Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Jul. 15, 2019 | Sep. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Entity Interactive Data Current | Yes | ||
Amendment Flag | false | ||
Document Period End Date | Mar. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | UNIVERSAL SECURITY INSTRUMENTS INC | ||
Entity Central Index Key | 0000102109 | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 2,478,100 | ||
Title of 12(b) Security | Common stock | ||
Trading Symbol | UUU | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding | 2,312,887 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
CURRENT ASSETS | ||
Cash | $ 374,472 | $ 128,161 |
Accounts receivable: | ||
Trade, less allowance for doubtful accounts | 365,293 | 418,550 |
Receivables from employees | 54,916 | 55,568 |
Receivable from Hong Kong Joint Venture | 45,217 | 0 |
Accounts, Notes, Loans and Financing Receivable, Net, Current | 465,426 | 474,118 |
Amount due from factor | 2,549,986 | 2,410,680 |
Inventories – finished goods | 6,852,305 | 5,491,892 |
Prepaid expenses | 145,190 | 278,100 |
TOTAL CURRENT ASSETS | 10,387,379 | 8,782,951 |
INVESTMENT IN HONG KONG JOINT VENTURE | 8,441,889 | 10,023,275 |
INTANGIBLE ASSETS - NET | 53,660 | 58,132 |
PROPERTY AND EQUIPMENT - NET | 19,998 | 35,585 |
OTHER ASSETS | 4,000 | 4,000 |
TOTAL ASSETS | 18,906,926 | 18,903,943 |
CURRENT LIABILITIES | ||
Line of credit – factor | 1,851,591 | 1,611,154 |
Accounts payable - Hong Kong Joint Venture | 4,962,023 | 3,838,627 |
Accounts payable - trade | 616,444 | 494,253 |
Accrued liabilities: | ||
Accrued payroll and employee benefits | 132,132 | 51,066 |
Accrued commissions and other | 470,876 | 155,507 |
TOTAL CURRENT LIABILITIES | 8,033,066 | 6,150,607 |
COMMITMENTS AND CONTINGENCIES | 0 | 0 |
SHAREHOLDERS' EQUITY | ||
Common stock, $.01 par value per share; 20,000,000 shares authorized, 2,312,887 shares issued and outstanding at March 31, 2019 and 2018 | 23,129 | 23,129 |
Additional paid-in capital | 12,885,841 | 12,885,841 |
Accumulated Deficit | (2,646,866) | (1,298,880) |
Accumulated other comprehensive income | 611,756 | 1,143,246 |
TOTAL SHAREHOLDERS' EQUITY | 10,873,860 | 12,753,336 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 18,906,926 | $ 18,903,943 |
CONSOLIDATED BALANCE SHEETS _Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares | Mar. 31, 2019 | Mar. 31, 2018 |
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 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net sales | $ 17,588,040 | $ 14,873,189 |
Cost of goods sold – acquired from Joint Venture | 10,688,538 | 10,099,984 |
Cost of goods sold - other | 1,345,271 | 229,150 |
GROSS PROFIT | 5,554,231 | 4,544,055 |
Selling, general and administrative expense | 4,864,522 | 4,616,391 |
Research and development expense | 502,845 | 653,899 |
Operating income (loss) | 186,864 | (726,235) |
Other expense: | ||
Loss from investment in Hong Kong Joint Venture | (1,049,897) | (1,322,950) |
Interest expense, net | (484,953) | (213,125) |
Loss before income taxes | (1,347,986) | (2,262,310) |
Income tax benefit | 0 | 0 |
NET LOSS | $ (1,347,986) | $ (2,262,310) |
Loss per share: | ||
Basic and diluted | $ (0.58) | $ (0.98) |
Shares used in computing net loss per share: | ||
Weighted average basis and diluted shares outstanding | 2,312,887 | 2,312,887 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
NET LOSS | $ (1,347,986) | $ (2,262,310) |
Other Comprehensive (Loss) Income Company's Portion of Hong Kong Joint Venture's Other Comprehensive (Loss) Income: | ||
Currency translation (loss) gain | (542,062) | 761,916 |
Unrealized gain on investment securities | 10,572 | 21,472 |
Total Other Comprehensive (Loss) Income | (531,490) | 783,388 |
COMPREHENSIVE LOSS | $ (1,879,476) | $ (1,478,922) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | (Accumulated Deficit) Retained Earnings [Member] | Accum. Other Comprehensive Income [Member] |
Balance at Mar. 31, 2017 | $ 14,232,258 | $ 23,129 | $ 12,885,841 | $ 963,430 | $ 359,858 |
Balance (in shares) at Mar. 31, 2017 | 2,312,887 | ||||
Currency translation gain (loss) | 761,916 | 761,916 | |||
Unrealized gain on investment securities | 21,472 | 21,472 | |||
Net loss | (2,262,310) | (2,262,310) | |||
Balance at Mar. 31, 2018 | 12,753,336 | $ 23,129 | 12,885,841 | (1,298,880) | 1,143,246 |
Balance (in shares) at Mar. 31, 2018 | 2,312,887 | ||||
Currency translation gain (loss) | (542,062) | (542,062) | |||
Unrealized gain on investment securities | 10,572 | 10,572 | |||
Net loss | (1,347,986) | (1,347,986) | |||
Balance at Mar. 31, 2019 | $ 10,873,860 | $ 23,129 | $ 12,885,841 | $ (2,646,866) | $ 611,756 |
Balance (in shares) at Mar. 31, 2019 | 2,312,887 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (1,347,986) | $ (2,262,310) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 20,058 | 31,286 |
Loss from investment in Hong Kong Joint Venture | 1,049,897 | 1,322,950 |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable and amounts due from factor | (130,614) | (627,646) |
Increase in inventories | (1,360,413) | (791,788) |
Decrease (Increase) in prepaid expenses | 132,910 | 213,828 |
Increase in accounts payable and accrued expenses | 1,642,022 | 2,648,563 |
Decrease in other assets | 0 | 0 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 5,874 | 534,883 |
INVESTING ACTIVITIES: | ||
Purchase of equipment | 0 | (16,106) |
Cash distributions from Joint Venture | 0 | 0 |
NET CASH USED IN INVESTING ACTIVITIES | 0 | (16,106) |
