What changed in this filing

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Item 1. Business

2025-07-29 compared with 2024-07-12 · 37 added, 22 removed, 39 unchanged (60% of the section changed)

Universal Security Instruments, Inc.

(“we” or “the Company”) designs and markets a variety of popularly priced safety products consisting primarily of smoke alarms, carbon monoxide alarms and related products.

Universal Safety Products, Inc., formerly “Universal Security Instruments, Inc.” (“we” or “the Company”) designs and markets a variety of popularly priced safety products which, during the period covered by this Annual Report, consisted primarily of smoke alarms, carbon monoxide alarms and related products.

Most of our products require minimal installation and are designed for easy installation by the consumer without professional assistance and are sold through retail stores.

We also market products to the electrical distribution trade through our wholly owned subsidiary, USI Electric, Inc.

(“USI Electric”).

We also market products to the electrical distribution trade through our wholly owned subsidiary, Universal Safety Electric, Inc., formerly, USI Electric, Inc.

(“Universal Electric”).

The electrical distribution trade includes electrical and lighting distributors as well as manufactured housing companies.

Products sold by USI Electric usually require professional installation.

Products sold by Universal Electric usually require professional installation.

As previously announced, management had been seeking access to additional funding or other resources, or the right strategic business combination, which would allow the Company to drive long-term value for its shareholders while taking advantage of sales growth opportunities that the Company seeks to execute.

In furtherance thereof, as previously announced on October 31, 2024, the Company entered into an Asset Purchase Agreement with Feit Electric Company, Inc.

(“Feit”) pursuant to which Feit agreed to acquire the smoke and carbon monoxide alarm portion of the Company’s business and the non-tangible assets of the Company, including but not limited to the trade name of Universal Security Instruments, Inc.

and Universal Electric, Inc.

The Closing was subject to the approval of the transaction by the requisite vote of the shareholders of the Company.

A special meeting of the shareholders to approve the sale and related actions was held on April 15, 2025, and the asset sale was approved.

Accordingly on May 22, 2025, the Company closed on the asset sale to Feit pursuant to the terms of the Asset Purchase Agreement.

The assets held for sale in accordance with the Asset Purchase Agreement at March 31, 2025, are shown separately in the financial statements accompanying this Annual Report and are valued at the lower of the assets carrying value or fair value less selling cost.

The Company currently intends to continue importing and marketing its product lines other than smoke alarms and carbon monoxide alarms and is exploring other business opportunities to drive long-term value for our shareholders.

Our sales for the year ended March 31, 2025, were $23,563,554 compared to $19,517,673 for the year ended March 31, 2024.

We reported a net loss of $395,790 in fiscal 2024 compared to net income of $720,411 in fiscal 2023, a decrease in net earnings of $1,116,201.

The net loss for the fiscal year ended March 31, 2024, is attributed to a decrease in sales to retail customers, and increased selling, general, and administrative expense, principally increased insurance, professional fees, salaries, and allowances for credit losses.

We reported net income of $500,684 in fiscal 2025 compared to a net loss of $695,790 in fiscal 2024, an increase in net income of $1,196,474.

The increase in the net income for the fiscal year ended March 31, 2025, is attributed primarily to an increase in sales to retail customers, and to recording an income tax benefit associated with the reversal of a portion of the reserve for deferred tax assets arising from the gain on the sale of assets discussed above.

In addition, as further discussed later, certain revisions increasing the net loss in the prior year have been recorded.

The Company was incorporated in Maryland in 1969.

5 unchanged sentences

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.

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.

The smoke alarms marketed to the electrical distribution trade also include hearing impaired and heat alarms with a variety of features.

During the period covered by this Annual Report, we marketed a line of residential smoke and carbon monoxide alarms under the trade names “UNIVERSAL” and “USI Electric” both of which were manufactured by Eyston Company Limited (Eyston) in the Peoples Republic of China (PRC), a principal supplier of the Company’s products.

Our line of safety alarms consisted of units powered by replaceable batteries, ten-year sealed batteries, or 120-volt units with a battery backup.

Our replaceable battery products contained different types of batteries with different battery lives, and some included alarm silencers.

The smoke alarms marketed to the electrical distribution trade also included hearing impaired and heat alarms with a variety of features.

We also market door chimes, ventilation products, ground fault circuit interrupters (GFCI’s), and other electrical devices.

Our wholly owned subsidiary, USI Electric, Inc., focuses its sales and marketing efforts to maximize safety product sales, especially smoke alarms and carbon monoxide alarms manufactured by Eyston, to the electrical distribution trade.

