Company Quick10K Filing
Quick10K
Universal Security Instruments
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$1.14 2 $3
10-Q 2019-06-30 Quarter: 2019-06-30
10-K 2019-03-31 Annual: 2019-03-31
10-Q 2018-12-31 Quarter: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-K 2018-03-31 Annual: 2018-03-31
10-Q 2017-12-31 Quarter: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-K 2017-03-31 Annual: 2017-03-31
10-Q 2016-12-31 Quarter: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-K 2016-03-31 Annual: 2016-03-31
10-Q 2015-12-31 Quarter: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-K 2015-03-31 Annual: 2015-03-31
10-Q 2014-12-31 Quarter: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-K 2014-03-31 Annual: 2014-03-31
10-Q 2013-12-31 Quarter: 2013-12-31
8-K 2019-07-12 Enter Agreement, Exhibits
8-K 2018-10-26 Shareholder Vote
8-K 2018-07-09 Enter Agreement, Exhibits
TEL TE Connectivity 30,203
KLAC KLA Tencor 23,656
STX Seagate Technology 13,031
NTAP Netapp 11,163
ARW Arrow Electronics 5,741
NVMI Nova Measuring Instruments 759
ITRN Ituran Location & Control 608
RADA Rada Electronic Industries 180
CYBE Cyberoptics 97
CUI CUI Global 17
UUU 2019-06-30
Part I - Financial Information
Item 1.Condensed Consolidated Financial Statements
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 4.Controls and Procedures
Part II - Other Information
Item 1.Legal Proceedings
Item 6.Exhibits
EX-31.1 tv526928_ex31-1.htm
EX-31.2 tv526928_ex31-2.htm
EX-32.1 tv526928_ex32-1.htm
EX-99.1 tv526928_ex99-1.htm

Universal Security Instruments Earnings 2019-06-30

UUU 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 tv526928_10q.htm FORM 10-Q

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly period ended June 30, 2019

 

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Commission file number 001-31747

 

UNIVERSAL SECURITY INSTRUMENTS, INC.

(Exact name of registrant as specified in its charter)

 

Maryland 52-0898545
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

 

11407 Cronhill Drive, Suite A
Owings Mills, Maryland 21117
(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (410) 363-3000

 

Inapplicable

(Former name, former address and former fiscal year if changed from last report.)

 

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

 

Title of each class Trading symbol

Name of each exchange on which registered

Common Stock UUU NYSE MKT LLC

  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

 

Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ¨ Accelerated filer ¨ Non-Accelerated Filer x Smaller Reporting Company x Emerging Growth Company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

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

 

At August 19, 2019, the number of shares outstanding of the registrant’s common stock was 2,312,887.

 

 

 

 

 

TABLE OF CONTENTS

 

  Page
Part I - Financial Information    
     
Item 1. Condensed Consolidated Financial Statements:  
     
  Condensed Consolidated Balance Sheets at June 30, 2019 (unaudited) and March 31, 2019 3
     
  Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2019 and 2018 (unaudited) 4
     
  Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended June 30, 2019 and 2018 (unaudited) 5
     
  Condensed Consolidated Statements of Shareholders’ Equity Three Months Ended June 30, 2019 6
     
  Condensed Consolidated Statements of Shareholders’ Equity Three Months Ended June 30, 2018 7
     
  Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2019 and 2018 (unaudited) 8
     
  Notes to Condensed Consolidated Financial Statements (unaudited) 9
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14
     
Item 4. Controls and Procedures 17
     
Part II - Other Information    
     
Item 1. Legal Proceedings 18
     
Item 6. Exhibits 18
     
  Signatures 20

 

2

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   (unaudited)   (audited) 
   June 30, 2019   March 31, 2019 
ASSETS          
CURRENT ASSETS          
Cash  $223,598   $374,472 
           
Accounts receivable:          
Trade, less allowance for doubtful accounts   482,963    365,293 
Receivables from employees   54,930    54,916 
Receivable from Hong Kong Joint Venture   12,144    45,217 
    550,037    465,426 
           
Amount due from factor   1,943,961    2,549,986 
Inventories – finished goods   7,487,800    6,852,305 
Prepaid expenses   130,163    145,190 
           
TOTAL CURRENT ASSETS   10,335,559    10,387,379 
           
INVESTMENT IN HONG KONG JOINT VENTURE   7,923,355    8,441,889 
INTANGIBLE ASSET – NET   52,542    53,660 
PROPERTY AND EQUIPMENT – NET   465,883    19,998 
OTHER ASSETS   4,000    4,000 
           
TOTAL ASSETS  $18,781,339   $18,906,926 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
CURRENT LIABILITIES          
Line of credit – factor  $1,695,381   $1,851,591 
Short-term portion of lease asset liability   162,906    - 
Accounts payable – Hong Kong Joint Venture   5,625,164    4,962,023 
Accounts payable – trade   391,823    616,444 
Accrued liabilities:          
Accrued payroll and employee benefits   99,401    132,132 
Accrued commissions and other   407,544    470,876 
           
