P&F Industries (PFIN) 10-K30 Mar 222021 FY Annual reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2020
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2021
Entity File Number	1-5332
Entity Registrant Name	P&F INDUSTRIES, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	22-1657413
Entity Address, Address Line One	445 Broadhollow Road, Suite 100
Entity Address, City or Town	Melville
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11747
City Area Code	631
Local Phone Number	694-9800
Title of 12(b) Security	Class A Common Stock, $1.00 par value
Trading Symbol	PFIN
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 11,150,000
Entity Common Stock, Shares Outstanding		3,181,286
Entity Central Index Key	0000075340
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Auditor Name	CohnReznick LLP
Auditor Firm ID	596
Auditor Location	Jericho, New York

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2021	Dec. 31, 2020
CURRENT ASSETS
Cash	$ 539,000	$ 904,000
Accounts receivable - net	7,550,000	7,468,000
Inventories	24,021,000	18,362,000
Prepaid expenses and other current assets	4,566,000	2,806,000
TOTAL CURRENT ASSETS	36,676,000	29,540,000
PROPERTY AND EQUIPMENT
Land	507,000	507,000
Buildings and improvements	3,605,000	3,544,000
Machinery and equipment	25,675,000	25,673,000
Property, Plant and Equipment, Gross	29,787,000	29,724,000
Less accumulated depreciation and amortization	21,707,000	20,329,000
NET PROPERTY AND EQUIPMENT	8,080,000	9,395,000
GOODWILL	4,447,000	4,449,000
OTHER INTANGIBLE ASSETS - net	5,592,000	6,226,000
DEFERRED INCOME TAXES - net	349,000	226,000
RIGHT-OF-USE ASSETS - OPERATING LEASES	2,969,000	3,281,000
OTHER ASSETS - net	77,000	250,000
TOTAL ASSETS	58,190,000	53,367,000
CURRENT LIABILITIES
Short-term borrowings	5,765,000	1,374,000
Accounts payable	2,920,000	2,199,000
Accrued compensation and benefits	1,475,000	525,000
Accrued other liabilities	1,078,000	1,354,000
Current leased obligations - operating leases	840,000	847,000
Current maturities of long-term debt (PPP loan)	0	1,983,000
TOTAL CURRENT LIABILITIES	12,078,000	8,282,000
Non-current leased obligations - operating leases	2,176,000	2,474,000
Long-term debt, less current maturities (PPP loan)	0	946,000
Other liabilities	96,000	127,000
TOTAL LIABILITIES	14,350,000	11,829,000
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock - $10 par; authorized - 2,000,000 shares; no shares issued	0	0
Additional paid-in capital	14,167,000	14,144,000
Retained earnings	36,046,000	33,756,000
Treasury stock, at cost - 1,273,000 shares on December 31, 2021 and 2020	(10,213,000)	(10,213,000)
Accumulated other comprehensive loss	(613,000)	(577,000)
TOTAL SHAREHOLDERS' EQUITY	43,840,000	41,538,000
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	58,190,000	53,367,000
Common Class A
SHAREHOLDERS' EQUITY
Common stock	4,453,000	4,428,000
Common Class B
SHAREHOLDERS' EQUITY
Common stock	$ 0	$ 0

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
Preferred stock, par value (in dollars per share)	$ 10	$ 10
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Treasury stock, shares	1,273,000	1,273,000
Common Class A
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized	7,000,000	7,000,000
Common stock, shares issued	4,453,000	4,428,000
Common Class B
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized	2,000,000	2,000,000
Common stock, shares issued	0	0

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Net revenue	$ 53,554,000	$ 49,136,000
Cost of sales	36,207,000	34,943,000
Gross profit	17,347,000	14,193,000
Selling, general and administrative expenses	19,856,000	19,367,000
Impairment of assets held for sale	88,000
Impairment of goodwill		1,612,000
Operating loss	(2,597,000)	(6,786,000)
Other income	4,957,000	106,000
Loss on sale of fixed assets	(27,000)	(35,000)
Interest expense	(45,000)	(140,000)
Income (loss) before income taxes	2,288,000	(6,855,000)
Income tax benefit	2,000	1,901,000
Net income (loss)	$ 2,290,000	$ (4,954,000)
Basic earnings (loss) per share	$ 0.72	$ (1.57)
Diluted earnings (loss) per share	$ 0.72	$ (1.57)
Weighted average common shares outstanding:
Basic	3,178,000	3,149,000
Diluted	3,192,000	3,149,000
Net income (loss)	$ 2,290,000	$ (4,954,000)
Other comprehensive (loss) income - foreign currency translation adjustment	(36,000)	43,000
Total comprehensive income (loss)	$ 2,254,000	$ (4,911,000)

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Common Class ACommon Stock	Additional paid-in capital	Retained earnings	Treasury stock	Accumulated other comprehensive loss	Total
Balance at Dec. 31, 2019	$ 4,416,000	$ 14,056,000	$ 38,867,000	$ (10,213,000)	$ (620,000)	$ 46,506,000
Balance (in shares) at Dec. 31, 2019	4,416,000			(1,273,000)
Net Income	$ 0	0	(4,954,000)	$ 0	0	(4,954,000)
Exercise of stock options	$ 6,000	12,000	0	0	0	18,000
Exercise of stock options (in shares)	6,000
Restricted common stock compensation	$ 6,000	35,000	0	0	0	41,000
Restricted common stock compensation (in shares)	6,000
Stock-based compensation	$ 0	41,000	0	0	0	41,000
Dividends	0	0	(157,000)	0	0	(157,000)
Foreign currency translation adjustment	0	0	0	0	43,000	43,000
Balance at Dec. 31, 2020	$ 4,428,000	14,144,000	33,756,000	$ (10,213,000)	(577,000)	41,538,000
Balance (in shares) at Dec. 31, 2020	4,428,000			(1,273,000)
Net Income	$ 0	0	2,290,000	$ 0	0	2,290,000
Restricted common stock compensation	$ 25,000	18,000	0	0	0	43,000
Restricted common stock compensation (in shares)	25,000
Stock-based compensation	$ 0	5,000	0	0	0	5,000
Foreign currency translation adjustment	0	0	0	0	(36,000)	(36,000)
Balance at Dec. 31, 2021	$ 4,453,000	$ 14,167,000	$ 36,046,000	$ (10,213,000)	$ (613,000)	$ 43,840,000
Balance (in shares) at Dec. 31, 2021	4,453,000			(1,273,000)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Cash Flows from Operating Activities
Net income (loss)	$ 2,290,000	$ (4,954,000)
Non-cash charges:
Depreciation	1,788,000	1,787,000
Amortization of other intangible assets	631,000	702,000
Operating lease expense	895,000	899,000
Amortization of debt issue costs	16,000	16,000
Amortization of consideration payable to customer	270,000	270,000
Provision for doubtful accounts	10,000	24,000
Stock-based compensation	5,000	41,000
Restricted stock-based compensation	43,000	41,000
(Loss) gain on sale of fixed assets	(27,000)	35,000
Deferred income taxes	(120,000)	(11,000)
Fair value adjustment of assets held for sale	88,000	0
Gain on contingent consideration settlement	0	(52,000)
Gain on lease obligation settlement	0	(31,000)
Gain on forgiveness of grant obligation	(2,929,000)	(53,000)
Impairment of assets	0	1,612,000
Changes in operating assets and liabilities:
Accounts receivable	(96,000)	1,835,000
Inventories	(5,671,000)	4,538,000
Prepaid expenses and other current assets	(1,825,000)	(1,341,000)
Accounts payable	726,000	352,000
Accrued compensation and benefits	954,000	(1,498,000)
Accrued other liabilities	(264,000)	(185,000)
Operating lease liabilities	(888,000)	(918,000)
Other liabilities	(45,000)	(62,000)
Total adjustments	(6,439,000)	8,001,000
Net cash (used in) provided by operating activities	(4,149,000)	3,047,000
Cash Flows from Investing Activities:
Capital expenditures	(642,000)	(1,104,000)
Proceeds from sale or disposal of machinery and equipment	58,000	1,000
Net cash used in investing activities	(584,000)	(1,103,000)
Cash Flows from Financing Activities:
Dividend payments	0	(157,000)
Proceeds from exercise of stock options	0	18,000
Net proceeds (payments) from short-term borrowings	4,391,000	(4,274,000)
Proceeds from Grant	0	53,000
Proceeds from PPP loan	0	2,929,000
Net cash provided by (used in) financing activities	4,391,000	(1,431,000)
Effect of exchange rate changes on cash	(23,000)	11,000
Net (decrease) increase in cash	(365,000)	524,000
Cash at beginning of year	904,000	380,000
Cash at end of year	539,000	904,000
Cash paid for:
Interest	39,000	120,000
Income taxes	22,000	35,000
Cash paid for amounts included in the measurement of operating lease liabilities	10,000	5,000
Supplemental disclosures of non-cash investing and financing activities:
Right of Use ("ROU") assets recognized for new operating lease liabilities	$ 427,000	$ 140,000