FINANCING ACTIVITIES: | ||
Net proceeds from (repayment of) line of credit - factor | 240,437 | (652,971) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 240,437 | (652,971) |
INCREASE (DECREASE) IN CASH | 246,311 | (134,194) |
Cash at beginning of period | 128,161 | 262,355 |
CASH AT END OF PERIOD | 374,472 | 128,161 |
Supplemental information: | ||
Interest paid | 398,406 | 162,446 |
Income taxes paid | $ 0 | $ 0 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Business Description and Accounting Policies [Text Block] | 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 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. 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. We believe that our 50% ownership interest in the Hong Kong Joint Venture allows us to significantly influence the operations of the Hong Kong Joint Venture. As such, we account for our interest in the Hong Kong Joint Venture using the equity method of accounting. We have included our investment balance as a non-current asset and have included our share of the Hong Kong Joint Venture’s loss in our consolidated statements of operations. The investment and earnings and losses are adjusted to eliminate intercompany profits. 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: Revenue Recognition: Adoption of ASC Topic 606, Revenue from Contracts with Customers - 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. 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 products acquired from our Hong Kong Joint Venture 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, 2019 and 2018 are as follows: Fiscal Year ended March 31, 2019 March 31, 2018 Sales of products acquired from our HKJV $ 16,039,519 $ 14,342,046 Sales of GFCI’s and ventilation fans 1,548,521 531,143 $ 17,588,040 $ 14,873,189 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 $132,137 and $118,729 for the years ended March 31, 2019 and 2018, respectively. Management considers amounts due from the Company’s factor to be “financing receivables”. Trade accounts receivable, other receivables, and receivables from our Hong Kong Joint Venture 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. At March 31, 2019 and 2018, an allowance of $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 and inspection fees. Expenses incurred for inventory quality control in the amount of approximately $45,000 and $45,000, have been capitalized and included in inventory for the fiscal years ended March 31, 2019 and 2018, 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 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 H, 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 $472,570 and $462,469 in fiscal years 2019 and 2018, respectively. Foreign currency The cumulative balance of currency translation, a component of accumulated other comprehensive income, amounted to $561,358 and $1,103,420 at March 31, 2019 and 2018, respectively. Net Loss per Share: Basic net loss per share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net 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 losses, the weighted average number of common shares outstanding is identical for the years ended March 31, 2019 and 2018 for both basic and diluted shares. In addition, there were no other securities outstanding during 2019 or 2018. Recently Issued Accounting Standards: Changes to U.S. 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 July 2018, the Financial Accounting Standards Board, or FASB, issued ASU 2018-11, Leases (Topic 842): Targeted Improvements . This amendment provides entities with an additional and optional transition method to adopt the new leases standard. Under the new transition method, an entity can initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases ). ASU 2018-11 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early application permitted. We do not expect that the adoption of ASU 2018-11 on April 1, 2019 will have a material impact on our financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting. This guidance expands the scope of accounting for share-based payment arrangements to include share-based payment transactions for acquiring goods and services from nonemployees. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. We do not expect that the adoption of ASU 2018-07 on April 1, 2019 will have a material impact on our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . Under this amendment, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and 2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early application permitted. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We do not expect that the adoption of ASU 2016-02 on April 1, 2019 will have a material impact on our financial statements |
MANAGEMENT'S PLAN