TOTAL CURRENT LIABILITIES   8,382,219    8,033,066 
           
LONG-TERM PORTION OF LEASE ASSET LIABILITY   283,784    - 
COMMITMENTS AND CONTINGENCIES   -    - 
           
SHAREHOLDERS’ EQUITY          
Common stock, $.01 par value per share; authorized 20,000,000 shares; 2,312,887 shares issued and outstanding at June 30, 2019 and March 31, 2019   23,129    23,129 
Additional paid-in capital   12,885,841    12,885,841 
Accumulated Deficit   (3,255,820)   (2,646,866)
Accumulated other comprehensive income   462,186    611,756 
TOTAL SHAREHOLDERS’ EQUITY   10,115,336    10,873,860 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $18,781,339   $18,906,926 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3

 

 

UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months Ended June 30, 
   2019   2018 
Net sales  $4,343,291   $4,045,996 
Cost of goods sold – acquired from Joint Venture   2,793,539    2,618,867 
Cost of goods sold – other   304,923    186,985 
           
GROSS PROFIT   1,244,829    1,240,144 
           
Selling, general and administrative expense   1,236,839    1,197,771 
Research and development expense   140,643    153,387 
           
Operating loss   (132,653)   (111,014)
           
Other expense:          
Loss from investment in Hong Kong Joint Venture   368,964    244,400 
Interest expense   107,337    83,419 
           
NET LOSS  $(608,954)  $(438,833)
           
Loss per share:          
Basic and diluted   $(0.26)  $(0.19)
           
Shares used in computing net loss per share:          
Weighted average basic and diluted shares outstanding   2,312,887    2,312,887 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4

 

 

UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE LOSS

(Unaudited)

 

   Three Months Ended June 30, 
   2019   2018 
NET LOSS  $(608,954)  $(438,833)
           
Other Comprehensive Loss          
Company’s portion of Hong Kong Joint Venture’s other          
Comprehensive loss:          
Currency translation   (100,773)   (379,479)
Unrealized loss on investment securities   (48,797)   (9,291)
Total Other Comprehensive Loss   (149,570)   (388,770)
COMPREHENSIVE LOSS  $(758,524)  $(827,603)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

5

 

 

UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

THREE MONTHS ENDED JUNE 30, 2019 (Unaudited)

 

   Common
Shares
   Stock
Amount
   Additional
Paid-In
Capital
   Accumulated
Deficit
   AOCI*   Total 
Balance at April 1, 2019   2,312,887   $23,129   $12,885,841   $(2,646,866)  $611,756   $10,873,860 
                               
Currency translation                       (100,773)   (100,773)
Unrealized loss on investment securities                       (48,797)   (48,797)
                               
Net loss                  (608,954)        (608,954)
                               
Balance at June 30, 2019   2,312,887   $23,129   $12,885,841   $(3,255,820)  $462,186   $10,115,336 

 

* Accumulated Other Comprehensive Income

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

6

 

 

UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

THREE MONTHS ENDED JUNE 30, 2018 (Unaudited)

 

   Common
Shares
   Stock
Amount
   Additional
Paid-In
Capital
   Accumulated
Deficit
   AOCI*   Total 
Balance at April 1, 2018   2,312,887   $23,129   $12,885,841   $(1,298,880)  $1,143,246   $12,753,336 
                               
Currency translation                       (379,479)   (379,479)
Unrealized loss on investment securities                       (9,291)   (9,291)
                               
Net loss                  (438,833)        (438,833)
                               
Balance at June 30, 2018   2,312,887   $23,129   $12,885,841   $(1,737,713)  $754,476   $11,925,733 

 

* Accumulated Other Comprehensive Income

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

7

 

 

UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Three Months Ended June 30, 
   2019   2018 
OPERATING ACTIVITIES          
Net loss  $(608,954)  $(438,833)
Adjustments to reconcile net loss to net cash provided by operating activities:          
Depreciation and amortization   1,923    7,092 
Loss from investment in Hong Kong Joint Venture   368,964    244,400 
Changes in operating assets and liabilities:          
Decrease in accounts receivable and amounts due from factor   521,414    333,004 
Increase in inventories, prepaid expenses, and other   (620,468)   (317,637)
Increase in accounts payable and accrued expenses   342,457    527,640 
           
NET CASH PROVIDED BY OPERATING ACTIVITIES   5,336    355,666 
           
FINANCING ACTIVITIES          
           
Net repayment of Line of Credit - Factor   (156,210)   (406,755)
           
NET CASH USED IN FINANCING ACTIVITIES   (156,210)   (406,755)
           
NET DECREASE IN CASH   (150,874)   (51,089)
           
Cash at beginning of period   374,472    128,161 
           
CASH AT END OF PERIOD  $223,598   $77,072 
           
Supplemental disclosures of cash flow information:          
Interest paid  $107,290   $96,367 
Income taxes paid   -    - 
           
Supplemental disclosures of non-cash activities:          
Right-of-use asset in exchange for operating lease liability  $475,538    - 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

8

 

 

UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Statement of Management

 

The condensed consolidated financial statements include the accounts of Universal Security Instruments, Inc. (USI or the Company) and its wholly-owned subsidiary. Except for the condensed consolidated balance sheet as of March 31, 2019, which was derived from audited financial statements, the accompanying condensed consolidated financial statements are unaudited. Significant inter-company accounts and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the interim condensed consolidated financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (US-GAAP) have been condensed or omitted. The interim condensed consolidated financial statements should be read in conjunction with the Company’s March 31, 2019 audited financial statements filed with the Securities and Exchange Commission on Form 10-K on July 16, 2019. The interim operating results are not necessarily indicative of the operating results for the full fiscal year.

