granted would have been $0 for both the three months ended
March 31, 2004  and 2003, as there were no options granted during either period.  At
March 31, 2004, the number of options  exercisable was 515,465 and weighted average
exercise prices of those options were $1.88.</font></td></tr></table>


<br>
<table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2"><b>Reclassification</b></font></td>
  </tr>
</table>
<p>
<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">Certain
amounts in the 2003 condensed consolidated financial statements have been reclassified to
conform  with the 2004 presentation.</font></td></tr></table>


<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><FONT SIZE="2"><B>Use
of Estimates</B></FONT></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">Management
has made a number of estimates and assumptions relating to the reporting of assets and
liabilities and the disclosure of contingent assets and liabilities to prepare these
condensed  consolidated financial statements in conformity with accounting principles
generally accepted in the  United States.  These estimates have a significant impact on
the Company&#146;s valuation and reserve accounts  relating to the allowance for sales
returns, doubtful accounts, inventory reserves and deferred income  taxes.  Actual
results could differ from these estimates.</font></td></tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
Page
6</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<p><table width=600><tr><td><font size=2><B>Note 3 - Long-Term Debt</B></font></td></tr></table>

<br>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="3"></TH>
    <TH COLSPAN="2"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="57"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD ALIGN="LEFT" WIDTH="436"><font size="2">Long-term debt is summarized as
      follows: </font></TD>
    <TD ALIGN="LEFT" WIDTH="27"><font size="2"></font></TD>
    <TD ALIGN="center" WIDTH="70"><font size="2"><b>March 31, <br>
      2004 </b></font>
      <hr noshade size="1">
    </TD>
    <TD ALIGN="LEFT" WIDTH="10"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="57" rowspan="2"><font size="2"></font><font size="2"></font></TD>
    <TD ALIGN="LEFT" WIDTH="436" rowspan="2"><font size="2">Note payable collateralized
      by real property, due</font><font size="2"> <br>
      &nbsp;&nbsp;&nbsp; December 31, 2009, bearing an interest rate of 6.875%</font></TD>
    <TD ALIGN="LEFT" WIDTH="27" rowspan="2"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2"></font></TD>
    <TD ALIGN="RIGHT" WIDTH="70" rowspan="2"><font size="2"></font><font size="2">2,423,000</font></TD>
    <TD ALIGN="LEFT" WIDTH="10" rowspan="2"><font size="2"></font><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM"> </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57">&nbsp;</TD>
    <TD ALIGN="LEFT" width="436">&nbsp;</TD>
    <TD ALIGN="LEFT" width="27">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="70">&nbsp;</TD>
    <TD ALIGN="LEFT" width="10">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57" rowspan="2"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="436" rowspan="2"><font size="2">Subordinated note,
      due September 30, 2005, bearing an interest</font><font size="2"> <br>
      &nbsp;&nbsp;&nbsp;rate of 4.75% per annum *</font></TD>
    <TD ALIGN="LEFT" width="27" rowspan="2"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="70" rowspan="2"><font size="2">1,000,000</font></TD>
    <TD ALIGN="LEFT" width="10" rowspan="2"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM"> </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57">&nbsp;</TD>
    <TD ALIGN="LEFT" width="436">&nbsp;</TD>
    <TD ALIGN="LEFT" width="27">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="70">&nbsp;</TD>
    <TD ALIGN="LEFT" width="10">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57" rowspan="2"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="436" rowspan="2"><font size="2">Subordinated note,
      due February 20, 2006, bearing an interest</font><font size="2"> <br>
      &nbsp;&nbsp;&nbsp;rate of 4.75% per annum **</font></TD>
    <TD ALIGN="LEFT" width="27" rowspan="2"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="70" rowspan="2"><font size="2">500,000</font></TD>
    <TD ALIGN="LEFT" width="10" rowspan="2"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM"> </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57">&nbsp;</TD>
    <TD ALIGN="LEFT" width="436">&nbsp;</TD>
    <TD ALIGN="LEFT" width="27">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="70">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="10">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="436"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="27"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="70"><font size="2">3,923,000</font></TD>
    <TD ALIGN="LEFT" width="10"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="436"><font size="2">Less current maturities</font></TD>
    <TD ALIGN="LEFT" width="27"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="70"><font size="2">(71,000</font></TD>
    <TD ALIGN="LEFT" width="10"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57">&nbsp;</TD>
    <TD ALIGN="LEFT" width="436">&nbsp;</TD>
    <TD ALIGN="LEFT" width="27">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="70">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="10">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="436"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="27"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="70"><font size="2">3,852,000</font></TD>
    <TD ALIGN="LEFT" width="10"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="436"><font size="2">Less unamortized debt discount</font></TD>
    <TD ALIGN="LEFT" width="27"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="70"><font size="2">(24,000</font></TD>
    <TD ALIGN="LEFT" width="10"><font size="2">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57">&nbsp;</TD>
    <TD ALIGN="LEFT" width="436">&nbsp;</TD>
    <TD ALIGN="LEFT" width="27">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="70">
      <hr noshade size="1" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="10">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="436"><font size="2"></font></TD>
    <TD ALIGN="LEFT" width="27"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" width="70"><font size="2">$&nbsp;3,828,000</font></TD>
    <TD ALIGN="LEFT" width="10"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="57">&nbsp;</TD>
    <TD ALIGN="LEFT" width="436">&nbsp;</TD>
    <TD ALIGN="LEFT" width="27">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="70">
      <hr noshade size="2" width="60" align="right">
    </TD>
    <TD ALIGN="LEFT" width="10">&nbsp;</TD>
  </TR>
</TABLE>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">*
The subordinated note of $1,000,000, due September 30, 2005, is from K.S. Best
International Co. Ltd.,  a company controlled by the brother of the Company&#146;s Chief
Executive Officer.  In connection with the  subordinated note, the Company issued 100,000
stock options with a relative estimated fair value of  $29,000. The amount has been
presented as debt discounts and accreted through periodic interest charges  through the
maturity date of these notes.</font></td></tr></table>