MANAGEMENT'S PLAN | 12 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE B – MANAGEMENT’S PLAN The Company had net losses of $1,347,986 and $2,262,310 for the years ended March 31, 2019 and 2018, respectively. Furthermore, as of March 31, 2018, working capital (computed as the excess of current assets over current liabilities) decreased by $278,031 from $2,632,344 at March 31, 2018, to $2,354,313 at March 31, 2019. Our short-term borrowings to finance operating losses, 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 $605,266 at March 31, 2019. In addition, we have secured extended payment terms for purchases up to $4,000,000 from our Hong Kong Joint Venture for the purchase of inventory. These amounts are unsecured, bear interest at 5.5%, and provide for repayment terms of one hundred-twenty days for each advance thereunder. The balance outstanding under this agreement at March 31, 2019 is $4,962,023 with $2,758,960 of this amount being beyond agreed repayment terms. The Hong Kong Joint We anticipate, now that our complete line of sealed smoke and carbon monoxide alarms has been introduced, that sales will continue to increase. These sealed 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 new 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. The Company has a history of sales that are insufficient to generate profitable operations, and has limited sources of financing. Management’s plan in response to these conditions includes increasing sales resulting from the delivery of the Company’s line of sealed battery ionization smoke alarms and carbon monoxide products, and obtaining additional financing on its credit facility. The Company has seen positive results on this plan during the fiscal years ended March 31, 2019 and 2018 due to sales of its sealed battery |
INVESTMENT IN THE HONG KONG JOI
INVESTMENT IN THE HONG KONG JOINT VENTURE | 12 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | NOTE C – INVESTMENT IN THE HONG KONG JOINT VENTURE The Company holds a 50% interest in a joint venture with a Hong Kong corporation, which has manufacturing facilities in the People’s Republic of China, for the manufacturing of consumer electronic products. As of March 31, 2019 and 2018, the Company has an investment balance of $8,441,889 and $10,023,275, respectively for its 50% interest in 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 as of March 31, 2019 and 2018. March 31, 2019 2018 Current assets $ 13,953,342 $ 12,515,645 Property and other assets 5,949,528 10,687,962 Total assets $ 19,902,870 $ 23,203,607 Current liabilities $ 2,344,644 $ 2,707,429 Non-current liabilities 388,437 389,961 Equity 17,169,789 20,106,217 Total liabilities and equity $ 19,902,870 $ 23,203,607 For the Year Ended March 31, 2019 2018 Net sales $ 13,252,710 $ 14,010,358 Gross profit 1,716,392 1,211,742 Net loss (1,791,405 ) (2,864,061 ) During the years ended March 31, 2019 and 2018, the Company purchased $10,982,518 and $10,505,864, respectively, of finished product from the Hong Kong Joint Venture, which represents 87.2% and 97.8%, respectively, of the Company’s total finished product purchases. At March 31, 2019 and 2018, the Company had outstanding $4,962,023 and $3,838,627 under an extended payment term agreement with the Hong Kong Joint Venture. The agreement provides extended payment terms for the purchase of inventory from the Hong Kong Joint Venture. Purchases under the agreement are limited to $4,000,000, bear interest at 5.50%, are for a term of one hundred-twenty (120) days, and are unsecured. Dividends declared and paid by the Hong Kong Joint Venture, which amounted to $0 and $0 for the fiscal years ended March 31, 2019 and 2018, respectively, are first used to repay any outstanding balance on the agreement. The balance outstanding under this agreement at March 31, 2019 is $4,962,023 with $2,758,960 of this amount being beyond agreed repayment terms. The Company’s investment in the Hong Kong Joint Venture as recorded on the Company’s consolidated balance sheets has been adjusted for the effect of intercompany profit of the Hong Kong Joint Venture in the ending inventory of the Company. |
SHORT-TERM BORROWINGS AND CREDI
SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS | 12 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Short-term Debt [Text Block] | 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. Effective September 1, 2017 the Agreement with Merchant was modified to restrict borrowing solely to eligible accounts receivable and removing the Company’s ability to borrow up to $1,000,000 supported by 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 on January 7, 2018, expires on January 6, 2020, and 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 $605,000 and $1,009,000 at March 31, 2019 and 2018, 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 7.50% at March 31, 2019 and 6.75% at March 31, 2018). 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, 2019 and 2018 there was $1,851,591 and $1,611,154 borrowed and outstanding under the factoring agreement. Under the Agreement, the Company assigned receivables of $16,868,324 and $15,052,852 during the years ended March 31, 2019 and 2018, respectively. The uncollected balance of non-recourse receivables held by the factor amounted to $2,549,986 and $2,410,680 at March 31, 2019 and 2018. Collected cash maintained on deposit at March 31 2019 and 2018 with the factor earns interest at the factor’s prime rate of interest less 2.5 percent (effective rate of 3.00% and 2.25% at March 31, 2019 and 2018, respectively.) There was no cash on deposit with the Factor at March 31, 2019 or 2018. |
PROPERTY AND EQUIPMENT - NET
PROPERTY AND EQUIPMENT - NET | 12 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 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 10 Furniture and fixtures - 5 15 Computer equipment - 5 Property and equipment consist of the following: March 31, 2018 2017 Leasehold improvements $ 166,722 $ 166,722 Machinery and equipment 190,400 190,400 Furniture and fixtures 261,292 261,292 Computer equipment 302,634 302,634 921,048 921,048 Less accumulated depreciation and amortization (901,050 ) (885,463 ) $ 19,998 $ 35,585 Depreciation and amortization expense totaled $15,587 and $26,814 for fiscal years ended March 31, 2019 and 2018, respectively. |