 

Management Plans

 

The Company had net losses of $608,954 for the three months ended June 30, 2019 and $1,347,986 and $2,262,310 for the years ended March 31, 2019 and 2018, respectively. Furthermore, as of June 30, 2019, working capital (computed as the excess of current assets over current liabilities) decreased by $400,973 from $2,354,313 at March 31, 2019, to $1,953,340 at June 30, 2019.

 

Our short-term borrowings to finance operating losses, trade accounts receivable, and foreign inventory purchases are provided pursuant to the terms of our Factoring Agreement with Merchant Factors Corporation (Merchant or Factor). Borrowings under our Factoring Agreement bear interest at prime plus 2% and are secured by trade accounts receivable and inventory. Advances from Merchant are at the sole discretion of Merchant based on their assessment of the Company’s receivables, inventory and financial condition at the time of each request for an advance. The unused availability of this facility totaled approximately $268,500 at June 30, 2019. In addition, we have secured extended payment terms for purchases up to $4,000,000 from our Hong Kong Joint Venture for the purchase of sealed battery alarms. These amounts are unsecured, bear interest at 5.5% per annum, and provide for repayment terms of 120 days for each purchase. The balance outstanding under this agreement at June 30, 2019 was $5,625,164 with $2,301,890 of this amount being beyond agreed repayment terms. The Hong Kong Joint Venture has provided discretionary approval to allow the Company to exceed the agreed upon repayment terms and has indicated it has no plans or intentions that would materially impact the financial position, operations, or cash flows of the Company.

 

The Company has a history of sales that are insufficient to generate profitable operations, and has limited sources of financing. Management’s plan in response to these conditions includes increasing sales resulting from the delivery of the Company’s line of sealed battery ionization smoke alarms, carbon monoxide products, and ground fault circuit interrupters. In addition the Company is seeking improved terms on its credit facility with the Hong Kong Joint Venture. The Company has seen positive results on this plan during the fiscal years ended March 31, 2019 and 2018 and through June 30, 2019 due to sales of its product offerings and management expects this growth to continue going forward. Though no assurances can be given, if management’s plan continues to be successful over the next twelve months, the Company anticipates that it should be able to meet its cash needs. Cash flows and credit availability is expected to be adequate to fund operations for one year from the issuance date of this report.

 

Line of Credit – Factor

 

On January 15, 2015, the Company entered into the Agreement with Merchant for the purpose of factoring the Company’s trade accounts receivable and to provide financing secured by finished goods inventory. Under the Agreement the Company may borrow eighty percent (80%) of eligible accounts receivable. Additional funding, characterized by Merchant as an over advance, may be provided up to one hundred percent (100%) of eligible accounts receivable. The over advance portion, if any, may not exceed fifty percent (50%) of eligible inventory up to a maximum of $500,000. The Agreement expires on January 6, 2020, and provides for continuation of the program for successive two year periods until terminated by one of the parties to the Agreement. As of June 30, 2019, the Company had borrowings of $1,695,381 under the Agreement, and the Company had remaining availability under the Agreement of approximately $268,500. Advances on factored trade accounts receivable are secured by all of the Company’s trade accounts receivable and inventories, are repaid periodically as collections are made by Merchant but are otherwise due upon demand, and bear interest at the prime commercial rate of interest, as published, plus two percent (Effective rate 7.50% at June 30, 2019). Advances under the factoring agreement are made at the sole discretion of Merchant, based on their assessment of the receivables, inventory and our financial condition at the time of each request for an advance.

 

9

 

 

Use of Estimates

 

The preparation of the condensed consolidated financial statements in conformity with US-GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results could differ materially from those estimates.

 

Revenue Recognition

 

The Company’s primary source of revenue is the sale of safety and security products based upon purchase orders or contracts with customers. Revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred to the customer when the product is shipped or delivered to the customer. Customers may not return, exchange or refuse acceptance of goods without our approval. Generally, the Company does not grant extended payment terms. Shipping and handling costs associated with outbound freight, after control over a product has transferred to a customer, are accounted for as a fulfillment cost and are recorded in selling, general and administrative expense.

 

The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for products sold. Revenue is recorded at the transaction price net of estimates of variable consideration. The Company uses the expected value method based on historical data in considering the impact of estimates of variable consideration, which may include trade discounts, allowances, product returns (including rights of return) or warranty replacements. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

 

We have established allowances to cover anticipated doubtful accounts based upon historical experience.

 

Disaggregation of Revenue

 

The Company presents revenue associated with sales of products acquired from our Hong Kong Joint Venture separately from revenue associated with sales of ground fault circuit interrupters (GFCI’s) and ventilation fans. The Company believes this disaggregation best depicts how our various product lines perform and are affected by economic factors. Revenue recognized by these categories for the fiscal quarters ended June 30, 2019 and 2018 are as follows:

 

   Three months ended 
   June 30, 2019   June 30, 2018 
Sales of products acquired from our HKJV  $3,939,841   $3,764,416 
Sales of GFCI’s and ventilation fans   403,450    281,580 
   $4,343,291   $4,045,996 

 

Receivables

 

Receivables are recorded when the Company has an unconditional right to consideration. We have established allowances to cover anticipated doubtful accounts based upon historical experience.