<P><table width=600>
  <tr>
    <td width=10% valign=top><font size="2">&nbsp; </font></td>
    <td width=90%><font size="2">**
The subordinated note of $500,000, due February 20, 2006, is from an un-related third
party.  In  connection with the subordinated note, the Company issued 50,000 stock
options with a relative estimated  fair value of $15,000. The amount has been presented
as debt discounts and accreted through periodic  interest charges through the maturity
date of these notes.</font></td></tr></table>


<p><table width=600><tr><td><FONT SIZE="2">
Item  2.  MANAGEMENT&#146;S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The following
discussion should be read in conjunction with the condensed consolidated financial
statements, including the related notes, appearing in Item 1 of this report as well as
our most recent annual report on Form 10-KSB. Also, several of the matters discussed in
this document contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements usually are denoted by words or phrases such as &#147;believes,&#148; &#147;expects,&#148; &#147;projects,&#148; &#147;estimates,&#148; &#147;anticipates,&#148; &#147;will
likely result&#148; or similar expressions. We wish to caution readers that all
forward-looking statements are necessarily speculative and not to place undue reliance
on forward-looking statements, which speak only as of the date made, and to advise
readers that actual results could vary due to a variety of risks and uncertainties.
Factors associated with the forward looking statements that could cause the forward
looking statements to be inaccurate and could otherwise impact our future results are
set forth in detail in our most recent annual report on Form 10-KSB. In addition to the
other information contained in this document, readers should carefully consider the
information contained in our Form 10-KSB for the year ended December 31, 2003 under the
heading &#147;Cautionary Statements and Risk Factors.&#148;</I></FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;References to
&#147;Taitron,&#148; &#147;the Company,&#148; &#147;we,&#148; &#147;our&#148; and &#147;us&#148; refer
to Taitron Components Incorporated  and its majority-owned subsidiary, unless the context
otherwise requires.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Overview</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a national
distributor of electronic components, primarily focused on transistors, diodes and  other
discrete semiconductors, optoelectronic devices and passive components with a reputation
of in-depth  inventories and knowledge of the products we sell.  Our customers consist of
other electronic distributors,  contract electronic manufacturers (CEMs) and original
equipment manufacturers (OEMs).</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The demand for
electronic components drastically decreased beginning in 2001 and continued through most
of  2003.  This downturn was marked by oversupply of components, excess manufacturing
capacity, accelerated </font></td></tr></table>


