10-K/A

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

FORM 10-K/A

x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended March 31, 2021 or

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to            .

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	(I.R.S. Employer
of 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

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

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

None 

Title of Class

Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Act). Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No x

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 disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or other information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 Act). Yes ¨ No x

The aggregate market value of Common Stock, $.01 par value, held by non-affiliates of the registrant based on the closing sales price of the Common Stock on the New York Stock Exchange (NYSE MKT LLC) on September 30, 2020, was $3,923,658.

The number of shares of common stock outstanding as of July 5, 2021 was 2,312,887.

documents incorporated by reference

To the extent specified, Part III of this Form 10-K incorporates information by reference to the Registrant’s definitive proxy statement for its 2021 Annual Meeting of Shareholders.

EXPLANATORY NOTE

UNIVERSAL SECURITY INSTRUMENTS, INC.  (the “Company”) is filing this Amendment No. 1 (the “Amendment”) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2021, filed with the Securities and Exchange Commission on July 8, 2021 (the “Original Filing”), solely for the purposes of furnishing the Interactive Data File disclosure as Exhibit 101 in accordance with Rule 405 of Regulation S-T, which was not included in the Original Filing. Exhibit 101 includes information in eXtensible Business Reporting Language (XBRL).

Other than as expressly set forth above, this Amendment does not, and does not purport to, amend, update or restate any other items or disclosures contained in the Original Filing and does not reflect events occurring after the date of the Original Filing. This Amendment consists solely of the cover page, this explanatory note, the exhibit index and the exhibits filed herewith.

PART IV

ITEM 15. EXHIBITS

(a)3. Exhibits required to be filed by Item 601 of Regulation S-K.

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), 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), by addendum dated July 12, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s  Current Report on Form 8-K filed July 16, 2019, File No. 1-31747), and by addendum dated July 27, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s  Current Report on Form 8-K filed July 27, 2020, File No. 1-31747).

21	Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2012, File No. 1-31747)
23.1	Independent Registered Public Accounting Firm’s Consent
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 July 8, 2021*
101	Interactive data files providing financial information from the Registrant’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021 in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of March 31, 2021 and 2020; (ii) Consolidated Statements of Operations for the years ended March 31, 2021 and 2020; (iii) Consolidated Statements of Comprehensive Income (Loss) for the years ended March 31, 2021 and 2020 (iv) Consolidated Statements of Shareholders’ Equity for the years ended March 31, 2021 and 2020; (v) Consolidated Statements of Cash Flows for the years ended March 31, 2021 and 2020; and (vi) Notes to Consolidated Financial Statements* *Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
July 22, 2021	By:	/s/ Harvey B. Grossblatt
		Harvey B. Grossblatt
		President and Chief Executive Officer
		(principal executive officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Harvey B. Grossblatt	President, Chief Executive Officer	July 22, 2021
Harvey B. Grossblatt	and Director
/s/ James B. Huff	Chief Financial Officer	July 22, 2021
James B. Huff	(principal financial officer and
	principal accounting officer)
/s/ Cary Luskin	Director	July 22, 2021
Cary Luskin
/s/ Ronald A. Seff	Director	July 22, 2021
Ronald A. Seff
/s/ Ira Bormel	Director	July 22, 2021
Ira Bormel

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Document And Entity Information - USD ($)	12 Months Ended
	Mar. 31, 2021	Jul. 05, 2021	Sep. 30, 2020
Document And Entity Information
Document Type	10-K/A
Document Period End Date	Mar. 31, 2021
Entity Registrant Name	UNIVERSAL SECURITY INSTRUMENTS INC
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 3,923,658
Entity Common Stock, Shares Outstanding		2,312,887
Entity Central Index Key	0000102109
Current Fiscal Year End Date	--03-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Amendment Flag	false
Trading Symbol	UUU
Title of 12(b) Security	Common Stock
Security Exchange Name	NYSE

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2021	Mar. 31, 2020
CURRENT ASSETS
Cash	$ 160,604	$ 93,794
Accounts receivable:
Trade, less allowance for doubtful accounts	653,172	109,548
Receivables from employees	5,000	36,876
Accounts, Notes, Loans and Financing Receivable, Net, Current	658,172	146,424
Amount due from factor	1,925,291	2,300,109
Inventories - finished goods	4,181,193	5,123,959
Prepaid expenses	336,699	113,145
TOTAL CURRENT ASSETS	7,261,959	7,777,431
INTANGIBLE ASSETS - NET	44,717	49,189
PROPERTY AND EQUIPMENT - NET	184,678	346,477
OTHER ASSETS	4,000	4,000
TOTAL ASSETS	7,495,354	8,177,097
CURRENT LIABILITIES
Line of credit - factor	18,904	1,561,665
Short-term portion of operating lease liability	171,122	158,578
Accounts payable - trade	509,561	505,904
Accounts payable - Eyston Company Ltd.	755,148	266,409
Accrued liabilities:
Accrued payroll and employee benefits	103,381	136,683
Accrued commissions and other	139,242	88,694
TOTAL CURRENT LIABILITIES	1,697,358	2,717,933
ACCOUNTS PAYABLE - Eyston Company Ltd. - noncurrent	1,081,440	839,831
LONG-TERM PORTION OF OPERATING LEASE LIABILITY	171,122	171,120
TOTAL LONG-TERM LIABILITIES	1,081,440	1,010,951
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, $.01 par value per share; 20,000,000 shares authorized, 2,312,887 shares issued and outstanding at March 31, 2021 and 2020	23,129	23,129
Additional paid-in capital	12,885,841	12,885,841
Accumulated Deficit	(8,192,414)	(8,460,757)
TOTAL SHAREHOLDERS' EQUITY	4,716,556	4,448,213
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 7,495,354	$ 8,177,097

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2021	Mar. 31, 2020
CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	2,312,887	2,312,887
Common stock, shares outstanding	2,312,887	2,312,887

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 17,520,151	$ 14,803,024
Cost of goods sold - acquired from Joint Venture		10,009,571
Cost of goods sold - other	11,880,442	1,034,599
GROSS PROFIT	5,639,709	3,758,854
Selling, general and administrative expense	5,034,380	4,628,881
Research and development expense	471,545	691,886
Operating income (loss)	133,784	(1,561,913)
Other income (expense):
Forgiveness of debt - PPP Loan	221,400
Loss from investment in Hong Kong Joint Venture		(3,842,275)
Interest expense, net	(86,841)	(409,703)
Earnings (Loss) before income taxes	268,343	(5,813,891)
NET INCOME (LOSS)	$ 268,343	$ (5,813,891)
Earnings (Loss) per share:
Basic and diluted	$ 0.12	$ (2.51)
Shares used in computing net earnings (loss) per share:
Weighted average basic and diluted shares outstanding	2,312,887	2,312,887

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
NET INCOME (LOSS)	$ 268,343	$ (5,813,891)
Other Comprehensive Loss Company's Portion of Hong Kong Joint Venture's Other Comprehensive Loss:
Currency translation loss		(134,151)
Unrealized loss on investment securities		(50,397)
Less: Reclassification adjustment for gain included in net loss		(427,208)
Total Other Comprehensive Loss		(611,756)
COMPREHENSIVE INCOME (LOSS)	$ 268,343	$ (6,425,647)