 

Remaining Performance Obligations

 

Remaining performance obligations represent the transaction price of firm orders for satisfied or partially satisfied performance obligations on contracts with an original expected duration of one year or more. The Company’s contracts are predominantly short-term in nature with a contract term of one year or less. For those contracts, the Company has utilized the practical expedient in ASC Topic 606 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

 

10

 

 

Joint Venture

 

The Company and its joint venture partner, a Hong Kong corporation, each owns a 50% interest in the Hong Kong joint venture that manufactures security products in its facilities located in the People’s Republic of China. There are no material differences between US-GAAP and the basis of accounting used by the Hong Kong Joint Venture. The following represents summarized balance sheet and income statement information of the Hong Kong Joint Venture as of and for the three months ended June 30, 2019 and 2018:

 

  

2019

(Unaudited)

  

2018

(Unaudited)

 
Net sales  $3,149,100   $3,266,557 
Gross profit   161,680    346,111 
Net loss   (808,833)   (546,959)
Total current assets   12,875,232    13,189,847 
Total assets   18,982,477    22,082,883 
Total current liabilities   2,159,436    2,990,291 
Total liabilities   2,902,978    3,378,728 

 

During the three months ended June 30, 2019 and 2018 the Company purchased $2,859,967 and $2,804,372, respectively, of products directly from the Hong Kong Joint Venture for resale. For the three months ended June 30, 2019 the Company has decreased its equity in the net loss of the Joint Venture to reflect a decrease of $35,453 in inter-Company profit on purchases held by the Company in inventory. For the three months ended June 30, 2018 the Company has decreased its equity in the net loss of the Joint Venture to reflect a decrease of $29,079 in inter-company profit on purchases held by the Company in inventory.

 

Income Taxes

 

We calculate our interim tax provision in accordance with the guidance for accounting for income taxes in interim periods. We estimate the annual effective tax rate and apply that tax rate to our ordinary quarterly pre-tax income. The tax expense or benefit related to discrete events during the interim period is recognized in the interim period in which those events occurred.

 

The Company recognizes a liability or asset for the deferred tax consequences of temporary differences between the tax basis of assets or liabilities and their reported amounts in the consolidated financial statements. These temporary differences may result in taxable or deductible amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. The deferred tax assets are reviewed periodically for recoverability and a valuation allowance is provided whenever it is more likely than not that a deferred tax asset will not be realized. After a review of projected taxable income and the components of the deferred tax asset in accordance with applicable accounting guidance it was determined that it is more likely than not that the tax benefits associated with the remaining components of the deferred tax assets will not be realized. This determination was made based on the Company’s history of losses from operations and the uncertainty as to whether the Company will generate sufficient taxable income to use the deferred tax assets prior to their expiration. Accordingly, a valuation allowance was established to fully offset the value of the deferred tax assets. Our ability to realize the tax benefits associated with the deferred tax assets depends primarily upon the timing of future taxable income and the expiration dates of the components of the deferred tax assets. If sufficient future taxable income is generated, we may be able to offset a portion of future tax expenses.

 

The Company follows ASC 740-10 which provides guidance for tax positions related to the recognition and measurement of a tax position taken or expected to be taken in a tax return and requires that we recognize in our consolidated financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position.  Interest and penalties, if any, related to income tax matters are recorded as income tax expenses.

 

The Deemed Repatriation Transition Tax (“Transition Tax”) is a tax on previously untaxed accumulated and current earnings and profits (“E&P”) of our Hong Kong Joint Venture. To determine the amount of the Transition Tax, the Company must determine, in addition to other factors, the amount of post-1986 E&P of the Hong Kong Joint Venture, as well as the amount of non-U.S. income taxes paid on such earnings. The Company has determined that it does not owe a Transition Tax since it has sufficient net operating loss carryforwards and foreign tax credit carryforwards to offset the E&P of its Hong Kong Joint Venture that are subject to the tax.

 

11

 

 

Accounts Receivable and Amount Due From Factor

 

The Company assigns the majority of its short-term receivables arising in the ordinary course of business to our factor. At the time a receivable is assigned to our factor the credit risk associated with the credit worthiness of the debtor is assumed by the factor. The Company continues to bear any credit risk associated with delivery or warranty issues related to the products sold.

 

Management assesses the credit risk of both its trade accounts receivable and its financing receivables based on the specific identification of accounts that have exceeded credit terms. An allowance for uncollectible receivables is provided based on that assessment. Changes in the allowance account are charged to operations in the period the change is determined. Amounts ultimately determined to be uncollectible are eliminated from the receivable accounts and from the allowance account in the period that the receivables’ status is determined to be uncollectible.

 

Based on the nature of the factoring agreement and prior experience, no allowance related to Amounts Due from Factor has been provided. At June 30, 2019 and 2018, an allowance of approximately $57,000 has been provided for uncollectible trade accounts receivable.