LEASES
LEASES | 12 Months Ended |
Mar. 31, 2019 | |
Leases, Operating [Abstract] | |
Operating Leases of Lessor Disclosure [Text Block] | NOTE F - LEASES During January 2009, the Company entered into an operating lease for its office and warehouse location in Owings Mills, Maryland which expired in March 2019. extended this operating lease to expire in April 2022. This lease is subject to increasing rentals at 2.5% per year. In November 2018, the Company renewed its operating lease through February 2020 for a 3,400 square foot office in Naperville, Illinois. This lease is subject to increasing rentals at three percent (3.0%) per year. 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 $208,734 and $223,355 for the years ended March 31, 2019 and 2018, respectively. 2020 2021 2022 2023 Total Future minimum lease payments are as follows: $ 221,568 $ 171,110 $ 175,431 $ 14,620 $ 582,779 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE G – INCOME TAXES The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act, among other things, reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, changes rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017, eliminates the corporate alternative minimum tax (“AMT”) and changes how existing AMT credits can be realized, creates the base erosion anti-abuse tax (BEAT), a new minimum tax, and creates a new limitation on deductible interest expense. On December 22, 2017, Staff Accounting Bulletin No. 118, or SAB 118, was issued to provide guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740, Income Taxes The Company re-measured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%, which resulted in an approximately $1.2 million reduction of the Company’s net deferred tax assets with a corresponding reduction to the valuation allowance. The Deemed Repatriation Transition Tax (“Transition Tax”) is a tax on previously untaxed accumulated and current earnings and profits (“E&P”) of our Hong Kong Joint Venture. To determine the amount of the Transition Tax, the Company must determine, in addition to other factors, the amount of post-1986 E&P of the Hong Kong Joint Venture, as well as the amount of non-U.S. income taxes paid on such earnings. The Company has determined that it does not owe a Transition Tax since it has sufficient net operating loss carryforwards and foreign tax credit carryforwards to offset the E&P of its Hong Kong Joint Venture that are subject to the tax. 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, 2018, 2017, and 2016 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, 2019 and 2018, the Company has total net federal and state operating loss carry forwards of approximately $278,431 and $9,301,000, respectively, which expire in various amounts at dates from 2019 through 2033. 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, 2019 2018 Federal benefit at statutory rate (21.0% for 2019 and 30.8% for 2018) before loss carry-forward $ (283,077 ) $ (695,660 ) Non-repatriated loss of Hong Kong Joint Venture 220,478 382,027 Permanent and other differences 14,581 13,336 State income tax benefit – net of federal effect (8,437 ) (31,785 ) Expiration of tax credits 132,439 236,628 Change in value of deferred tax assets due to change in effective rate - 1,197,474 Change in deferred tax asset valuation allowance (75,984 ) (1,102,020 ) $ - $ - The individual components of the Company’s deferred tax assets are as follows: March 31, 2019 2018 Deferred tax assets: Accruals and allowances $ 42,055 $ 36,409 Inventory uniform capitalization 17,316 33,250 Net operating loss carry forward 68,745 2,298,116 Foreign tax credit carry forward 72,213 459,199 Research and development tax credit carry forward 61,701 61,701 Allowance for unrealizable deferred tax assets (262,030 ) (2,888,675 ) Net deferred tax asset $ - $ - |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 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. On July 9, 2018, the Company renewed the CEO Agreement through July 31, 2019. |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 12 Months Ended |
Mar. 31, 2019 | |
Major Customers [Abstract] | |
Major Customers [Text Block] | NOTE I - MAJOR CUSTOMERS 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. As described in Note C, the Company purchased a majority of its products from its 50% owned Hong Kong Joint Venture. The Company had one customer that represented 12.2% and 13.9% of the Company’s net sales for the fiscal years ending March 31, 2019 and 2018, respectively. |
QUARTERLY FINANCIAL DATA
QUARTERLY FINANCIAL DATA | 12 Months Ended |
Mar. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information [Text Block] | NOTE J - QUARTERLY FINANCIAL DATA (UNAUDITED) Quarterly Results of Operations (Unaudited): The unaudited quarterly results of operations for fiscal years 2019 and 2018 are summarized as follows: Quarter Ended June 30, September 30, December 31, March 31, 2019 Net sales $ 4,045,996 $ 4,526,252 $ 4,491,862 $ 4,523,930 Gross profit 1,240,144 1,456,492 1,061,378 1,796,217 Net loss (438,833 ) (121,324 ) (516,993 ) (270,836 ) Net loss per share: Basic and diluted (0.19 ) (0.05 ) (0.22 ) (0.12 ) 2018 Net sales $ 3,318,237 $ 3,582,816 $ 3,555,431 $ 4,416,705 Gross profit 981,533 1,158,788 1,067,548 1,336,186 Net loss (543,663 ) (167,925 ) (1,014,796 ) (535,926 ) Net loss per share: Basic and diluted (0.24 ) (0.07 ) (0.44 ) (0.23 ) |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
