Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Jul. 15, 2020 | Sep. 30, 2019 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2020 | ||
Entity Registrant Name | UNIVERSAL SECURITY INSTRUMENTS INC | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,755,321 | ||
Entity Common Stock, Shares Outstanding | 2,312,887 | ||
Entity Central Index Key | 0000102109 | ||
Current Fiscal Year End Date | --03-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Trading Symbol | UUU |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
CURRENT ASSETS | ||
Cash | $ 93,794 | $ 374,472 |
Accounts receivable: | ||
Trade, less allowance for doubtful accounts | 109,548 | 365,293 |
Receivables from employees | 36,876 | 54,916 |
Receivable from Hong Kong Joint Venture | 45,217 | |
Accounts, Notes, Loans and Financing Receivable, Net, Current | 146,424 | 465,426 |
Amount due from factor | 2,300,109 | 2,549,986 |
Inventories - finished goods | 5,123,959 | 6,852,305 |
Prepaid expenses | 113,145 | 145,190 |
TOTAL CURRENT ASSETS | 7,777,431 | 10,387,379 |
INVESTMENT IN HONG KONG JOINT VENTURE | 8,441,889 | |
INTANGIBLE ASSET - NET | 49,189 | 53,660 |
PROPERTY AND EQUIPMENT - NET | 346,477 | 19,998 |
OTHER ASSETS | 4,000 | 4,000 |
TOTAL ASSETS | 8,177,097 | 18,906,926 |
CURRENT LIABILITIES | ||
Line of credit - factor | 1,561,665 | 1,851,591 |
Short-term portion of operating lease liability | 158,578 | |
Accounts payable - trade | 505,904 | 616,444 |
Accounts payable - Eyston Company Ltd. | 266,409 | 4,962,023 |
Accrued liabilities: | ||
Accrued payroll and employee benefits | 136,683 | 132,132 |
Accrued commissions and other | 88,694 | 470,876 |
TOTAL CURRENT LIABILITIES | 2,717,933 | 8,033,066 |
ACCOUNTS PAYABLE - Eyston Company Ltd. - noncurrent | 839,831 | |
LONG-TERM PORTION OF OPERATING LEASE LIABILITY | 171,120 | |
TOTAL LONG-TERM LIABILITIES | 1,010,951 | |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY | ||
Common stock, $.01 par value per share; authorized 20,000,000 shares; 2,312,887 shares issued and outstanding at December 31, 2019 and March 31, 2019 | 23,129 | 23,129 |
Additional paid-in capital | 12,885,841 | 12,885,841 |
Accumulated Deficit | (8,460,757) | (2,646,866) |
Accumulated other comprehensive income | 611,756 | |
TOTAL SHAREHOLDERS' EQUITY | 4,448,213 | 10,873,860 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 8,177,097 | $ 18,906,926 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Mar. 31, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 2,312,887 | 2,312,887 |
Common stock, shares outstanding | 2,312,887 | 2,312,887 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net sales | $ 14,803,024 | $ 17,588,040 |
Cost of goods sold - acquired from Joint Venture | 10,009,571 | 10,688,538 |
Cost of goods sold - other | 1,034,599 | 1,345,271 |
GROSS PROFIT | 3,758,854 | 5,554,231 |
Selling, general and administrative expense | 4,628,881 | 4,864,522 |
Research and development expense | 691,886 | 502,845 |
Operating (loss) income | (1,561,913) | 186,864 |
Other expense: | ||
Loss from investment in Hong Kong Joint Venture | (3,842,275) | (1,049,897) |
Interest expense | (409,703) | (484,953) |
Loss before income taxes | (5,813,891) | (1,347,986) |
NET LOSS | $ (5,813,891) | $ (1,347,986) |
Loss per share: | ||
Basic and diluted | $ (2.51) | $ (0.58) |
Shares used in computing net loss per share: | ||
Weighted average basic and diluted shares outstanding | 2,312,887 | 2,312,887 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
NET LOSS | $ (5,813,891) | $ (1,347,986) |
Other Comprehensive (Loss) Income Company's portion of Hong Kong Joint Venture's other comprehensive (loss) income: | ||
Currency translation loss | (134,151) | (542,062) |
Unrealized (loss) gain on investment securities | (50,397) | 10,572 |
Less: Reclassification adjustment for gain included in net loss | (427,208) | |
Total Other Comprehensive Loss | (611,756) | (531,490) |
COMPREHENSIVE LOSS | $ (6,425,647) | $ (1,879,476) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | AOCI [Member] | Total |
Balance at Mar. 31, 2018 | $ 23,129 | $ 12,885,841 | $ (1,298,880) | $ 1,143,246 | $ 12,753,336 |
Balance (in shares) at Mar. 31, 2018 | 2,312,887 | ||||
Currency translation 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 | $ 23,129 | 12,885,841 | (2,646,866) | 611,756 | 10,873,860 |
Balance (in shares) at Mar. 31, 2019 | 2,312,887 | ||||
Currency translation loss | (134,151) | (134,151) | |||
Unrealized gain on investment securities | (50,397) | (50,397) | |||
Less: Reclassification adjustment for gain included in net loss | $ (427,208) | (427,208) | |||
Net loss | (5,813,891) | (5,813,891) | |||
Balance at Mar. 31, 2020 | $ 23,129 | $ 12,885,841 | $ (8,460,757) | $ 4,448,213 | |
Balance (in shares) at Mar. 31, 2020 | 2,312,887 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (5,813,891) | $ (1,347,986) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 7,690 | 20,058 |
Depreciation of right-of-use asset | 156,250 | |
Loss from investment in Hong Kong Joint Venture | 3,842,275 | 1,049,897 |
Changes in operating assets and liabilities: | ||
Decrease (Increase) in accounts receivable and amounts due from factor | 568,879 | (130,614) |
Decrease (Increase) in inventories | 1,728,346 | (1,360,413) |
Decrease in prepaid expenses | 32,045 | 132,910 |
(Decrease) Increase in accounts payable and accrued expenses | (356,096) | 1,642,022 |
Decrease in operating lease liability | (156,250) | |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 9,248 | 5,874 |
FINANCING ACTIVITIES: | ||
Net (repayment of) proceeds from line of credit - factor | (289,926) | 240,437 |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (289,926) | 240,437 |
(DECREASE) INCREASE IN CASH | (280,678) | 246,311 |
Cash at beginning of period | 374,472 | 128,161 |
CASH AT END OF PERIOD | 93,794 | 374,472 |
SUPPLEMENTAL INFORMATION: | ||
Interest paid | 496,250 | $ 398,406 |
Supplemental disclosures of non-cash activities: | ||
Right-of-use asset in exchange for operating lease liability | 485,948 | |