 

Net Loss per Common Share

 

Basic net loss per common share is computed based on the weighted average number of common shares outstanding during the periods presented. Diluted earnings per common share is computed based on the weighted average number of common shares outstanding plus the effect of stock options and other potentially dilutive common stock equivalents. The dilutive effect of stock options and other potentially dilutive common stock equivalents is determined using the treasury stock method based on the Company’s average stock price. There were no potentially dilutive common stock equivalents outstanding during the three month periods ended June 30, 2019 or 2018. As a result, basic and diluted weighted average common shares outstanding are identical for the three month periods ended June 30, 2019 and 2018.

 

Contingencies

 

From time to time, the Company is involved in various claims and routine litigation matters. In the opinion of management, after consultation with legal counsel, the outcomes of such matters are not anticipated to have a material adverse effect on the Company’s condensed consolidated financial position, results of operations, or cash flows in future years.

 

Recently Adopted Accounting Standards

 

Changes to US-GAAP are established by the Financial Accounting Standards Board (FASB) in the form of Accounting Standards Updates (ASU’s) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASU’s.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less are accounted for similar to previous guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on April 1, 2019, the date it became effective for public companies based on the Company’s fiscal year, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of April 1, 2019 as a result of this adoption. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. The Company also elected the practical expedient provided in a subsequent amendment to the standard that removed the requirement to separate lease and non-lease components, provided certain conditions were met.

 

12

 

 

The impact of the adoption of this guidance on the Company’s condensed consolidated financial statements is discussed below:

 

The Company is a lessee in lease agreements for office space. Certain of the Company’s leases contain provisions that provide for one or more options to renew at the Company’s sole discretion. The Company’s leases are comprised of fixed lease payments, with its real estate leases including lease payments subject to a rate or index which may be variable. Certain real estate leases also include executory costs such as common area maintenance (non-lease component). As a practical expedient permitted under ASC 842, the Company has elected to account for the lease and non-lease components as a single lease component. Lease payments, which may include lease components and non-lease components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable lease amounts based on a rate or index (fixed in substance) as stipulated in the lease contract. None of the Company’s lease agreements contain any residual value guarantees or material restrictive covenants. As a result of the Company’s election of the package of practical expedients permitted within ASC 842, which among other things, allows for the carryforward of historical lease classification, all of the Company’s lease agreements in existence at the date of adoption that were classified as operating leases under ASC 840 have been classified as operating leases under ASC 842. Lease expense for payments related to the Company’s operating leases is recognized on a straight-line basis over the related lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments as specified in the lease. Right-of-use assets and lease liabilities related to the Company’s operating leases are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term and amounted to $475,538 at the date of adoption. When the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s borrowing rates at the lease commencement date in determining the present value of lease payments. The right-of use asset also includes any lease payments made at or before lease commencement less any lease incentives. As of June 30, 2019, the Company had right-of-use assets of $446,690 and lease liabilities of $446,690 related to its operating leases. Right-of-use assets are included in property and equipment, net, on the condensed consolidated balance sheet and lease liabilities related to the Company’s operating leases are included in short-term and long-term lease asset liability on the condensed consolidated balance sheet. As of June 30, 2019 the Company’s weighted-average remaining lease term and weighted-average discount rate related to its operating leases were 2.83 years and 6.0%, respectively. During the three months ended June 30, 2019, the cash paid for amounts included in the measurement of lease liabilities related to the Company’s operating leases was $35,192, which is included as an operating cash outflow within the consolidated statements of cash flows. During the three months ended June 30, 2019, the operating lease costs related to the Company’s operating leases was $28,848, which is included in operating costs and expenses in the condensed consolidated statements of operations. During the three months ended June 30, 2019, the Company did not enter into any lease agreements set to commence in the future and there were no newly leased assets for which a right-of use asset was recorded in exchange for a new lease liability, other than those lease assets recorded upon implementation.

 

The future minimum payments under operating leases were as follows at June 30, 2019 for the fiscal year ending March 31, 2020:

 

2020 (remainder)  $125,413 
2021   171,440 
2022   175,770 
2023   14,670 
      
Total minimum operating lease payments   487,293 
Less: amounts representing interest   (40,603)
Present value of net minimum operating lease payments   446,690 
Less: current portion   162,906 
Long-term portion of operating lease obligations   283,784 

 

13

 

 

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

As used throughout this Report, “we,” “our,” “the Company” “USI” and similar words refers to Universal Security Instruments, Inc.

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains certain forward-looking statements reflecting our current expectations with respect to our operations, performance, financial condition, and other developments. These forward-looking statements may generally be identified by the use of the words “may”, “will”, “believes”, “should”, “expects”, “anticipates”, “estimates”, and similar expressions. These statements are necessarily estimates reflecting management’s best judgment based upon current information and involve a number of risks and uncertainties. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and readers are advised that various factors could affect our financial performance and could cause our actual results for future periods to differ materially from those anticipated or projected. While it is impossible to identify all such factors, such factors include, but are not limited to, those risks identified in our periodic reports filed with the Securities and Exchange Commission.