Mar. 31, 2019 | |
Postemployment Benefits [Abstract] | |
Postemployment Benefits Disclosure [Text Block] | 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 $36,868 and $37,876 for the years ended March 31, 2019 and 2018, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE L – RELATED PARTY TRANSACTIONS During the fiscal year ended March 31, 2019 and 2018, inventory purchases and other company expenses of approximately $1,723,000 and $1,667,000, 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, 2019 and 2018 amounted to $168,826 and $160,438, respectively, and the amount outstanding at March 31, 2019 and 2018 is $55,321 and $8,225, respectively. |
INTANGIBLE ASSETS - NET
INTANGIBLE ASSETS - NET | 12 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | 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, 2019 and 2018 was $4,472 and $4,472, respectively. Accumulated amortization at March 31, 2019 and 2018 was $35,774 and $31,302, respectively. Amortization expense for the next five years is expected to be $4,472 through 2024. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | 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, 2019 or 2018. |
NATURE OF BUSINESS AND SUMMAR_2
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Nature Of Operations [Policy Text Block] | 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 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. |
Consolidation, Policy [Policy Text Block] | 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. We believe that our 50% ownership interest in the Hong Kong Joint Venture allows us to significantly influence the operations of the Hong Kong Joint Venture. As such, we account for our interest in the Hong Kong Joint Venture using the equity method of accounting. We have included our investment balance as a non-current asset and have included our share of the Hong Kong Joint Venture’s loss in our consolidated statements of operations. The investment and earnings and losses are adjusted to eliminate intercompany profits. |
Use of Estimates, Policy [Policy Text Block] | 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 and Cash Equivalents, Policy [Policy Text Block] | Cash: |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition: Adoption of ASC Topic 606, Revenue from Contracts with Customers - 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. 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 products acquired from our Hong Kong Joint Venture 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, 2019 and 2018 are as follows: Fiscal Year ended March 31, 2019 March 31, 2018 Sales of products acquired from our HKJV $ 16,039,519 $ 14,342,046 Sales of GFCI’s and ventilation fans 1,548,521 531,143 $ 17,588,040 $ 14,873,189 |
Trade and Other Accounts Receivable, Policy [Policy Text Block] | 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 $132,137 and $118,729 for the years ended March 31, 2019 and 2018, respectively. Management considers amounts due from the Company’s factor to be “financing receivables”. Trade accounts receivable, other receivables, and receivables from our Hong Kong Joint Venture 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. At March 31, 2019 and 2018, an allowance of $57,000 has been provided for uncollectible trade accounts receivable. |
Inventory, Policy [Policy Text Block] | 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 and inspection fees. Expenses incurred for inventory quality control in the amount of approximately $45,000 and $45,000, have been capitalized and included in inventory for the fiscal years ended March 31, 2019 and 2018, 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 or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of long-lived assets |
Income Tax, Policy [Policy Text Block] | 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 H, Income Taxes. |
Warranties [Policy Text Block] | 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 Expense, Policy [Policy Text Block] | Research and Development: Research and development costs are charged to operations as incurred. |
Shipping and Handling Cost, Policy [Policy Text Block] | 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 $472,570 and $462,469 in fiscal years 2019 and 2018, respectively. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign currency The cumulative balance of currency translation, a component of accumulated other comprehensive income, amounted to $561,358 and $1,103,420 at March 31, 2019 and 2018, respectively. |
Earnings Per Share, Policy [Policy Text Block] | Net Loss per Share: Basic net loss per share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net 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 losses, the weighted average number of common shares outstanding is identical for the years ended March 31, 2019 and 2018 for both basic and diluted shares. In addition, there were no other securities outstanding during 2019 or 2018. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Standards: Changes to U.S. 