SUMMARY OF ACCOUNTING POLICIES

SUMMARY OF ACCOUNTING POLICIES	12 Months Ended
SUMMARY OF ACCOUNTING POLICIES	Dec. 31, 2021
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES	NOTE 1—SUMMARY OF ACCOUNTING POLICIES Principles of Consolidation The Consolidated Financial Statements contained herein include the accounts of P&F Industries, Inc. and subsidiaries (“P&F” or the “Company”). All significant intercompany balances and transactions have been eliminated. The Company P&F is a Delaware corporation incorporated in 1963. The Company conducts its business through a wholly-owned subsidiary, Continental Tool Group, Inc. (“Continental”), which in turn operates through its wholly-owned subsidiaries, Florida Pneumatic Manufacturing Corporation (“Florida Pneumatic”) and Hy-Tech Machine, Inc. (“Hy-Tech”). Exhaust Technologies Inc. (“ETI”), Universal Air Tool Company Limited (“UAT”) and Jiffy Air Tool, Inc. (“Jiffy”), are all wholly-owned subsidiaries of Florida Pneumatic. The business of Air Tool Service Company (“ATSCO”) operates through a wholly-owned subsidiary of Hy-Tech. During 2019, the Company through a wholly-owned subsidiary of Hy-Tech, acquired substantially all the operating assets comprising the businesses of Blaz-Man Gear, Inc. and Gear Products & Manufacturing, Inc., each a manufacturer and distributer of custom gears. Florida Pneumatic directly, and through its wholly-owned subsidiaries Exhaust Technologies Inc. (“ETI”), Universal Air Tool Company Limited (“UAT”), and Jiffy Air Tool, Inc. (“Jiffy”) imports, manufactures, and markets pneumatic hand tools of its own design, primarily to the retail, industrial, automotive and aerospace markets. Its products include sanders, grinders, drills, saws, and impact wrenches. These tools are similar in appearance and function to electric hand tools, but are powered by compressed air, rather than by electricity or a battery. Air tools, as they are more commonly referred to, generally offer better performance, and weigh less than their electrical counterparts. Florida Pneumatic imports and/or manufactures approximately 75 types of pneumatic hand tools, most of which are sold at prices ranging from $50 to $1,000, under the names “Florida Pneumatic,” “Universal Tool”, “Jiffy Air Tool”, AIRCAT, NITROCAT, as well as under the trade names or trademarks of several private label customers. These products are sold to retailers, distributors, manufacturers and private label customers through in-house sales personnel and manufacturers’ representatives. The AIRCAT and NITROCAT brands of pneumatic tools are sold primarily to the automotive service and repair market (“automotive market”). Users of Florida Pneumatic’s hand tools include industrial maintenance and production staffs, do-it-yourself mechanics, professional automobile mechanics and auto body personnel. Jiffy manufactures and distributes pneumatic tools and components primarily to aerospace manufacturers. Hy-Tech designs, manufactures, and distributes industrial tools, pneumatic systems, gearing, accessories, and a wide variety of replacement parts under various brands including ATP, NUMATX, Thaxton and Power Transmission Group. These tools, etc. are sold at prices ranging from $300 to $42,000. Hy-Tech’s “Engineered Solutions” products are sold direct to Original Equipment Manufacturers (OEMs), and industrial branded products are sold through a broad network of specialized industrial distributors serving the power generation, petrochemical, aerospace, construction, railroad, mining, ship building and fabricated metals industries, among others. Hy-Tech works directly with its industrial customers, designing and manufacturing products from finished components to complete turnkey systems to be sold under their own brand names. Hy-Tech’s “Power Transmission Group”, commonly referred to as “PTG”, produces spiral bevel and straight bevel gears along with a wide variety of other gearing. These products are sold direct to OEMs, end-users and gearbox repair companies. PTG works directly with its customers engineering departments to design or redesign gears or gearboxes to optimize a solution for functionality and manufacturability. Nearly all of Hy-Tech brands are manufactured in the United States of America. Hy-Tech markets ATP branded impact sockets, striking wrenches and accessories that are imported from Italy and Asia. NOTE 1—SUMMARY OF ACCOUNTING POLICIES – Continued The Company – Continued The sales of Hy-Tech products through various channel and direct customers are managed by both direct sales personnel and a network of specialized manufacturer representatives. Further, its products are sold as standard off-the-shelf and also customized to be sold for customer specific specifications . Basis of Financial Statement Presentation The Company prepares its Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States (“US GAAP”). COVID-19 On March 11, 2020, the World Health Organization designated the recent novel coronavirus, or COVID-19, as a global pandemic. COVID-19 was first detected in Wuhan City, Hubei Province, China and continued to spread, significantly impacting various markets around the world, including the United States. Various policies and initiatives have been implemented to reduce the global transmission of COVID-19. The COVID-19 virus and the resultant global economic down-turn had a negative impact on our fiscal 2021 results. Additionally, we believe the supply-chain crisis is related to the pandemic. Beginning in early 2021, but magnifying during the third quarter of 2021, we encountered severe shipping / receiving delays of inventory / containers from our Asian suppliers, which has caused intermittent shortages of inventory. Further, the costs of international freight have greatly increased. In addition, the COVID-19 pandemic has caused many of our customers and potential customers to refuse on-site visits, which is critical to generating revenue. We believe that until the above issues subside, our business will likely continue to be adversely affected. Going Concern Assessment Management assesses going concern uncertainty to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period,” as defined in US GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, it considers various scenarios, forecasts, projections, estimates and makes certain key assumptions, including the timing and nature of projected cash expenditures, its ability to reduce, delay or curtail cash outflows and its ability to raise additional capital, if necessary, among other factors. Management has prepared estimates of operations covering the look-forward period and believes that sufficient funds will be generated from operations, working capital, and its existing credit facility to fund its operations. The Company has contingency plans in which it would further reduce or defer additional expenses and cash outlays, should operations weaken beyond current forecasts. The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is unclear what the full impact of COVID-19 will be in the future or when the Company believes a return to more normal operations may occur. As part of the business incentives offered in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Company, on April 20, 2020, received a $2.9 million Paycheck Protection Program (“PPP”) loan, which was forgiven in 2021. Additionally, in December 2021, the Company recorded an Employee Retention Credit of approximately $2.0 million. See Note 7 - CARES Act to the Company’s consolidated financial statements for further discussion. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. NOTE 1—SUMMARY OF ACCOUNTING POLICIES – Continued Going Concern Assessment – Continued During 2021, the Company generated an after-tax income of $2,290,000. For fiscal years ended December 31, 2020, and 2021, the Company reported operating losses, and had negative cash flows in 2021. At December 31, 2021, the Company had working capital of $24,598,000 and availability on its bank facility of approximately $9,578,000. See Note 6 – Debt, for further discussion. Revenue Recognition The Company records revenue based on a five-step model in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers The Company’s performance obligations underlying its core revenue sources remain substantially unchanged. Its revenue is generated through the sale of finished products and is generally recognized at the point in time when merchandise is transferred to the customer with a fixed payment due generally within 30 to 90 days, and in an amount that considers the impacts of estimated allowances. Further, the Company has made a policy election to account for shipping and handling activities that occur after the customer has obtained control of the products as fulfillment costs rather than as an additional promised service. This election is consistent with the Company’s prior policy, and therefore the adoption of ASC 606 relating to shipping and handling activities did not have any impact on its financial results. There are no other performance obligations as of December 31, 2021. Accounts receivable at December 31, 2019, was $9,313,000. The Company analyzes its revenue as follows: Revenue generated at Florida Pneumatic. Year Ended December 31, 2021 2020 (Decrease) increase Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 14,543,000 35.1 % $ 13,270,000 34.7 % $ 1,273,000 9.6 % Retail 13,995,000 33.7 12,940,000 33.8 1,055,000 8.2 Aerospace 7,184,000 17.3 8,087,000 21.1 (903,000) (11.2) Industrial 5,289,000 12.7 3,481,000 9.1 1,808,000 51.9 Other 477,000 1.2 498,000 1.3 (21,000) (4.2) Total $ 41,488,000 100.0 % $ 38,276,000 100.0 % $ 3,212,000 8.4 % NOTE 1—SUMMARY OF ACCOUNTING POLICIES – Continued Revenue Recognition – Continued Revenue generated at Hy-Tech. Year Ended December 31, 2021 2020 (Decrease) increase Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 5,842,000 48.4 % $ 4,272,000 39.4 % $ 1,570,000 36.8 % PTG 2,846,000 23.6 3,326,000 30.6 (480,000) (14.4) ATP 3,024,000 25.1 2,796,000 25.7 228,000 8.2 Other 354,000 2.9 466,000 4.3 (112,000) (24.0) Total $ 12,066,000 100.0 % $ 10,860,000 100.0 % $ 1,206,000 11.1 % Shipping and Handling Costs Expenses for shipping and handling costs are included in selling, general and administrative expenses, and totaled approximately $2,038,000 and $1,831,000, respectively, for the years ended December 31, 2021 and 2020. Cash and Cash Equivalents Cash consists of cash held in bank demand deposits. The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2021, and 2020. Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, accounts payable and short-term debt approximate fair value as of December 31, 2021, and 2020 because of the relatively short-term maturity of these financial instruments. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are customer obligations due under normal trade terms. The Company sells its products to retailers, distributors, OEMs and end-users involved in a variety of industries. The Company performs continuing credit evaluations of its customers’ financial condition, and although the Company generally does not require collateral, letters of credit may be required from customers in certain circumstances. Management reviews accounts receivable to determine if any receivables will potentially be uncollectible. Factors considered in the determination include, among other factors, number of days an invoice is past due, customer historical trends, available credit ratings information, other financial data, and the overall economic environment. Collection agencies may also be utilized if management so determines. The Company records an allowance for doubtful accounts based on specifically identified amounts that are believed to be uncollectible. The Company also records as an additional allowance a certain percentage of aged accounts receivable, based on historical experience and the Company’s assessment of the general financial conditions affecting its customer base. If actual collection experience changes, revisions to the allowance may be required. The Company has a limited number of customers with individually large amounts due at any given balance sheet date. Any unanticipated change in the creditworthiness of any of these customers could have a material effect on the Company’s results of operations in the period in which such changes or events occur. After all reasonable attempts to collect an account receivable have failed, the amount of the receivable is written off against the allowance. Based on the information available, the Company believes that its allowance for doubtful accounts as of December 31, 2021, is adequate. However, actual write-offs might exceed the recorded allowance. NOTE 1—SUMMARY OF ACCOUNTING POLICIES - Continued Concentrations of Credit Risk The Company places the majority of its cash with its primary bank, Capital One Bank, National Association (“Capital One”), which is insured by the Federal Deposit Insurance Corporation (“FDIC”). Significant concentrations of credit risk may arise from the Company’s cash maintained at Capital One, as from time-to-time cash balances may exceed the FDIC limits. At December 31, 2021, there was $27,000 in excess of the FDIC insured amount. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. The Company had one customer that accounted for 35.9% and 38.0% of its consolidated accounts receivable at December 31, 2021, and 2020, respectively. Further, this customer accounted for 26.1% and 26.3% of the Company’s consolidated revenue in 2021 and 2020, respectively. There was no other customer that accounted for more than 10% of our consolidated revenue in 2021 or 2020. Inventories Inventories are valued at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. The inventory balance, which includes raw materials, labor, and manufacturing overhead costs, is recorded net of an allowance for obsolete or unmarketable inventory. Such allowance is based upon both historical experience and management’s understanding of market conditions and forecasts of future product demand. If the actual amount of obsolete or unmarketable inventory significantly exceeds the estimated allowance, the Company’s cost of sales, gross profit and net earnings would be significantly affected. Property and Equipment and Depreciation and Amortization Property and equipment are stated at cost less accumulated depreciation and amortization. Generally, the Company capitalizes items in excess of $1,000. Minor replacements and maintenance and repair items are charged to expense as incurred. Upon disposal or retirement of assets, the cost and related accumulated depreciation are removed from the Company’s consolidated balance sheets. Depreciation of buildings and machinery and equipment is computed by using the straight-line method over the estimated useful lives of the assets. Buildings are depreciated over periods ranging from 27.5 to 31 years, and machinery and equipment is depreciated over periods ranging from 3 to 10 years. Leasehold improvements are amortized over the life of the lease or the useful life of the related asset, whichever is shorter. Long-Lived Assets In accordance with authoritative guidance pertaining to the accounting for the impairment or disposal of long-lived assets, property and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company’s assessment of recoverability of property and equipment is performed on a reporting unit level. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of such asset to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of such asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. NOTE 1—SUMMARY OF ACCOUNTING POLICIES - Continued Acquisitions The Company accounts for acquired businesses using the purchase method of accounting, which requires that the assets acquired, liabilities assumed, and contingent consideration, if any, are recorded as of the date of the acquisition at their respective fair values. It further requires that acquisition-related costs be recognized separately from the acquisition and expensed as incurred and that restructuring costs be expensed in periods subsequent to the acquisition date. Generally, the Company engages third party valuation appraisal firms to assist it in determining the fair values and useful lives of the assets acquired and liabilities assumed. The Company records a preliminary purchase price allocation for its acquisitions and finalizes purchase price allocations as additional information relative to the fair values of the assets acquired become known. Goodwill, Intangible and Long-Lived Assets Goodwill is carried at cost less any impairment charges. Goodwill and intangible assets with indefinite lives are not amortized but are subject to an annual test for impairment at the reporting unit level and between annual tests in certain circumstances. In accordance with authoritative guidance issued by the Financial Accounting Standards Board (“FASB”), the Company tests goodwill for impairment on an annual basis. This test occurs in the fourth quarter or more frequently if the Company believes indicators of impairment exist. An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (that is, a likelihood of more than 50)% that the fair value of a reporting unit is less than its carrying amount. If the carrying amount of the reporting unit is less than its fair value, no impairment exists, and no further action is required. If the carrying amount of a reporting unit exceeds its fair value, the entity will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. Intangible assets other than goodwill and intangible assets with indefinite lives, are carried at cost less accumulated amortization. Intangible assets are generally amortized on a straight-line basis over their respective useful lives, generally 3 to 20 years. Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold, and use is based on the amount by which the carrying value exceeds the fair value of the asset. Warranty Liability The Company offers certain warranties against product defects for periods ranging from one NOTE 1—SUMMARY OF ACCOUNTING POLICIES - Continued Income Taxes The Company accounts for income taxes using the asset and liability approach. This approach requires the recognition of current tax assets or liabilities for the amounts refundable or payable on tax returns for the current year, as well as the recognition of deferred tax assets or liabilities for the expected future tax consequences of temporary differences that can arise between (a) the amount of taxable income and pretax financial income for a year, such as from net operating loss carryforwards and other tax credits, and (b) the tax bases of assets or liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates. The impact on deferred tax assets and liabilities of changes in tax rates and laws, if any, is reflected in the Consolidated Financial Statements in the period enacted. Further, the Company evaluates the likelihood of realizing benefit from our deferred tax assets by estimating future sources of taxable income and the impact of tax planning strategies. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The Company files a consolidated Federal tax return. P&F and certain of its subsidiaries file combined tax returns in New York, California, Illinois, and Texas. All subsidiaries, other than UAT, file other state and local tax returns on a stand-alone basis. UAT files an income tax return to the taxing authorities in the United Kingdom. Tax benefits are recognized for an uncertain tax position when, in the Company’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more likely than not recognition threshold, the tax benefit is measured as the largest amount that is judged to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances and when new information becomes available. Such adjustments are recognized entirely in the period in which they are identified. The effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by the Company. Interest and penalties recognized on the liability for unrecognized tax benefits are recorded as income tax expense. The authoritative guidance for income taxes requires a reduction of the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not (defined as a likelihood of more than 50)% such assets will not be realized. The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in the Company’s financial statements or tax returns and future profitability. The Company’s accounting for deferred tax consequences represents its best estimate of those future events. Changes in the Company’s estimates, due to unanticipated events or otherwise, could have a material effect on its financial condition and results of operations. The Company continually evaluates its deferred tax assets to determine if a valuation allowance is required. On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in tax years 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. In addition to the NOL changes, the CARES Act enacted the employee retention credit and modifies the limitation of business interest for tax years beginning in 2019 and 2020. The modifications to Section 163(j) of the Internal Revenue Code increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income (See Note 10 – Income taxes). NOTE 1—SUMMARY OF ACCOUNTING POLICIES - Continued Lease Accounting The Company adopted ASC 842, Leases If the rate implicit in a lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgment when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The Company’s operating leases include vehicles, office space and the use of real property. The Company has not identified any material finance leases as of December 31, 2021. For the year ended December 31, 2021, the Company had $895,000 in Operating lease expense. The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of December 31, 2021: As of December 31, 2021 2022 $ 875,000 2023 873,000 2024 598,000 2025 309,000 2026 174,000 Thereafter 693,000 Total operating lease payments 3,522,000 Less imputed interest (506,000) Total operating lease liabilities $ 3,016,000 Weighted average remaining lease term 5.5 years Weighted average discount rate 6.7 % Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, possible disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an on-going basis P&F evaluates its estimates, including those related to collectability of accounts receivable, valuation of inventories, recoverability of goodwill and intangible assets, consideration payable to customer and income taxes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Actual results may differ from those estimates under different assumptions or conditions. NOTE 1—SUMMARY OF ACCOUNTING POLICIES - Continued Advertising The Company typically expenses its costs of advertising in the period in which they are incurred and are included in Selling, General, and Administrative expenses. For the years ended December 31, 2021, and 2020 advertising expenses were $1,276,000 and $1,529,000, respectively. Earnings (Loss) Per Common Share Basic earnings (loss) per common share exclude any dilution. It is based upon the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per common share reflect the effect of shares of Common Stock issuable upon the exercise of stock options unless the effect on earnings is anti-dilutive. Diluted earnings (loss) per common share is computed using the treasury stock method. Under this method, the aggregate number of shares of Common Stock outstanding reflects the assumed use of proceeds from the hypothetical exercise of any outstanding options to purchase shares of the Company’s Class A Common Stock. The average market value for the period is used as the assumed purchase price. The following table sets forth the computation of basic and diluted earnings (loss) per common share: Years Ended December 31, 2021 2020 Numerator for basic and diluted earnings (loss) per common share: Net income (loss) $ 2,290,000 $ (4,954,000) Denominator: Denominator for basic income (loss) per share—weighted average common shares outstanding 3,178,000 3,149,000 Dilutive securities (1) 14,000 — Denominator for diluted income (loss) per share—adjusted weighted average common shares and assumed conversions 3,192,000 3,149,000 (1) Dilutive securities consist of the “in the money” stock options. In the event of a loss, options are considered anti-dilutive and are therefore not included in the calculation of diluted loss per share. The average anti-dilutive options outstanding for the years ended December 31, 2021, and 2020 were 137,000 and 164,000, respectively. December 31, 2021 and 2020. NOTE 1—SUMMARY OF ACCOUNTING POLICIES - Continued Share-Based Compensation In accordance with US GAAP, the Company measures and recognizes compensation expense for all share-based payment awards based on estimated fair values. Share-based compensation expense is included in selling, general and administrative expense on the accompanying consolidated statements of operations and comprehensive income (loss). With respect to stock options, US GAAP requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations and comprehensive income (loss). The Company records compensation expense ratably over the vesting periods. The Company estimates forfeitures at the time of grant and revises this estimate, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company uses the Black-Scholes option-pricing model as its method of valuation for share-based awards granted. As such, the Company’s determination of fair value of share-based payment awards is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, relevant interest rates, and the expected term of the awards. With respect to any issuance of its Common Stock, the Company determines fair value per share as the closing price of its Common Stock on the date of the grant of said shares. Foreign Currency Translation The assets and liabilities of international operations are translated at the exchange rates in effect at the balance sheet date. Revenue and expense accounts are translated at the monthly average exchange rates. Adjustments arising from the translation of the foreign currency financial statements of the Company’s international operations are reported as a component of “Accumulated other comprehensive loss” in the Company’s consolidated balance sheets. For foreign currency remeasurement from each local currency into the appropriate functional currency, monetary assets and liabilities are remeasured to functional currencies using current exchange rates in effect at the balance sheet date. Gains or losses from these remeasurements were not significant and have been included in the Company’s consolidated statements of operations and comprehensive income (loss). Non-monetary assets and liabilities are recorded at historical exchange rates, and the related remeasurement gains or losses are reported as a component of “Accumulated other comprehensive loss” in the Company’s consolidated balance sheets. Recently Adopted Accounting Pronouncements In March 2020, FASB issued Accounting Standards Update (“ASU”) ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In November 2021, the FASB issued ASU 2021-10, Disclosures by Business Entities about Government Assistance NOTE 1—SUMMARY OF ACCOUNTING POLICIES - Continued Recently Adopted Accounting Pronouncements - Continued No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures. Not Yet Adopted The Company does not expect any recently issued but not yet adopted accounting pronouncements to have a material effect on its financial statements.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	12 Months Ended
FAIR VALUE MEASUREMENTS	Dec. 31, 2021
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	NOTE 2—FAIR VALUE MEASUREMENTS Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company is required to classify certain assets and liabilities based on the following hierarchy: ● Level 1: Quoted prices for identical assets or liabilities in active markets that can be assessed at the measurement date. ● Level 2: Inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. ● Level 3: Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. The guidance requires the use of observable market data if such data is available without undue cost and effort. As of December 31, 2021, and 2020, the carrying amounts reflected in the accompanying consolidated balance sheets for current assets and current liabilities approximated fair value due to the short-term nature of these accounts. Assets and liabilities measured at fair value on a non-recurring basis include goodwill and intangible assets. Such assets are reviewed quarterly for impairment indicators. If a triggering event has occurred, the assets are re-measured when the estimated fair value of the corresponding asset group is less than the carrying value. The fair value measurements, in such instances, are based on significant unobservable inputs (Level 3).