 

overview

 

We are in the business of marketing and distributing safety and security products which are primarily manufactured through our 50%-owned Hong Kong Joint Venture. Our financial statements detail our sales and other operational results only, and report the financial results of the Hong Kong Joint Venture using the equity method. Accordingly, the following discussion and analysis of the three month periods ended June 30, 2019 and 2018 relate to the operational results of the Company. A discussion and analysis of the Hong Kong Joint Venture’s operational results for these periods is presented below under the heading “Joint Venture.”

 

The Company has developed products based on new smoke and gas detection technologies, with what the Company believes are improved sensing technology and product features. To date we have applied for thirteen patents on these new technologies and features. We have been granted ten patents (including six for new technologies and features). Most of our new technologies and features have been trademarked under the trade name IoPhic.

 

Changes in international trade duties and other aspects of international trade policy, both in the U.S. and abroad, could materially impact the cost of our products. All of our products are imported from the Peoples Republic of China (PRC). To date, our ground fault circuit interrupters (GFCI), which constitute only a small portion of our sales, have been included in products subject to a 25% tariff effective August 23, 2018. Additionally, tariffs of 25% have been imposed on our Carbon Monoxide and Photoelectric alarms and additional tariffs of 10% have been proposed on the remainder of items the Company imports beginning after September 1, 2019. We are monitoring these developments and will determine our strategies as additional information becomes available. Any increase in tariffs that is not offset by an increase in our sales prices could have an adverse effect on our business, financial position, results of operations or cash flows.

 

Results of Operations

 

Three Months Ended June 30, 2019 and 2018

 

Sales. Net sales for the three months ended June 30, 2019 were $4,343,291 compared to $4,045,996 for the comparable three months in the prior year, an increase of $297,295 (7.3%). Sales increased principally due to the increased sales of ground fault circuit interrupters and other electrical devices and accessories.

 

Gross Profit Margin. Gross profit margin is calculated as net sales less cost of goods sold expressed as a percentage of net sales. Our gross profit margin was 28.7% and 30.7% of sales for the quarters ended June 30, 2019 and 2018, respectively. The decrease in gross profit margin was primarily due to the increase in tariffs as discussed above.

 

14

 

 

Expenses. Selling, general and administrative expenses were $1,236,839 for the three months ended June 30, 2019, compared to $1,197,771 for the comparable three months in the prior year. As a percentage of net sales, these expenses decreased to 28.5% for the three month period ended June 30, 2019, from 29.6% for the 2018 period. These expenses decreased as a percentage of net sales since selling, general, and administrative expenses do not increase in direct proportion to increased sales.

 

Research and development expenses were $140,643 for the three month period ended June 30, 2019 compared to $153,387 for the comparable quarter of the prior year, a decrease of $12,744 (8.3%). The primary reasons for the decrease are decreased expenditures paid to independent testing facilities as the sealed product line has been completed.

 

Interest Expense and Other. Our interest expense was $107,337 for the quarter ended June 30, 2019, compared to interest expense of $83,419 for the quarter ended June 30, 2018. Interest expense is dependent upon the total amounts borrowed on average from the Factor and on extended trade payables due to the Hong Kong Joint Venture. Amounts due to the Hong Kong Joint Venture increased in the current fiscal year’s three month period as compared to the same period in the prior fiscal year.

 

Net Loss. We reported a net loss of $608,954 for the quarter ended June 30, 2019, compared to a net loss of $438,833 for the corresponding quarter of the prior fiscal year, a $170,121 (38.8%) increase in the net loss. The net loss increased principally due to the increase in the Company’s equity in the loss of the Hong Kong Joint Venture.

 

Joint Venture

 

Net Sales. Net sales of the Joint Venture for the three months ended June 30, 2019 were $3,149,100, compared to $3,266,557, for the comparable period in the prior fiscal year. The net sales of the Joint Venture were generally comparable with the three month period of the prior fiscal year. While sales to the Company increased during this period when compared to the prior year, the Joint Venture’s net sales to other unaffiliated customers decreased from the prior year’s period.

 

Gross Profit Margin. Gross margins of the Joint Venture for the three month period ended June 30, 2019 decreased to 5.1% from 10.6% for the 2018 corresponding period. Gross margins depend on sales volume of various products, with varying margins, accordingly, increased sales of higher margin products and decreased sales of lower margin products positively affect the overall gross margins.

 

Expenses. Selling, general and administrative expenses were $1,077,299 for the three month periods ended June 30, 2019, compared to $1,137,851 in the comparable period in the prior year. As a percentage of sales, expenses were 34.2% for the three month period ended June 30, 2019, compared to 34.8% for the three month period ended June 30, 2018.

 

Interest Income. Interest income on assets held for investment was $64,384 for the three month period ended June 30, 2019, compared to interest income of $40,046 for the prior year’s period. Interest income is dependent on the average balance of assets held for investment.

 

Net Loss. Net loss for the three months ended June 30, 2019 was $808,833 compared to a net loss of $546,959 in the comparable period last year. The increase in the net loss for the three month period is due primarily to decreased gross profit margins.

 

Liquidity. Cash needs of the Joint Venture are currently met by funds generated from operations and existing cash and marketable securities. During the three months ended June 30, 2019, working capital decreased by $1,586,215 from $11,608,698 on March 31, 2019 to $10,022,483 on June 30, 2019.