XML

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	AOCI [Member]	Total
Balance at Mar. 31, 2019	$ 23,129	$ 12,885,841	$ (2,646,866)	$ 611,756	$ 10,873,860
Balance (in shares) at Mar. 31, 2019	2,312,887
Currency translation loss				(134,151)	(134,151)
Unrealized loss on investment securities				(50,397)	(50,397)
Less: Reclassification adjustment for gain included in net loss				$ (427,208)	(427,208)
Net Income (Loss)			(5,813,891)		(5,813,891)
Balance at Mar. 31, 2020	$ 23,129	12,885,841	(8,460,757)		4,448,213
Balance (in shares) at Mar. 31, 2020	2,312,887
Net Income (Loss)			268,343		268,343
Balance at Mar. 31, 2021	$ 23,129	$ 12,885,841	$ (8,192,414)		$ 4,716,556
Balance (in shares) at Mar. 31, 2021	2,312,887

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
OPERATING ACTIVITIES:
Net Income (Loss)	$ 268,343	$ (5,813,891)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	7,695	7,690
Forgiveness of debt - Paycheck Protection Program	(221,400)
Depreciation of right-of-use asset	158,576	156,250
Increase in allowance for doubtful accounts receivable	100,000
Loss from investment in Hong Kong Joint Venture		3,842,275
Changes in operating assets and liabilities:
(Increase) Decrease in accounts receivable and amounts due from factor	(236,930)	568,879
Decrease in inventories	942,766	1,728,346
(Increase) Decrease in prepaid expenses	(223,554)	32,045
Increase (Decrease) in accounts payable and accrued expenses	751,252	(356,096)
Decrease in operating lease liability	(158,576)	(156,250)
NET CASH PROVIDED BY OPERATING ACTIVITIES	1,388,172	9,248
FINANCING ACTIVITIES:
Proceeds from - Paycheck Protection Program	221,400
Net repayment of line of credit - factor	(1,542,762)	(289,926)
NET CASH USED IN FINANCING ACTIVITIES	(1,321,362)	(289,926)
INCREASE (DECREASE) IN CASH	66,810	(280,678)
Cash at beginning of period	93,794	374,472
CASH AT END OF PERIOD	160,604	93,794
Supplemental information:
Interest paid	82,184	496,250
Supplemental disclosures of non-cash activities:
Right-of-use asset in exchange for operating lease liability		485,948
Conversion of trade accounts payable to note payable	$ 1,081,440
Reduction in trade accounts payable to Eyston Co. Ltd. arising from the sale of the Hong Kong Joint Venture		$ 4,000,000

XML

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Mar. 31, 2021

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business: Universal Security Instruments, Inc.’s (the “Company”) primary business is the sale of smoke alarms and other safety products to retailers, wholesale distributors and to the electrical distribution trade which includes electrical and lighting distributors as well as manufactured housing companies. The Company imports all of its safety and other products from foreign manufacturers. The Company, as an importer, is subject to tariffs which vary depending on types of products and country of origin, changes in economic and political conditions in the country of manufacture, potential trade restrictions and currency fluctuations.

Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary USI Electric, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. In 1989 we formed Eyston Company Limited (Eyston), a limited liability company under the laws of Hong Kong, as a 50% joint venture partner with a Hong Kong-based partner, to manufacture various products in the Peoples Republic of China (the “Hong Kong Joint Venture”). Effective March 31, 2020, we sold our 50% interest in the Hong Kong Joint Venture in exchange for $4,000,000. We believe that our 50% ownership interest in the Hong Kong Joint Venture through the date of its sale on March 31, 2020 allowed us to significantly influence the operations of the Hong Kong Joint Venture. As such, we accounted for our interest in the operations of the Hong Kong Joint Venture using the equity method of accounting we have included our investment balance as a non-current asset through the date of sale. We have included our share of the Hong Kong Joint Venture’s loss in our consolidated statements of operations for fiscal years ended March 31, 2020. The investment and earnings and losses were adjusted to eliminate intercompany profits through the date of its sale on March 31, 2020.

Use of Estimates: In preparing financial statements in conformity with accounting principles generally accepted in the United States of America (US-GAAP), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash: The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk with cash.

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. 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.

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.

Disaggregation of Revenue: The Company presents below revenue associated with sales of safety alarm products 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 years ended March 31, 2021 and 2020 are as follows:

	Fiscal Year ended
	March 31, 2021		March 31, 2020
Sales of safety alarms	$	15,218,162	$	13,098,923
Sales of GFCI’s and ventilation fans		2,301,989		1,704,101
	$	17,520,151	$	14,803,024

Accounts Receivable: The Company assigns the majority of its trade receivables on a pre-approved non-recourse basis to Merchant Factors Corporation (Merchant or Factor) under a factoring agreement on an ongoing basis. Factoring charges recognized on assignment of receivables are deducted from revenue in the consolidated statements of operations and amounted to $154,267 and $118,141 for the years ended March 31, 2021 and 2020, respectively.

Management considers amounts due from the Company’s factor to be “financing receivables”. Trade accounts receivable, foreign receivables, and receivables from our suppliers are not considered to be financing receivables.

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 from one accounting period to the next 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 for uncollectible financing receivables has been provided and no amounts are considered to be past due at March 31, 2021. At March 31, 2021 and 2020, respectively, an allowance of $157,000 and $57,000 has been provided for uncollectible trade accounts receivable.

Inventories: Inventories are stated at the lower of cost (first in/first out method) or net realizable value. Included as a component of finished goods inventory are additional non-material costs. These costs include freight, import duty, tariffs, and inspection fees. Expenses incurred for inventory quality control in the amount of approximately $45,000 and $45,000, were absorbed in inventory for the fiscal years ended March 31, 2021 and 2020, respectively. We evaluate inventories on a quarterly basis and write down inventory that is considered obsolete or unmarketable in an amount equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions.

Impairment of long-lived assets: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset group may not be recoverable. The factors considered in performing this assessment include current operating results, anticipated future results, the manner in which the asset group is used and the effects of obsolescence, demand, competition and other economic factors. Accordingly, when indicators of impairment are present, the Company evaluates the carrying value of these asset groups in relation to the operating performance of the business and future undiscounted cash flows expected to result from the use of these asset groups. Impairment losses are recognized when the sum of expected future cash flows is less than the asset groups carrying value, and losses are determined based upon the excess carrying value of the asset group over its fair value. Based on this assessment, no impairment to long-lived assets resulted for fiscal years ended March 31, 2021 and 2020.

Leases: The Company determines if an arrangement is a lease at inception. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company estimates the incremental borrowing rate to discount the lease payments based on information available at lease commencement. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company utilizes certain practical expedients, including the election not to reassess its prior conclusions about lease identification, lease classification and initial direct costs, as well as the election not to separate lease and non-lease components for arrangements where the Company is a lessee. Lease expense is recognized on a straight-line basis over the lease term. See Note F, Leases.

Income Taxes: 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.