ACCOUNTS RECEIVABLE AND ALLOWAN

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS	12 Months Ended
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS	Dec. 31, 2021
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS	NOTE 3—ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable - net consist of: December 31, December 31, 2021 2020 Accounts receivable $ 7,817,000 $ 7,726,000 Allowance for doubtful accounts, sales discounts, and chargebacks (267,000) (258,000) $ 7,550,000 $ 7,468,000

INVENTORIES

INVENTORIES	12 Months Ended
INVENTORIES	Dec. 31, 2021
INVENTORIES
INVENTORIES	NOTE 4—INVENTORIES Inventories consist of: December 31, December 31, 2021 2020 Raw materials $ 2,166,000 $ 2,077,000 Work in process 1,360,000 1,127,000 Finished goods 20,495,000 15,158,000 $ 24,021,000 $ 18,362,000

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	12 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS	Dec. 31, 2021
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS	NOTE 5—GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill In accordance with authoritative guidance issued by the FASB, the Company performed an annual impairment test of goodwill and indefinite-lived intangible assets as of November 30, 2021. For both 2021 and 2020, with respect to the Company’s two reporting units, Florida Pneumatic and Hy-Tech, the Company determined their fair value using the income approach methodology of valuation, which considers the expected present value of future cash flows. As an integral part of the valuation process, the Company utilizes its latest cash flows forecasts for the next six fiscal years, and then applies projected minimal growth for all remaining years, based upon available statistical data and management’s estimates. At December 31, 2021, only Florida Pneumatic had goodwill. The result of the Company’s impairment test as of November 30, 2021, determined that Florida Pneumatic’s fair value exceeded the carrying value and, as such, no impairment to goodwill assets was recorded. During the second quarter of 2020, the Company determined that a triggering event occurred as it concluded that the impact of COVID-19 on its sales, profitability and cash flows resulted in a reduction to its operating forecasts reflecting the uncertainty of the current environment. As a result, the Company performed an interim goodwill impairment test. After completion of the interim goodwill impairment test, the Company concluded that Hy-Tech’s goodwill was fully impaired and recorded a non-cash goodwill impairment charge of $284,000 during the second quarter of 2020. Consistent with the procedures followed in the Company’s annual impairment test, it estimated the fair values of each of its reporting units using the income approach. The income approach uses projected future cash flows that are discounted using a weighted average cost of capital analysis that reflects current market conditions. NOTE 5—GOODWILL AND OTHER INTANGIBLE ASSETS - Continued Other Intangible Assets The result of the Company’s impairment test as of November 30, 2021, for Florida Pneumatic and Hy-Tech determined that their respective fair value exceeded the carrying value and, as such, no impairment to other intangible assets was recorded. December 31, 2021 December 31, 2020 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Other intangible assets: Customer relationships (1) $ 6,495,000 $ 3,545,000 $ 2,950,000 $ 6,502,000 $ 3,034,000 $ 3,468,000 Trademarks and trade names (1) 2,187,000 — 2,187,000 2,187,000 — 2,187,000 Trademarks and trade names 200,000 73,000 127,000 200,000 59,000 141,000 Engineering drawings 330,000 254,000 76,000 330,000 239,000 91,000 Non-compete agreements (1) 335,000 290,000 45,000 335,000 266,000 69,000 Patents 1,286,000 1,079,000 207,000 1,286,000 1,016,000 270,000 Totals $ 10,833,000 $ 5,241,000 $ 5,592,000 $ 10,840,000 $ 4,614,000 $ 6,226,000 (1) A portion of these intangibles are maintained in a foreign currency and are therefore subject to foreign exchange rate fluctuations. The Company, during the second quarter of 2020, estimated the fair value of the NUMATX patent, and its UAT trade name based on an income approach using the relief-from-royalty method. This approach is dependent upon a number of factors, including estimates of future growth and trends, royalty rates, discount rates and other variables. For the interim impairment test, its estimates of future revenue and profitability associated with NUMATX and UAT were significantly reduced, primarily reflecting the impact of COVID-19. The Company reduced the royalty rate used to estimate the fair value, reflecting the impact of the uncertain environment resulting from COVID-19. Additionally, the weighted average cost of capital used to discount the cash flows for the interim goodwill impairment test was slightly higher than the last annual test, also reflecting the increasing uncertainty resulting from COVID-19. Further, the Company estimated the fair value of Hy-Tech’s customer relationships based on the discounted value of future cash flows and determined that, primarily for the same reasons noted above related to impairment of the NUMATX patent and the UAT trade name, Hy-Tech’s customer relationships were fully impaired. As a result of the aforementioned, the Company adjusted the fair value of the above-mentioned intangible assets by recording a non-cash impairment charge of $1,328,000 in the second quarter of 2020. The weighted average amortization period for intangible assets was as follows: December 31, 2021 December 31, 2020 Customer relationships 6.7 7.6 Trademarks and trade names 9.5 10.5 Engineering drawings 5.1 6.1 Non-compete agreements 2.0 3.0 Patents 4.5 5.2 Amortization expense of intangible assets subject to amortization was as follows: Years ended December 31, 2021 2020 $ 631,000 $ 702,000 NOTE 5—GOODWILL AND OTHER INTANGIBLE ASSETS - Continued Other Intangible Assets - Continued Amortization expense for each of the next five years and thereafter is estimated to be as follows: 2022 $ 629,000 2023 625,000 2024 577,000 2025 548,000 2026 348,000 Thereafter 678,000 $ 3,405,000

DEBT

DEBT	12 Months Ended
DEBT	Dec. 31, 2021
DEBT
DEBT	NOTE 6—DEBT In October 2010, the Company entered into a Loan and Security Agreement (“Credit Agreement”) with an affiliate of Capital One, National Association (“Capital One” or the “Bank”). The Credit Agreement, as amended and restated in April 2017 and further amended from time-to-time, among other things, provides the ability to borrow funds under a $16,000,000 revolver line (“Revolver”), subject to certain borrowing base criteria. Additionally, there is a $2,000,000 line of credit for capital expenditures (“Capex Loan”), with $1,600,000 available for future borrowings. Revolver and Capex Loan borrowings are secured by the Company’s accounts receivable, inventory, equipment, and real property, among other things. P&F and certain of its subsidiaries are borrowers under the Credit Agreement, and their obligations are cross guaranteed by certain other subsidiaries. The Credit Agreement expires on February 8, 2024. At the Company’s option, Revolver borrowings bear interest at either LIBOR or the Base Rate, as the term is defined in the Credit Agreement, plus an Applicable Margin, as defined in the Credit Agreement. The Company is subject to limitations on the number of LIBOR borrowings. The Company provides Capital One with monthly borrowing base certificates, and in certain circumstances, it is required to deliver monthly financial statements and certificates of compliance with various financial covenants. Should an event of default occur the interest rate would increase by two percent per annum during the period of default, in addition to other remedies provided to Capital One. At December 31, 2021, short-term or Revolver borrowing was $5,765,000 compared to $1,374,000, at December 31, 2020. Applicable Margin Rates at December 31, 2021, and 2020, for LIBOR and Base Rates were 1.50% and 0.50%, respectively. Additionally, at December 31, 2021 and 2020, there was approximately $9,578,000 and $11,971,000, respectively, available to the Company under its Revolver arrangement. On December 31, 2021, the process of cessation of LIBOR as a reference rate began. Between December 31, 2021, and June 30, 2023, any borrowings under our existing credit facility within the Credit Agreement will continue to use LIBOR as the basis for interest rates. If the Credit Agreement is amended or replaced during this period, it is possible that the Bank may no longer use LIBOR as a reference rate and instead the Company could be subject to an interest rate based on either the Secured Overnight Financing Rate ("SOFR"), which is deemed a replacement benchmark for LIBOR, or an alternate index to be agreed upon. After June 30, 2023, all borrowings will be based on SOFR or the alternate index. The average balances of short-term borrowings from our Bank for the years ended December 31, 2021, and 2020 were $2,686,000 and $4,042,000, respectively. The effect of the Paycheck Protection Program loan, (“PPP Loan”) discussed in Note 7 – CARES Act, on our average borrowings was not evidenced until the latter portion of 2020.