 

Management Plans and Liquidity

 

The Company had net losses of $608,954 for the three months ended June 30, 2019 and $1,347,986 and $2,262,310 for the years ended March 31, 2019 and 2018, respectively. Furthermore, as of June 30, 2019, working capital (computed as the excess of current assets over current liabilities) decreased by $400,973 from $2,354,313 at March 31, 2019, to $1,953,340 at June 30, 2019.

 

Our short-term borrowings to finance operating losses, trade accounts receivable, and foreign inventory purchases are provided pursuant to the terms of our Factoring Agreement with Merchant Factors Corporation (Merchant or Factor). Borrowings under our Factoring Agreement bear interest at prime plus 2% and are secured by trade accounts receivable and inventory. Advances from Merchant are at the sole discretion of Merchant based on their assessment of the Company’s receivables, inventory and financial condition at the time of each request for an advance. The unused availability of this facility totaled approximately $268,500 at June 30, 2019. In addition, we have secured extended payment terms for purchases up to $4,000,000 from our Hong Kong Joint Venture for the purchase of sealed battery alarms. These amounts are unsecured, bear interest at 5.5% per annum, and provide for repayment terms of 120 days for each purchase. The balance outstanding under this agreement at June 30, 2019 was $5,625,164 with $2,301,890 of this amount being beyond agreed repayment terms. The Hong Kong Joint Venture has provided discretionary approval to allow the Company to exceed the agreed upon repayment terms and has indicated it has no plans or intentions that would materially impact the financial position, operations, or cash flows of the Company.

 

15

 

  

The Company has a history of sales that are insufficient to generate profitable operations, and has limited sources of financing. Management’s plan in response to these conditions includes increasing sales resulting from the delivery of the Company’s line of sealed battery ionization smoke alarms, carbon monoxide products, and ground fault circuit interrupters. In addition the Company is seeking improved terms on its credit facility with the Hong Kong Joint Venture. The Company has seen positive results on this plan during the fiscal years ended March 31, 2019 and 2018 and through June 30, 2019 due to sales of its product offerings and management expects this growth to continue going forward. Though no assurances can be given, if management’s plan continues to be successful over the next twelve months, the Company anticipates that it should be able to meet its cash needs. Cash flows and credit availability is expected to be adequate to fund operations for one year from the issuance date of this report.

 

Operating activities provided cash of $5,336 for the three months ended June 30, 2019. This was primarily due to an increase in accounts payable and accrued expenses of $342,457 and a decrease in accounts receivable and amounts due to factor of $521,414 offset by a net loss of $608,954 and an increase in inventories, prepaid expenses and other of $620,468. The net loss includes a non-cash loss from the investment in the Hong Kong Joint Venture of $368,964. Operating activities provided cash of $355,666 for the three months ended June 30, 2018. This was primarily due to an increase in accounts payable and accrued expenses of $527,640 and a decrease in accounts receivable and amounts due to factor of $333,004 offset by a net loss of $438,833 and an increase in inventories, prepaid expenses and other of $317,637. The net loss includes a non-cash loss from the investment in the Hong Kong Joint Venture of $244,400.

 

Investing activities did not use or provide cash during the period ended June 30, 2019 or 2018.

 

Financing activities used cash of $156,210 and $406,755 during the three months ended June 30, 2019 and 2018, respectively, which is comprised of repayments net of advances on the line of credit from our factor.

 

Critical Accounting Policies and Estimates

 

In the notes to the consolidated financial statements, and in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Form 10-K, we have disclosed those accounting policies that we consider to be significant in determining our results of Operations and financial condition. Except as disclosed below, there have been no material changes to those policies that we consider to be significant since the filing of our Form 10-K. The accounting principles used in preparing our unaudited condensed consolidated financial statements conform in all material respects to accounting principles generally accepted in the U.S.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less are accounted for similar to previous guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on April 1, 2019, the date it became effective for public companies based on the Company’s fiscal year, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of April 1, 2019 as a result of this adoption. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. The Company also elected the practical expedient provided in a subsequent amendment to the standard that removed the requirement to separate lease and non-lease components, provided certain conditions were met.

 

16

 

 

The impact of the adoption of this guidance on the Company’s condensed consolidated financial statements is discussed below:

 

The Company is a lessee in lease agreements for office space. Certain of the Company’s leases contain provisions that provide for one or more options to renew at the Company’s sole discretion. The Company’s leases are comprised of fixed lease payments, with its real estate leases including lease payments subject to a rate or index which may be variable. Certain real estate leases also include executory costs such as common area maintenance (non-lease component). As a practical expedient permitted under ASC 842, the Company has elected to account for the lease and non-lease components as a single lease component. Lease payments, which may include lease components and non-lease components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable lease amounts based on a rate or index (fixed in substance) as stipulated in the lease contract.

 

None of the Company’s lease agreements contain any material residual value guarantees or material restrictive covenants. As a result of the Company’s election of the package of practical expedients permitted within ASC 842, which among other things, allows for the carryforward of historical lease classification, all of the Company’s lease agreements in existence at the date of adoption that were classified as operating leases under ASC 840 have been classified as operating leases under ASC 842. Lease expense for payments related to the Company’s operating leases is recognized on a straight-line basis over the related lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

 

Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments as specified in the lease. Right-of-use assets and lease liabilities related to the Company’s operating leases are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term and amount to $475,538 at the date of adoption. When the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s borrowing rates at the lease commencement date in determining the present value of lease payments. The right-of use asset also includes any lease payments made at or before lease commencement less any lease incentives.