<p>&nbsp;
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<p><table width=600><tr><td><font size=2>migration  of the manufacturing capacity of
OEM/CEM customers abroad and the consolidation of CEM customers domestically.  In
response, we are refocusing our business strategy beyond the traditional role of
electronic components  fulfillment to the additional role of engineering and turn-key
services for the existing OEM and CEM customers.  We intend to form strategic business
partnerships with a few selected existing customers and provide them with  original
design and manufacturing (ODM) services for their multi-year turn-key projects.  We
expect to see some  new opportunities and results from these additional services during
2004.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that
the overall market demand for our products has increased during the first quarter of
2004,  as we have experienced some business improvement in shipments and bookings and our
supplier&#146;s lead times have  been stretching out with prices steadily increasing.
Under these recent market condition changes and the results  of our cost-cutting efforts
accomplished during the past few years, we believe these factors may help us return  to
consistent profitability in 2004.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our core strategy
consists of carrying a substantial quantity and variety of products in inventory to meet
the rapid delivery requirements of our customers.  This strategy allows us to fill
customer orders immediately  from stock on hand.  However, while we believe strong market
demand is returning, we are focused on lowering our  inventory balances and increasing
our cash holdings.  Our long-term growth strategy is to rely not only on the  existing
component fulfillment service, but also the value-added engineering service to support
our existing  small and medium size OEM customers in outsourcing their product design and
manufacturing work offshore.  In  accordance with Generally Accepted Accounting
Principles, we classify inventory as a current asset.  However, if  all or a substantial
portion of the inventory was required to be immediately liquidated, the inventory would
not  be as readily marketable or liquid as other items included or classified as a
current asset, such as cash.  We  cannot assure you that demand in the discrete
semiconductor market will increase and that market conditions will  improve.  Therefore,
it is possible that further declines in our carrying values of inventory may result.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Critical Accounting Policies and Estimates</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of Estimates
&#151; 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 financial statements in  conformity with accounting principles generally
accepted in the U.S.  These estimates have a significant impact  on our valuation and
reserve accounts relating to the allowance for sales returns, doubtful accounts,
inventory  reserves and deferred income taxes.  Actual results could differ from these
estimates.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue
Recognition &#151; Revenue is recognized upon shipment of the merchandise, which is when
legal transfer  of title occurs.  Reserves for sales allowances and customer returns are
established based upon historical  experience and our estimates of future returns.  Sales
returns for the period ended March 31, 2004 and 2003 were  $46,000.  The allowance for
sales returns and doubtful accounts at March 31, 2004 was $160,000.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory &#151; Inventory,
consisting principally of products held for resale, is recorded at the lower of  cost
(determined using the first in-first out method) or estimated market value.  We had
inventory balances in  the amount of $19,204,000 at March 31, 2004, which is presented
net of valuation allowances of $861,000.  We  evaluate inventories to identify excess,
high-cost, slow-moving or other factors rendering inventories as  unmarketable at normal
profit margins.  For inventories supplied under franchise agreements, we rely upon our
contractual rights to receive compensation for price differences caused by market
fluctuations.  Due to the large  number of transactions and the complexity of managing
and maintaining a large inventory of product offerings,  estimates are made regarding
adjustments to the cost of inventories.  Based on our assumptions about future  demand
and market conditions, inventories are carried at the lower of cost or estimated market
value.  If our  assumptions about future demand change, or market conditions are less
favorable than those projected, additional  write-downs of inventories may be required.
In any case, actual amounts could be different from those estimated.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred Taxes
&#151; We review the nature of each component of our deferred income taxes for
reasonableness.  If determined that it is more likely than not that we will not realize
all or part of our net deferred tax assets  in the future, we record a valuation
allowance against the deferred tax assets, which allowance will be charged  to income tax
expense in the period of such determination.  We also consider the scheduled reversal of
deferred  tax liabilities, tax planning strategies and future taxable income in assessing
the realizability of deferred tax  assets.  We also consider the weight of both positive
and negative evidence in determining whether a valuation  allowance is needed.  However,
due to the previously reported continuous net losses, we have fully reserved a  $652,000
allowance against our net deferred tax assets.</font></td></tr></table>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
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<p><table width=600><tr><td><font size=2><I>Results of Operations</I></font></td></tr></table>