Reduction in accounts payable - Eyston Company Ltd arising from the sale of the investment in the Hong Kong Joint Venture | $ 4,000,000 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Mar. 31, 2020 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business: Universal Security Instruments, Inc.’s (the “Company”) primary business is the sale of smoke alarms and other safety products to retailers, wholesale distributors and to the electrical distribution trade which includes electrical and lighting distributors as well as manufactured housing companies. The Company imports all of its safety and other products from foreign manufacturers. The Company, as an importer, is subject to tariffs which vary depending on types of products and country of origin, changes in economic and political conditions in the country of manufacture, potential trade restrictions and currency fluctuations. Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary USI Electric, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. In 1989 we formed Eyston Company Limited (Eyston), a limited liability company under the laws of Hong Kong, as a 50% joint venture partner with a Hong Kong-based partner, to manufacture various products in the Peoples Republic of China (the "Hong Kong Joint Venture"). Effective March 31, 2020 we sold our 50% interest in the Hong Kong Joint Venture in exchange for $4,000,000. We believe that our 50% ownership interest in the Hong Kong Joint Venture through the date of its sale on March 31, 2020 allowed us to significantly influence the operations of the Hong Kong Joint Venture. As such, we accounted for our interest in the operations of the Hong Kong Joint Venture using the equity method of accounting we have included our investment balance as a non-current asset through the date of sale. We have included our share of the Hong Kong Joint Venture’s loss in our consolidated statements of operations for fiscal years ended March 31, 2020 and 2019. The investment and earnings and losses were adjusted to eliminate intercompany profits through the date of its sale on March 31, 2020. Use of Estimates: In preparing financial statements in conformity with accounting principles generally accepted in the United States of America (US-GAAP), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash: The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk with cash. Revenue Recognition: The Company’s primary source of revenue is the sale of safety and security products based upon purchase orders or contracts with customers. Revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred to the customer when the product is shipped or delivered to the customer. Customers may not return, exchange or refuse acceptance of goods without our approval. Generally, the Company does not grant extended payment terms. Shipping and handling costs associated with outbound freight, after control over a product has transferred to a customer, are accounted for as a fulfillment cost and are recorded in selling, general and administrative expense. 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 Eyston, the 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, 2020 and 2019 are as follows: Fiscal Year ended March 31, 2020 March 31, 2019 Sales of safety alarms acquired from Eyston $ 13,098,923 $ 16,039,519 Sales of GFCI’s and ventilation fans 1,704,101 1,548,521 $ 14,803,024 $ 17,588,040 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 $118,141 and $132,137 for the years ended March 31, 2020 and 2019, 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, 2020 and 2019, 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, tariffs, and inspection fees. Expenses incurred for inventory quality control in the amount of approximately $45,000 and $45,000, were absorbed in inventory for the fiscal years ended March 31, 2020 and 2019, respectively. We evaluate inventories on a quarterly basis and write down inventory that is considered obsolete or unmarketable in an amount equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. Impairment of long-lived assets : Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The factors considered in performing this assessment include current operating results, anticipated future results, the manner in which the asset group is used and the effects of obsolescence, demand, competition and other economic factors. Accordingly, when indicators of impairment are present, the Company evaluates the carrying value of these asset groups in relation to the operating performance of the business and future undiscounted cash flows expected to result from the use of these asset groups. Impairment losses are recognized when the sum of expected future cash flows is less than the asset groups carrying value, and losses are determined based upon the excess carrying value of the asset group over its fair value. Based on this assessment, no impairment to long-lived assets resulted for fiscal years ended March 31, 2020 and 2019. Income Taxes: The Company recognizes a liability or asset for the deferred tax consequences of temporary differences between the tax basis of assets or liabilities and their reported amounts in the consolidated financial statements. These temporary differences may result in taxable or deductible amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. The deferred tax assets are reviewed periodically for recoverability and a valuation allowance is provided whenever it is more likely than not that a deferred tax asset will not be realized. The Company follows Accounting Standards Codification (ASC) 740‑10 that gives guidance to tax positions related to the recognition and measurement of a tax position taken or expected to be taken in a tax return and requires that we recognize in our financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. Interest and penalties, if any, related to income tax matters are recorded as income tax expenses. See Note G, Income Taxes. Warranties: We generally provide warranties, on the safety products, from one to ten years to the non-commercial end user on all products sold. The manufacturers of our safety products provide us with a one-year warranty on all products we purchase for resale. Claims for warranty replacement of products beyond the one-year warranty period covered by the manufacturers have not been historically material. Research and Development: Research and development costs are charged to operations as incurred. Shipping and Handling Fees and Costs: The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with inbound freight are included in cost of goods sold. Shipping and handling costs associated with outbound freight are included in selling, general and administrative expenses and totaled $343,838 and $472,570 in fiscal years 2020 and 2019, respectively. Foreign currency : The activity and accounts of the Hong Kong Joint Venture are denominated in Hong Kong dollars and are translated to US dollars. The Company translates the accounts of the Hong Kong Joint Venture at the applicable exchange rate in effect at the year-end date for assets and liabilities and at the average exchange rate for the reporting period for statement of operation purposes. The Company currently does not maintain cash in foreign banks to support its operations in Hong Kong. The cumulative balance of currency translation, a component of accumulated other comprehensive income, amounted to $561,358 at March 31, 2019. The reclassification of the realized gain from other comprehensive income is included in the loss from investment in the Hong Kong Joint Venture in the Consolidated Statements of Operations. 