Liquidity and Management Plans	6 Months Ended
Sep. 30, 2020
Liquidity and Management Plans
Liquidity and Management Plans	Liquidity and Management Plans As the Company previously reported, on August 31, 2020, the Company received a letter from NYSE American LLC (the “Exchange”) stating that the Exchange has determined that the Company is not in compliance with the Exchange’s continued listing requirements as the result of the Company’s failure to maintain stockholders’ equity of $6.0 million after reporting losses from continuing operations and/or net losses in its five most recent fiscal years. On September 23, 2020, the Company submitted to the Exchange the Company’s plan (the “Plan”) of actions the Company has taken or will take to regain compliance with the continued listing standards by February 28, 2022 (the “Plan Period”). On November 5, 2020, the Company received a letter from the Exchange advising the Company that the Exchange has accepted the Plan and granted the Plan Period through February 28, 2022. The Exchange will review the Company periodically to determine whether the Company is making progress consistent with the Plan. The Company is working diligently to execute its Plan to regain compliance with the Exchange’s continued listing requirements. As our products are sold primarily to the construction industry and do-it-yourself centers, restrictions and limitations imposed by the COVID-19 pandemic have had an impact on the Company’s sales. We are not yet able to quantify the full impact of the COVID-19 pandemic on our sales and financial results, but we believe that during the first half of calendar 2020 (our fourth quarter of fiscal 2020 and first quarter of fiscal 2021) sales were negatively impacted by lower sales resulting from steps taken to combat the spread of COVID-19. Sales in our second fiscal quarter ended September 30, 2020 increased significantly when compared to sales for the 2019 period due to the Company’s ability to fill an order from inventory for a large national retailer new customer, when the national retailer’s usual supplier was unable to fill the order due to delays caused by the pandemic. We expect that this national retailer will continue to purchase products from the Company during our third fiscal quarter ending December 31, 2020. Our September quarter sales growth was also due to sales of two products to another large national retailer which purchased certain of our models as a 450 store test, which should be completed later this fiscal year. We anticipate that the sales growth anticipated through our fiscal quarter ending December 31, 2020, the associated increase in availability from the Factor resulting from these increased sales, and the funds received from the Paycheck Protection Program will provide sufficient working capital for the next twelve months following the date of this report. Our financial results were also positively impacted by a reduction in research and interest expenses for the six months ended September 30, 2020. Our short-term borrowings to finance any operating losses, trade accounts receivable, and foreign inventory purchases are provided pursuant to the terms of its Factoring Agreement with Merchant Factors Corporation (Merchant or Factor). Borrowings under the 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 Merchant’s 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 $2,985,000 at September 30, 2020. 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 our line of sealed battery ionization smoke alarms, carbon monoxide products, and ground fault circuit interrupters. The Company has seen positive results on this plan due to increased sales of its product offerings to a major home improvement retailer during the second quarter of our fiscal year ending March 31, 2021. The increase in sales to the major home improvement retailer has resulted in significant additional availability under the provisions of our facility with the Factor. Management anticipates this sales growth to continue going forward. In addition, effective March 31, 2020, we sold its ownership interest in its former Hong Kong Joint Venture reducing its current liabilities due to the Hong Kong Joint Venture by $4,000,000. Furthermore, in May, 2020 we received a Paycheck Protection Program loan of $221,400 under the CARES Act and expect the loan will be forgiven in compliance with the provisions of the Act. Though no assurances can be given, if management’s plan continues to be successful over the next twelve months, we anticipate that the Company should be able to meet its cash needs for the next twelve months following the issuance date of this report. Cash flows and credit availability are expected to be adequate to fund operations for one year from the issuance date of this report.

Liquidity and Management Plans

As the Company previously reported, on August 31, 2020, the Company received a letter from NYSE American LLC (the “Exchange”) stating that the Exchange has determined that the Company is not in compliance with the Exchange’s continued listing requirements as the result of the Company’s failure to maintain stockholders’ equity of $6.0 million after reporting losses from continuing operations and/or net losses in its five most recent fiscal years. On September 23, 2020, the Company submitted to the Exchange the Company’s plan (the “Plan”) of actions the Company has taken or will take to regain compliance with the continued listing standards by February 28, 2022 (the “Plan Period”). On November 5, 2020, the Company received a letter from the Exchange advising the Company that the Exchange has accepted the Plan and granted the Plan Period through February 28, 2022. The Exchange will review the Company periodically to determine whether the Company is making progress consistent with the Plan. The Company is working diligently to execute its Plan to regain compliance with the Exchange’s continued listing requirements.

As our products are sold primarily to the construction industry and do-it-yourself centers, restrictions and limitations imposed by the COVID-19 pandemic have had an impact on the Company’s sales. We are not yet able to quantify the full impact of the COVID-19 pandemic on our sales and financial results, but we believe that during the first half of calendar 2020 (our fourth quarter of fiscal 2020 and first quarter of fiscal 2021) sales were negatively impacted by lower sales resulting from steps taken to combat the spread of COVID-19. Sales in our second fiscal quarter ended September 30, 2020 increased significantly when compared to sales for the 2019 period due to the Company’s ability to fill an order from inventory for a large national retailer new customer, when the national retailer’s usual supplier was unable to fill the order due to delays caused by the pandemic. We expect that this national retailer will continue to purchase products from the Company during our third fiscal quarter ending December 31, 2020. Our September quarter sales growth was also due to sales of two products to another large national retailer which purchased certain of our models as a 450 store test, which should be completed later this fiscal year. We anticipate that the sales growth anticipated through our fiscal quarter ending December 31, 2020, the associated increase in availability from the Factor resulting from these increased sales, and the funds received from the Paycheck Protection Program will provide sufficient working capital for the next twelve months following the date of this report. Our financial results were also positively impacted by a reduction in research and interest expenses for the six months ended September 30, 2020.

Our short-term borrowings to finance any operating losses, trade accounts receivable, and foreign inventory purchases are provided pursuant to the terms of its Factoring Agreement with Merchant Factors Corporation (Merchant or Factor). Borrowings under the 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 Merchant’s 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 $2,985,000 at September 30, 2020.

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 our line of sealed battery ionization smoke alarms, carbon monoxide products, and ground fault circuit interrupters. The Company has seen positive results on this plan due to increased sales of its product offerings to a major home improvement retailer during the second quarter of our fiscal year ending March 31, 2021. The increase in sales to the major home improvement retailer has resulted in significant additional availability under the provisions of our facility with the Factor. Management anticipates this sales growth to continue going forward. In addition, effective March 31, 2020, we sold its ownership interest in its former Hong Kong Joint Venture reducing its current liabilities due to the Hong Kong Joint Venture by $4,000,000. Furthermore, in May, 2020 we received a Paycheck Protection Program loan of $221,400 under the CARES Act and expect the loan will be forgiven in compliance with the provisions of the Act. Though no assurances can be given, if management’s plan continues to be successful over the next twelve months, we anticipate that the Company should be able to meet its cash needs for the next twelve months following the issuance date of this report. Cash flows and credit availability are expected to be adequate to fund operations for one year from the issuance date of this report.