<p><table width=600><tr><td><font size=2><I>Three month Period Ended March 31, 2004
Compared To The Three month Period Ended March 31, 2003.</I></font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net sales for the
three months ended March 31, 2004 were $2,491,000, compared with $3,155,000 for the same
period last year, a decrease of $664,000 or 21.1%.  The decrease is primarily due to an
industry-wide decrease in  demand for discrete and passive and semiconductor components.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of goods sold
for the quarter ended March 31, 2004 decreased to $1,842,000 from $2,188,000 for the
same period last year, a decrease of $346,000 or 15.8%.  Consistent with the decrease in
net sales, cost of goods  sold decreased, however at a slower rate, resulting in gross
profit decreasing as a percentage of net sales to  26.1% for the quarter ended March 31,
2004 from 30.7% for the same period last year.  Gross profit decreased by  $318,000 to
$649,000 for the quarter ended March 31, 2004 from $967,000 for the same period in 2003.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general
and administrative (&#147;SGA&#148;) expenses decreased by $240,000 or 28.3% for the
quarter  ended March 31, 2004 compared to the same period of 2003.  The decrease is
primarily attributable to  personnel-related expenses decreasing by $104,000, bad debt
expenses decreasing by $47,000, depreciation and  amortization decreasing by $43,000 and
trade commissions decreasing by $29,000.  As a percentage of net sales,  SG&amp;A
decreased to 24.5% for the three months ended March 31, 2004 from 26.9% for the same
period last year.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating earnings
were $40,000 for the quarter ended March 31, 2004 as compared to $118,000 for the  same
period last year.  The decrease in operating earnings results from the decrease in gross
profit margin, as  discussed above.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense,
net of interest income, for the quarter ended March 31, 2004 decreased by $46,000
compared to the same period last year.  The decrease is primarily due to lower
outstanding borrowing levels  incurred during the current quarter, when compared to the
same period last year.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No income tax
provision or benefit was recorded during the quarter ended March 31, 2004, or the same
period last year because of taxable losses generated by the Company in each of these
periods.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income was
$10,000 for the quarter ended March 31, 2004 as compared to $6,000 for the same period
last year.</font></td></tr></table>



<p><table width=600><tr><td><font size=2><I>Liquidity and Capital Resources</I></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have satisfied
our liquidity requirements principally through cash generated from operations and
subordinated promissory notes.  A summary of our cash flows resulting from our operating,
investing and financing  activities for the three months ended March 31, 2004 and 2003
are as follows:</font></td></tr></table>


