UNIVERSAL SAFETY PRODUCTS, INC.
For the period ended Jun 30, 2025. Filed Aug 19, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 19, 2025
UUU$5.29+3.7%Stored close · as of Oct 16, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-14.
0001410578-25-000141
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-19.
0001410578-25-001850
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 29 previous paragraphs and 25 current paragraphs.
8 unchanged; 8 reworded; 8 added; 13 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Management had been seeking access to additional funding or other resources, or the right strategic business combination, which would allow the Company to drive long-term value for its shareholders while taking advantage of growth opportunities that the Company seeks to execute. In furtherance thereof, as previously announced on October 31, 2024, the Company entered into an Asset Purchase Agreement with Feit Electric Company, Inc. (“Feit”) pursuant to which Feit agreed to acquire the smoke and carbon monoxide alarm portion of the Company’s business and the non-tangible assets of the Company, including but not limited to the trade name of Universal Security Instruments, Inc. and Universal Electric, Inc. The Closing was subject to the approval of the transaction by the requisite vote of the shareholders of the Company. A special meeting of the shareholders to approve the sale and related actions was held on April 15, 2025, and the asset sale was approved. Accordingly on May 22, 2025, the Company closed on the asset sale to Feit pursuant to the terms of the Asset Purchase Agreement. The Company currently intends to continue importing and marketing its product lines other than smoke alarms and carbon monoxide alarms and is exploring other business opportunities to drive long-term value for our shareholders.
Current report
Changes in international trade duties and other aspects of international trade policy, both in the U.S. and abroad, could materially impact the cost of our products. We import all our products. As an importer, we are subject to numerous 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. Substantially all our safety products are imported from the People’s Republic of China. Certain of these products are currently subject to tariffs of fifty-five (55%) percent. The imposition of and modification of tariffs during the latter half of the fiscal year ended March 31, 2025, and subsequent thereto, has increased uncertainty as to the short-term sustainability of importing products from our principal suppliers. If the Company is unable to import products at a competitive price point our sales could be adversely affected.
Current report
Sales. Net sales for the three months ended June 30, 2025, were $3,824,247 compared to $4,598,516 for the comparable three months in the prior year, a decrease of $774,269 (16.8%). As previously discussed, the Company sold the rights to sell a significant portion of its product line on May 22, 2025. Sales subsequent to this date include only those products which the Company continues to import and market.
Current report
Gain on Sale of Assets. We reported a gain on the sale of assets previously held for sale in the amount of $2,820,668. The purchase price of approximately $4,955,000 was reduced by the basis of the assets held for sale amounting to approximately $1,682,000 and by certain customary costs associated with the sale, including commissions and consulting fees amounting to approximately $834,000.
Current report
Provision for Income Taxes. Current and deferred income tax provisions amounting to $122,000 and $361,000, respectively were provided in the current fiscal quarter ended June 30, 2025, to record the expected tax liability associated with net earnings, principally arising as a result of the gain on the sale of assets held for sale. The deferred tax liability is a reversal of the deferred tax asset recorded in the fiscal year ended March 31, 2025, related to the sale of assets held for sale.
Current report
Net Income (Loss). We reported net income of $1,810,321 for the quarter ended June 30, 2025, compared to a net loss of $442,206 for the corresponding quarter of the prior fiscal year, a $2,252,527 increase in net income. The primary reason for the increase in the net income is the Company’s sale of a portion of its business, as previously discussed, resulting in a gain on the sale of $2,820,668.
Current report
Investing activities for the three months ended June 30, 2025, provided cash from the sale of assets, net of the payment of related liabilities, of $2,820,668.
Current report
The Company believes its balances of cash, funds available to borrow under the terms of its factoring agreement, and cash generated by ongoing operations will be sufficient to satisfy its cash requirements over the next twelve months and beyond. The Company’s contractual cash requirements have not changed materially since it filed its Form 10-K for the fiscal year ended March 31, 2025.
Removed paragraphs (13)
Previous report
The Company has developed products based on new smoke and gas detection technologies, with what the Company believes are improved sensing technology and product features. Most of our new technologies and features have been trademarked under the trade name IoPhic.
Previous report
Changes in international trade duties and other aspects of international trade policy, both in the U.S. and abroad, could materially impact the cost of our products. All of our products are imported from the Peoples Republic of China (PRC). To date, only certain of our products such as Carbon Monoxide and Photoelectric alarms, and certain wiring devices, have been subjected to tariffs of 25%. We are monitoring these developments and will determine our strategies as additional information becomes available. Any increase in tariffs that is not offset by an increase in our sales prices could have an adverse effect on our business, financial position, results of operations or cash flows.