CARES ACT

CARES ACT	12 Months Ended
CARES ACT	Dec. 31, 2021
CARES ACT
CARES ACT	NOTE 7 - CARES ACT On April 20, 2020, the Company received a PPP loan in the amount of $2,929,000, as provided pursuant to the CARES Act and administered by the United States Small Business Administration (“SBA”). The PPP loan, which was unsecured and guaranteed by the SBA, was designed to create economic stimulus by providing additional operating capital to small businesses in the U.S., such as P&F. To facilitate the PPP loan, the Company entered into a Promissory Note dated April 17, 2020, with BNB Bank as the lender (the “Lender”). Under the terms of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), as amended by the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”), the Company was eligible to apply for and receive forgiveness for all or a portion of the PPP loan. Such forgiveness was determined, subject to limitations, based on the use of the loan proceeds for certain permissible purposes as set forth in the PPP loan, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”) incurred during the 24 weeks subsequent to funding, and on the maintenance of employee compensation levels, as defined, following the funding of the PPP loan. In February 2021, in accordance with the Flexibility Act, the Company filed an application for forgiveness with the Lender, who approved this submission and subsequently submitted the Company’s application to the SBA. On June 9, 2021, the Company was advised that the SBA had approved the Company’s PPP loan forgiveness application and as such, the PPP loan and interest were forgiven in their entirety and recorded as Other income on the accompanying consolidated statement of operations and comprehensive income (loss). The CARES Act provides an employee retention credit (“ERC”) that is a refundable tax credit against certain employer taxes. On December 27, 2020, Congress enacted the Taxpayer Certainty and Disaster Tax Relief Act of 2020, (“Tax Relief Act”), which amended and extended ERC availability under Section 2301 of the CARES Act. Before the enactment of the Tax Relief Act, businesses who were provided SBA PPP Loans under the CARES Act were ineligible for the ERC. Following enactment of the Tax Relief Act, such businesses became retroactively eligible for the ERC. Under the CARES Act, a company needed a more than 50% decline in gross receipts in 2020, compared to the same quarter in 2019, in order to use the gross receipts test to be eligible for the ERC. The Company determined it did not qualify for the ERC for 2020 as it did not satisfy the gross receipts test for any quarter in 2020. The Tax Relief Act provided for changes in the ERC for 2020 and provided an additional credit for all quarters of 2021. The Tax Relief Act revised the gross receipts test, using two scenarios to qualify: 1) a company that has had a more than 20% decline in gross receipts in 2021, compared to the same quarter in 2019, or 2) a company can elect to use the gross receipts from the immediately preceding quarter, and compare these prior quarter gross receipts to the same quarter in 2019, rather than the current quarter. The Company evaluated its eligibility for the ERC and determined that it met all the criteria to claim a refundable tax credit against the employer share of Social Security taxes equal to seventy percent (70%) of the qualified wages that the Company paid to employees for the three-month periods ended June 30 and September 30, 2021. The Company adopted ASU 2010-10 to which Topic 832 gives guidance to account for transactions with a government by analogizing to a grant accounting model, which the Company’s policy is the International Accounting Standard 20 model. As a result, the Company recorded $2,028,000 as a receivable in Prepaid expenses and other current assets and a like amount in Other income for the ERC.

STOCK OPTIONS - STOCK COMPENSAT

STOCK OPTIONS - STOCK COMPENSATION	12 Months Ended
STOCK OPTIONS - STOCK COMPENSATION	Dec. 31, 2021
STOCK OPTIONS - STOCK COMPENSATION
STOCK OPTIONS - STOCK COMPENSATION	NOTE 8—STOCK OPTIONS – STOCK COMPENSATION In 2012, the Company’s Board of Directors and stockholders approved the P&F Industries, Inc. 2012 Stock Incentive Plan (the “2012 Plan”). In 2021, the Company’s Board of Directors and stockholders approved an amendment and restatement of the 2012 plan and renamed it the 2021 Stock Incentive Plan (the “2021 Plan”). The 2021 Plan authorizes the issuance to employees, consultants and non-employee directors of nonqualified stock options, stock appreciation rights, restricted stock, performance shares, performance units, and other stock-based awards. In addition, employees are eligible to be granted incentive stock options under the 2021 Plan. The 2021 Plan is currently administered by the compensation committee of the Company’s Board of Directors (the “Committee”). The aggregate number of shares of the Company’s Class A Common Stock (“Common Stock ”) that may be issued under the 2021 Plan may not exceed 500,000 shares; provided, however, that any shares of Common Stock that are subject to a stock option, stock appreciation right or other stock-based award that is based on the appreciation in value of a share of Common Stock in excess of an amount equal to at least the fair market value of the Common Stock on the date such other stock-based award is granted (each an “Appreciation Award”) will be counted against this limit as one share for every share granted. Any shares of restricted stock or shares of Common Stock that are subject to any other award other than Appreciation Award will be counted against this limit as 1.5 shares for every share granted. The maximum number of shares of Common Stock with respect to which any award of stock options, stock appreciation rights or other Appreciation Award that may be granted under the 2021 Plan during any fiscal year to any eligible employee or consultant will be 100,000 shares per type of award. The maximum number of shares of Common Stock subject to any award of performance shares for any performance period, other stock-based awards that are not Appreciation Awards or shares of restricted stock for which the grant of such award or the lapse of the relevant restriction period is subject to the attainment of specified performance goals that may be granted under the 2021 Plan during any fiscal year to any eligible employee or consultant will be 65,000 shares per type of award. The maximum number of shares of Common Stock for all such types of awards to any eligible employee or consultant will be 165,000 shares during any fiscal year. There are no annual limits on the number of shares of Common Stock with respect to an award of restricted stock that is not subject to the attainment of specified performance goals to eligible employees or consultants. The maximum value at grant of performance units which may be granted under the 2021 Plan during any fiscal year will be $1,000,000. The aggregat value of stock-based awards and cash-based compensation paid to any non-employee director for any fiscal year of the Company in respect of his or her service as a non-employee director cannot exceed $300,000, or $450,000 for non-employee directors serving in a lead role on the Board, in each case, based on the fair market value of stock awards and the aggregate value of cash compensation, in each case determined as of the date of grant. With respect to stock options, the Committee determines the number of shares of Common Stock subject to each option, the term of each option, which may not exceed ten years (or five years in the case of an incentive stock option granted to a 10% stockholder), the exercise price, the vesting schedule (if any), and the other material terms of each option. No stock option may have an exercise price less than the fair market value of the Common Stock at the time of grant (or, in the case of an incentive stock option granted to a 10% stockholder, 110% of fair market value). With respect to all other permissible grants under the 2021 Plan, the Committee will determine their terms and conditions, subject to the terms and conditions of the 2021 Plan The 2021 Plan is the successor to the Company’s 2002 Stock Incentive Plan (“Previous Plan”) – see below. Stock option awards made under the Previous Plan will continue in effect and remain governed by the provisions of that plan. The Company’s Previous Plan authorized the issuance to employees and directors of options to purchase a maximum of 1,100,000 shares of Common Stock. These options had to be issued within ten years of the effective date of the Previous Plan and are exercisable for a ten-year period from the date of grant, at prices not less than 100% of the closing market value of the Common Stock on the date the option is granted. In the event options granted contained a vesting schedule over a period of years, the Company recognized compensation cost for these awards ratably over the service period. NOTE 8—STOCK OPTIONS – STOCK COMPENSATION - Continued The Company generally estimates the fair value of its Common Stock options using the following factors: ● Risk-free interest rate ● Expected term ● Volatility ● Dividend yield The Company did not issue any options to purchase shares of its Common Stock during 2021 or 2020. The following table contains information on the status of the Company’s stock options: Weighted Number Average Aggregate of Exercise Price Intrinsic Shares Per Share Value Outstanding, January 1, 2020 226,075 $ 6.59 Granted — — Exercised (6,226) 2.92 Forfeited (7,998) 6.38 Expired (10,973) 2.92 Outstanding, December 31, 2020 200,878 6.59 Granted — — Exercised — — Forfeited (6,180) 7.61 Expired (16,199) 4.37 Outstanding, December 31, 2021 178,499 $ 6.76 $ 60,643 Vested, December 31, 2021 175,831 $ 6.73 $ 60,643 The following is a summary of changes in non-vested shares, all of which are expected to vest: December 31, 2021 2020 Weighted Weighted Average Average Option Grant-Date Option Grant-Date Shares Fair Value Shares Fair Value Non-vested shares, beginning of year 5,334 $ 4.60 37,666 $ 4.45 Granted — — — — Vested (2,666) 4.60 (31,250) 4.43 Forfeited — — (1,082) 4.41 Non-vested shares, end of year 2,668 $ 4.60 5,334 $ 4.60 NOTE 8—STOCK OPTIONS – STOCK COMPENSATION - Continued Stock-based compensation expense recognized for the years ended December 31, 2021, and 2020 was approximately $5,000 and $41,000, respectively. The Company recognizes stock-based compensation cost over the requisite service period. However, the exercisability of the respective non-vested options, which are at predetermined dates, does not necessarily correspond to the periods in which straight-line amortization of compensation expenses is recorded. As of December 31, 2021, the Company had approximately $1,000 of total unrecognized compensation costs related to non-vested awards granted under its stock-based plans, which it expects to recognize over a weighted average period of 0.2 years. The following table summarizes information about stock options outstanding and exercisable at December 31, 2021: Options Outstanding Options Exercisable Weighted Average Weighted Weighted Average Remaining Average Remaining Weighted Number Contractual Exercise Number Contractual Average outstanding Life (Years) Price exercisable Life (Years) Exercise Price 2,090 0.4 $ 4.29 2,090 0.4 $ 4.29 41,809 0.5 $ 4.74 41,809 0.5 $ 4.74 42,850 1.3 $ 7.86 42,850 1.3 $ 7.86 83,750 5.7 $ 7.09 83,750 5.7 $ 7.09 8,000 7.2 $ 8.55 5,332 7.2 $ 8.55 178,499 3.4 $ 6.76 175,831 3.4 $ 6.73 Other Information At December 31, 2021, and 2020, there were 203,037 and 58,658 shares available for issuance under the 2021 Plan. Restricted Stock On February 16, 2021, the Company granted 25,000 restricted shares of its Common Stock to its Chief Financial Officer. The Company determined that the fair value of these shares was $6.36 per share, which was the closing price of the Company’s Common Stock on the date of the grant. This grant will vest 20% on each the first five anniversary dates following the date of grant. The Company will ratably amortize over the five-year vesting period the total non-cash compensation expense of approximately $159,000, or $32,000 per annum, to selling, general and administrative expenses. On May 20, 2020, the Company granted 1,250 restricted shares of its Common Stock to each non-employee member of its Board of Directors, totaling 6,250 restricted shares. The Company determined that the fair value of these shares was $5.14 per share, which was the closing price of the Company’s Common Stock on the date of the grant. These shares cannot be traded earlier than the first anniversary of the grant date. The Company ratably amortized the total non-cash compensation expense of approximately $32,000 to selling, general and administrative expenses through May 2021. Treasury Stock There were no changes to the Company’s Treasury Stock during fiscal 2021.

DIVIDEND PAYMENTS

DIVIDEND PAYMENTS	12 Months Ended
DIVIDEND PAYMENTS	Dec. 31, 2021
DIVIDENDS.
DIVIDENDS	NOTE 9—DIVIDENDS The Company did not declare any dividends during fiscal 2021. On February 11, 2020, the Company’s Board of Directors, in accordance with its dividend policy, declared a quarterly cash dividend of $0.05 per common share, which was paid on February 28, 2020, to shareholders of record at the close of business on February 24, 2020. The total amount of this dividend payment was approximately $157,000.

INCOME TAXES

INCOME TAXES	12 Months Ended
INCOME TAXES	Dec. 31, 2021
INCOME TAXES
INCOME TAXES	NOTE 10—INCOME TAXES Income tax benefit in the consolidated statements of operations and comprehensive income (loss) consists of: Years Ended December 31, 2021 2020 Current: Federal $ 63,000 $ (1,821,000) State and local 55,000 (73,000) Foreign — 3,000 Total current 118,000 (1,891,000) Deferred: Federal (69,000) (238,000) State and local (48,000) 263,000 Foreign (3,000) (35,000) Total deferred (120,000) (10,000) Totals $ (2,000) $ (1,901,000) At December 31, 2021, the Company had state net operating loss carryforwards of approximately $2,100,000, of which we have a full valuation allowance against. The state net operating losses generally expire through 2041. On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in tax years 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The NOL carryback provision of the CARES Act resulted in a $1,921,000 benefit to the Company. In addition to the NOL changes, the CARES Act enacted the employee retention credit and modifies the limitation of business interest for tax years beginning in 2019 and 2020. The modifications to Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income. This modification increased the allowable interest expense deduction of the Company and resulted in less taxable income for the year ended 2020, resulting in less utilization of net operating losses. NOTE 10—INCOME TAXES – Continued Deferred tax assets consist of: December 31, 2021 2020 Deferred tax assets: Bad debt reserves $ 24,000 $ 25,000 Inventory reserves 789,000 762,000 Warranty and other reserves 45,000 74,000 Stock-based compensation 200,000 205,000 Goodwill 755,000 852,000 Acquisition costs 201,000 212,000 Net operating losses - state 166,000 168,000 Other 98,000 51,000 Less valuation allowance (287,000) (316,000) 1,991,000 2,033,000 Deferred tax liabilities: Prepaid expenses (238,000) (260,000) Depreciation (914,000) (1,113,000) Intangibles (490,000) (434,000) Net deferred tax assets $ 349,000 $ 226,000 The Company maintains a valuation allowance against certain state net operating losses and state depreciation adjustments. The Company believes it is more likely than not that the remaining tax benefits associated with the state net operating losses and depreciation adjustments will not be realized in the foreseeable future based upon its ability to generate sufficient state taxable income. The components of income (loss) before income taxes consisted of the following: Years ended December 31, 2021 2020 United States operations $ 2,320,000 $ (6,663,000) International operations (32,000) (192,000) Income (loss) before income taxes $ 2,288,000 $ (6,855,000) A reconciliation of the Federal statutory rate to the net effective (benefit) tax rate is as follows: Years ended December 31, 2021 2020 Federal income (benefit) tax expense computed at statutory rates 21.0 % (21.0) % (Decrease) increase in taxes resulting from: State and local taxes, net of Federal tax benefit 3.7 (2.4) Permanent differences - net 3.3 0.4 Valuation allowance (1.3) 4.6 Foreign rate differential 0.1 0.1 CARES Act (26.9) (9.3) Other — (0.1) Benefit tax rate (0.1) % (27.7) % NOTE 10—INCOME TAXES – Continued The Company files a consolidated Federal tax return. The Company and certain of its subsidiaries file tax returns in various U.S. state jurisdictions. Its foreign subsidiary, UAT, files in the United Kingdom. With few exceptions, the years that remain subject to examination are the years ended December 31, 2018, through December 31, 2021. Interest and penalties, if any, related to income tax liabilities are included in income tax expense. As of December 31, 2021, the Company does not have a liability for uncertain tax positions.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2021
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	NOTE 11—COMMITMENTS AND CONTINGENCIES (a) (b) (c)

SUBSEQUENT EVENT

SUBSEQUENT EVENT	12 Months Ended
SUBSEQUENT EVENT	Dec. 31, 2021
SUBSEQUENT EVENT
SUBSEQUENT EVENT	NOTE 12—SUBSEQUENT EVENT Effective January 15, 2022, through a wholly-owned subsidiary of Hy-Tech, the Company acquired substantially all the non-real estate assets comprising the business of Jackson Gear Company (“JGC”), a Pennsylvania-based corporation that manufactures and distributes custom gears and power transmission gear products. The purchase price consisted of an aggregate of approximately $2.3 million in cash, which was funded by Revolver borrowings and the assumption of certain payables. The Company intends to incorporate this business into PTG and believes that the acquisition will provide added market exposure into the market for larger gears. In connection with this acquisition, the Company entered into the Consent, Joinder and Amendment No. 9 (“Amendment No. 9”) to Second Amended and Restated Loan and Security Agreement (the “Credit Agreement”), with Capital One, National Association. Amendment No. 9, among other things, provided consent to this acquisition. Total Total purchase price $ 2,300,000 The following table presents preliminary purchase price allocation: Accounts receivable $ 490,000 Inventories 292,000 Machinery and equipment 851,000 Goodwill 805,000 Liabilities assumed (138,000) Total estimated purchase price $ 2,300,000 The excess of the total purchase price over the fair value of the net assets acquired is currently being presented as goodwill. The Company has not yet determined the value of the identifiable intangible assets. When finalized, any goodwill will be amortized over 15 years for tax purposes, but not deductible for financial reporting purposes. Any identifiable intangible assets subject to amortization will be amortized over 15 years for tax purposes.