<br>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="3"></TH>
    <TH COLSPAN="3"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="25">&nbsp;</TD>
    <TD ALIGN="LEFT" WIDTH="347"><font size="2"></font></TD>
    <TD ALIGN="center" colspan="6"><font size="2"><b>Three months ended March
      31,</b></font>
      <hr noshade size="1">
    </TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="25">&nbsp;</TD>
    <TD ALIGN="center" WIDTH="347"><font size="2">(Dollars in thousands)</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2"><b>2004</b></font>
      <hr noshade size="1">
      <font size="2"> (Unaudited)</font></TD>
    <TD ALIGN="center" WIDTH="28"><font size="2"></font></TD>
    <TD ALIGN="center" colspan="3"><font size="2"><b>2003</b></font>
      <hr noshade size="1">
      <font size="2"> (Unaudited) </font><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="25">&nbsp;</TD>
    <TD ALIGN="LEFT" WIDTH="347"><font size="2">Operating activities</font></TD>
    <TD ALIGN="RIGHT" WIDTH="59"><font size="2">$&nbsp;500</font></TD>
    <TD ALIGN="left" WIDTH="37">&nbsp;</TD>
    <TD ALIGN="LEFT" WIDTH="28"><font size="2"></font></TD>
    <TD ALIGN="RIGHT" WIDTH="62"><font size="2">$&nbsp;933</font></TD>
    <TD ALIGN="left" WIDTH="14">&nbsp;</TD>
    <TD ALIGN="LEFT" WIDTH="29"><font size="2"></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="25">&nbsp;</TD>
    <TD ALIGN="LEFT" width="347"><font size="2">Investing activities</font></TD>
    <TD ALIGN="RIGHT" width="59"><font size="2">(24</font></TD>
    <TD ALIGN="left" width="37"><font size="2">)</font></TD>
    <TD ALIGN="LEFT" width="28">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="62"><font size="2">(1</font></TD>
    <TD ALIGN="left" width="14"><font size="2">)</font></TD>
    <TD ALIGN="LEFT" width="29">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="25">&nbsp;</TD>
    <TD ALIGN="LEFT" width="347"><font size="2">Financing activities</font></TD>
    <TD ALIGN="RIGHT" width="59"><font size="2">(437</font></TD>
    <TD ALIGN="left" width="37"><font size="2">)</font></TD>
    <TD ALIGN="LEFT" width="28">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="62"><font size="2">(819</font></TD>
    <TD ALIGN="left" width="14"><font size="2">)</font></TD>
    <TD ALIGN="LEFT" width="29">&nbsp;</TD>
  </TR>
</TABLE>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash flows
provided by operating activities decreased to $500,000 during the three months ended
March 31,  2004, as compared to $933,000 during the same period last year.  The change is
primarily due to a decrease in  inventory of $512,000 during the first three months of
2004, as compared to a decrease of $1,290,000 during the  same period last year.  Our
ability to continue generating cash from operations is dependent upon using its  current
inventory (as opposed to new purchases of inventory) for generating sales, collection of
its receivables  and extended payments of accounts payables.</font></td></tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
Page
9</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash flows used in
investing activities was $24,000 during the three months ended March 31, 2004 compared
to $1,000 during the same period last year.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash flows used in
financing activities decreased to $437,000 from $819,000 during the three months ended
March 31, 2004 and 2003, respectively, as we repaid more borrowings during the 2003
period.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory is
included in current assets, however, it may take over one year for the inventory to turn
and  therefore may not be saleable within a one-year time frame.  Hence, inventory would
not be as readily marketable  or liquid as other items included in current assets, such
as cash.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that
funds generated from operations, in addition to existing cash balances, is likely to be
sufficient to finance our working capital and capital expenditure requirements for the
foreseeable future or  until principal payments are due under our outstanding
obligations.  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.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the date of
this Report,  we had no  commitments  for other equity or debt  financing or other
capital  expenditures.</font></td></tr></table>



<p><table width=600><tr><td><FONT SIZE="2">
Item  3.  Controls and Procedures</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the last day
covered by this report,  the Company  carried out an evaluation,  under the  supervision
and with the participation of the Company&#146;s  management,  including the Company&#146;s
Chief Executive  Officer,  of the  effectiveness  of the design and  operation  of the
Company&#146;s  disclosure  controls  and  procedures  pursuant  to  Rule 13a-14 of the
Securities  Exchange Act of 1934 (the &#147;Exchange  Act&#148;).  Based upon that
evaluation,  the Chief  Executive  Officer  concluded  that the  Company&#146;s
disclosure  controls  and  procedures  are  effective in timely  alerting them to
material information  relating to the Company (including its consolidated  subsidiary)
required to  be included in the Company&#146;s Exchange Act filings.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There have been no
significant  changes in the Company&#146;s  internal controls or in other factors which
could  significantly affect internal controls subsequent to the date the Company carried
out its evaluation.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>PART II.  OTHER INFORMATION</font></td></tr></table>
<p><table width=600><tr>
    <td><font size=2>Item 1. Legal Proceedings.</font></td>
  </tr></table>
<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not Applicable</font></td></tr></table>

<p><table width=600><tr><td><font size=2>Item 2.  Changes In Securities and Small
Business Issuer Purchases of Equity Securities.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no
issuances or sales of our securities by us during the first quarter of 2004 that were not
registered under the Securities Act.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the first
quarter 2004, we repurchased 148,520 shares of our Class A common stock in open market
transactions for an aggregate amount of $323,000.  .</font></td></tr></table>

<p><table width=600><tr><td><font size=2>Item 3.  Defaults Upon Senior Securities.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>Item 4.  Submission of Matters to a Vote of
Security Holders.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>Item 5.  Other Information.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>Item 6.  Exhibits and Reports on Form 8-K.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)  Exhibits:</font></td></tr></table>



