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Products sold by USI Electric usually require professional installation.
−Removed: Due to shutdowns, quarantines and other restrictions and delays in operations caused by or related to COVID-19 in the PRC and the United States, the Company has experienced delays in shipping and receiving of products.
−Removed: We are not yet able to quantify the full impact of the COVID-19 pandemic on our sales and financial results.
−Removed: While sales increased when compared to sales for the comparable 2021 period, delivery schedules have been delayed and freight costs have increased significantly.
−Removed: Our sales growth has been due primarily to increased sales to electrical distributors reflecting increased housing demand and increased retail sales to large national retailers.
Our sales for the year ended March 31, 2023, were $22,178,873 compared to $19,549,785 for the year ended March 31, 2022.
−Removed: We reported a net loss of $78,150 in fiscal 2022 compared to net income of $268,343 in fiscal 2021, a decrease in net earnings of $346,493 (129.1%).
−Removed: The net loss for the fiscal year ended March 31, 2022, is attributed to decreased gross margins arising from increases in freight, customs, and duty expenditures.
−Removed: In addition, the Company has incurred increased legal and consulting fees associated with the proposed merger (described below).
−Removed: The net earnings for the fiscal year ended March 31, 2021, are primarily attributed to increased sales and gross margins compared to the fiscal year ended March 31, 2020, and to the forgiveness of debt associated with the Paycheck Protection Program loan under the CARES Act.
+Added: We reported net income of $720,411 in fiscal 2023 compared to a net loss of $78,150 in fiscal 2022, an increase in net earnings of $798,561.
+Added: The increase in net income for the fiscal year ended March 31, 2023, is primarily due to increases in sales to retail customers as previously discussed above and to decreased expenditures related to a terminated proposed Merger as compared to the prior fiscal year.
+Added: The net loss for the fiscal year ended March 31, 2022, is attributed to increased legal and consulting fees associated with the proposed merger (described below).
The Company was incorporated in Maryland in 1969.
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As previously reported, on February 25, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company (USI), a wholly owned subsidiary of the Company D-U Merger Sub, Inc.
−Removed: a Delaware corporation (“Merger Sub”) and Infinite Reality, Inc., a Delaware corporation (“Infinite Reality”).
−Removed: The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Infinite Reality, with Infinite Reality continuing as the surviving corporation and wholly owned subsidiary of the Company (the “Merger”).
−Removed: The Merger will become effective at the time when the Certificate of Merger has been duly filed or such later date specified in the filed certificate (the “Effective Time”).
−Removed: As a result, immediately following the Effective Time, the former Infinite Reality stockholders will hold approximately 97.6% of the outstanding shares of USI Common Stock and the stockholders of USI will retain ownership of approximately 2.4% of the outstanding shares of USI Common Stock.
−Removed: The directors and officers of Infinite Reality prior to the Effective Time will remain the directors and officers after the Effective Time, until their resignation or removal.
−Removed: At the Effective Time, the Company will take the actions required to replace the officers and directors of the Company with designees by Infinite Reality.
−Removed: At the Effective Time, the parties intend for the Company to convert from a Maryland corporation to a Delaware corporation.
−Removed: Pursuant to the Merger Agreement, Infinite Reality shareholders acquire the right to convert their Infinite Reality common stock held immediately prior to the Merger into the Company common stock.
−Removed: Holders of the Company’s common stock prior to the Effective Time (“Legacy Shareholders”) may also receive a dividend of the Company common stock if the market capitalization of the Company is less than $500 million within180 days after the Effective Time.
−Removed: Under the terms of the Merger Agreement, the Company current operating business will continue, and the Company has agreed to use its best efforts to sell or spin off its business operations prior to the Effective Time.
−Removed: In the event the Company’s current business operations are not sold or otherwise divested by the Effective Time, a Contingent Value Rights Agreement will issue to each
−Removed: Legacy Shareholder.