SUMMARY OF ACCOUNTING POLICIES

SUMMARY OF ACCOUNTING POLICIES (Policies)	12 Months Ended
SUMMARY OF ACCOUNTING POLICIES (Policies)	Dec. 31, 2021
SUMMARY OF ACCOUNTING POLICIES
Principles of Consolidation	Principles of Consolidation The Consolidated Financial Statements contained herein include the accounts of P&F Industries, Inc. and subsidiaries (“P&F” or the “Company”). All significant intercompany balances and transactions have been eliminated.
The Company	The Company P&F is a Delaware corporation incorporated in 1963. The Company conducts its business through a wholly-owned subsidiary, Continental Tool Group, Inc. (“Continental”), which in turn operates through its wholly-owned subsidiaries, Florida Pneumatic Manufacturing Corporation (“Florida Pneumatic”) and Hy-Tech Machine, Inc. (“Hy-Tech”). Exhaust Technologies Inc. (“ETI”), Universal Air Tool Company Limited (“UAT”) and Jiffy Air Tool, Inc. (“Jiffy”), are all wholly-owned subsidiaries of Florida Pneumatic. The business of Air Tool Service Company (“ATSCO”) operates through a wholly-owned subsidiary of Hy-Tech. During 2019, the Company through a wholly-owned subsidiary of Hy-Tech, acquired substantially all the operating assets comprising the businesses of Blaz-Man Gear, Inc. and Gear Products & Manufacturing, Inc., each a manufacturer and distributer of custom gears. Florida Pneumatic directly, and through its wholly-owned subsidiaries Exhaust Technologies Inc. (“ETI”), Universal Air Tool Company Limited (“UAT”), and Jiffy Air Tool, Inc. (“Jiffy”) imports, manufactures, and markets pneumatic hand tools of its own design, primarily to the retail, industrial, automotive and aerospace markets. Its products include sanders, grinders, drills, saws, and impact wrenches. These tools are similar in appearance and function to electric hand tools, but are powered by compressed air, rather than by electricity or a battery. Air tools, as they are more commonly referred to, generally offer better performance, and weigh less than their electrical counterparts. Florida Pneumatic imports and/or manufactures approximately 75 types of pneumatic hand tools, most of which are sold at prices ranging from $50 to $1,000, under the names “Florida Pneumatic,” “Universal Tool”, “Jiffy Air Tool”, AIRCAT, NITROCAT, as well as under the trade names or trademarks of several private label customers. These products are sold to retailers, distributors, manufacturers and private label customers through in-house sales personnel and manufacturers’ representatives. The AIRCAT and NITROCAT brands of pneumatic tools are sold primarily to the automotive service and repair market (“automotive market”). Users of Florida Pneumatic’s hand tools include industrial maintenance and production staffs, do-it-yourself mechanics, professional automobile mechanics and auto body personnel. Jiffy manufactures and distributes pneumatic tools and components primarily to aerospace manufacturers. Hy-Tech designs, manufactures, and distributes industrial tools, pneumatic systems, gearing, accessories, and a wide variety of replacement parts under various brands including ATP, NUMATX, Thaxton and Power Transmission Group. These tools, etc. are sold at prices ranging from $300 to $42,000. Hy-Tech’s “Engineered Solutions” products are sold direct to Original Equipment Manufacturers (OEMs), and industrial branded products are sold through a broad network of specialized industrial distributors serving the power generation, petrochemical, aerospace, construction, railroad, mining, ship building and fabricated metals industries, among others. Hy-Tech works directly with its industrial customers, designing and manufacturing products from finished components to complete turnkey systems to be sold under their own brand names. Hy-Tech’s “Power Transmission Group”, commonly referred to as “PTG”, produces spiral bevel and straight bevel gears along with a wide variety of other gearing. These products are sold direct to OEMs, end-users and gearbox repair companies. PTG works directly with its customers engineering departments to design or redesign gears or gearboxes to optimize a solution for functionality and manufacturability. Nearly all of Hy-Tech brands are manufactured in the United States of America. Hy-Tech markets ATP branded impact sockets, striking wrenches and accessories that are imported from Italy and Asia. NOTE 1—SUMMARY OF ACCOUNTING POLICIES – Continued The Company – Continued The sales of Hy-Tech products through various channel and direct customers are managed by both direct sales personnel and a network of specialized manufacturer representatives. Further, its products are sold as standard off-the-shelf and also customized to be sold for customer specific specifications .
Basis of Financial Statement Presentation	Basis of Financial Statement Presentation The Company prepares its Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States (“US GAAP”). COVID-19 On March 11, 2020, the World Health Organization designated the recent novel coronavirus, or COVID-19, as a global pandemic. COVID-19 was first detected in Wuhan City, Hubei Province, China and continued to spread, significantly impacting various markets around the world, including the United States. Various policies and initiatives have been implemented to reduce the global transmission of COVID-19. The COVID-19 virus and the resultant global economic down-turn had a negative impact on our fiscal 2021 results. Additionally, we believe the supply-chain crisis is related to the pandemic. Beginning in early 2021, but magnifying during the third quarter of 2021, we encountered severe shipping / receiving delays of inventory / containers from our Asian suppliers, which has caused intermittent shortages of inventory. Further, the costs of international freight have greatly increased. In addition, the COVID-19 pandemic has caused many of our customers and potential customers to refuse on-site visits, which is critical to generating revenue. We believe that until the above issues subside, our business will likely continue to be adversely affected.
Going Concern Assessment	Going Concern Assessment Management assesses going concern uncertainty to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period,” as defined in US GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, it considers various scenarios, forecasts, projections, estimates and makes certain key assumptions, including the timing and nature of projected cash expenditures, its ability to reduce, delay or curtail cash outflows and its ability to raise additional capital, if necessary, among other factors. Management has prepared estimates of operations covering the look-forward period and believes that sufficient funds will be generated from operations, working capital, and its existing credit facility to fund its operations. The Company has contingency plans in which it would further reduce or defer additional expenses and cash outlays, should operations weaken beyond current forecasts. The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is unclear what the full impact of COVID-19 will be in the future or when the Company believes a return to more normal operations may occur. As part of the business incentives offered in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Company, on April 20, 2020, received a $2.9 million Paycheck Protection Program (“PPP”) loan, which was forgiven in 2021. Additionally, in December 2021, the Company recorded an Employee Retention Credit of approximately $2.0 million. See Note 7 - CARES Act to the Company’s consolidated financial statements for further discussion. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. NOTE 1—SUMMARY OF ACCOUNTING POLICIES – Continued Going Concern Assessment – Continued During 2021, the Company generated an after-tax income of $2,290,000. For fiscal years ended December 31, 2020, and 2021, the Company reported operating losses, and had negative cash flows in 2021. At December 31, 2021, the Company had working capital of $24,598,000 and availability on its bank facility of approximately $9,578,000. See Note 6 – Debt, for further discussion.
Revenue recognition	Revenue Recognition The Company records revenue based on a five-step model in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers The Company’s performance obligations underlying its core revenue sources remain substantially unchanged. Its revenue is generated through the sale of finished products and is generally recognized at the point in time when merchandise is transferred to the customer with a fixed payment due generally within 30 to 90 days, and in an amount that considers the impacts of estimated allowances. Further, the Company has made a policy election to account for shipping and handling activities that occur after the customer has obtained control of the products as fulfillment costs rather than as an additional promised service. This election is consistent with the Company’s prior policy, and therefore the adoption of ASC 606 relating to shipping and handling activities did not have any impact on its financial results. There are no other performance obligations as of December 31, 2021. Accounts receivable at December 31, 2019, was $9,313,000. The Company analyzes its revenue as follows: Revenue generated at Florida Pneumatic. Year Ended December 31, 2021 2020 (Decrease) increase Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 14,543,000 35.1 % $ 13,270,000 34.7 % $ 1,273,000 9.6 % Retail 13,995,000 33.7 12,940,000 33.8 1,055,000 8.2 Aerospace 7,184,000 17.3 8,087,000 21.1 (903,000) (11.2) Industrial 5,289,000 12.7 3,481,000 9.1 1,808,000 51.9 Other 477,000 1.2 498,000 1.3 (21,000) (4.2) Total $ 41,488,000 100.0 % $ 38,276,000 100.0 % $ 3,212,000 8.4 % NOTE 1—SUMMARY OF ACCOUNTING POLICIES – Continued Revenue Recognition – Continued Revenue generated at Hy-Tech. Year Ended December 31, 2021 2020 (Decrease) increase Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 5,842,000 48.4 % $ 4,272,000 39.4 % $ 1,570,000 36.8 % PTG 2,846,000 23.6 3,326,000 30.6 (480,000) (14.4) ATP 3,024,000 25.1 2,796,000 25.7 228,000 8.2 Other 354,000 2.9 466,000 4.3 (112,000) (24.0) Total $ 12,066,000 100.0 % $ 10,860,000 100.0 % $ 1,206,000 11.1 %
Shipping and Handling Costs	Shipping and Handling Costs Expenses for shipping and handling costs are included in selling, general and administrative expenses, and totaled approximately $2,038,000 and $1,831,000, respectively, for the years ended December 31, 2021 and 2020.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash consists of cash held in bank demand deposits. The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2021, and 2020.
Financial Instruments	Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, accounts payable and short-term debt approximate fair value as of December 31, 2021, and 2020 because of the relatively short-term maturity of these financial instruments.
Accounts Receivable and Allowance for Doubtful Accounts	Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are customer obligations due under normal trade terms. The Company sells its products to retailers, distributors, OEMs and end-users involved in a variety of industries. The Company performs continuing credit evaluations of its customers’ financial condition, and although the Company generally does not require collateral, letters of credit may be required from customers in certain circumstances. Management reviews accounts receivable to determine if any receivables will potentially be uncollectible. Factors considered in the determination include, among other factors, number of days an invoice is past due, customer historical trends, available credit ratings information, other financial data, and the overall economic environment. Collection agencies may also be utilized if management so determines. The Company records an allowance for doubtful accounts based on specifically identified amounts that are believed to be uncollectible. The Company also records as an additional allowance a certain percentage of aged accounts receivable, based on historical experience and the Company’s assessment of the general financial conditions affecting its customer base. If actual collection experience changes, revisions to the allowance may be required. The Company has a limited number of customers with individually large amounts due at any given balance sheet date. Any unanticipated change in the creditworthiness of any of these customers could have a material effect on the Company’s results of operations in the period in which such changes or events occur. After all reasonable attempts to collect an account receivable have failed, the amount of the receivable is written off against the allowance. Based on the information available, the Company believes that its allowance for doubtful accounts as of December 31, 2021, is adequate. However, actual write-offs might exceed the recorded allowance. NOTE 1—SUMMARY OF ACCOUNTING POLICIES - Continued
Customer Concentration	Concentrations of Credit Risk The Company places the majority of its cash with its primary bank, Capital One Bank, National Association (“Capital One”), which is insured by the Federal Deposit Insurance Corporation (“FDIC”). Significant concentrations of credit risk may arise from the Company’s cash maintained at Capital One, as from time-to-time cash balances may exceed the FDIC limits. At December 31, 2021, there was $27,000 in excess of the FDIC insured amount. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. The Company had one customer that accounted for 35.9% and 38.0% of its consolidated accounts receivable at December 31, 2021, and 2020, respectively. Further, this customer accounted for 26.1% and 26.3% of the Company’s consolidated revenue in 2021 and 2020, respectively. There was no other customer that accounted for more than 10% of our consolidated revenue in 2021 or 2020.
Inventories	Inventories Inventories are valued at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. The inventory balance, which includes raw materials, labor, and manufacturing overhead costs, is recorded net of an allowance for obsolete or unmarketable inventory. Such allowance is based upon both historical experience and management’s understanding of market conditions and forecasts of future product demand. If the actual amount of obsolete or unmarketable inventory significantly exceeds the estimated allowance, the Company’s cost of sales, gross profit and net earnings would be significantly affected.
Property and Equipment and Depreciation and Amortization	Property and Equipment and Depreciation and Amortization Property and equipment are stated at cost less accumulated depreciation and amortization. Generally, the Company capitalizes items in excess of $1,000. Minor replacements and maintenance and repair items are charged to expense as incurred. Upon disposal or retirement of assets, the cost and related accumulated depreciation are removed from the Company’s consolidated balance sheets. Depreciation of buildings and machinery and equipment is computed by using the straight-line method over the estimated useful lives of the assets. Buildings are depreciated over periods ranging from 27.5 to 31 years, and machinery and equipment is depreciated over periods ranging from 3 to 10 years. Leasehold improvements are amortized over the life of the lease or the useful life of the related asset, whichever is shorter.
Long-Lived Assets	Long-Lived Assets In accordance with authoritative guidance pertaining to the accounting for the impairment or disposal of long-lived assets, property and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company’s assessment of recoverability of property and equipment is performed on a reporting unit level. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of such asset to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of such asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.
Acquisitions	Acquisitions The Company accounts for acquired businesses using the purchase method of accounting, which requires that the assets acquired, liabilities assumed, and contingent consideration, if any, are recorded as of the date of the acquisition at their respective fair values. It further requires that acquisition-related costs be recognized separately from the acquisition and expensed as incurred and that restructuring costs be expensed in periods subsequent to the acquisition date. Generally, the Company engages third party valuation appraisal firms to assist it in determining the fair values and useful lives of the assets acquired and liabilities assumed. The Company records a preliminary purchase price allocation for its acquisitions and finalizes purchase price allocations as additional information relative to the fair values of the assets acquired become known.
Goodwill, Intangible and Long-Lived Assets	Goodwill, Intangible and Long-Lived Assets Goodwill is carried at cost less any impairment charges. Goodwill and intangible assets with indefinite lives are not amortized but are subject to an annual test for impairment at the reporting unit level and between annual tests in certain circumstances. In accordance with authoritative guidance issued by the Financial Accounting Standards Board (“FASB”), the Company tests goodwill for impairment on an annual basis. This test occurs in the fourth quarter or more frequently if the Company believes indicators of impairment exist. An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (that is, a likelihood of more than 50)% that the fair value of a reporting unit is less than its carrying amount. If the carrying amount of the reporting unit is less than its fair value, no impairment exists, and no further action is required. If the carrying amount of a reporting unit exceeds its fair value, the entity will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. Intangible assets other than goodwill and intangible assets with indefinite lives, are carried at cost less accumulated amortization. Intangible assets are generally amortized on a straight-line basis over their respective useful lives, generally 3 to 20 years. Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold, and use is based on the amount by which the carrying value exceeds the fair value of the asset.
Warranty Liability	Warranty Liability The Company offers certain warranties against product defects for periods ranging from one
Income Taxes	Income Taxes The Company accounts for income taxes using the asset and liability approach. This approach requires the recognition of current tax assets or liabilities for the amounts refundable or payable on tax returns for the current year, as well as the recognition of deferred tax assets or liabilities for the expected future tax consequences of temporary differences that can arise between (a) the amount of taxable income and pretax financial income for a year, such as from net operating loss carryforwards and other tax credits, and (b) the tax bases of assets or liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates. The impact on deferred tax assets and liabilities of changes in tax rates and laws, if any, is reflected in the Consolidated Financial Statements in the period enacted. Further, the Company evaluates the likelihood of realizing benefit from our deferred tax assets by estimating future sources of taxable income and the impact of tax planning strategies. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The Company files a consolidated Federal tax return. P&F and certain of its subsidiaries file combined tax returns in New York, California, Illinois, and Texas. All subsidiaries, other than UAT, file other state and local tax returns on a stand-alone basis. UAT files an income tax return to the taxing authorities in the United Kingdom. Tax benefits are recognized for an uncertain tax position when, in the Company’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more likely than not recognition threshold, the tax benefit is measured as the largest amount that is judged to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances and when new information becomes available. Such adjustments are recognized entirely in the period in which they are identified. The effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by the Company. Interest and penalties recognized on the liability for unrecognized tax benefits are recorded as income tax expense. The authoritative guidance for income taxes requires a reduction of the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not (defined as a likelihood of more than 50)% such assets will not be realized. The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in the Company’s financial statements or tax returns and future profitability. The Company’s accounting for deferred tax consequences represents its best estimate of those future events. Changes in the Company’s estimates, due to unanticipated events or otherwise, could have a material effect on its financial condition and results of operations. The Company continually evaluates its deferred tax assets to determine if a valuation allowance is required. On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in tax years 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. In addition to the NOL changes, the CARES Act enacted the employee retention credit and modifies the limitation of business interest for tax years beginning in 2019 and 2020. The modifications to Section 163(j) of the Internal Revenue Code increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income (See Note 10 – Income taxes).
Lease Accounting	Lease Accounting The Company adopted ASC 842, Leases If the rate implicit in a lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgment when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The Company’s operating leases include vehicles, office space and the use of real property. The Company has not identified any material finance leases as of December 31, 2021. For the year ended December 31, 2021, the Company had $895,000 in Operating lease expense. The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of December 31, 2021: As of December 31, 2021 2022 $ 875,000 2023 873,000 2024 598,000 2025 309,000 2026 174,000 Thereafter 693,000 Total operating lease payments 3,522,000 Less imputed interest (506,000) Total operating lease liabilities $ 3,016,000 Weighted average remaining lease term 5.5 years Weighted average discount rate 6.7 %
Management Estimates	Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, possible disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an on-going basis P&F evaluates its estimates, including those related to collectability of accounts receivable, valuation of inventories, recoverability of goodwill and intangible assets, consideration payable to customer and income taxes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Actual results may differ from those estimates under different assumptions or conditions.
Advertising	NOTE 1—SUMMARY OF ACCOUNTING POLICIES - Continued Advertising The Company typically expenses its costs of advertising in the period in which they are incurred and are included in Selling, General, and Administrative expenses. For the years ended December 31, 2021, and 2020 advertising expenses were $1,276,000 and $1,529,000, respectively.
(Loss) Earnings Per Common Share	Earnings (Loss) Per Common Share Basic earnings (loss) per common share exclude any dilution. It is based upon the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per common share reflect the effect of shares of Common Stock issuable upon the exercise of stock options unless the effect on earnings is anti-dilutive. Diluted earnings (loss) per common share is computed using the treasury stock method. Under this method, the aggregate number of shares of Common Stock outstanding reflects the assumed use of proceeds from the hypothetical exercise of any outstanding options to purchase shares of the Company’s Class A Common Stock. The average market value for the period is used as the assumed purchase price. The following table sets forth the computation of basic and diluted earnings (loss) per common share: Years Ended December 31, 2021 2020 Numerator for basic and diluted earnings (loss) per common share: Net income (loss) $ 2,290,000 $ (4,954,000) Denominator: Denominator for basic income (loss) per share—weighted average common shares outstanding 3,178,000 3,149,000 Dilutive securities (1) 14,000 — Denominator for diluted income (loss) per share—adjusted weighted average common shares and assumed conversions 3,192,000 3,149,000 (1) Dilutive securities consist of the “in the money” stock options. In the event of a loss, options are considered anti-dilutive and are therefore not included in the calculation of diluted loss per share. The average anti-dilutive options outstanding for the years ended December 31, 2021, and 2020 were 137,000 and 164,000, respectively. December 31, 2021 and 2020.
Share-Based Compensation	Share-Based Compensation In accordance with US GAAP, the Company measures and recognizes compensation expense for all share-based payment awards based on estimated fair values. Share-based compensation expense is included in selling, general and administrative expense on the accompanying consolidated statements of operations and comprehensive income (loss). With respect to stock options, US GAAP requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations and comprehensive income (loss). The Company records compensation expense ratably over the vesting periods. The Company estimates forfeitures at the time of grant and revises this estimate, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company uses the Black-Scholes option-pricing model as its method of valuation for share-based awards granted. As such, the Company’s determination of fair value of share-based payment awards is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, relevant interest rates, and the expected term of the awards. With respect to any issuance of its Common Stock, the Company determines fair value per share as the closing price of its Common Stock on the date of the grant of said shares.
Foreign Currency Translation	Foreign Currency Translation The assets and liabilities of international operations are translated at the exchange rates in effect at the balance sheet date. Revenue and expense accounts are translated at the monthly average exchange rates. Adjustments arising from the translation of the foreign currency financial statements of the Company’s international operations are reported as a component of “Accumulated other comprehensive loss” in the Company’s consolidated balance sheets. For foreign currency remeasurement from each local currency into the appropriate functional currency, monetary assets and liabilities are remeasured to functional currencies using current exchange rates in effect at the balance sheet date. Gains or losses from these remeasurements were not significant and have been included in the Company’s consolidated statements of operations and comprehensive income (loss). Non-monetary assets and liabilities are recorded at historical exchange rates, and the related remeasurement gains or losses are reported as a component of “Accumulated other comprehensive loss” in the Company’s consolidated balance sheets.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In March 2020, FASB issued Accounting Standards Update (“ASU”) ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In November 2021, the FASB issued ASU 2021-10, Disclosures by Business Entities about Government Assistance NOTE 1—SUMMARY OF ACCOUNTING POLICIES - Continued Recently Adopted Accounting Pronouncements - Continued No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures. Not Yet Adopted The Company does not expect any recently issued but not yet adopted accounting pronouncements to have a material effect on its financial statements.