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, 2020 and 2019 for both basic and diluted shares. In addition, there were no other securities outstanding during 2020 or 2019. 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 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 was adopted effective April 1, 2019 and did not have an effect on the financial statements of the Company at March 31, 2020. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less are accounted for similar to previous guidance for operating leases with the election of the practical expedient. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on April 1, 2019, the date it became effective for public companies based on the Company's fiscal year, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to the accumulated deficit as of April 1, 2019 as a result of this adoption. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. The Company also elected the practical expedient provided in a subsequent amendment to the standard that removed the requirement to separate lease and non-lease components, provided certain conditions were met. (See Note F) |
LIQUIDITY AND MANAGEMENT'S PLAN
LIQUIDITY AND MANAGEMENT'S PLAN | 12 Months Ended |
Mar. 31, 2020 | |
LIQUIDITY AND MANAGEMENT'S PLAN | |
LIQUIDITY AND MANAGEMENT'S PLAN | NOTE B – LIQUIDITY AND MANAGEMENT’S PLAN The Company had net losses of $5,813,891 and $1,347,986 for the years ended March 31, 2020 and 2019, respectively. As the Company's products are sold primarily to the construction industry and do-it-yourself centers, restrictions and limitations imposed by the COVID-19 pandemic have had a negative impact on the Company's sales. The Company is not yet able to quantify the full impact of the COVID-19 pandemic on its sales and financial results, but believes that the pandemic was a factor in significantly lower sales for the fourth quarter of its fiscal year ended March 31, 2020 when compared to sales for the 2019 period. 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 $738,000 at March 31, 2020. The Company sold its fifty percent ownership in the Hong Kong Joint Venture effective March 31, 2020. The non-cash proceeds from the sale were used to reduce our trade accounts payable due to the Hong Kong Joint Venture by $4,000,000. In addition, the Company and the HKJV agreed to convert $839,831 of trade accounts payable to an interest only note payable. In April, 2020 the Company and the HKJV formalized these terms into a note payable agreement with a maturity date of April 19, 2022. Until March 31, 2020 the Company had secured extended payment terms for purchases up to $4,000,000 from our Hong Kong Joint Venture for the purchase of sealed battery alarms. These amounts were unsecured, incurred interest at 5.5% per annum, and provided for repayment terms of 120 days for each purchase. Subsequent to March 31, 2020 Eyston will continue to be the Company's principal supplier of safety alarms and the Company will pay for these purchases upon evidence of shipment from the factory. We anticipate, now that our complete line of sealed smoke and carbon monoxide alarms has been introduced, that these products will compete on price and functionality with similar products offered by our larger competitors. While we believe there will be market acceptance of our products we cannot be assured of this. Should our products not achieve the level of acceptance we anticipate this will have a significant impact on our future operations and potentially impact our ability to continue operations. 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, carbon monoxide products, and ground fault circuit interrupters. In addition, effective March 31, 2020, the Company sold its ownership interest in the Hong Kong Joint Venture reducing its current liabilities due to the Hong Kong Joint Venture by $4,000,000. Subsequent to March 31, 2020 the Company has seen positive results on this plan due to increased sales of its product offerings to a major home improvement retailer during the second quarter of the Company's fiscal year ending March 31, 2021. The increase in sales to the major home improvement retailer has resulted in significant additional availability under the provisions of the Company's facility with its Factor. Management expects this sales growth to continue going forward. In May, 2020 the Company received a Paycheck Protection Program loan of $221,400 under the CARES Act and expects the loan will be forgiven in compliance with the provisions of the Act. Though no assurances can be given, if management’s plan continues to be successful over the next twelve months, the Company anticipates that it should be able to meet its cash needs for the next twelve months following the issuance date of this report. Cash flows and credit availability is expected to be adequate to fund operations for one year from the issuance date of this report. |
INVESTMENT IN THE HONG KONG JOI
INVESTMENT IN THE HONG KONG JOINT VENTURE | 12 Months Ended |
Mar. 31, 2020 | |
INVESTMENT IN THE HONG KONG JOINT VENTURE | |