−Removed: The Merger Agreement includes customary rights of each party to terminate the Merger Agreement, including:
−Removed: in the event shareholder approval is not obtained;
−Removed: if the Company’s shares are not approved for continued listing by the NYSE MKT LLC following the Effective Time;
−Removed: and if a party receives a superior offer and complies with the terms of the Merger Agreement regarding accepting such offer.
−Removed: On May 16, 2022, the Company filed with the United States Securities Exchange Commission (SEC) a proxy statement and Form S-4 registration statement in connection with the Merger.
−Removed: If USI or Infinite Reality accepts a superior offer and terminates the Merger Agreement, the terminating party will pay a breakup fee to the non-terminating party covering its out-of-pocket expenses, subject to a cap of $100,000, plus 4% of the market capitalization of USI as of the Effective Date.
+Added: a Delaware corporation (“Merger Sub”) and Infinite Reality, Inc., a Delaware corporation (“Infinite Reality”) whereby Infinite Reality was to merge with and into the Merger Sub (the “Merger”).
+Added: On December 12, 2022, Infinite Reality terminated the Merger Agreement.
Safety Products
We market a line of residential smoke and carbon monoxide alarms under the trade names “UNIVERSAL” and “USI Electric” both of which are manufactured by Eyston Company Limited (Eyston) in the Peoples Republic of China (PRC), a principal supplier of the Company’s products.
−Removed: Our line of safety alarms consists of units powered by replaceable batteries, ten-year sealed batteries, or are 120 volt with battery backup.
+Added: Our line of safety alarms consists of units powered by replaceable batteries, ten-year sealed batteries, or 120-volt units with a battery backup.
Our replaceable battery products contain different types of batteries with different battery lives, and some include alarm silencers.
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Our inventory purchases are also subject to delays in delivery due to problems with shipping and docking facilities, as well as other problems associated with purchasing products abroad.
−Removed: As previously discussed, in light of shutdowns, quarantines and other restrictions and delays in operations caused by or related to COVID-19 in Hong Kong, the PRC and the United States, the Company has experienced delays in shipping and receiving of products.
Sales and Marketing;
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Sales outside the United States are made by our officers and through exporters and amounted to less than five percent of total net sales in fiscal years 2023 and 2022.
−Removed: We also market our products through our website and through our own sales catalogs and brochures, which are mailed directly to trade customers.
+Added: We also market our products through our website and through our own sales catalogs and brochures, which are mailed directly to customers.
Our customers, in turn, may advertise our products in their own catalogs and brochures and in their ads in newspapers and other media.
2 unchanged sentences
Our backlog as of March 31, 2022, was approximately $6,028,000.
−Removed: The increase in backlog is primarily due to delays in unloading of freight at California ports of entry caused by or related to COVID-19 issues.
+Added: The decrease in backlog is primarily due to a resumption in shipping of orders during the fiscal year ending March 31, 2023 after experiencing delays unloading freight at California ports of entry caused by or related to COVID-19 issues in the prior fiscal year.
The majority of our products are manufactured for us by Eyston and amounted to approximately 88.5% and 83.6% of our purchases for the fiscal years ended March 31, 2023, and 2022, respectively.
Certain other private label products are also manufactured for us by foreign suppliers.
−Removed: We believe that our relationships with our other suppliers are good.
+Added: We believe that our relationships with our suppliers are good.
The loss of any of our other suppliers would have a short-term adverse effect on our operations, but replacement sources for these suppliers could be developed.
5 unchanged sentences
The success of our products may depend on our ability to improve and update our products in a timely manner and to adapt to new technological advances.
−Removed: As of March 31, 2022, we had twelve employees, eight of whom are engaged in administration and sales, and the balance of whom are engaged in product development.
+Added: As of March 31, 2023, we had eleven employees, seven of whom are engaged in administration and sales, and the balance of whom are engaged in product development.
Our employees are not unionized, and we believe that our relations with our employees are satisfactory.
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.