The Company follows Accounting Standards Codification (ASC) 740‑10 that gives guidance to 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 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. See Note G, Income Taxes.

Warranties: We generally provide warranties, on the safety products, from one to ten years to the non-commercial end user on all products sold. The manufacturers of our safety products provide us with a one-year warranty on all products we purchase for resale. Claims for warranty replacement of products beyond the one-year warranty period covered by the manufacturers have not been historically material.

Research and Development: Research and development costs are charged to operations as incurred.

Shipping and Handling Fees and Costs: The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with inbound freight are included in cost of goods sold. Shipping and handling costs associated with outbound freight are included in selling, general and administrative expenses and totaled $409,692 and $343,838 in fiscal years 2021 and 2020, respectively.

Foreign currency: The activity and accounts of the Hong Kong Joint Venture are denominated in Hong Kong dollars and are translated to US dollars. The Company translates the accounts of the Hong Kong Joint Venture at the applicable exchange rate in effect at the year-end date for assets and liabilities and at the average exchange rate for the reporting period for statement of operation purposes.

The reclassification of the realized gain from other comprehensive income is included in the loss from investment in the Hong Kong Joint Venture in the Consolidated Statements of Operations for the fiscal year ended March 31, 2020.

Net Earnings (Loss) per Share: Basic net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares and common share equivalents outstanding (unless their effect is anti-dilutive) for the period. As a result of the net loss for the fiscal year ended March 31, 2020, the weighted average number of common shares outstanding is identical for both basic and diluted shares. In addition, there were no other securities outstanding during 2021 or 2020 other than common stock.

Recently Issued 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 June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” The guidance in ASU 2016-13 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. It replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The Company adopted this guidance as of April 1, 2020, and the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

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LIQUIDITY AND MANAGEMENT'S PLAN

12 Months Ended

Mar. 31, 2021

LIQUIDITY AND MANAGEMENT'S PLAN

LIQUIDITY AND MANAGEMENT'S PLAN

NOTE B – LIQUIDITY AND MANAGEMENT’S PLAN

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.

The Company had net income of $268,343 for the fiscal year ended March 31, 2021 and a net loss of $5,813,891 for the year ended March 31, 2020.

As the Company’s 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 and third fiscal quarters ended September 30, 2020, and December 31, 2020 increased significantly when compared to sales for the comparable 2019 periods due to the Company’s ability to fill orders from inventory for a large national retailer new customer, when the national retailer’s usual supplier was unable to fill the orders due to delays caused by the pandemic.  Our sales growth was also due to sales of two products to another large national retailer which purchased certain of our models as a 1,350 store test, which were completed in the fourth quarter of the fiscal year ending March 31, 2021.

Our short-term borrowings to finance operations, trade accounts receivable, and foreign inventory purchases are provided pursuant to the terms of our Factoring Agreement with Merchant. Advances from the Company’s factor, 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 $1,795,000 at March 31, 2021.

The Company sold its fifty percent ownership in Eyston effective March 31, 2020. The non-cash proceeds from the sale were used to reduce our trade accounts payable due to Eyston by $4,000,000. In addition, the Company and Eyston agreed to convert $1,081,440 of trade accounts payable to an interest only note payable with a maturity date of April 19, 2022.   Until March 31, 2020 we had secured extended payment terms for purchases up to $4,000,000 from Eyston for the purchase of sealed battery alarms.  These amounts were unsecured, incurred interest at 5.5% per annum, and provided for repayment terms of 120 days for each purchase. Subsequent to March 31, 2020, Eyston continues to be the Company’s principal supplier of safety alarms and the Company will pay for these purchases upon evidence of shipment from the factory.

We anticipate, now that our complete line of sealed smoke and carbon monoxide alarms has been introduced, that these products will compete on price and functionality with similar products offered by our larger competitors. While we believe there will be market acceptance of our products we cannot be assured of this. Should our products not achieve the level of acceptance we anticipate this will have a significant impact on our future operations and potentially impact our ability to continue operations.

Prior to the fiscal year ended March 31, 2021 the Company has a history of sales that were insufficient to generate profitable operations, and has limited sources of financing. Management’s plan in response to these conditions continues to be to increase sales resulting from the delivery of the Company’s  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 and third quarters of the Company’s fiscal year ended March 31, 2021.  This increase in sales has resulted in significant additional availability under the Company’s facility with its Factor.  Management expects sales growth to continue going forward.  In May, 2020 the Company received a Paycheck Protection Program loan of $221,400 under the CARES Act and the loan was subsequently forgiven in compliance with the provisions of the CARES Act. 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 for the next twelve months following the issuance date of this report. Cash flows and credit availability is expected to be adequate to fund operations for one year from the issuance date of this report.

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INVESTMENT IN THE HONG KONG JOINT VENTURE

12 Months Ended

Mar. 31, 2021

INVESTMENT IN THE HONG KONG JOINT VENTURE

INVESTMENT IN THE HONG KONG JOINT VENTURE

NOTE C – INVESTMENT IN THE HONG KONG JOINT VENTURE

The Company held a fifty percent interest in Eyston Company Limited, the Hong Kong Joint Venture, which has manufacturing facilities in the People’s Republic of China, for the manufacturing of certain of our electronic and electrical products. The Company sold its fifty percent interest in the Hong Kong Joint Venture in exchange for $4,000,000. The Company recorded a loss related to the sale of the Company’s investment in the Hong Kong Joint Venture of $2,472,620, and a loss from its equity share of the Hong Kong Joint Venture’s net loss for the year ended March 31, 2020 of $1,369,655. The combined loss is recorded as the loss from investment in the Hong Kong Joint Venture on the Consolidated Statements of Operations for the year ended March 31, 2020. The proceeds of the sale were used to reduce our outstanding trade account payable balance owed to the Hong Kong Joint Venture. There are no material differences between US-GAAP and those used by the Hong Kong Joint Venture.

The following represents summarized financial information derived from the financial statements of the Hong Kong Joint Venture for the fiscal year ended March 31, 2020.

	For the Year Ended March 31,
	2020
Net Sales	$	8,054,070
Gross Profit		276,787
Net Loss		(3,235,107)

During the year ended March 31, 2021 and 2020, the Company purchased $7,612,131 and $7,335,646, respectively, of finished product from Eyston, which represented 77.6% and 82.7%, respectively, of the Company’s total finished product purchases.

Effective March 31, 2020, the Company sold its fifty percent ownership interest in the Hong Kong Joint Venture and converted $1,081,440 of trade accounts payable due to the Hong Kong Joint Venture to an unsecured long-term interest only note payable with the principal balance due in April 2022. Interest is based on the Shanghai Commercial Bank Limited in Hong Kong US Dollar prime rate published on the first day of each calendar month plus 2%  (5.25% effective rate at March 31, 2020) and is payable monthly. For the fiscal year ended March 31, 2020 the Company had secured extended payment terms for purchases up to $4,000,000 from Eyston for the purchase of sealed battery alarms. These amounts were unsecured, incurred interest at 5.5% per annum, and provided for repayment terms of 120 days for each purchase.