<p>&nbsp;
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<P>
<table width=600>
  <TR>
    <TD width=10% valign=top>&nbsp;</TD>
    <TD width=9% valign=top><font size=2> 31 </FONT></TD>
    <TD width=81% valign=top><font size=2> Certification Pursuant to Section 302
      of the Sarbanes-Oxley Act of 2002.</font></TD>
  </TR>
</TABLE>

<P>
<table width=600>
  <TR>
    <TD width=10% valign=top>&nbsp;</TD>
    <TD width=9% valign=top><font size=2> 32 </FONT></TD>
    <TD width=81% valign=top><font size=2> Certification Pursuant to Section 906
      of the Sarbanes-Oxley Act of 2002.</font></TD>
  </TR>
</TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)  Reports on
Form 8-K:</font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
March 18,  2004,  the  Company  filed a Form 8-K  reporting  financial  results for the
fourth  quarter and year-ended December 31, 2003.</font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
other reports on Form 8-K were filed during the quarter ended March 31, 2004.</font></td></tr></table>


<p><table width=600><tr><td><FONT SIZE="2">
SIGNATURES</FONT></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with
the  requirements of the Securities  Exchange Act of 1934, the registrant  caused  this
report to be signed on its behalf by the undersigned, thereunto duly authorized.</font></td></tr></table>


<P><table width=600>
  <tr>
    <td width=8% valign=top>&nbsp;</td>
    <td width=8%><font size="2"></font></td>
    <td width=32% valign="top">&nbsp;</td>
    <td width=52%><font size="2">TAITRON COMPONENTS INCORPORATED</font></td>
  </tr></table>