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 July 2018, the Financial Accounting Standards Board, or FASB, issued ASU 2018-11, Leases (Topic 842): Targeted Improvements . This amendment provides entities with an additional and optional transition method to adopt the new leases standard. Under the new transition method, an entity can initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases ). ASU 2018-11 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early application permitted. We do not expect that the adoption of ASU 2018-11 on April 1, 2019 will have a material impact on our financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting. This guidance expands the scope of accounting for share-based payment arrangements to include share-based payment transactions for acquiring goods and services from nonemployees. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. We do not expect that the adoption of ASU 2018-07 on April 1, 2019 will have a material impact on our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . Under this amendment, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and 2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early application permitted. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We do not expect that the adoption of ASU 2016-02 on April 1, 2019 will have a material impact on our financial statements |
NATURE OF BUSINESS AND SUMMAR_3
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Disaggregation of Revenue [Abstract] | |
Disaggregation of Revenue [Table Text Block] | Revenue recognized by these categories for the fiscal years ended March 31, 2019 and 2018 are as follows: Fiscal Year ended March 31, 2019 March 31, 2018 Sales of products acquired from our HKJV $ 16,039,519 $ 14,342,046 Sales of GFCI’s and ventilation fans 1,548,521 531,143 $ 17,588,040 $ 14,873,189 |
INVESTMENT IN THE HONG KONG J_2
INVESTMENT IN THE HONG KONG JOINT VENTURE (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule Of Financial Statement Information Of Joint Ventures [Table Text Block] | The following represents summarized financial information derived from the financial statements of the Hong Kong Joint Venture as of March 31, 2019 and 2018. March 31, 2019 2018 Current assets $ 13,953,342 $ 12,515,645 Property and other assets 5,949,528 10,687,962 Total assets $ 19,902,870 $ 23,203,607 Current liabilities $ 2,344,644 $ 2,707,429 Non-current liabilities 388,437 389,961 Equity 17,169,789 20,106,217 Total liabilities and equity $ 19,902,870 $ 23,203,607 For the Year Ended March 31, 2019 2018 Net sales $ 13,252,710 $ 14,010,358 Gross profit 1,716,392 1,211,742 Net loss (1,791,405 ) (2,864,061 ) |
PROPERTY AND EQUIPMENT - NET (T
PROPERTY AND EQUIPMENT - NET (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment consist of the following: March 31, 2018 2017 Leasehold improvements $ 166,722 $ 166,722 Machinery and equipment 190,400 190,400 Furniture and fixtures 261,292 261,292 Computer equipment 302,634 302,634 921,048 921,048 Less accumulated depreciation and amortization (901,050 ) (885,463 ) $ 19,998 $ 35,585 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | 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 $208,734 and $223,355 for the years ended March 31, 2019 and 2018, respectively. 2020 2021 2022 2023 Total Future minimum lease payments are as follows: $ 221,568 $ 171,110 $ 175,431 $ 14,620 $ 582,779 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The reconciliation between the statutory federal income tax provision and the actual effective tax provision is as follows: Years ended March 31, 2019 2018 Federal benefit at statutory rate (21.0% for 2019 and 30.8% for 2018) before loss carry-forward $ (283,077 ) $ (695,660 ) Non-repatriated loss of Hong Kong Joint Venture 220,478 382,027 Permanent and other differences 14,581 13,336 State income tax benefit – net of federal effect (8,437 ) (31,785 ) Expiration of tax credits 132,439 236,628 Change in value of deferred tax assets due to change in effective rate - 1,197,474 Change in deferred tax asset valuation allowance (75,984 ) (1,102,020 ) $ - $ - |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The individual components of the Company’s deferred tax assets are as follows: March 31, 2019 2018 Deferred tax assets: Accruals and allowances $ 42,055 $ 36,409 Inventory uniform capitalization 17,316 33,250 Net operating loss carry forward 68,745 2,298,116 Foreign tax credit carry forward 72,213 459,199 Research and development tax credit carry forward 61,701 61,701 Allowance for unrealizable deferred tax assets (262,030 ) (2,888,675 ) Net deferred tax asset $ - $ - |
QUARTERLY FINANCIAL DATA (Table
QUARTERLY FINANCIAL DATA (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information [Table Text Block] | The unaudited quarterly results of operations for fiscal years 2019 and 2018 are summarized as follows: Quarter Ended June 30, September 30, December 31, March 31, 2019 Net sales $ 4,045,996 $ 4,526,252 $ 4,491,862 $ 4,523,930 Gross profit 1,240,144 1,456,492 1,061,378 1,796,217 Net loss (438,833 ) (121,324 ) (516,993 ) (270,836 ) Net loss per share: Basic and diluted (0.19 ) (0.05 ) (0.22 ) (0.12 ) 2018 Net sales $ 3,318,237 $ 3,582,816 $ 3,555,431 $ 4,416,705 Gross profit 981,533 1,158,788 1,067,548 1,336,186 Net loss (543,663 ) (167,925 ) (1,014,796 ) (535,926 ) Net loss per share: Basic and diluted (0.24 ) (0.07 ) (0.44 ) (0.23 ) |
NATURE OF BUSINESS AND SUMMAR_4
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | $ 4,491,862 | $ 4,526,252 | $ 4,045,996 | $ 4,523,930 | $ 3,555,431 | $ 3,582,816 | $ 3,318,237 | $ 4,416,705 | $ 17,588,040 | $ 14,873,189 |
Sales of products acquired from our HKJV [Member] | ||||||||||
Revenues | 16,039,519 | 14,342,046 | ||||||||
Sales of GFCI's and ventilation fans [Member] | ||||||||||
Revenues | $ 1,548,521 | $ 531,143 |