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SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS

12 Months Ended

Mar. 31, 2021

SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS

SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS

NOTE D – SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS

On January 15, 2015, the Company entered into an 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 modified 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 which was extended and expires on January 6, 2022, provides for continuation of the program for successive two year periods until terminated by one of the parties to the Agreement. The amount available to borrow from Merchant is approximately $1,795,000 and $738,000 at March 31, 2021 and 2020, respectively. Advances on factored trade accounts receivable and borrowing on inventories 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 5.25% at March 31, 2021 and March 31, 2020). Advances under the 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. At March 31, 2021 and 2020 there was $18,904 and $1,561,665 borrowed and outstanding under the factoring agreement, respectively.

Under the Agreement, the Company assigned receivables of $17,003,317 and $14,162,999 during the years ended March 31, 2021 and 2020, respectively. The uncollected balance of non-recourse receivables held by the factor amounted to $1,925,291 and $2,300,109 at March 31, 2021 and 2020. Collected cash maintained on deposit at March 31, 2021 and 2020 with the factor earns interest at the factor’s prime rate of interest less 2.5 percent (effective rate of 0.75% and 0.75% at March 31, 2021 and 2020, respectively.) There was no cash on deposit with the Factor at March 31, 2021 or 2020.

In May, 2020 the Company received a Paycheck Protection Program loan of $221,400 under the CARES Act and during the fiscal year ended March 31, 2021, the loan was forgiven in compliance with the provisions of the CARES Act.

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PROPERTY AND EQUIPMENT - NET

12 Months Ended

Mar. 31, 2021

PROPERTY AND EQUIPMENT - NET

PROPERTY AND EQUIPMENT - NET

NOTE E – PROPERTY AND EQUIPMENT - NET

Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided by using the straight-line method based on estimated useful lives. Expenditures for major betterments that extend the useful life of property and equipment are capitalized. Repair and maintenance costs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in the results of operations.

The estimated useful lives for financial reporting purposes are as follows:

Leasehold improvements	-	Shorter of term of lease or useful life of asset
Machinery and equipment	-	5 to 10 years
Furniture and fixtures	-	5 to 15 years
Computer equipment	-	5 years

Property and equipment consist of the following:

	March 31,
	2021		2020
Leasehold improvements	$	652,670	$	652,670
Machinery and equipment		190,400		190,400
Furniture and fixtures		261,292		261,292
Computer equipment		302,634		302,634
		1,406,996		1,406,996
Less accumulated depreciation		(1,222,318)		(1,060,519)
	$	184,678	$	346,477

Depreciation expense totaled $161,799, which includes $158,576 of amortization of right-of-use lease asset, and $159,469 which included $156,250 of amortization of right-of-use lease asset for fiscal years ended March 31, 2021 and 2020, respectively. Right-of-use lease assets of $171,122 and $329,698, net, are included in leasehold improvements in Property and Equipment on the Consolidated Balance Sheets as of March 31, 2021 and 2020, respectively.

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LEASES

12 Months Ended

Mar. 31, 2021

LEASES

LEASES

NOTE F – LEASES

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.

During January 2009, the Company entered into an operating lease for its office and warehouse location in Owings Mills, Maryland which was set to expire in March 2019. In October, 2018, we extended this operating lease to expire in April 2022. This lease is subject to increasing rentals at 2.5% per year. The Company renewed its operating lease through February 2022 for a 3,400 square foot office in Naperville, Illinois. Included are 3 one-year renewal options that are not included in the measurement of the lease term.

Our operating leases for real estate are generally renewable with terms and conditions similar to the original lease. Rent expense, including common area maintenance, totaled $239,557 and $208,734 for the years ended March 31, 2021 and 2020, respectively.  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 approximately $485,000 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 March 31, 2021, the Company had right-of-use assets of $171,122 and lease liabilities of $171,122 related to its operating leases.  Right-of-use assets are included in property and equipment, net, on the consolidated balance sheet and lease liabilities related to the Company’s operating leases are included in short-term and long-term lease liability on the consolidated balance sheet.  As of March 31, 2021 the Company’s weighted-average remaining lease term and weighted-average discount rate related to its operating leases is one year and 6.0%, respectively. During the fiscal year ended March 31, 2021, the cash paid for amounts included in the measurement of lease liabilities related to the Company’s operating leases was $173,622, which is included as an operating cash outflow within the consolidated statements of cash flows. During the fiscal year ended March 31, 2021, the operating lease costs related to the Company’s operating leases was $173,622 which is included in operating costs and expenses in the consolidated statements of operations.   During the fiscal years ended March 31, 2021 and 2020, the Company did not enter into any material 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. As of March 31, 2020, the Company had right-of-use assets of $329,698 and lease liabilities of $329,698 related to its operating leases. Right-of-use assets are included in property and equipment, net, on the consolidated balance sheet and lease liabilities related to the Company’s operating leases are included in short-term and long-term lease liability on the consolidated balance sheet. As of March 31, 2020 the Company’s weighted-average remaining lease term and weighted-average discount rate related to its operating leases were two years and 6.0%, respectively. During the fiscal year ended March 31, 2020, the cash paid for amounts included in the measurement of lease liabilities related to the Company’s operating leases was $160,605, which is included as an operating cash outflow within the consolidated statements of cash flows. During the fiscal year ended March 31, 2020, the operating lease costs related to the Company’s operating leases was $160,605 which is included in operating costs and expenses in the consolidated statements of operations.

The future minimum payments under operating leases were as follows at March 31, 2021:

2022	$	175,792
2023		—
Total operating lease payments	$	175,792
Less: amounts representing interest		(4,670)
Present value of net operating lease payments	$	171,122
Less: current portion		—
Long-term portion of operating lease obligations	$	171,122

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INCOME TAXES

12 Months Ended

Mar. 31, 2021

INCOME TAXES

INCOME TAXES

NOTE G – INCOME TAXES

The Company files its income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. Income tax returns filed for the fiscal years ended March 31, 2020, 2019, and 2018 are considered open and subject to examination by tax authorities. Deferred income tax assets and liabilities are computed and recognized for those differences that have future tax consequences and will result in net taxable or deductible amounts in future periods. Deferred tax expense or benefit is the result of changes in the net asset or liability for deferred taxes. The deferred tax liabilities and assets for the Company result primarily from net operating loss and tax credit carry forwards, reserves and accrued liabilities.

At March 31, 2021, the Company has total net federal operating loss carry forwards of approximately $5,912,000 There are certain limitations to the use and application of these items. Management reviews net operating loss carry forwards and income tax credit carry forwards to evaluate if those amounts are recoverable. After a review of projected taxable income and the components of the deferred tax assets 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 reconciliation between the statutory federal income tax provision and the actual effective tax provision is as follows:

	Years ended March 31,
	2021		2020
Federal tax (benefit) at statutory rate (21%) before loss carry-forward	$	56,352	$	(1,220,917)
Permanent and other differences		(33,029)		7,646
State income tax (benefit) – net of federal effect		3,353		(72,000)
Expiration of tax credits		129,999		—
Change in deferred tax asset valuation allowance		(156,675)		1,285,271
	$	—	$	—

The individual components of the Company’s deferred tax assets are as follows:

	March 31,
	2021		2020
Deferred tax assets:
Accruals and allowances	$	76,376	$	39,112
Inventory uniform capitalization		11,027		18,544
Net operating loss carry forward		1,241,522		1,258,433
Foreign tax credit carry forward		—		169,511
Research and development tax credit carry forward		61,701		61,701
Allowance for unrealizable deferred tax assets		(1,390,626)		(1,547,301)
Net deferred tax asset	$	—	$	—

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Mar. 31, 2021

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE H – COMMITMENTS AND CONTINGENCIES

From time to time, the Company is involved in various lawsuits and legal matters. It is the opinion of management, based on consultation with legal counsel, that there are no outstanding material claims outside of the normal course of business.