SUMMARY OF ACCOUNTING POLICIE_2

SUMMARY OF ACCOUNTING POLICIES (Tables)	12 Months Ended
SUMMARY OF ACCOUNTING POLICIES (Tables)	Dec. 31, 2021
SUMMARY OF ACCOUNTING POLICIES
Schedule of operating lease liabilities	The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of December 31, 2021: As of December 31, 2021 2022 $ 875,000 2023 873,000 2024 598,000 2025 309,000 2026 174,000 Thereafter 693,000 Total operating lease payments 3,522,000 Less imputed interest (506,000) Total operating lease liabilities $ 3,016,000 Weighted average remaining lease term 5.5 years Weighted average discount rate 6.7 %
Schedule of Revenue	Revenue generated at Florida Pneumatic. Year Ended December 31, 2021 2020 (Decrease) increase Percent of Percent of Revenue revenue Revenue revenue $ % Automotive $ 14,543,000 35.1 % $ 13,270,000 34.7 % $ 1,273,000 9.6 % Retail 13,995,000 33.7 12,940,000 33.8 1,055,000 8.2 Aerospace 7,184,000 17.3 8,087,000 21.1 (903,000) (11.2) Industrial 5,289,000 12.7 3,481,000 9.1 1,808,000 51.9 Other 477,000 1.2 498,000 1.3 (21,000) (4.2) Total $ 41,488,000 100.0 % $ 38,276,000 100.0 % $ 3,212,000 8.4 % NOTE 1—SUMMARY OF ACCOUNTING POLICIES – Continued Revenue Recognition – Continued Revenue generated at Hy-Tech. Year Ended December 31, 2021 2020 (Decrease) increase Percent of Percent of Revenue revenue Revenue revenue $ % OEM $ 5,842,000 48.4 % $ 4,272,000 39.4 % $ 1,570,000 36.8 % PTG 2,846,000 23.6 3,326,000 30.6 (480,000) (14.4) ATP 3,024,000 25.1 2,796,000 25.7 228,000 8.2 Other 354,000 2.9 466,000 4.3 (112,000) (24.0) Total $ 12,066,000 100.0 % $ 10,860,000 100.0 % $ 1,206,000 11.1 %
Schedule of computation of basic and diluted (loss) per common share	Years Ended December 31, 2021 2020 Numerator for basic and diluted earnings (loss) per common share: Net income (loss) $ 2,290,000 $ (4,954,000) Denominator: Denominator for basic income (loss) per share—weighted average common shares outstanding 3,178,000 3,149,000 Dilutive securities (1) 14,000 — Denominator for diluted income (loss) per share—adjusted weighted average common shares and assumed conversions 3,192,000 3,149,000 (1) Dilutive securities consist of the “in the money” stock options. In the event of a loss, options are considered anti-dilutive and are therefore not included in the calculation of diluted loss per share.