NATURE OF BUSINESS AND SUMMAR_5
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Factoring Charges | $ 132,137 | $ 118,729 |
Allowance for Doubtful Accounts Receivable | 57,000 | 57,000 |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | 561,358 | 1,103,420 |
Expenses Incurred in Inventory, Amount | 45,000 | 45,000 |
Shipping and Handling [Member] | ||
Cost of Goods and Services Sold | $ 472,570 | $ 462,469 |
Hong Kong Joint Venture [Member] | ||
Equity Method Investment, Ownership Percentage | 50.00% |
MANAGEMENT'S PLAN (Details Text
MANAGEMENT'S PLAN (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Organization Consolidation And Presentation OF Financial Statements [Line Items] | ||||||||||
Net Income (Loss) Attributable to Parent | $ (516,993) | $ (121,324) | $ (438,833) | $ (270,836) | $ (1,014,796) | $ (167,925) | $ (543,663) | $ (535,926) | $ (1,347,986) | $ (2,262,310) |
Decrease in Working Capital | 278,031 | |||||||||
Working Capital | 2,354,313 | $ 2,632,344 | $ 2,354,313 | $ 2,632,344 | ||||||
Line of Credit Facility, Frequency of Payment and Payment Terms | provide for repayment terms of one hundred-twenty days for each advance thereunder | |||||||||
Accounts Payable, Related Parties | $ 2,758,960 | $ 2,758,960 | ||||||||
Hong Kong Joint Venture [Member] | ||||||||||
Organization Consolidation And Presentation OF Financial Statements [Line Items] | ||||||||||
Line of Credit Facility, Interest Rate at Period End | 5.50% | 5.50% | ||||||||
Line of Credit Facility, Capacity Available for Trade Purchases | $ 4,000,000 | $ 4,000,000 | ||||||||
Line of Credit Facility, Remaining Borrowing Capacity | 605,266 | 605,266 | ||||||||
Accounts Payable, Related Parties | 4,962,023 | 4,962,023 | ||||||||
Extended Maturity [Member] | Hong Kong Joint Venture [Member] | ||||||||||
Organization Consolidation And Presentation OF Financial Statements [Line Items] | ||||||||||
Accounts Payable, Related Parties | $ 2,758,960 | $ 2,758,960 |
INVESTMENT IN THE HONG KONG J_3
INVESTMENT IN THE HONG KONG JOINT VENTURE (Details) - Hong Kong Joint Venture [Member] - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Current assets | $ 13,953,342 | $ 12,515,645 |
Property and other assets | 5,949,528 | 10,687,962 |
Total assets | 19,902,870 | 23,203,607 |
Current liabilities | 2,344,644 | 2,707,429 |
Non-current liabilities | 388,437 | 389,961 |
Equity | 17,169,789 | 20,106,217 |
Total liabilities and equity | $ 19,902,870 | $ 23,203,607 |
INVESTMENT IN THE HONG KONG J_4
INVESTMENT IN THE HONG KONG JOINT VENTURE (Details 1) - Hong Kong Joint Venture [Member] - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net sales | $ 13,252,710 | $ 14,010,358 |
Gross profit | 1,716,392 | 1,211,742 |
Net loss | $ (1,791,405) | $ (2,864,061) |
INVESTMENT IN THE HONG KONG J_5
INVESTMENT IN THE HONG KONG JOINT VENTURE (Details Textual) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounts Payable, Related Parties | $ 2,758,960 | |
Hong Kong Joint Venture [Member] | ||
Equity Method Investment, Ownership Percentage | 50.00% | |
Related Party Transaction, Purchases from Related Party | $ 10,982,518 | $ 10,505,864 |
Related Party Transaction, Rate | 87.20% | 97.80% |
Equity Method Investment, Aggregate Cost | $ 8,441,889 | $ 10,023,275 |
Accounts Payable, Related Parties | 4,962,023 | 3,838,627 |
Long-term Line of Credit | $ 4,000,000 | |
Line of Credit Facility, Interest Rate at Period End | 5.50% | |
Dividends | $ 0 | $ 0 |
SHORT-TERM BORROWINGS AND CRE_2
SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS (Details Textual) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Short-term Debt [Line Items] | ||
Line of Credit, Current | $ 1,851,591 | $ 1,611,154 |
Line of Credit Facility, Borrowing Capacity, Description | the Agreement with Merchant was modified to restrict borrowing solely to eligible accounts receivable and removing the Company's ability to borrow up to $1,000,000 supported by 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. | |
Line of Credit Facility, Interest Rate Description | Collected cash maintained on deposit at March 31 2019 and 2018 with the factor earns interest at the factor's prime rate of interest less 2.5 percent (effective rate of 3.00% and 2.25% at March 31, 2019 and 2018, respectively.) | |
Factoring Agreement Receivables Sold | $ 16,868,324 | 15,052,852 |
Due From Factor | 2,549,986 | 2,410,680 |
Merchant Factors Corporation [Member] | ||
Short-term Debt [Line Items] | ||
Long-term Line of Credit | 605,000 | 1,009,000 |
Line of Credit, Current | $ 1,851,591 | $ 1,611,154 |
Line of Credit Facility, Interest Rate Description | bear interest at the prime commercial rate of interest, as published, plus two percent (effective rate 7.50% at March 31, 2019 and 6.75% at March 31, 2018). | |
Accounts Receivables Factoring Agreement Expiration Date | Jan. 6, 2020 | |
Accounts Receivables Factoring Agreement Term | 2 years |
PROPERTY AND EQUIPMENT - NET (D
PROPERTY AND EQUIPMENT - NET (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 |
Property, Plant and Equipment, Gross | $ 921,048 | $ 921,048 | |
Less accumulated depreciation and amortization | (901,050) | (885,463) | |
Property, Plant and Equipment, Net | $ 19,998 | 35,585 | 35,585 |
Leasehold improvements [Member] | |||
Property, Plant and Equipment, Gross | 166,722 | 166,722 | |
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 |
PROPERTY AND EQUIPMENT - NET _2