The Company’s employment agreement with its CEO (the “CEO Agreement”) requires the Company to make certain post-employment payments to the CEO in the event of his termination following a change in control, death, disability, non-renewal, or resignation with “Good Reason” under terms of the CEO Agreement. Additionally, the CEO Agreement requires the Company to make post-employment payments, which can range from approximately $94,000 to $1,995,000, dependent upon the controlling event, as discussed above. In July, 2020, the Company renewed the CEO Agreement through July 31, 2021.

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CONCENTRATIONS

12 Months Ended

Mar. 31, 2021

CONCENTRATIONS

CONCENTRATIONS

NOTE I - CONCENTRATIONS

The Company is primarily a distributor of safety products for use in home and business under both its trade names and private labels for other companies. The Company acquires all of the smoke alarm and carbon monoxide alarm safety products that it sells from Eyston Company, Ltd. At March 31, 2021, the Company had receivables due from Eyston Company, Ltd. of $381,401 recorded in trade accounts receivable.

The Company had one customer in the fiscal year that ended March 31, 2021 that represented 21.9% of the Company’s net sales and two customers in the fiscal year that ended March 31, 2020 that represented 12.2% and 10.3% of the Company’s net sales, respectively.

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QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Mar. 31, 2021

QUARTERLY FINANCIAL DATA (UNAUDITED)

QUARTERLY FINANCIAL DATA (UNAUDITED)

NOTE J - QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly Results of Operations (Unaudited):

The unaudited quarterly results of operations for fiscal years 2021 and 2020 are summarized as follows:

	Quarter Ended
	June 30,		September 30,		December 31,		March 31,
2021
Net sales	$	2,940,768	$	6,457,295	$	5,124,750	$	2,997,338
Gross profit		1,077,143		2,104,028		1,520,323		938,215
Net income (loss)		(78,982)		725,845		78,318		(456,838)
Net income (loss) per share:
Basic and diluted		(0.03)		0.31		0.03		(0.19)
2020
Net sales	$	4,343,291	$	3,622,269	$	3,223,678	$	3,613,786
Gross profit		1,244,829		1,090,346		769,992		653,687
Net loss		(608,954)		(700,814)		(1,011,833)		(3,492,290)
Net loss per share:
Basic and diluted		(0.26)		(0.30)		(0.44)		(1.51)

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RETIREMENT PLAN

12 Months Ended

Mar. 31, 2021

RETIREMENT PLAN

RETIREMENT PLAN

NOTE K – RETIREMENT PLAN

The Company has a retirement savings plan under Section 401(k) of the Internal Revenue Code. All full-time employees who have completed 12 months of service are eligible to participate. Employees are permitted to contribute up to the amounts prescribed by law. The Company may provide contributions to the plan consisting of a matching amount equal to a percentage of the employee’s contribution, not to exceed four percent (4%). Employer contributions were $43,412 and $41,121 for the years ended March 31, 2021 and 2020, respectively.

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RELATED PARTY TRANSACTIONS

12 Months Ended

Mar. 31, 2021

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE L – RELATED PARTY TRANSACTIONS

During the fiscal year ended March 31, 2021 and 2020, inventory purchases and other company expenses of approximately $1,206,000  and $999,000 respectively, were charged to credit card accounts of Harvey B. Grossblatt, the Company’s Chief Executive Officer and certain of his immediate family members. The Company subsequently reimbursed these charges in full. Mr. Grossblatt receives mileage benefits from these charges. The maximum amount outstanding and due to Mr. Grossblatt at any point during the fiscal year ended March 31, 2021 and 2020 amounted to $158,134 and $136,876, respectively, and the amount outstanding at March 31, 2021 and 2020 is $50,536 and $27,102, respectively.

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INTANGIBLE ASSETS - NET

12 Months Ended

Mar. 31, 2021

INTANGIBLE ASSETS - NET

INTANGIBLE ASSETS - NET

NOTE M – INTANGIBLE ASSETS - NET

Intangible assets consist of legal expenses of $89,434 incurred in obtaining and perfecting patents on newly developed detector technology and are capitalized for financial statement purposes. Upon issuance, patents are amortized on a straight-line basis over twenty years. Amortization expense for the fiscal year ended March 31, 2021 and 2020 was $4,472 and $4,471,  respectively. Accumulated amortization at March 31, 2021 and 2020 was $44,717 and $40,245, respectively. Amortization expense for the next five years is expected to be $4,472 through 2026.

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SHAREHOLDERS' EQUITY

12 Months Ended

Mar. 31, 2021

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

NOTE N – SHAREHOLDERS’ EQUITY

Under the terms of the Company’s 2011 Non-Qualified Stock Option Plan, 120,000 shares of common stock are reserved for the granting of stock options. There were no stock options outstanding at March 31, 2021 or 2020.

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NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Mar. 31, 2021

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Nature of Business: Universal Security Instruments, Inc.’s (the “Company”) primary business is the sale of smoke alarms and other safety products to retailers, wholesale distributors and to the electrical distribution trade which includes electrical and lighting distributors as well as manufactured housing companies. The Company imports all of its safety and other products from foreign manufacturers. The Company, as an importer, is subject to tariffs which vary depending on types of products and country of origin, changes in economic and political conditions in the country of manufacture, potential trade restrictions and currency fluctuations.

Principles of Consolidation

Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary USI Electric, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. In 1989 we formed Eyston Company Limited (Eyston), a limited liability company under the laws of Hong Kong, as a 50% joint venture partner with a Hong Kong-based partner, to manufacture various products in the Peoples Republic of China (the “Hong Kong Joint Venture”). Effective March 31, 2020, we sold our 50% interest in the Hong Kong Joint Venture in exchange for $4,000,000. We believe that our 50% ownership interest in the Hong Kong Joint Venture through the date of its sale on March 31, 2020 allowed us to significantly influence the operations of the Hong Kong Joint Venture. As such, we accounted for our interest in the operations of the Hong Kong Joint Venture using the equity method of accounting we have included our investment balance as a non-current asset through the date of sale. We have included our share of the Hong Kong Joint Venture’s loss in our consolidated statements of operations for fiscal years ended March 31, 2020. The investment and earnings and losses were adjusted to eliminate intercompany profits through the date of its sale on March 31, 2020.

Use of Estimates

Use of Estimates: In preparing financial statements in conformity with accounting principles generally accepted in the United States of America (US-GAAP), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash

Cash: The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk with cash.

Revenue Recognition

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. 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.

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.