Previous report
Sales. Net sales for the three months ended December 31, 2024, were $5,535,148 compared to $4,654,978 for the comparable three months in the prior year, an increase of $880,170 (18.9%). Sales increased principally due to the timing of orders from a large retail customer.
Previous report
Expenses. Selling, general and administrative expenses were $1,762,446 for the three months ended December 31, 2024, compared to $1,310,872 for the comparable three months in the prior year. As a percentage of net sales, these expenses increased to 31.8% for the three-month period ended December 31, 2024, from 28.2% for the 2023 period. These expenses increased as a dollar amount principally due to the timing of expenditures comprised principally of legal, proxy solicitation, proxy tabulation, and consulting business advisors related to efforts in the current quarter to pursue the previously mentioned Asset Purchase Agreement pursuant to which the Company has agreed, subject to shareholder approval, to sell certain inventory and non-tangible assets of the Company, constituting substantially all of the assets of the Company.
Previous report
Net (Loss) Income. We reported a net loss of $936,639 for the quarter ended December 31, 2024, compared to net income of $102,176 for the corresponding quarter of the prior fiscal year, a $1,038,815 decrease in net income. Net income decreased principally due to lower gross profit margins as discussed above and due to expenditures related to efforts in the current quarter to pursue strategic alternatives and merger activities.
Previous report
Nine Months Ended December 31, 2024 and 2023
Previous report
Sales. Net sales for the nine months ended December 31, 2024, were $17,336,933 compared to $15,071,204 for the comparable nine months in the prior period, an increase of $2,265,729 (15.0%). Sales increased principally due to the timing of orders to a large retailer, improvements in deliveries of products, and the easing of supply chain disruptions in shipping and handling of containers at California ports of entry. While delays in manufacturing and shipping have improved somewhat over the past fiscal year, we continue to experience delays in receiving inventory for sale.
Previous report
Gross Profit Margin. The gross profit margin is calculated as net sales less cost of goods sold expressed as a percentage of net sales. The Company’s gross profit margin was 23.7% for the period ended December 31, 2024, and 30.0% for the period ended December 31, 2023. Gross margins for the nine-month period ended December 31, 2024, decreased principally due to an increase in the allowance for excess and obsolete inventory recorded during the nine-month period ended December 31, 2024, and due to the bulk sale of certain excess and obsolete inventory at reduced gross profit margins. In addition, gross margins in the nine-month period decreased due to increases in the cost of certain electronic components and variations in the mix of products sold. Gross margins are also impacted by variations in the mix of products sold and due to continued increases in the cost of certain electronic components.
Previous report
Engineering and product development expenses were $328,367 for the nine months ended December 31, 2024, compared to $273,673 for the comparable period of the prior year. These expenses increased primarily due to an increase in product development costs.
Previous report
Interest Expense. Our interest expense was $211,939 for the nine months ended December 31, 2024, compared to interest expense of $120,315 for the nine months ended December 31, 2023. Net interest income of $24,746 was earned in the nine month period ended December 31, 2023 primarily on refunded customs charges. Interest expense is dependent upon the total amounts borrowed from the Factor and changes in interest rates during the period as compared to the corresponding period of the prior year.
Previous report
Net (Loss) Income. We reported a net loss of $801,867 for the nine months ended December 31, 2024, compared to net income of $80,881 for the corresponding period of the prior fiscal year, a decrease in net income of $882,748. Net income decreased principally due to lower gross profit margins as discussed above and due to expenditures related to efforts in the nine months ended December 31, 2024, to pursue strategic alternatives and merger activities.
Previous report
There were no investing activities for the nine months ended December 31, 2024, or 2023.
Previous report
During the nine-month period ending December 31, 2024, the Company recorded a net loss of $801,867 and used cash of $736,999 in operating activities. Approximately $435,000 of the loss from operations is related to costs incurred in furtherance of the proposed sale of the operating assets of the Company in accordance with the Asset Purchase Agreement noted above. These expenditures used significant cash and have negatively impacted the Company’s availability of cash advances under its factoring agreement. The Company has previously disclosed that it has limited financial resources and access to capital. Financing is limited to amounts available under the factoring agreement as previously discussed. The uncertainty associated with the recurring operating losses, and limited financial resources and access to capital, raise substantial doubt about our ability to continue as a going concern for at least one-year after the date the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are issued.
Reworded paragraphs (8)
Previous wording
As used throughout this Report, “we,” “our,” “the Company” “USI” and similar words refers to Universal Security Instruments, Inc.
Current wording
As used throughout this Report, “we,” “our,” “the Company” and similar words refers to Universal Safety Products, Inc.
Previous wording
We are in the business of marketing and distributing safety and security products. Our financial statements detail our sales and other operational results for the three and nine-month periods ended December 31, 2024, and 2023.