INVESTMENT IN THE HONG KONG JOINT VENTURE | NOTE C – INVESTMENT IN THE HONG KONG JOINT VENTURE The Company held a fifty percent interest in Eyston Company Limited, the Hong Kong Joint Venture, which has manufacturing facilities in the People’s Republic of China, for the manufacturing of certain of our electronic and electrical products. The Company sold its fifty percent interest in the Hong Kong Joint Venture in exchange for $4,000,000. The Company recorded a loss related to the sale of the Company's investment in the Hong Kong Joint Venture of $2,472,620, and a loss from its equity share of the Hong Kong Joint Venture's net loss for the year ended March 31, 2020 of $1,369,655. The combined loss is recorded as the loss from investment in the Hong Kong Joint Venture on the Consolidated Statements of Operations for the year ended March 31, 2020. The proceeds of the sale were used to reduce our outstanding trade account payable balance owed to the Hong Kong Joint Venture. As of March 31, 2019, the Company had an investment balance of $8,441,889, 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 for the years ended March 31, 2020 and 2019. March 31, 2019 Current assets $ 13,953,342 Property and other assets 5,949,528 Total assets $ 19,902,870 Current liabilities $ 2,344,644 Non-current liabilities 388,437 Equity 17,169,789 Total liabilities and equity $ 19,902,870 For the Year Ended March 31, 2020 2019 Net Sales $ 8,054,070 $ 13,252,710 Gross Profit 276,787 1,716,392 Net Loss (3,235,107) (1,791,405) During the years ended March 31, 2020 and 2019, the Company purchased $7,335,646 and $10,982,518, respectively, of finished product from the Hong Kong Joint Venture, which represents 82.7% and 87.2%, respectively, of the Company’s total finished product purchases. Effective March 31, 2020, the Company sold its fifty percent ownership interest in the Hong Kong Joint Venture and converted $839,831 of trade accounts payable due to the Hong Kong Joint Venture to an unsecured long-term interest only note payable in April 2020. Interest is based on the Shanghai Commercial Bank Limited in Hong Kong US Dollar prime rate published on the first day of each calendar month plus 2% (5.25% effective rate at March 31, 2020) and is payable monthly. The principal balance of $839,831 is due and payable on April 19, 2022. The Company has reflected this amount as a noncurrent liability at March 31, 2020 as the terms of sale were completed with the HKJV in connection with the sale. At March 31, 2019, the Company had outstanding $4,962,023 under an extended payment term agreement with the Hong Kong Joint Venture. The extended payment term agreement was canceled with the sale of the Company's interest in the Hong Kong Joint Venture. The agreement previously had provided for extended payment terms for the purchase of inventory from the Hong Kong Joint Venture. Purchases under the agreement were limited to $4,000,000, incurred interest at 5.50%, are for a term of one hundred-twenty (120) days, and were unsecured. Dividends declared and paid by the Hong Kong Joint Venture, which amounted to $0 for the fiscal years ended March 31, 2020 and 2019, 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 at March 31, 2019, as recorded on the Company’s consolidated balance sheets and through the date of sale, 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, 2020 | |
SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS | |
SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS | NOTE D – SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS On January 15, 2015, the Company entered into an Agreement with Merchant for the purpose of factoring the Company’s trade accounts receivable and to provide financing secured by finished goods inventory. Under the modified Agreement the Company may borrow eighty percent (80%) of eligible accounts receivable. Additional funding, characterized by Merchant as an over advance, may be provided up to one hundred percent (100%) of eligible accounts receivable. The over advance portion, if any, may not exceed fifty percent (50%) of eligible inventory up to a maximum of $500,000. The Agreement which was extended on January 7, 2020, expires on January 6, 2022, 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 $738,000 and $605,000 at March 31, 2020 and 2019, respectively. Advances on factored trade accounts receivable and borrowing on inventories are secured by all of the Company’s trade accounts receivable and inventories, are repaid periodically as collections are made by Merchant but are otherwise due upon demand, and bear interest at the prime commercial rate of interest, as published, plus two percent (effective rate 5.25% at March 31, 2020 and 7.50% at March 31, 2019). 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, 2020 and 2019 there was $1,561,665 and $1,851,591 borrowed and outstanding under the factoring agreement. Under the Agreement, the Company assigned receivables of $14,162,999 and $16,868,324 during the years ended March 31, 2020 and 2019, respectively. The uncollected balance of non-recourse receivables held by the factor amounted to $2,300,109 and $2,549,986 at March 31, 2020 and 2019. Collected cash maintained on deposit at March 31, 2020 and 2019 with the factor earns interest at the factor’s prime rate of interest less 2.5 percent (effective rate of 0.75% and 3.00% at March 31, 2020 and 2019, respectively.) There was no cash on deposit with the Factor at March 31, 2020 or 2019. |
PROPERTY AND EQUIPMENT - NET
PROPERTY AND EQUIPMENT - NET | 12 Months Ended |
Mar. 31, 2020 | |
PROPERTY AND EQUIPMENT - NET | |
PROPERTY AND EQUIPMENT - NET | NOTE E – PROPERTY AND EQUIPMENT - NET Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided by using the straight-line method based on estimated useful lives. Expenditures for major betterments that extend the useful life of property and equipment are capitalized. Repair and maintenance costs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in the results of operations. The estimated useful lives for financial reporting purposes are as follows: Leasehold improvements - Shorter of term of lease or useful life of asset Machinery and equipment - 5 to 10 years Furniture and fixtures - 5 to 15 years Computer equipment - 5 years Property and equipment consist of the following: March 31, 2020 2019 Leasehold improvements $ 652,670 $ 166,722 Machinery and equipment 190,400 190,400 Furniture and fixtures 261,292 261,292 Computer equipment 302,634 302,634 1,406,996 921,048 Less accumulated depreciation and amortization (1,060,519) (901,050) $ 346,477 $ 19,998 Depreciation and amortization expense totaled $159,469, which includes $156,250 of amortization of right-of-use lease asset, and $15,587 for fiscal years ended March 31, 2020 and 2019, respectively. Right-of-use lease assets of $329,698, net, are included in leasehold improvements in Property and Equipment on the Consolidated Balance Sheets. |
LEASES
LEASES | 12 Months Ended |
Mar. 31, 2020 | |
LEASES | |