Disaggregation of Revenue: The Company presents below revenue associated with sales of safety alarm products 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 years ended March 31, 2021 and 2020 are as follows:

	Fiscal Year ended
	March 31, 2021		March 31, 2020
Sales of safety alarms	$	15,218,162	$	13,098,923
Sales of GFCI’s and ventilation fans		2,301,989		1,704,101
	$	17,520,151	$	14,803,024

Accounts Receivable

Accounts Receivable: The Company assigns the majority of its trade receivables on a pre-approved non-recourse basis to Merchant Factors Corporation (Merchant or Factor) under a factoring agreement on an ongoing basis. Factoring charges recognized on assignment of receivables are deducted from revenue in the consolidated statements of operations and amounted to $154,267 and $118,141 for the years ended March 31, 2021 and 2020, respectively.

Management considers amounts due from the Company’s factor to be “financing receivables”. Trade accounts receivable, foreign receivables, and receivables from our suppliers are not considered to be financing receivables.

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 from one accounting period to the next 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 for uncollectible financing receivables has been provided and no amounts are considered to be past due at March 31, 2021. At March 31, 2021 and 2020, respectively, an allowance of $157,000 and $57,000 has been provided for uncollectible trade accounts receivable.

Inventories

Inventories: Inventories are stated at the lower of cost (first in/first out method) or net realizable value. Included as a component of finished goods inventory are additional non-material costs. These costs include freight, import duty, tariffs, and inspection fees. Expenses incurred for inventory quality control in the amount of approximately $45,000 and $45,000, were absorbed in inventory for the fiscal years ended March 31, 2021 and 2020, respectively. We evaluate inventories on a quarterly basis and write down inventory that is considered obsolete or unmarketable in an amount equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions.

Impairment of long-lived assets

Impairment of long-lived assets: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset group may not be recoverable. The factors considered in performing this assessment include current operating results, anticipated future results, the manner in which the asset group is used and the effects of obsolescence, demand, competition and other economic factors. Accordingly, when indicators of impairment are present, the Company evaluates the carrying value of these asset groups in relation to the operating performance of the business and future undiscounted cash flows expected to result from the use of these asset groups. Impairment losses are recognized when the sum of expected future cash flows is less than the asset groups carrying value, and losses are determined based upon the excess carrying value of the asset group over its fair value. Based on this assessment, no impairment to long-lived assets resulted for fiscal years ended March 31, 2021 and 2020.

Leases

Leases: The Company determines if an arrangement is a lease at inception. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company estimates the incremental borrowing rate to discount the lease payments based on information available at lease commencement. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company utilizes certain practical expedients, including the election not to reassess its prior conclusions about lease identification, lease classification and initial direct costs, as well as the election not to separate lease and non-lease components for arrangements where the Company is a lessee. Lease expense is recognized on a straight-line basis over the lease term. See Note F, Leases.

Income Taxes

Income Taxes: 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.

The Company follows Accounting Standards Codification (ASC) 740‑10 that gives guidance to 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 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. See Note G, Income Taxes.

Warranties

Warranties: We generally provide warranties, on the safety products, from one to ten years to the non-commercial end user on all products sold. The manufacturers of our safety products provide us with a one-year warranty on all products we purchase for resale. Claims for warranty replacement of products beyond the one-year warranty period covered by the manufacturers have not been historically material.

Research and Development

Research and Development: Research and development costs are charged to operations as incurred.

Shipping and Handling Fees and Costs

Shipping and Handling Fees and Costs: The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with inbound freight are included in cost of goods sold. Shipping and handling costs associated with outbound freight are included in selling, general and administrative expenses and totaled $409,692 and $343,838 in fiscal years 2021 and 2020, respectively.

Foreign currency

Foreign currency: The activity and accounts of the Hong Kong Joint Venture are denominated in Hong Kong dollars and are translated to US dollars. The Company translates the accounts of the Hong Kong Joint Venture at the applicable exchange rate in effect at the year-end date for assets and liabilities and at the average exchange rate for the reporting period for statement of operation purposes.

The reclassification of the realized gain from other comprehensive income is included in the loss from investment in the Hong Kong Joint Venture in the Consolidated Statements of Operations for the fiscal year ended March 31, 2020.

Net Earnings (Loss) per Share

Net Earnings (Loss) per Share: Basic net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares and common share equivalents outstanding (unless their effect is anti-dilutive) for the period. As a result of the net loss for the fiscal year ended March 31, 2020, the weighted average number of common shares outstanding is identical for both basic and diluted shares. In addition, there were no other securities outstanding during 2021 or 2020 other than common stock.

Recently Issued Accounting Standards

Recently Issued 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 June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” The guidance in ASU 2016-13 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. It replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The Company adopted this guidance as of April 1, 2020, and the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

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NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Mar. 31, 2021

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of revenue recognized by these categories

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 years ended March 31, 2021 and 2020 are as follows:

	Fiscal Year ended
	March 31, 2021		March 31, 2020
Sales of safety alarms	$	15,218,162	$	13,098,923
Sales of GFCI’s and ventilation fans		2,301,989		1,704,101
	$	17,520,151	$	14,803,024

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INVESTMENT IN THE HONG KONG JOINT VENTURE (Tables)

12 Months Ended

Mar. 31, 2021

INVESTMENT IN THE HONG KONG JOINT VENTURE

Schedule of income statement information of the Hong Kong joint venture

The following represents summarized financial information derived from the financial statements of the Hong Kong Joint Venture for the fiscal year ended March 31, 2020.

	For the Year Ended March 31,
	2020
Net Sales	$	8,054,070
Gross Profit		276,787
Net Loss		(3,235,107)

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PROPERTY AND EQUIPMENT - NET (Tables)

12 Months Ended

Mar. 31, 2021

PROPERTY AND EQUIPMENT - NET

Schedule of Estimated Useful Lives for Financial Reporting

The estimated useful lives for financial reporting purposes are as follows:

Leasehold improvements	-	Shorter of term of lease or useful life of asset
Machinery and equipment	-	5 to 10 years
Furniture and fixtures	-	5 to 15 years
Computer equipment	-	5 years

Schedule of Property, Plant and Equipment

Property and equipment consist of the following:

	March 31,
	2021		2020
Leasehold improvements	$	652,670	$	652,670
Machinery and equipment		190,400		190,400
Furniture and fixtures		261,292		261,292
Computer equipment		302,634		302,634
		1,406,996		1,406,996
Less accumulated depreciation		(1,222,318)		(1,060,519)
	$	184,678	$	346,477

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LEASES (Tables)

12 Months Ended

Mar. 31, 2021

LEASES

Summary of future minimum payments under operating leases

The future minimum payments under operating leases were as follows at March 31, 2021:

2022	$	175,792
2023		—
Total operating lease payments	$	175,792
Less: amounts representing interest		(4,670)
Present value of net operating lease payments	$	171,122
Less: current portion		—
Long-term portion of operating lease obligations	$	171,122

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INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2021

INCOME TAXES

Schedule of Reconciliation Between the Statutory Federal Income Tax Provision and the Actual Effective Tax Provision