ACCOUNTS RECEIVABLE AND ALLOW_2

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables)	12 Months Ended
	Dec. 31, 2021
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Schedule of accounts receivable - net	Accounts receivable - net consist of: December 31, December 31, 2021 2020 Accounts receivable $ 7,817,000 $ 7,726,000 Allowance for doubtful accounts, sales discounts, and chargebacks (267,000) (258,000) $ 7,550,000 $ 7,468,000

INVENTORIES (Tables)

INVENTORIES (Tables)	12 Months Ended
INVENTORIES (Tables)	Dec. 31, 2021
INVENTORIES
Schedule of inventories	Inventories consist of: December 31, December 31, 2021 2020 Raw materials $ 2,166,000 $ 2,077,000 Work in process 1,360,000 1,127,000 Finished goods 20,495,000 15,158,000 $ 24,021,000 $ 18,362,000

GOODWILL AND OTHER INTANGIBLE_2

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	12 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	Dec. 31, 2021
GOODWILL AND OTHER INTANGIBLE ASSETS
Schedule of other intangible assets	December 31, 2021 December 31, 2020 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Other intangible assets: Customer relationships (1) $ 6,495,000 $ 3,545,000 $ 2,950,000 $ 6,502,000 $ 3,034,000 $ 3,468,000 Trademarks and trade names (1) 2,187,000 — 2,187,000 2,187,000 — 2,187,000 Trademarks and trade names 200,000 73,000 127,000 200,000 59,000 141,000 Engineering drawings 330,000 254,000 76,000 330,000 239,000 91,000 Non-compete agreements (1) 335,000 290,000 45,000 335,000 266,000 69,000 Patents 1,286,000 1,079,000 207,000 1,286,000 1,016,000 270,000 Totals $ 10,833,000 $ 5,241,000 $ 5,592,000 $ 10,840,000 $ 4,614,000 $ 6,226,000 (1) A portion of these intangibles are maintained in a foreign currency and are therefore subject to foreign exchange rate fluctuations. The weighted average amortization period for intangible assets was as follows: December 31, 2021 December 31, 2020 Customer relationships 6.7 7.6 Trademarks and trade names 9.5 10.5 Engineering drawings 5.1 6.1 Non-compete agreements 2.0 3.0 Patents 4.5 5.2
Schedule of amortization expense of intangible assets	Amortization expense of intangible assets subject to amortization was as follows: Years ended December 31, 2021 2020 $ 631,000 $ 702,000 NOTE 5—GOODWILL AND OTHER INTANGIBLE ASSETS - Continued Other Intangible Assets - Continued Amortization expense for each of the next five years and thereafter is estimated to be as follows: 2022 $ 629,000 2023 625,000 2024 577,000 2025 548,000 2026 348,000 Thereafter 678,000 $ 3,405,000

STOCK OPTIONS - STOCK COMPENS_2

STOCK OPTIONS - STOCK COMPENSATION (Tables)	12 Months Ended
STOCK OPTIONS - STOCK COMPENSATION (Tables)	Dec. 31, 2021
STOCK OPTIONS - STOCK COMPENSATION
Schedule of share-based compensation stock options	The following table contains information on the status of the Company’s stock options: Weighted Number Average Aggregate of Exercise Price Intrinsic Shares Per Share Value Outstanding, January 1, 2020 226,075 $ 6.59 Granted — — Exercised (6,226) 2.92 Forfeited (7,998) 6.38 Expired (10,973) 2.92 Outstanding, December 31, 2020 200,878 6.59 Granted — — Exercised — — Forfeited (6,180) 7.61 Expired (16,199) 4.37 Outstanding, December 31, 2021 178,499 $ 6.76 $ 60,643 Vested, December 31, 2021 175,831 $ 6.73 $ 60,643
Schedule of share-based compensation arrangement by share-based payment award and options vested and expected to vest	The following is a summary of changes in non-vested shares, all of which are expected to vest: December 31, 2021 2020 Weighted Weighted Average Average Option Grant-Date Option Grant-Date Shares Fair Value Shares Fair Value Non-vested shares, beginning of year 5,334 $ 4.60 37,666 $ 4.45 Granted — — — — Vested (2,666) 4.60 (31,250) 4.43 Forfeited — — (1,082) 4.41 Non-vested shares, end of year 2,668 $ 4.60 5,334 $ 4.60
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]	The following table summarizes information about stock options outstanding and exercisable at December 31, 2021: Options Outstanding Options Exercisable Weighted Average Weighted Weighted Average Remaining Average Remaining Weighted Number Contractual Exercise Number Contractual Average outstanding Life (Years) Price exercisable Life (Years) Exercise Price 2,090 0.4 $ 4.29 2,090 0.4 $ 4.29 41,809 0.5 $ 4.74 41,809 0.5 $ 4.74 42,850 1.3 $ 7.86 42,850 1.3 $ 7.86 83,750 5.7 $ 7.09 83,750 5.7 $ 7.09 8,000 7.2 $ 8.55 5,332 7.2 $ 8.55 178,499 3.4 $ 6.76 175,831 3.4 $ 6.73

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
INCOME TAXES (Tables)	Dec. 31, 2021
INCOME TAXES
Schedule of Components of Income Tax (Benefit) Expense	Income tax benefit in the consolidated statements of operations and comprehensive income (loss) consists of: Years Ended December 31, 2021 2020 Current: Federal $ 63,000 $ (1,821,000) State and local 55,000 (73,000) Foreign — 3,000 Total current 118,000 (1,891,000) Deferred: Federal (69,000) (238,000) State and local (48,000) 263,000 Foreign (3,000) (35,000) Total deferred (120,000) (10,000) Totals $ (2,000) $ (1,901,000)
Schedule of Deferred tax assets (liabilities)	NOTE 10—INCOME TAXES – Continued Deferred tax assets consist of: December 31, 2021 2020 Deferred tax assets: Bad debt reserves $ 24,000 $ 25,000 Inventory reserves 789,000 762,000 Warranty and other reserves 45,000 74,000 Stock-based compensation 200,000 205,000 Goodwill 755,000 852,000 Acquisition costs 201,000 212,000 Net operating losses - state 166,000 168,000 Other 98,000 51,000 Less valuation allowance (287,000) (316,000) 1,991,000 2,033,000 Deferred tax liabilities: Prepaid expenses (238,000) (260,000) Depreciation (914,000) (1,113,000) Intangibles (490,000) (434,000) Net deferred tax assets $ 349,000 $ 226,000
Schedule of components of (loss) income before income taxes	The components of income (loss) before income taxes consisted of the following: Years ended December 31, 2021 2020 United States operations $ 2,320,000 $ (6,663,000) International operations (32,000) (192,000) Income (loss) before income taxes $ 2,288,000 $ (6,855,000)
Schedule reconciliation of the Federal statutory rate	A reconciliation of the Federal statutory rate to the net effective (benefit) tax rate is as follows: Years ended December 31, 2021 2020 Federal income (benefit) tax expense computed at statutory rates 21.0 % (21.0) % (Decrease) increase in taxes resulting from: State and local taxes, net of Federal tax benefit 3.7 (2.4) Permanent differences - net 3.3 0.4 Valuation allowance (1.3) 4.6 Foreign rate differential 0.1 0.1 CARES Act (26.9) (9.3) Other — (0.1) Benefit tax rate (0.1) % (27.7) %

SUBSEQUENT EVENT (Tables)

SUBSEQUENT EVENT (Tables)	12 Months Ended
SUBSEQUENT EVENT (Tables)	Dec. 31, 2021
SUBSEQUENT EVENT
Schedule of purchase price allocation	Total Total purchase price $ 2,300,000 The following table presents preliminary purchase price allocation: Accounts receivable $ 490,000 Inventories 292,000 Machinery and equipment 851,000 Goodwill 805,000 Liabilities assumed (138,000) Total estimated purchase price $ 2,300,000

SUMMARY OF ACCOUNTING POLICIE_3

SUMMARY OF ACCOUNTING POLICIES - Retail automotive industrial and aerospace (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 53,554,000	$ 49,136,000
Florida Pneumatic
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 41,488,000	$ 38,276,000
Percentage of revenue	100.00%	100.00%
Increase (decrease)	$ 3,212,000
Percentage of Increase (decrease)	8.40%
Florida Pneumatic \| Automotive
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 14,543,000	$ 13,270,000
Percentage of revenue	35.10%	34.70%
Increase (decrease)	$ 1,273,000
Percentage of Increase (decrease)	9.60%
Florida Pneumatic \| Retail
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 13,995,000	$ 12,940,000
Percentage of revenue	33.70%	33.80%
Increase (decrease)	$ 1,055,000
Percentage of Increase (decrease)	8.20%
Florida Pneumatic \| Aerospace
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 7,184,000	$ 8,087,000
Percentage of revenue	17.30%	21.10%
Increase (decrease)	$ (903,000)
Percentage of Increase (decrease)	(11.20%)
Florida Pneumatic \| Industrial
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 5,289,000	$ 3,481,000
Percentage of revenue	12.70%	9.10%
Increase (decrease)	$ 1,808,000
Percentage of Increase (decrease)	51.90%
Florida Pneumatic \| Other
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 477,000	$ 498,000
Percentage of revenue	1.20%	1.30%
Increase (decrease)	$ (21,000)
Percentage of Increase (decrease)	(4.20%)
Hy-Tech [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 12,066,000	$ 10,860,000
Percentage of revenue	100.00%	100.00%
Increase (decrease)	$ 1,206,000
Percentage of Increase (decrease)	11.10%
Hy-Tech [Member] \| OEM
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 5,842,000	$ 4,272,000
Percentage of revenue	48.40%	39.40%
Increase (decrease)	$ 1,570,000
Percentage of Increase (decrease)	36.80%
Hy-Tech [Member] \| ATP
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 3,024,000	$ 2,796,000
Percentage of revenue	25.10%	25.70%
Increase (decrease)	$ 228,000
Percentage of Increase (decrease)	8.20%
Hy-Tech [Member] \| PTG
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 2,846,000	$ 3,326,000
Percentage of revenue	23.60%	30.60%
Increase (decrease)	$ (480,000)
Percentage of Increase (decrease)	(14.40%)
Hy-Tech [Member] \| Other
Schedule Of Summary Of Accounting Policies [Line Items]
Revenues	$ 354,000	$ 466,000
Percentage of revenue	2.90%	4.30%
Increase (decrease)	$ (112,000)
Percentage of Increase (decrease)	(24.00%)

SUMMARY OF ACCOUNTING POLICIE_4

SUMMARY OF ACCOUNTING POLICIES - Maturity analysis of the annual undiscounted cash flows (Details)	Dec. 31, 2021USD ($)
Operating lease liabilities
2022	$ 875,000
2023	873,000
2024	598,000
2025	309,000
2026	174,000
Thereafter	693,000
Total operating lease payments	3,522,000
Less imputed interest	(506,000)
Total operating lease liabilities	$ 3,016,000
Weighted-average remaining lease term	5 years 6 months
Weighted-average discount rate	6.70%

SUMMARY OF ACCOUNTING POLICIE_5

SUMMARY OF ACCOUNTING POLICIES - Customer Concentration (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Summary Of Accounting Policies [Line Items]
Property, Plant and Equipment, Cost Capitalization	1,000
Advertising Expense	$ 1,276,000	$ 1,529,000
Weighted average antidilutive stock options outstanding	137,000	164,000
Selling, general and administrative expenses	$ 19,856,000	$ 19,367,000
Shipping and Handling [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Selling, general and administrative expenses	$ 2,038,000	$ 1,831,000
Maximum [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Finite-Lived Intangible Asset, Useful Life	20 years
Liability period	3 years
Minimum [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years
Liability period	1 year
Machinery and Equipment [Member] \| Maximum [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Machinery and Equipment [Member] \| Minimum [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Building [Member] \| Maximum [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	31 years
Building [Member] \| Minimum [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	27 years 6 months
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| One customer
Schedule Of Summary Of Accounting Policies [Line Items]
Concentration Risk, Percentage	35.90%	38.00%
Sales Revenue, Segment [Member] \| Customer Concentration Risk [Member] \| One customer
Schedule Of Summary Of Accounting Policies [Line Items]
Concentration Risk, Percentage	26.10%	26.30%

SUMMARY OF ACCOUNTING POLICIE_6

SUMMARY OF ACCOUNTING POLICIES - Basic and diluted earnings per common share (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Numerator for basic and diluted (loss) income per common share:
Net income (loss)	$ 2,290,000	$ (4,954,000)
Denominator:
Denominator for basic income (loss) per share-weighted average common shares outstanding	3,178,000	3,149,000
Dilutive securities (1)	14,000
Denominator for diluted income (loss) per share-adjusted weighted average common shares and assumed conversions	3,192,000	3,149,000

SUMMARY OF ACCOUNTING POLICIE_7

SUMMARY OF ACCOUNTING POLICIES - Additional information (Details)	Apr. 20, 2020USD ($)	Dec. 31, 2021USD ($)item$ / product	Dec. 31, 2020USD ($)	Dec. 31, 2019USD ($)
Schedule Of Summary Of Accounting Policies [Line Items]
Employee Retention Credit		$ 2,000,000
Net income (loss)		2,290,000	$ (4,954,000)
Working capital		24,598,000
Operating Lease, Expense		895,000	899,000
Accounts receivable - net		7,550,000	7,468,000	$ 9,313,000
Cash equivalents		0	0
Federal Deposit Insurance Corporation Excess Insured Amount		27,000
Short-term Debt [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Line of Credit Facility, Remaining Borrowing Capacity		$ 9,578,000	$ 11,971,000
Florida Pneumatic
Schedule Of Summary Of Accounting Policies [Line Items]
Number Of Types Of Pneumatic Hand Tools Imported Or Manufactured \| item		75
Florida Pneumatic \| Minimum [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Sale Price Per Product \| $ / product		50
Florida Pneumatic \| Maximum [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Sale Price Per Product \| $ / product		1,000
Hy-Tech [Member] \| Minimum [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Sale Price Per Product \| $ / product		300
Hy-Tech [Member] \| Maximum [Member]
Schedule Of Summary Of Accounting Policies [Line Items]
Sale Price Per Product \| $ / product		42,000
Payroll Protection Program
Schedule Of Summary Of Accounting Policies [Line Items]
Loan received	$ 2,900,000