  

ITEM 4.CONTROLS AND PROCEDURES 

  

Evaluation of Disclosure Controls and Procedures

 

We maintain a system of disclosure controls and procedures (as such item is defined in Rules 13a – 15(e) and 15d – 15(e) of the Exchange Act) that is designed to provide reasonable assurance that information, which is required to be disclosed by us in the reports that we file or submit under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and is accumulated and communicated to management in a timely manner. Our Chief Executive Officer and Chief Financial Officer have evaluated this system of disclosure controls and procedures in accordance with applicable Securities and Exchange Commission guidance as of the end of the period covered by this quarterly report, and have concluded that disclosure controls and procedures were not effective because of the material weakness in internal control over financial reporting as discussed below.

 

Material weaknesses arose in our oversight of the accounting function as well as the disclosure controls and procedures of the Hong Kong Joint Venture (HKJV). The HKJV is a material component of the Company’s consolidated financial statements. With respect to our internal control over financial reporting, these matters above are being discussed among management, the HKJV and our Audit Committee. Management intends to review, revise and improve our internal controls over financial reporting until the material weaknesses in internal control over financial reporting are eliminated. Management’s specific remediation to address these material weaknesses will include among other items: a) enhancing corporate financial reporting resources, particularly for oversight, and process improvement, and b) reinforcing internal policies with all process owners.

 

Changes in Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

17

 

 

PART II - OTHER INFORMATION

 

ITEM 1.LEGAL PROCEEDINGS

 

From time to time, the Company is involved in various lawsuits and legal matters. It is the opinion of management, based on the advice of legal counsel, that these matters will not have a material adverse effect on the Company’s financial statements.

 

ITEM 6.EXHIBITS

 

Exhibit No.

3.1  Articles of Incorporation (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 1988, File No. 1-31747)
3.2  Articles Supplementary, filed October 14, 2003 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 31, 2002, file No. 1-31747)
3.3  Bylaws, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed July 13, 2011, File No. 1-31747)
10.1  2011 Non-Qualified Stock Option Plan (incorporated by reference to the Company’s Proxy Statement with respect to the Company’s 2011 Annual Meeting of Shareholders, filed July 26, 2011, File No. 1-31747)
10.2  Hong Kong Joint Venture Agreement, as amended (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2003, File No. 1-31747)
10.3  Discount Factoring Agreement between the Registrant and Merchant Factors Corp., dated January 6, 2015 (substantially identical agreement entered into by USI’s wholly-owned subsidiary, USI Electric, Inc.) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 16, 2015, file No. 1-31747)
10.4  Lease between Universal Security Instruments, Inc. and St. John Properties, Inc. dated November 4, 2008 for its office and warehouse located at 11407 Cronhill Drive, Suites A-D, Owings Mills, Maryland 21117 (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2008, File No. 1-31747)
10.5  Amendment to Lease between Universal Security Instruments, Inc. and St. John Properties, Inc. dated June 23, 2009 (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2009, File No. 1-31747)
10.6  Amended and Restated Employment Agreement dated July 18, 2007 between the Company and Harvey B. Grossblatt (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2007, File No. 1-31747), as amended by Addendum dated November 13, 2007 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 15, 2007, File No. 1-31747), by Addendum dated September 8, 2008 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 8, 2008, File No. 1-31747), by Addendum dated March 11, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 12, 2010, File No. 1-31747), by Addendum dated July 19, 2012 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 20, 2012, File No. 1-31747), by Addendum dated July 3, 2013 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 8, 2013, File No. 1-31747), and by Addendum dated July 21, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 21, 2014, File No. 1-31747) ), by addendum dated July 23, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 28, 2015, File No. 1-31747), by addendum dated July 12, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 12, 2016, File No. 1-31747) by addendum dated July 18, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 20, 2017, File No. 1-31747), and by addendum dated July 9, 2018 (incorporated by reference to Exhibit 10.1 to the Company’s  Current Report on Form 8-K filed July 9, 2018, File No. 1-31747).

 

18

 

 

31.1  Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer*
31.2  Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer*
32.1  Section 1350 Certifications*
99.1  Press Release dated August 19, 2019*
101  Interactive data files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the fiscal year ended March 31, 2019 in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of June 30, 2019 and March 31, 2019; (ii) Consolidated Statements of Operations for the three month periods ended June 30, 2019 and 2018; (iii) Consolidated Statements of Shareholders’ Equity for the three month periods ended June 30, 2019 and 2018; (iv) Consolidated Statements of Cash Flows for the three month periods ended June 30, 2019 and 2018; and (v) Notes to Consolidated Financial Statements*

 

 

*Filed herewith

19

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    UNIVERSAL SECURITY INSTRUMENTS, INC.
    (Registrant)
     
Date:     August 19, 2019 By: /s/ Harvey B. Grossblatt
      Harvey B. Grossblatt
      President, Chief Executive Officer
     
     
  By: /s/ James B. Huff
      James B. Huff
      Vice President, Chief Financial Officer

 

20