Current wording
We are in the business of marketing and distributing safety and security products. Our financial statements detail our sales and other operational results for the three-month periods ended June 30, 2025, and 2024.
Previous wording
Gross Profit Margin. Gross profit margin is calculated as net sales less cost of goods sold expressed as a percentage of net sales. Our gross profit margin was 18.5% and 32.3% of sales for the quarters ended December 31, 2024, and 2023, respectively. Gross margins for the three-month period ended December 31, 2024, decreased principally due to the bulk sale of certain excess and obsolete inventory at reduced gross profit margins. In addition, gross margins in the current and prior comparable three-month periods were impacted by variations in the mix of products sold.
Current wording
Gross Profit Margin. Gross profit margin is calculated as net sales less cost of goods sold expressed as a percentage of net sales. Our gross profit margin was 18 2% and 23.7% of sales for the quarters ended June 30, 2025, and 2024, respectively. Gross margins were negatively impacted in the periods ended June 30, 2025, and 2024 principally due to tariffs, the mix of products sold due to the previously discussed sale of a portion of our business, and higher ocean freight costs.
Previous wording
Expenses. Selling, general and administrative expenses were $4,369,219 for the nine months ended December 31, 2024, compared to $4,068,162 for the comparable nine months in the prior year. As a percentage of sales, these expenses were 25.2% for the nine-month period ended December 31, 2024, and 27.0% for the comparable 2023 period. These expenses increased as a dollar amount principally due to the timing of expenditures related to efforts in the current nine-month period and the comparable period of the prior year to pursue strategic alternatives and merger activities.
Current wording
Expenses. Selling, general and administrative expenses were $1,113,303 for the three months ended June 30, 2025, and $1,397,421 for the comparable three months in the prior year. As a percentage of net sales, these expenses decreased to 29.1% for the three-month period ended June 30, 2025, from 30.4% for the 2024 period. These expenses, as a percentage of net sales, were comparable to the same period of the prior fiscal year.
Previous wording
Engineering and product development expenses were $130,395 for the three-month period ended December 31, 2024, and $77,295 for the comparable quarter of the prior year, a $53,100 (68.7%) increase. These expenses increased primarily due to an increase in product development costs.
Current wording
Engineering and Product Development. Engineering and product development expenses were $112,007 for the three-month period ended June 30, 2025, were comparable to $87,601 for the same quarter of the prior year.
Previous wording
Interest Expense. Our interest expense was $77,409 for the quarter ended December 31, 2024, compared to interest expense of $36,310 for the quarter ended December 31, 2023. Interest expense is dependent upon the total amounts borrowed from the Factor and changes in interest rates during the period as compared to the corresponding period of the prior year.
Current wording
Interest Expense. Our interest income was $3,827 for the quarter ended June 30, 2025, compared to interest expense of $44,888 for the quarter ended June 30, 2024. Interest expense is dependent upon the total amounts borrowed from the Factor and interest rates during the period as compared to the corresponding period of the prior year.
Previous wording
Operating activities used cash of $736,999 for the nine months ended December 31, 2024. This was primarily due to a decrease in accounts receivable and amount due from factor of $32,581, and an increase in accounts payable and accrued expenses of $1,233,487, offset by an increase in inventories and prepaid expenses of $1,505,513, and a net loss of $801,867. Operating activities provided cash of $225,962 for the nine months ended December 31, 2023. This was primarily due to net income of $80,881, a decrease in accounts receivable and amount due from factor of $311,821, and an increase in accounts payable and accrued expenses of $874,648, and offset by an increase in inventories, prepaid expenses of $1,050,814.
Current wording
Operating activities provided cash of $2,752,110 for the three months ended June 30, 2025. This was primarily due to a decrease in accounts receivable and amounts due from factor or $1,579,321, a decrease in inventories and prepaid expenses of $3,768,052, net income of $1,810,321, a decrease in deferred tax assets of $361,000, and offset by a decrease in accounts payable and accrued expenses of $1,945,916 and the gain on sale of asset of $2,820,668.
Previous wording
Financing activities provided cash of $730,800 during the nine months ended December 31, 2024, and used cash of $338,286 during the nine months ended December 30, 2023, which is comprised of borrowings from the factor net of repayments.
Current wording
Financing activities used cash of $2,100,458 during the three months ended June 30, 2025, which is comprised of repayments net of advances from the factor. Financing activities provided cash of $1,454,566 during the three months ended June 30, 2024, which is comprised of borrowings net of advances from the factor.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Operating activities used cash of $1,198,108 for the three months ended June 30, 2024. This was primarily due to an increase in inventories, prepaid expenses and other of $260,271, a decrease in accounts payable and accrued liabilities of $852,240, and a net loss of $442,206, and offset by a decrease in accounts receivable and amount due from factor of $354,990.