LEASES | NOTE F – LEASES The Company is a lessee in lease agreements for office space. Certain of the Company’s leases contain provisions that provide for one or more options to renew at the Company’s sole discretion. The Company’s leases are comprised of fixed lease payments, with its real estate leases including lease payments subject to a rate or index which may be variable. Certain real estate leases also include executory costs such as common area maintenance (non-lease component). As a practical expedient permitted under ASC 842, the Company has elected to account for the lease and non-lease components as a single lease component. Lease payments, which may include lease components and non-lease components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable lease amounts based on a rate or index (fixed in substance) as stipulated in the lease contract. During January 2009, the Company entered into an operating lease for its office and warehouse location in Owings Mills, Maryland which was set to expire in March 2019. In October, 2018, we extended this operating lease to expire in April 2022. This lease is subject to increasing rentals at 2.5% per year. In November 2019, the Company renewed its operating lease through February 2021 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 for the year ended March 31, 2019. Rent expense for short term operating leases amounted to $67,448 for the year ended March 31, 2020. None of the Company’s lease agreements contain any residual value guarantees or material restrictive covenants. As a result of the Company’s election of the package of practical expedients permitted within ASC 842, which among other things, allows for the carryforward of historical lease classification, all of the Company’s lease agreements in existence at the date of adoption that were classified as operating leases under ASC 840 have been classified as operating leases under ASC 842. Lease expense for payments related to the Company’s operating leases is recognized on a straight-line basis over the related lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments as specified in the lease. Right-of-use assets and lease liabilities related to the Company’s operating leases are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term and amounted to approximately $485,000 at the date of adoption. When the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s borrowing rates at the lease commencement date in determining the present value of lease payments. The right-of use asset also includes any lease payments made at or before lease commencement less any lease incentives. As of March 31, 2020, the Company had right-of-use assets of $329,698 and lease liabilities of $329,698 related to its operating leases. Right-of-use assets are included in property and equipment, net, on the consolidated balance sheet and lease liabilities related to the Company’s operating leases are included in short-term and long-term lease liability on the consolidated balance sheet. As of March 31, 2020 the Company’s weighted-average remaining lease term and weighted-average discount rate related to its operating leases were two years and 6.0%, respectively. During the fiscal year ended March 31, 2020, the cash paid for amounts included in the measurement of lease liabilities related to the Company’s operating leases was $160,605, which is included as an operating cash outflow within the consolidated statements of cash flows. During the fiscal year ended March 31, 2020, the operating lease costs related to the Company’s operating leases was $160,605 which is included in operating costs and expenses in the consolidated statements of operations. During the fiscal year ended March 31, 2020, the Company did not enter into any lease agreements set to commence in the future and there were no newly leased assets for which a right-of use asset was recorded in exchange for a new lease liability, other than th o se lease assets recorded upon implementation. The future minimum payments under operating leases were as follows at March 31, 2020: 2021 $ 171,462 2022 175,792 2023 14,670 Total operating lease payments $ 361,924 Less: amounts representing interest (32,226) Present value of net operating lease payments $ 329,698 Less: current portion 158,578 Long-term portion of operating lease obligations $ 171,120 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Mar. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE G – INCOME TAXES The Company files its income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. Income tax returns filed for the fiscal years ended March 31, 2019, 2018, and 2017 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, 2020, the Company has total net federal and state operating loss carry forwards of approximately $5,714,000, which expire in various amounts at dates from 2020 through 2034. 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, 2020 2019 Federal benefit at statutory rate (21%) before loss carry-forward $ (1,220,917) $ (283,077) Non-repatriated loss of Hong Kong Joint Venture — 220,478 Permanent and other differences 7,646 14,581 State income tax benefit – net of federal effect (72,000) (8,437) Expiration of tax credits — 132,439 Change in deferred tax asset valuation allowance 1,285,271 (75,984) $ — $ — The individual components of the Company’s deferred tax assets are as follows: March 31, 2020 2019 Deferred tax assets: Accruals and allowances $ 39,112 $ 42,055 Inventory uniform capitalization 18,544 17,316 Net operating loss carry forward 1,258,433 68,745 Foreign tax credit carry forward 169,511 72,213 Research and development tax credit carry forward 61,701 61,701 Allowance for unrealizable deferred tax assets (1,547,301) (262,030) Net deferred tax asset $ — $ — |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE H – COMMITMENTS AND CONTINGENCIES From time to time, the Company is involved in various lawsuits and legal matters. It is the opinion of management, based on consultation with legal counsel, that there are no outstanding material claims outside of the normal course of business. The Company’s employment agreement with its CEO (the “CEO Agreement”) requires the Company to make certain post-employment payments to the CEO in the event of his termination following a change in control, death, disability, non-renewal, or resignation with “Good Reason” under terms of the CEO Agreement. Additionally, the CEO Agreement requires the Company to make post-employment payments, which can range from approximately $94,000 to $1,995,000, dependent upon the controlling event, as discussed above. In July, 2020, the Company renewed the CEO Agreement through July 31, 2021. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Mar. 31, 2020 | |
CONCENTRATIONS | |