The reconciliation between the statutory federal income tax provision and the actual effective tax provision is as follows:

	Years ended March 31,
	2021		2020
Federal tax (benefit) at statutory rate (21%) before loss carry-forward	$	56,352	$	(1,220,917)
Permanent and other differences		(33,029)		7,646
State income tax (benefit) – net of federal effect		3,353		(72,000)
Expiration of tax credits		129,999		—
Change in deferred tax asset valuation allowance		(156,675)		1,285,271
	$	—	$	—

Schedule of Deferred Tax Assets

The individual components of the Company’s deferred tax assets are as follows:

	March 31,
	2021		2020
Deferred tax assets:
Accruals and allowances	$	76,376	$	39,112
Inventory uniform capitalization		11,027		18,544
Net operating loss carry forward		1,241,522		1,258,433
Foreign tax credit carry forward		—		169,511
Research and development tax credit carry forward		61,701		61,701
Allowance for unrealizable deferred tax assets		(1,390,626)		(1,547,301)
Net deferred tax asset	$	—	$	—

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QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)

12 Months Ended

Mar. 31, 2021

QUARTERLY FINANCIAL DATA (UNAUDITED)

Schedule of Quarterly Financial Information

The unaudited quarterly results of operations for fiscal years 2021 and 2020 are summarized as follows:

	Quarter Ended
	June 30,		September 30,		December 31,		March 31,
2021
Net sales	$	2,940,768	$	6,457,295	$	5,124,750	$	2,997,338
Gross profit		1,077,143		2,104,028		1,520,323		938,215
Net income (loss)		(78,982)		725,845		78,318		(456,838)
Net income (loss) per share:
Basic and diluted		(0.03)		0.31		0.03		(0.19)
2020
Net sales	$	4,343,291	$	3,622,269	$	3,223,678	$	3,613,786
Gross profit		1,244,829		1,090,346		769,992		653,687
Net loss		(608,954)		(700,814)		(1,011,833)		(3,492,290)
Net loss per share:
Basic and diluted		(0.26)		(0.30)		(0.44)		(1.51)

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NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended								12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2021	Mar. 31, 2020
Revenues	$ 2,997,338	$ 5,124,750	$ 6,457,295	$ 2,940,768	$ 3,613,786	$ 3,223,678	$ 3,622,269	$ 4,343,291	$ 17,520,151	$ 14,803,024
Products acquired from our HKJV [Member]
Revenues									15,218,162	13,098,923
G F C I s And Ventilation Fans [Member]
Revenues									$ 2,301,989	$ 1,704,101

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NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details)	12 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)
Schedule of Equity Method Investments [Line Items]
Factoring Charges	$ 154,267	$ 118,141
Allowance for Doubtful Accounts Receivable	157,000	57,000
Expenses Incurred in Inventory, Amount	45,000	45,000
Shipping and Handling [Member]
Schedule of Equity Method Investments [Line Items]
Cost of Goods and Services Sold	$ 409,692	$ 343,838
Disposed by sale | Hong Kong Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest disposed	50	50
Consideration for disposal of joint venture	$ 4,000,000	$ 4,000,000
Hong Kong Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest held (in percentage)	50.00%

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LIQUIDITY AND MANAGEMENT'S PLAN (Details) - USD ($)	1 Months Ended	3 Months Ended								12 Months Ended
	May 31, 2020	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2021	Mar. 31, 2020	Aug. 31, 2020
Organization Consolidation And Presentation OF Financial Statements [Line Items]
Failure to maintain stockholders' equity after reporting losses from continuing operations and/or net losses												$ 6,000,000
Net Income (Loss) Attributable to Parent		$ (456,838)	$ 78,318	$ 725,845	$ (78,982)	$ (3,492,290)	$ (1,011,833)	$ (700,814)	$ (608,954)	$ 268,343	$ (5,813,891)
Hong Kong Joint Venture [Member]
Organization Consolidation And Presentation OF Financial Statements [Line Items]
Line of Credit Facility, Remaining Borrowing Capacity		$ 1,795,000								$ 1,795,000
Reduce trade accounts payable											4,000,000
Trade accounts payable converted to an unsecured long-term note payable						1,081,440					1,081,440
Line of Credit Facility, Capacity Available for Trade Purchases						$ 4,000,000					$ 4,000,000
Line of Credit Facility, Interest Rate at Period End						5.50%					5.50%
Repayment term for each advance											120 days
Paycheck Protection Program loan
Organization Consolidation And Presentation OF Financial Statements [Line Items]
Proceeds from debt	$ 221,400

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INVESTMENT IN THE HONG KONG JOINT VENTURE - Financial statements of the Hong Kong Joint Venture (Details) - USD ($)	3 Months Ended								12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2021	Mar. 31, 2020
Net sales	$ 2,997,338	$ 5,124,750	$ 6,457,295	$ 2,940,768	$ 3,613,786	$ 3,223,678	$ 3,622,269	$ 4,343,291	$ 17,520,151	$ 14,803,024
Gross profit	938,215	1,520,323	2,104,028	1,077,143	653,687	769,992	1,090,346	1,244,829	5,639,709	3,758,854
Net Income (Loss)	$ (456,838)	$ 78,318	$ 725,845	$ (78,982)	$ (3,492,290)	$ (1,011,833)	$ (700,814)	$ (608,954)	$ 268,343	(5,813,891)
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | Hong Kong Joint Venture [Member]
Net sales										8,054,070
Gross profit										276,787
Net Income (Loss)										$ (3,235,107)

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INVESTMENT IN THE HONG KONG JOINT VENTURE - Additional Information (Details) - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Unsecured long-term interest only note payable
Schedule of Equity Method Investments [Line Items]
Trade accounts payable converted to an unsecured long-term note payable		$ 1,081,440
Effective interest rate (as a percent)		5.25%
Unsecured long-term interest only note payable | Prime Rate
Schedule of Equity Method Investments [Line Items]
Spread on variable interest rate (as a percent)		2.00%
Hong Kong Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Net carrying value prior to the sale		$ 2,472,620
Hong Kong Joint Venture [Member] | Disposed by sale
Schedule of Equity Method Investments [Line Items]
Ownership interest disposed	50	50
Consideration for disposal of joint venture	$ 4,000,000	$ 4,000,000
Hong Kong Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Line of Credit Facility, Interest Rate at Period End		5.50%
Trade accounts payable converted to an unsecured long-term note payable		$ 1,081,440
Principal balance due and payable		$ 4,000,000
Repayment term for each advance		120 days
Hong Kong Joint Venture [Member] | Hong Kong Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Net carrying value prior to the sale		$ 1,369,655
Hong Kong Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	50.00%
Related Party Transaction, Purchases from Related Party	$ 7,612,131	$ 7,335,646
Related Party Transaction, Rate	77.60%	82.70%