PROPERTY AND EQUIPMENT - NET (Details Textual) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Depreciation, Depletion and Amortization | $ 20,058 | $ 31,286 |
Leasehold improvements [Member] | ||
Property Plant And Equipment Useful Life Description | Shorter of term of lease or useful life of asset | |
Computer equipment [Member] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Maximum [Member] | Machinery and equipment [Member] | ||
Property, Plant and Equipment, Useful Life | 10 years | |
Maximum [Member] | Furniture and fixtures [Member] | ||
Property, Plant and Equipment, Useful Life | 15 years | |
Minimum [Member] | Machinery and equipment [Member] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Minimum [Member] | Furniture and fixtures [Member] | ||
Property, Plant and Equipment, Useful Life | 5 years |
LEASES (Details)
LEASES (Details) | Mar. 31, 2019USD ($) |
2020 | $ 221,568 |
2021 | 171,110 |
2022 | 175,431 |
2023 | 14,620 |
Total | $ 582,779 |
LEASES (Details Textual)
LEASES (Details Textual) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2018ft² | Jan. 31, 2009 | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | |
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 expired in March 2019. | |||
Operating Lease Rent Increment Percentage | (3.00%) | 2.50% | ||
Operating Leases, Rent Expense | $ | $ 208,734 | $ 223,355 | ||
Office in Naperville [Member] | ||||
Land Subject to Ground Leases | ft² | 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Federal benefit at statutory rate (21.0% for 2019 and 30.8% for 2018) before loss carry-forward | $ (283,077) | $ (695,660) |
Non-repatriated loss of Hong Kong Joint Venture | 220,478 | 382,027 |
Permanent and other differences | 14,581 | 13,336 |
State income tax benefit - net of federal effect | (8,437) | (31,785) |
Expiration of tax credits | 132,439 | 236,628 |
Change in value of deferred tax assets due to change in effective rate | 0 | 1,197,474 |
Change in deferred tax asset valuation allowance | (75,984) | (1,102,020) |
Income tax benefit | $ 0 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Deferred tax assets: | ||
Accruals and allowances | $ 42,055 | $ 36,409 |
Inventory uniform capitalization | 17,316 | 33,250 |
Net operating loss carry forward | 68,745 | 2,298,116 |
Foreign tax credit carry forward | 72,213 | 459,199 |
Research and development tax credit carry forward | 61,701 | 61,701 |
Allowance for unrealizable deferred tax assets | (262,030) | (2,888,675) |
Net deferred tax asset | $ 0 | $ 0 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Operating Loss Carryforwards | $ 278,431 | $ 9,301,000 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 21.00% | 21.00% | 30.80% |
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2033 | |||
Deferred Tax Assets, Net of Valuation Allowance | $ 0 | $ 0 | ||
Scenario, Plan [Member] | ||||
Deferred Tax Assets, Net of Valuation Allowance | $ 1,200,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) | Mar. 31, 2019USD ($) |
Minimum [Member] | |
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | $ 94,000 |
Maximum [Member] | |
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | $ 1,995,000 |
MAJOR CUSTOMERS (Details Textua
MAJOR CUSTOMERS (Details Textual) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
One Customer [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk, Percentage | 12.20% | 13.90% |
Hong Kong Joint Venture [Member] | ||
Equity Method Investment, Ownership Percentage | 50.00% |
QUARTERLY FINANCIAL DATA (Detai
QUARTERLY FINANCIAL DATA (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Net sales | $ 4,491,862 | $ 4,526,252 | $ 4,045,996 | $ 4,523,930 | $ 3,555,431 | $ 3,582,816 | $ 3,318,237 | $ 4,416,705 | $ 17,588,040 | $ 14,873,189 |
Gross profit | 1,061,378 | 1,456,492 | 1,240,144 | 1,796,217 | 1,067,548 | 1,158,788 | 981,533 | 1,336,186 | 5,554,231 | 4,544,055 |
Net loss | $ (516,993) | $ (121,324) | $ (438,833) | $ (270,836) | $ (1,014,796) | $ (167,925) | $ (543,663) | $ (535,926) | $ (1,347,986) | $ (2,262,310) |
Net loss per share: | ||||||||||
Basic and diluted (in dollars per share) | $ (0.22) | $ (0.05) | $ (0.19) | $ (0.12) | $ (0.44) | $ (0.07) | $ (0.24) | $ (0.23) | $ (0.58) | $ (0.98) |
RETIREMENT PLAN (Details Textua
RETIREMENT PLAN (Details Textual) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.00% | |
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 36,868 | $ 37,876 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - Chief Executive Officer [Member] - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Related Party Transaction, Amounts of Transaction | $ 1,723,000 | $ 1,667,000 |
Due to Related Parties, Current | 55,321 | 8,225 |
Maximum [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Amounts of Transaction | $ 168,826 | |
Minimum [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Amounts of Transaction | $ 160,438 |
INTANGIBLE ASSETS - NET (Detail
INTANGIBLE ASSETS - NET (Details Textual) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Capitalization Finite Lived Intangible Assets Legal Expenses | $ 89,434 | |
Amortization of Intangible Assets | 4,472 | $ 4,472 |
Finite-Lived Intangible Assets, Accumulated Amortization | 35,774 | $ 31,302 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 4,472 | |
Patents [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 20 years |
SHAREHOLDERS' EQUITY (Details T
SHAREHOLDERS' EQUITY (Details Textual) | Mar. 31, 2019shares |
Non Qualified Stock Option Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 120,000 |