CONCENTRATIONS | NOTE I - CONCENTRATIONS The Company is primarily a distributor of safety products for use in home and business under both its trade names and private labels for other companies. As described in Note C, the Company purchased a majority of its products from the Hong Kong Joint Venture. The Company had two different customers, one in each of the fiscal years that ended March 31, 2020 and 2019 that represented 10.3% and 12.2% of the Company’s net sales. |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Mar. 31, 2020 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | NOTE J - QUARTERLY FINANCIAL DATA (UNAUDITED) Quarterly Results of Operations (Unaudited): The unaudited quarterly results of operations for fiscal years 2020 and 2019 are summarized as follows: Quarter Ended June 30, September 30, December 31, March 31, 2020 Net sales $ 4,343,291 $ 3,622,269 $ 3,223,678 $ 3,613,786 Gross profit 1,244,829 1,090,346 769,992 653,687 Net loss (608,954) (700,814) (1,011,833) (3,492,290) Net loss per share: Basic and diluted (0.26) (0.30) (0.44) (1.51) 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) |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
Mar. 31, 2020 | |
RETIREMENT PLAN | |
RETIREMENT PLAN | NOTE K – RETIREMENT PLAN The Company has a retirement savings plan under Section 401(k) of the Internal Revenue Code. All full-time employees who have completed 12 months of service are eligible to participate. Employees are permitted to contribute up to the amounts prescribed by law. The Company may provide contributions to the plan consisting of a matching amount equal to a percentage of the employee’s contribution, not to exceed four percent (4%). Employer contributions were $41,121 and $36,868 for the years ended March 31, 2020 and 2019, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Mar. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE L – RELATED PARTY TRANSACTIONS During the fiscal year ended March 31, 2020 and 2019, inventory purchases and other company expenses of approximately $999,000 and $1,723,000, 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, 2020 and 2019 amounted to $136,876 and $168,826, respectively, and the amount outstanding at March 31, 2020 and 2019 is $27,102 and $55,321, respectively. |
INTANGIBLE ASSETS - NET
INTANGIBLE ASSETS - NET | 12 Months Ended |
Mar. 31, 2020 | |
INTANGIBLE ASSETS - NET | |
INTANGIBLE ASSETS - NET | NOTE M – INTANGIBLE ASSETS - NET Intangible assets consist of legal expenses of $89,434 incurred in obtaining and perfecting patents on newly developed detector technology and are capitalized for financial statement purposes. Upon issuance, patents are amortized on a straight-line basis over twenty years. Amortization expense for the fiscal year ended March 31, 2020 and 2019 was $4,471 and $4,472, respectively. Accumulated amortization at March 31, 2020 and 2019 was $40,245 and $35,774, respectively. Amortization expense for the next five years is expected to be $4,475 through 2025. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Mar. 31, 2020 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE N – SHAREHOLDERS’ EQUITY Under the terms of the Company’s 2011 Non-Qualified Stock Option Plan, 120,000 shares of common stock are reserved for the granting of stock options. There were no stock options outstanding at March 31, 2020 or 2019. |
NATURE OF BUSINESS AND SUMMAR_2
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2020 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Business | Nature of Business: Universal Security Instruments, Inc.’s (the “Company”) primary business is the sale of smoke alarms and other safety products to retailers, wholesale distributors and to the electrical distribution trade which includes electrical and lighting distributors as well as manufactured housing companies. The Company imports all of its safety and other products from foreign manufacturers. The Company, as an importer, is subject to tariffs which vary depending on types of products and country of origin, changes in economic and political conditions in the country of manufacture, potential trade restrictions and currency fluctuations. |
Principles of Consolidation | Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary USI Electric, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. In 1989 we formed Eyston Company Limited (Eyston), a limited liability company under the laws of Hong Kong, as a 50% joint venture partner with a Hong Kong-based partner, to manufacture various products in the Peoples Republic of China (the "Hong Kong Joint Venture"). Effective March 31, 2020 we sold our 50% interest in the Hong Kong Joint Venture in exchange for $4,000,000. We believe that our 50% ownership interest in the Hong Kong Joint Venture through the date of its sale on March 31, 2020 allowed us to significantly influence the operations of the Hong Kong Joint Venture. As such, we accounted for our interest in the operations of the Hong Kong Joint Venture using the equity method of accounting we have included our investment balance as a non-current asset through the date of sale. We have included our share of the Hong Kong Joint Venture’s loss in our consolidated statements of operations for fiscal years ended March 31, 2020 and 2019. The investment and earnings and losses were adjusted to eliminate intercompany profits through the date of its sale on March 31, 2020. |
Use of Estimates | Use of Estimates: In preparing financial statements in conformity with accounting principles generally accepted in the United States of America (US-GAAP), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash | Cash: The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk with cash. |
Revenue Recognition | Revenue Recognition: The Company’s primary source of revenue is the sale of safety and security products based upon purchase orders or contracts with customers. Revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred to the customer when the product is shipped or delivered to the customer. Customers may not return, exchange or refuse acceptance of goods without our approval. Generally, the Company does not grant extended payment terms. Shipping and handling costs associated with outbound freight, after control over a product has transferred to a customer, are accounted for as a fulfillment cost and are recorded in selling, general and administrative expense. 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 Eyston, the 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, 2020 and 2019 are as follows: Fiscal Year ended March 31, 2020 March 31, 2019 Sales of safety alarms acquired from Eyston $ 13,098,923 $ 16,039,519 Sales of GFCI’s and ventilation fans 1,704,101 1,548,521 $ 14,803,024 $ 17,588,040 |