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SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS (Details) - USD ($)	1 Months Ended	12 Months Ended
	May 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Short-term Debt [Line Items]
Line of Credit, Current		$ 18,904	$ 1,561,665
Line of Credit Facility, Borrowing Capacity, Description		Under the modified 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.
Line of Credit Facility, Interest Rate Description		Collected cash maintained on deposit at March 31, 2021 and 2020 with the factor earns interest at the factor's prime rate of interest less 2.5 percent (effective rate of 0.75% and 0.75% at March 31, 2021 and 2020, respectively.)
Factoring Agreement Receivables Sold		$ 17,003,317	14,162,999
Due From Factor		1,925,291	2,300,109
Merchant Factors Corporation [Member]
Short-term Debt [Line Items]
Long-term Line of Credit		1,795,000	738,000
Line of Credit, Current		$ 18,904	$ 1,561,665
Line of Credit Facility, Interest Rate Description		bear interest at the prime commercial rate of interest, as published, plus two percent (effective rate 5.25% at March 31, 2021 and March 31, 2020).
Accounts Receivables Factoring Agreement Expiration Date		Jan. 06, 2022
Accounts Receivables Factoring Agreement Term		2 years
Paycheck Protection Program loan
Short-term Debt [Line Items]
Proceeds from debt	$ 221,400

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PROPERTY AND EQUIPMENT - NET (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020
Property, Plant and Equipment, Gross	$ 1,406,996	$ 1,406,996
Less accumulated depreciation	(1,222,318)	(1,060,519)
Property, Plant and Equipment, Net, Total	184,678	346,477
Leasehold Improvements [Member]
Property, Plant and Equipment, Gross	652,670	652,670
Machinery and Equipment [Member]
Property, Plant and Equipment, Gross	190,400	190,400
Furniture and Fixtures [Member]
Property, Plant and Equipment, Gross	261,292	261,292
Computer Equipment [Member]
Property, Plant and Equipment, Gross	$ 302,634	$ 302,634

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PROPERTY AND EQUIPMENT - NET - Estimated useful lives for financial reporting purposes (Details) - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Non Cash Right of Use Assets, Depreciation	$ 158,576	$ 156,250
Depreciation, Amortization and Accretion, Net	161,799	159,469
Right-of-use assets	$ 171,122	329,698
Leasehold Improvements [Member]
Property Plant And Equipment Useful Life Description	Shorter of term of lease or useful life of asset
Right-of-use assets	$ 171,122	$ 329,698
Machinery and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	10 years
Machinery and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	5 years
Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	15 years
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	5 years
Computer Equipment [Member]
Property, Plant and Equipment, Useful Life	5 years

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LEASES (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020
Future minimum payments under operating leases
2022	$ 175,792
Total operating lease payments	175,792
Less: amounts representing interest	(4,670)
Present value of net operating lease payments	171,122	$ 329,698
Less: current portion	171,122	158,578
Long-term portion of operating lease obligations	$ 171,122	$ 171,120

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LEASES - Additional Information (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2009 USD ($) Options	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Nov. 30, 2019 ft²
Description of Lessor Leasing Arrangements, Operating Leases		During January 2009, the Company entered into an operating lease for its office and warehouse location in Owings Mills, Maryland which was set to expire in March 2019
Operating Lease Rent Increment Percentage	2.50%
Term of renewal options that are not included in measurement of lease term	1 year
Number of one-year renewal options that are not included in measurement of lease term | Options	3
Operating Leases, Rent Expense		$ 239,557	$ 208,734
Lease, Practical Expedients, Package [true false]		true
Non Cash Right Of Use Asset In Exchange For Operating Lease Liability	$ 485,000		485,948
Right-of-use assets		$ 171,122	329,698
Lease liabilities		$ 171,122	$ 329,698
Weighted-average remaining lease term		1 year	2 years
Weighted-average discount rate		6.00%	6.00%
Cash paid for amounts included in measurement of lease liabilities		$ 173,622	$ 160,605
Operating lease costs		$ 173,622	$ 160,605
Office in Naperville [Member]
Land Subject to Ground Leases | ft²				3,400

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INCOME TAXES (Details) - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
INCOME TAXES
Federal tax (benefit) at statutory rate (21%) before loss carry-forward	$ 56,352	$ (1,220,917)
Permanent and other differences	(33,029)	7,646
State income tax (benefit) - net of federal effect	3,353	(72,000)
Expiration of tax credits	129,999
Change in deferred tax asset valuation allowance	$ (156,675)	$ 1,285,271

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INCOME TAXES - Company's deferred tax assets (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020
Deferred tax assets:
Accruals and allowances	$ 76,376	$ 39,112
Inventory uniform capitalization	11,027	18,544
Net operating loss carry forward	1,241,522	1,258,433
Foreign tax credit carry forward		169,511
Research and development tax credit carry forward	61,701	61,701
Allowance for unrealizable deferred tax assets	$ (1,390,626)	$ (1,547,301)

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INCOME TAXES - Additional Information (Details) - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
INCOME TAXES
Operating Loss Carryforwards	$ 5,912,000
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%

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COMMITMENTS AND CONTINGENCIES (Details)	Mar. 31, 2021 USD ($)
Maximum [Member]
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year	$ 1,995,000
Minimum [Member]
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year	$ 94,000

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CONCENTRATIONS (Details) - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Trade Accounts Receivable [Member]
Receivables due from Eyston Company, Ltd.	$ 381,401
One Customer [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	21.90%	12.20%
Two Customer [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage		10.30%

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QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($)	3 Months Ended								12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2021	Mar. 31, 2020
QUARTERLY FINANCIAL DATA (UNAUDITED)
Net sales	$ 2,997,338	$ 5,124,750	$ 6,457,295	$ 2,940,768	$ 3,613,786	$ 3,223,678	$ 3,622,269	$ 4,343,291	$ 17,520,151	$ 14,803,024
Gross profit	938,215	1,520,323	2,104,028	1,077,143	653,687	769,992	1,090,346	1,244,829	5,639,709	3,758,854
Net income (loss)	$ (456,838)	$ 78,318	$ 725,845	$ (78,982)	$ (3,492,290)	$ (1,011,833)	$ (700,814)	$ (608,954)	$ 268,343	$ (5,813,891)
Net income (loss) per share:
Basic and diluted (in dollars per share)	$ (0.19)	$ 0.03	$ 0.31	$ (0.03)	$ (1.51)	$ (0.44)	$ (0.30)	$ (0.26)	$ 0.12	$ (2.51)

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RETIREMENT PLAN (Details) - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
RETIREMENT PLAN
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	4.00%
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 43,412	$ 41,121

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RELATED PARTY TRANSACTIONS (Details) - Chief Executive Officer [Member] - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction	$ 1,206,000	$ 999,000
Due to Related Parties, Current	50,536	27,102
Maximum [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction	$ 158,134	$ 136,876

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INTANGIBLE ASSETS - NET (Details) - USD ($)	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Capitalization Finite Lived Intangible Assets Legal Expenses	$ 89,434
Amortization of Intangible Assets	4,472	$ 4,471
Finite-Lived Intangible Assets, Accumulated Amortization	44,717	$ 40,245
Finite-Lived Intangible Assets, Amortization Expense, Year Five	$ 4,472
Patents [Member]
Finite-Lived Intangible Asset, Useful Life	20 years

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SHAREHOLDERS' EQUITY (Details)	Mar. 31, 2021 shares
SHAREHOLDERS' EQUITY
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	120,000