<P>
<table width=600>
  <tr>
    <td valign=top width=182><font size="2">Date: May 17, 2004</font></td>
    <td width=94><font size="2"></font></td>
    <td valign="top" width=26><font size="2">By:<br>
      <br>
      </font></td>
    <td width=278><font size="2"> /s/ Stewart Wang</font>
      <hr noshade size="1">
      <font size="2"> Stewart Wang </font></td>
  </tr>
  <tr>
    <td valign=top width=182>&nbsp;</td>
    <td width=94>&nbsp;</td>
    <td valign="top" width=26><font size="2">Its:</font></td>
    <td width=278><font size="2">Chief Executive Officer, President and<br>
      Chief Financial Officer</font></td>
  </tr>
</table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
Page
11</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;
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<SEQUENCE>2
<FILENAME>e17944ex31.htm
<DESCRIPTION>CERTIFICATION
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<p>&nbsp; <!-- *************************************************************************** -->
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<p>
<table width=600>
  <tr>
    <td width=10% valign=top><font size="2">Exhibit 31</font></td>
    <td width=4% valign="top" align="center"><font size="2">&#151;</font></td>
    <td width=86%><font size="2"> Certification of Principal Executive Officer
      and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td  align=center><font size=2>Certification</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>I, Stewart Wang, certify that:</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top"><font size="2">1. </font></td>
    <td width=80%><font size="2"> I have reviewed this quarterly report on Form
      10-QSB of Taitron Components Incorporated;</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top"><font size="2">2. </font></td>
    <td width=80%><font size="2"> Based on my knowledge, this report does not
      contain any untrue statement of a material fact or omit to state a material
      fact necessary to make the statements made, in light of the circumstances
      under which such statements were made, not misleading with respect to the
      period covered by this report;</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top"><font size="2">3. </font></td>
    <td width=80%><font size="2"> Based on my knowledge, the financial statements,
      and other financial information included in this report, fairly present
      in all material respects the financial condition, results of operations
      and cash flows of the small business issuer as of, and for, the periods
      presented in this report;</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top"><font size="2">4. </font></td>
    <td width=80%><font size="2"> The small business issuer&#146;s other certifying
      officer(s) and I are responsible for establishing and maintaining disclosure
      controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
      15d-15(e)) and internal control over financial reporting (as defined in
      Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer
      and have:</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=80%><font size="2">(a) Designed such disclosure controls and procedures,
      or caused such disclosure controls and procedures to be designed under our
      supervision, to ensure that material information relating to the small business
      issuer, including its consolidated subsidiaries, is made known to us by
      others within those entities, particularly during the period in which this
      report is being prepared;</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=80%><font size="2">(b) Designed such internal control over financial
      reporting, or caused such internal control over financial reporting to be
      designed under our supervision, to provide reasonable assurance regarding
      the reliability of financial reporting and the preparation of financial
      statements for external purposes in accordance with generally accepted accounting
      principles;</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=80%><font size="2">(c) Evaluated the effectiveness of the small
      business issuer&#146;s disclosure controls and procedures and presented
      in this report our conclusions about the effectiveness of the disclosure
      controls and procedures, as of the end of the period covered by this report
      based on such evaluation; and</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=80%><font size="2">(d) Disclosed in this report any change in the
      small business issuer&#146;s internal control over financial reporting that
      occurred during the small business issuer&#146;s most recent fiscal quarter
      (the small business issuer&#146;s fourth fiscal quarter in the case of an
      annual report) that has materially affected, or is reasonably likely to
      materially affect, the small business issuer&#146;s internal control over
      financial reporting; and</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top"><font size="2">5. </font></td>
    <td width=80%><font size="2"> The small business issuer&#146;s other certifying
      officer(s) and I have disclosed, based on our most recent evaluation of
      internal control over financial reporting, to the small business issuer&#146;s
      auditors and the audit committee of the small business issuer&#146;s board
      of directors (or persons performing the equivalent functions):</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=80%><font size="2">(a) All significant deficiencies and material
      weaknesses in the design or operation of internal control over financial
      reporting which are reasonably likely to adversely affect the small business
      issuer&#146;s ability to record, process, summarize and report financial
      information; and</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top>&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=10% valign="top">&nbsp;</td>
    <td width=80%><font size="2">(b) Any fraud, whether or not material, that
      involves management or other employees who have a significant role in the
      small business issuer&#146;s internal control over financial reporting.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr valign="top">
    <td width=241><font size="2">Dated May 17, 2004.</font></td>
    <td width=29><font size="2">By:</font></td>
    <td width=314><font size="2"> /s/ Stewart Wang</font>
      <hr noshade size="1">
      <font size="2"> Stewart Wang</font></td>
  </tr>
  <tr valign="top">
    <td width=241>&nbsp;</td>
    <td width=29><font size="2">Its:</font></td>
    <td width=314><font size="2"> Principal Executive Officer and Principal Financial
      Officer</font></td>
  </tr>
</table>
<p>&nbsp;
<table width=600>
  <tr>
    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> Page 12</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
</table>
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<p>
<table width=600>
  <tr>
    <td valign=top width=59><font size="2">Exhibit 32</font></td>
    <td valign="top" align="center" width=22><font size="2">&#151; </font></td>
    <td width=503><font size="2"> Certification of Principal Executive Officer
      and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>This certification is provided pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002, 18 U.S.C Section 1350, and accompanies the
      quarterly report on Form 10-QSB for the quarter ended March 31, 2004 of
      Taitron Components Incorporated.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>I, Stewart Wang, the Principal Executive Officer and Principal
      Financial Officer of registrant, certify that to the best of my knowledge:</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=10% valign=top><font size="2"> </font></td>
    <td width=10% valign=top><font size="2">&nbsp;(i)</font></td>
    <td width=90%><font size="2"> the quarterly report on Form 10-QSB fully complies
      with the requirements of Section 13(a) or Section 15(d) of the Securities
      Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=10% valign=top><font size="2"> </font></td>
    <td width=10% valign=top><font size="2">&nbsp;(ii)</font></td>
    <td width=90%><font size="2"> the information contained in such report fairly
      presents, in all material respects, the financial condition and results
      of operations of the registrant.</font></td>
  </tr>
</table>
<p>
<p>
<table width=600>
  <tr valign="top">
    <td width=231><font size="2">Dated May 17, 2004.</font></td>
    <td width=27><font size="2">By:</font></td>
    <td width=326><font size="2">/s/ Stewart Wang</font>
      <hr noshade size="1">
      <font size="2"> Stewart Wang</font></td>
  </tr>
  <tr valign="top">
    <td width=231>&nbsp;</td>
    <td width=27><font size="2">Its:</font></td>
    <td width=326><font size="2"> Principal Executive Officer and Principal Financial
      Officer</font></td>
  </tr>
</table>
<p>&nbsp;
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    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> Page 13</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
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<p>&nbsp;
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