Accounts Receivable | Accounts Receivable: The Company assigns the majority of its trade receivables on a pre-approved non-recourse basis to Merchant Factors Corporation (Merchant or Factor) under a factoring agreement on an ongoing basis. Factoring charges recognized on assignment of receivables are deducted from revenue in the consolidated statements of operations and amounted to $118,141 and $132,137 for the years ended March 31, 2020 and 2019, 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, 2020 and 2019, an allowance of $57,000 has been provided for uncollectible trade accounts receivable. |
Inventories | Inventories: Inventories are stated at the lower of cost (first in/first out method) or net realizable value. Included as a component of finished goods inventory are additional non-material costs. These costs include freight, import duty, tariffs, and inspection fees. Expenses incurred for inventory quality control in the amount of approximately $45,000 and $45,000, were absorbed in inventory for the fiscal years ended March 31, 2020 and 2019, respectively. We evaluate inventories on a quarterly basis and write down inventory that is considered obsolete or unmarketable in an amount equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. |
Impairment of long-lived assets | Impairment of long-lived assets : Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The factors considered in performing this assessment include current operating results, anticipated future results, the manner in which the asset group is used and the effects of obsolescence, demand, competition and other economic factors. Accordingly, when indicators of impairment are present, the Company evaluates the carrying value of these asset groups in relation to the operating performance of the business and future undiscounted cash flows expected to result from the use of these asset groups. Impairment losses are recognized when the sum of expected future cash flows is less than the asset groups carrying value, and losses are determined based upon the excess carrying value of the asset group over its fair value. Based on this assessment, no impairment to long-lived assets resulted for fiscal years ended March 31, 2020 and 2019. |
Income Taxes | Income Taxes: The Company recognizes a liability or asset for the deferred tax consequences of temporary differences between the tax basis of assets or liabilities and their reported amounts in the consolidated financial statements. These temporary differences may result in taxable or deductible amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. The deferred tax assets are reviewed periodically for recoverability and a valuation allowance is provided whenever it is more likely than not that a deferred tax asset will not be realized. The Company follows Accounting Standards Codification (ASC) 740‑10 that gives guidance to tax positions related to the recognition and measurement of a tax position taken or expected to be taken in a tax return and requires that we recognize in our financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. Interest and penalties, if any, related to income tax matters are recorded as income tax expenses. See Note G, Income Taxes. |
Warranties | Warranties: We generally provide warranties, on the safety products, from one to ten years to the non-commercial end user on all products sold. The manufacturers of our safety products provide us with a one-year warranty on all products we purchase for resale. Claims for warranty replacement of products beyond the one-year warranty period covered by the manufacturers have not been historically material. |
Research and Development | Research and Development: Research and development costs are charged to operations as incurred. |
Shipping and Handling Fees and Costs | Shipping and Handling Fees and Costs: The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with inbound freight are included in cost of goods sold. Shipping and handling costs associated with outbound freight are included in selling, general and administrative expenses and totaled $343,838 and $472,570 in fiscal years 2020 and 2019, respectively. |
Foreign currency | Foreign currency : The activity and accounts of the Hong Kong Joint Venture are denominated in Hong Kong dollars and are translated to US dollars. The Company translates the accounts of the Hong Kong Joint Venture at the applicable exchange rate in effect at the year-end date for assets and liabilities and at the average exchange rate for the reporting period for statement of operation purposes. The Company currently does not maintain cash in foreign banks to support its operations in Hong Kong. The cumulative balance of currency translation, a component of accumulated other comprehensive income, amounted to $561,358 at March 31, 2019. The reclassification of the realized gain from other comprehensive income is included in the loss from investment in the Hong Kong Joint Venture in the Consolidated Statements of Operations. |
Net Loss per Share | 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, 2020 and 2019 for both basic and diluted shares. In addition, there were no other securities outstanding during 2020 or 2019. |
Recently Issued Accounting Standards | 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 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 was adopted effective April 1, 2019 and did not have an effect on the financial statements of the Company at March 31, 2020. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less are accounted for similar to previous guidance for operating leases with the election of the practical expedient. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on April 1, 2019, the date it became effective for public companies based on the Company's fiscal year, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to the accumulated deficit as of April 1, 2019 as a result of this adoption. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. The Company also elected the practical expedient provided in a subsequent amendment to the standard that removed the requirement to separate lease and non-lease components, provided certain conditions were met. |
NATURE OF BUSINESS AND SUMMAR_3
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of revenue recognized by these categories | The Company believes this disaggregation best depicts how our various product lines perform and are affected by economic factors. Revenue recognized by these categories for the fiscal years ended March 31, 2020 and 2019 are as follows: Fiscal Year ended March 31, 2020 March 31, 2019 Sales of safety alarms acquired from Eyston $ 13,098,923 $ 16,039,519 Sales of GFCI’s and ventilation fans 1,704,101 1,548,521 $ 14,803,024 $ 17,588,040 |