ACCOUNTS RECEIVABLE AND ALLOW_3

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable	$ 7,817,000	$ 7,726,000
Allowance for doubtful accounts, sales discounts and chargebacks	(267,000)	(258,000)
Accounts receivable - net	$ 7,550,000	$ 7,468,000	$ 9,313,000

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
INVENTORIES
Raw material	$ 2,166,000	$ 2,077,000
Work in process	1,360,000	1,127,000
Finished goods	20,495,000	15,158,000
Inventories	$ 24,021,000	$ 18,362,000

GOODWILL AND OTHER INTANGIBLE_3

GOODWILL AND OTHER INTANGIBLE ASSETS - Other intangible assets - (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Other intangible assets:
Cost	$ 10,833,000	$ 10,840,000
Accumulated amortization	5,241,000	4,614,000
Net book value	5,592,000	6,226,000
Customer relationships [Member]
Other intangible assets:
Cost	6,495,000	6,502,000
Accumulated amortization	3,545,000	3,034,000
Net book value	$ 2,950,000	$ 3,468,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	6 years 8 months 12 days	7 years 7 months 6 days
Trademarks and trade names one [Member]
Other intangible assets:
Cost	$ 2,187,000	$ 2,187,000
Accumulated amortization	0	0
Net book value	$ 2,187,000	$ 2,187,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	9 years 6 months	10 years 6 months
Trademarks and Trade Names Two [Member]
Other intangible assets:
Cost	$ 200,000	$ 200,000
Accumulated amortization	73,000	59,000
Net book value	127,000	141,000
Engineering drawings [Member]
Other intangible assets:
Cost	330,000	330,000
Accumulated amortization	254,000	239,000
Net book value	$ 76,000	$ 91,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years 1 month 6 days	6 years 1 month 6 days
Non-compete agreements [Member]
Other intangible assets:
Cost	$ 335,000	$ 335,000
Accumulated amortization	290,000	266,000
Net book value	$ 45,000	$ 69,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	2 years	3 years
Patents [Member]
Other intangible assets:
Cost	$ 1,286,000	$ 1,286,000
Accumulated amortization	1,079,000	1,016,000
Net book value	$ 207,000	$ 270,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	4 years 6 months	5 years 2 months 12 days

GOODWILL AND OTHER INTANGIBLE_4

GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization expense of intangible assets - (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
GOODWILL AND OTHER INTANGIBLE ASSETS
Amortization of Intangible Assets	$ 631,000	$ 702,000

GOODWILL AND OTHER INTANGIBLE_5

GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated amortization expense (Details)	Dec. 31, 2021USD ($)
GOODWILL AND OTHER INTANGIBLE ASSETS
2022	$ 629,000
2023	625,000
2024	577,000
2025	548,000
2026	348,000
Thereafter	678,000
Total	$ 3,405,000

GOODWILL AND OTHER INTANGIBLE_6

GOODWILL AND OTHER INTANGIBLE ASSETS - Additional information - (Details)	3 Months Ended
	Jun. 30, 2020USD ($)
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill, Impairment Loss	$ 284,000
Impairment charges	$ 1,328,000

DEBT (Details)

DEBT (Details) - USD ($)	12 Months Ended
DEBT (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Apr. 30, 2017
Debt Instrument [Line Items]
Short-term Debt	$ 5,765,000	$ 1,374,000
Short-term Debt [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Remaining Borrowing Capacity	9,578,000	11,971,000
Line of Credit Facility, Average Outstanding Amount	$ 2,686,000	$ 4,042,000
Short-term Debt [Member] \| Base Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.50%	0.50%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 16,000,000
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases			2,000,000
Capex Borrowing [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 1,600,000

CARES ACT (Details)

CARES ACT (Details) - USD ($)	Apr. 20, 2020	Dec. 31, 2021	Dec. 31, 2020
CARES ACT
Proceeds from Issuance of Other Long-term Debt	$ 2,929,000	$ 0	$ 2,929,000
Refundable tax credit percentage		70.00%
Refundable tax credit		$ 2,028,000

STOCK OPTIONS - STOCK COMPENS_3

STOCK OPTIONS - STOCK COMPENSATION - Outstanding options (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Outstanding	178,499
Weighted Average Exercise Price per share, Outstanding (in dollars per share)	$ 6.76
Weighted Average Remaining Contractual Life, Outstanding (Years)	3 years 4 months 24 days
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Outstanding	200,878	226,075
Number of Shares, Exercised		(6,226)
Number of Shares, Forfeited	(6,180)	(7,998)
Number of Shares, Expired	16,199	10,973
Number of Shares, Outstanding	178,499	200,878
Number of Shares, Vested	175,831
Weighted Average Exercise Price per share, Outstanding (in dollars per share)	$ 6.59	$ 6.59
Weighted Average Exercise Price per share, Exercised (in dollars per share)		2.92
Weighted Average Exercise Price per share, Forfeited (in dollars per share)	7.61	6.38
Weighted Average Exercise Price per share, Expired (in dollars per share)	4.37	2.92
Weighted Average Exercise Price per share, Outstanding (in dollars per share)	6.76	$ 6.59
Weighted Average Exercise Price per share, Vested (in dollars per share)	$ 6.73
Aggregate Intrinsic Value, Outstanding (in dollars)	$ 60,643
Aggregate Intrinsic Value, Vested (in dollars)	$ 60,643

STOCK OPTIONS - STOCK COMPENS_4

STOCK OPTIONS - STOCK COMPENSATION - Employee Stock Option (Details) - Stock Option - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option Shares, Non-vested shares, beginning of year	5,334	37,666
Option Shares, Granted	0	0
Option Shares, Vested	(2,666)	(31,250)
Option Shares, Forfeited		(1,082)
Option Shares, Non-vested shares, end of year	2,668	5,334
Weighted Average Grant-Date Fair Value, Non-vested shares, beginning of year (in dollars per share)	$ 4.60	$ 4.45
Weighted Average Grant-Date Fair Value, Granted (in dollars per share)	0	0
Weighted Average Grant-Date Fair Value, Vested (in dollars per share)	4.60	4.43
Weighted Average Grant-Date Fair Value, Forfeited (in dollars per share)		4.41
Weighted Average Grant-Date Fair Value, Non-vested shares, end of year (in dollars per share)	$ 4.60	$ 4.60

STOCK OPTIONS - STOCK COMPENS_5

STOCK OPTIONS - STOCK COMPENSATION - Stock options outstanding and exercisable (Details)	12 Months Ended
	Dec. 31, 2021$ / sharesshares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number outstanding \| shares	178,499
Options Outstanding Weighted Average Remaining Contractual Life (Years)	3 years 4 months 24 days
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 6.76
Number exercisable \| shares	175,831
Options Exercisable Weighted Average Remaining Contractual Life (Years)	3 years 4 months 24 days
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 6.73
Exercise Price Range One [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number outstanding \| shares	2,090
Options Outstanding Weighted Average Remaining Contractual Life (Years)	4 months 24 days
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 4.29
Number exercisable \| shares	2,090
Options Exercisable Weighted Average Remaining Contractual Life (Years)	4 months 24 days
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 4.29
Exercise Price Range Two [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number outstanding \| shares	41,809
Options Outstanding Weighted Average Remaining Contractual Life (Years)	6 months
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 4.74
Number exercisable \| shares	41,809
Options Exercisable Weighted Average Remaining Contractual Life (Years)	6 months
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 4.74
Exercise Price Range Three [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number outstanding \| shares	42,850
Options Outstanding Weighted Average Remaining Contractual Life (Years)	1 year 3 months 18 days
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 7.86
Number exercisable \| shares	42,850
Options Exercisable Weighted Average Remaining Contractual Life (Years)	1 year 3 months 18 days
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 7.86
Exercise Price Range Four [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number outstanding \| shares	83,750
Options Outstanding Weighted Average Remaining Contractual Life (Years)	5 years 8 months 12 days
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 7.09
Number exercisable \| shares	83,750
Options Exercisable Weighted Average Remaining Contractual Life (Years)	5 years 8 months 12 days
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 7.09
Exercise Price Range Five [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number outstanding \| shares	8,000
Options Outstanding Weighted Average Remaining Contractual Life (Years)	7 years 2 months 12 days
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 8.55
Number exercisable \| shares	5,332
Options Exercisable Weighted Average Remaining Contractual Life (Years)	7 years 2 months 12 days
Weighted Average Exercise Price (in dollars per share) \| $ / shares	$ 8.55

STOCK OPTIONS - STOCK COMPENS_6

STOCK OPTIONS - STOCK COMPENSATION - Additional information (Details) - USD ($)	Feb. 16, 2021	May 20, 2020	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			1,100,000
Appreciation Award Description			1.5 shares for every share granted
Share Based Compensation Stock Option Plan Authorized			100,000
Share Based Compensation Arrangement By Share Based Payment Award Options Nonvested Percentage			100.00%
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount			$ 1,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			2 months 12 days
Stock-based compensation			$ 5,000	$ 41,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant			203,037	58,658
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance			178,499
Fair Market value			110.00%
Treasury Stock, Shares, Acquired			0
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee			165,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		1,250
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance		6,250
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 5.14
Vesting period	5 years
Grant Vest	20.00%
Restricted stock-based compensation	$ 159,000	$ 32,000
Restricted stock-based compensation per annual	$ 32,000
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee			1,000,000
Stock Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee			65,000
Non Employee Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Value of Shares Per Employee			$ 300,000
Non Employee Directors Serving In Lead Role [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Value of Shares Per Employee			$ 450,000
Employees And Directors [Member] \| Common Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			500,000
Chief Financial Officer [Member] \| Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Available for Grant	25,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 6.36

DIVIDEND PAYMENTS (Details)

DIVIDEND PAYMENTS (Details)	Feb. 11, 2020USD ($)$ / shares
DIVIDENDS.
Dividends Payable, Amount Per Share \| $ / shares	$ 0.05
Dividends Payable, Current \| $	$ 157,000

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	12 Months Ended
INCOME TAXES (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Current:
Federal	$ 63,000	$ (1,821,000)
State and local	55,000	(73,000)
Foreign		3,000
Total current	118,000	(1,891,000)
Deferred:
Federal	(69,000)	(238,000)
State and local	(48,000)	263,000
Foreign	(3,000)	(35,000)
Total deferred	(120,000)	(10,000)
Totals	$ (2,000)	$ (1,901,000)

INCOME TAXES - Deferred tax ass

INCOME TAXES - Deferred tax assets (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Bad debt reserves	$ 24,000	$ 25,000
Inventory reserves	789,000	762,000
Warranty and other reserves	45,000	74,000
Stock-based compensation	200,000	205,000
Goodwill	755,000	852,000
Acquisition costs	201,000	212,000
Net operating losses - state	166,000	168,000
Other	98,000	51,000
Less valuation allowance	(287,000)	(316,000)
Deferred Tax Assets	1,991,000	2,033,000
Deferred tax liabilities:
Prepaid expenses	(238,000)	(260,000)
Depreciation	(914,000)	(1,113,000)
Intangibles	(490,000)	(434,000)
Net deferred tax assets	$ 349,000	$ 226,000

INCOME TAXES - Components of (l

INCOME TAXES - Components of (loss) income before income tax (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
INCOME TAXES
United States operations	$ 2,320,000	$ (6,663,000)
International operations	(32,000)	(192,000)
Income (loss) before income taxes	$ 2,288,000	$ (6,855,000)

INCOME TAXES - Reconciliation o

INCOME TAXES - Reconciliation of tax rate (Details)	12 Months Ended
INCOME TAXES - Reconciliation of tax rate (Details)	Dec. 31, 2021	Dec. 31, 2020
INCOME TAXES
Federal income (benefit) tax expense computed at statutory rates	21.00%	(21.00%)
(Decrease) increase in taxes resulting from:
State and local taxes, net of Federal tax benefit	3.70%	(2.40%)
Permanent differences - net	3.30%	0.40%
Valuation allowance	(1.30%)	4.60%
Foreign rate differential	0.10%	0.10%
CARES Act	(26.90%)	(9.30%)
Other	0.00%	(0.10%)
Benefit tax rate	(0.10%)	(27.70%)

INCOME TAXES - Additional infor

INCOME TAXES - Additional information (Details)	12 Months Ended
INCOME TAXES - Additional information (Details)	Dec. 31, 2021USD ($)
INCOME TAXES
Operating Loss Carryforwards	$ 2,100,000
NOL carryback provision of CARES Act	$ 1,921,000

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Additional information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
COMMITMENTS AND CONTINGENCIES.
Defined Contribution Plan, Cost Recognized	$ 229,000	$ 275,000
Purchase Obligation	$ 16,331,000	$ 8,530,000

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details)	Jan. 15, 2022USD ($)
Subsequent Event \| Jackson Gear Company
Subsequent Event [Line Items]
Total purchase price	$ 2,300,000

SUBSEQUENT EVENT - Purchase pri

SUBSEQUENT EVENT - Purchase price allocation (Details) - USD ($)	Jan. 15, 2022	Dec. 31, 2021	Dec. 31, 2020
Subsequent Event [Line Items]
GOODWILL		$ 4,447,000	$ 4,449,000
Subsequent Event \| Jackson Gear Company
Subsequent Event [Line Items]
Accounts receivable - net	$ 490,000
Inventories	292,000
Machinery and equipment	851,000
GOODWILL	805,000
Liabilities assumed	(138,000)
Total purchase price	$ 2,300,000
Amortization period	15 years