Our Universal Electric subsidiary focused its sales and marketing efforts to maximize safety product sales, especially smoke alarms and carbon monoxide alarms manufactured by Eyston, to the electrical distribution trade.

Import Matters

3 unchanged sentences

Certain of these products are currently subject to tariffs of twenty-five percent.

Subsequent to March 31, 2025 tariffs on these products increased to 55%.

The imposition of and modification of tariffs during the latter half of the current fiscal year ended March 31, 2025, and subsequent thereto, has increased uncertainty as to the short-term sustainability of importing products from our principal suppliers.

If the Company is unable to import products at a competitive price point our sales could be adversely affected.

We have attempted to protect ourselves from fluctuations in currency exchange rates to the extent possible by negotiating commitments in U.S.

2 unchanged sentences

We sell our products to various customers, and our total sales market can be divided generally into two categories;

sales by the Company to retailers, including wholesale distributors, chain, discount, television retailers and home center stores, catalog and mail order companies and other distributors (“retailers”), and sales by our USI Electric subsidiary to the electrical distribution trade (primarily

electrical and lighting distributors and manufactured housing companies) and foreign customers.

sales by the Company to retailers, including wholesale distributors, chain, discount, television retailers and home center stores, catalog and mail order companies and other distributors (“retailers”), and sales by our Universal Electric subsidiary to the electrical distribution trade (primarily electrical and lighting distributors and manufactured housing companies) and foreign customers.

Products marketed by the Company have historically been retailed to “do-it-yourself” consumers by these retailers.

1 unchanged sentence

We do not currently market a significant portion of our products directly to end users.

A significant portion of our sales are made by approximately 40 independent sales organizations, compensated by commission, which represents approximately 100 sales representatives, some of which have warehouses where USI Electric products are maintained for sale.

In addition, the Company has established a national distribution system with eight regional stocking warehouses throughout the United States which generally enables customers to receive their orders the next day without paying for overnight freight charges.

We expect that, as a result of the previously discussed sale of a portion of the Company’s business operations, there will be changes in the number and make up of these independent sales organizations.

In addition, the Company established a national distribution system with eight regional stocking warehouses throughout the United States which generally enables customers to receive their orders the next day without paying for overnight freight charges.

Our agreements with these sales organizations are generally cancelable by either party upon 30 days notice.

We do not believe that the loss of any one of these organizations would have a material adverse effect upon our business.

Sales are also made directly by the officers and full-time employees of the Company and our USI Electric subsidiary, some of whom have other responsibilities for the Company.

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 2024 and 2023.

We also market our products through our website and through our own sales catalogs and brochures, which are mailed directly to customers.

Sales are also made directly by the officers and certain full-time employees of the Company and our Universal Electric subsidiary, some of whom have other responsibilities for the Company.

Sales outside the United States are made through exporters and amounted to less than five percent of total net sales in fiscal years 2025 and 2024.

During the period covered by this Annual Report, we also marketed our products through our website and through our own sales catalogs and brochures, which were 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, 2024, was approximately $5,314,000.

The increase in backlog is primarily due to pending orders to a large retailer and to delays in receiving products from the factory for shipment to customers due to delays experienced in obtaining certain electronic components and delays in ocean freight shipments.

The decrease in backlog is primarily due to pending orders to a large retailer in the prior fiscal year that were delayed due to a backlog in critical components and shipping delays.

The majority of our products are manufactured for us by Eyston and amounted to approximately 96.3% and 84.3% of our purchases for the fiscal years ended March 31, 2025, and 2024, respectively.

3 unchanged sentences

In fiscal years 2025 and 2024, sales of safety products accounted for substantially all of our total sales.

In the sale of smoke alarms and carbon monoxide alarms, we compete in all of our markets with First Alert and Walter Kidde Portable Equipment, Inc.

In the sale of smoke alarms and carbon monoxide alarms, we competed in all of our markets with First Alert and Walter Kidde Portable Equipment, Inc.

These companies have greater financial resources and financial strength than we have.

However, we believe that our safety products compete favorably in the market primarily on the basis of styling, features, and pricing.

However, we believe that these products competed favorably in the market primarily on the basis of styling, features, and pricing.

The safety industry in general involves changing technology.

2 unchanged sentences

Our employees are not unionized, and we believe that our relations with our employees are satisfactory.

Future Business

Subsequent to the May 22, 2025 asset sale to Feit, we intend to continue importing and marketing our product lines, other than smoke alarms and carbon monoxide alarms, and we are exploring other business opportunities to drive long-term value for our shareholders.

Because we are a smaller reporting company, this section is not applicable.

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.

What changed 10-K

Item 1. Business