INVESTMENT IN THE HONG KONG J_2
INVESTMENT IN THE HONG KONG JOINT VENTURE (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
INVESTMENT IN THE HONG KONG JOINT VENTURE | |
Schedule of 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 for the years ended March 31, 2020 and 2019. March 31, 2019 Current assets $ 13,953,342 Property and other assets 5,949,528 Total assets $ 19,902,870 Current liabilities $ 2,344,644 Non-current liabilities 388,437 Equity 17,169,789 Total liabilities and equity $ 19,902,870 For the Year Ended March 31, 2020 2019 Net Sales $ 8,054,070 $ 13,252,710 Gross Profit 276,787 1,716,392 Net Loss (3,235,107) (1,791,405) |
PROPERTY AND EQUIPMENT - NET (T
PROPERTY AND EQUIPMENT - NET (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
PROPERTY AND EQUIPMENT - NET | |
Schedule of Estimated Useful Lives for Financial Reporting | The estimated useful lives for financial reporting purposes are as follows: Leasehold improvements - Shorter of term of lease or useful life of asset Machinery and equipment - 5 to 10 years Furniture and fixtures - 5 to 15 years Computer equipment - 5 years |
Schedule of Property, Plant and Equipment | Property and equipment consist of the following: March 31, 2020 2019 Leasehold improvements $ 652,670 $ 166,722 Machinery and equipment 190,400 190,400 Furniture and fixtures 261,292 261,292 Computer equipment 302,634 302,634 1,406,996 921,048 Less accumulated depreciation and amortization (1,060,519) (901,050) $ 346,477 $ 19,998 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
LEASES | |
Summary of future minimum payments under operating leases | The future minimum payments under operating leases were as follows at March 31, 2020: 2021 $ 171,462 2022 175,792 2023 14,670 Total operating lease payments $ 361,924 Less: amounts representing interest (32,226) Present value of net operating lease payments $ 329,698 Less: current portion 158,578 Long-term portion of operating lease obligations $ 171,120 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
INCOME TAXES | |
Schedule of Reconciliation Between the Statutory Federal Income Tax Provision and the Actual Effective Tax Provision | The reconciliation between the statutory federal income tax provision and the actual effective tax provision is as follows: Years ended March 31, 2020 2019 Federal benefit at statutory rate (21%) before loss carry-forward $ (1,220,917) $ (283,077) Non-repatriated loss of Hong Kong Joint Venture — 220,478 Permanent and other differences 7,646 14,581 State income tax benefit – net of federal effect (72,000) (8,437) Expiration of tax credits — 132,439 Change in deferred tax asset valuation allowance 1,285,271 (75,984) $ — $ — |
Schedule of Deferred Tax Assets | The individual components of the Company’s deferred tax assets are as follows: March 31, 2020 2019 Deferred tax assets: Accruals and allowances $ 39,112 $ 42,055 Inventory uniform capitalization 18,544 17,316 Net operating loss carry forward 1,258,433 68,745 Foreign tax credit carry forward 169,511 72,213 Research and development tax credit carry forward 61,701 61,701 Allowance for unrealizable deferred tax assets (1,547,301) (262,030) Net deferred tax asset $ — $ — |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of Quarterly Financial Information | The unaudited quarterly results of operations for fiscal years 2020 and 2019 are summarized as follows: Quarter Ended June 30, September 30, December 31, March 31, 2020 Net sales $ 4,343,291 $ 3,622,269 $ 3,223,678 $ 3,613,786 Gross profit 1,244,829 1,090,346 769,992 653,687 Net loss (608,954) (700,814) (1,011,833) (3,492,290) Net loss per share: Basic and diluted (0.26) (0.30) (0.44) (1.51) 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) |
NATURE OF BUSINESS AND SUMMAR_4
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | $ 3,613,786 | $ 3,223,678 | $ 3,622,269 | $ 4,343,291 | $ 4,523,930 | $ 4,491,862 | $ 4,526,252 | $ 4,045,996 | $ 14,803,024 | $ 17,588,040 |
Products Acquired From Our H K J V [Member] | ||||||||||
Revenues | 13,098,923 | 16,039,519 | ||||||||
G F C I s And Ventilation Fans [Member] | ||||||||||
Revenues | $ 1,704,101 | $ 1,548,521 |
NATURE OF BUSINESS AND SUMMAR_5
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 12 Months Ended | |
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||
Factoring Charges | $ 118,141 | $ 132,137 |
Allowance for Doubtful Accounts Receivable | 57,000 | |
Expenses Incurred in Inventory, Amount | 45,000 | 45,000 |
Cumulative balance of currency translation | (134,151) | (542,062) |
Shipping and Handling [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Cost of Goods and Services Sold | $ 343,838 | 472,570 |
Hong Kong Joint Venture [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Cumulative balance of currency translation | 561,358 | |
Disposed by sale | Hong Kong Joint Venture [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest disposed | 50 | |
Consideration for disposal of joint venture | $ 4,000,000 | $ 8,441,889 |
Hong Kong Joint Venture [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest held | 50.00% |
LIQUIDITY AND MANAGEMENT'S PL_2
LIQUIDITY AND MANAGEMENT'S PLAN (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | |
Organization Consolidation And Presentation OF Financial Statements [Line Items] | ||||||||||
Accounts Payable, Related Parties | $ 2,758,960 | $ 2,758,960 | ||||||||
Net Income (Loss) Attributable to Parent | (3,492,290) | $ (1,011,833) | $ (700,814) | $ (608,954) | $ (270,836) | $ (516,993) | $ (121,324) | $ (438,833) | (5,813,891) | $ (1,347,986) |
Net Income (Loss) Attributable to Parent | $ (3,492,290) | $ (1,011,833) | $ (700,814) | $ (608,954) | $ (270,836) | $ (516,993) | $ (121,324) | $ (438,833) | $ (5,813,891) | $ (1,347,986) |
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% | ||||||||
Long-term Line of Credit | $ 4,000,000 | $ 4,000,000 | ||||||||
Reduce trade accounts payable | 4,000,000 | |||||||||
Trade accounts payable converted to an unsecured long-term interest only note payable | 839,831 | 839,831 | ||||||||
Line of Credit Facility, Capacity Available for Trade Purchases | 4,000,000 | $ 4,000,000 | ||||||||
Repayment term for each advance | 120 days | |||||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 738,000 | $ 738,000 | ||||||||
Paycheck Protection Program loan | ||||||||||
Organization Consolidation And Presentation OF Financial Statements [Line Items] | ||||||||||
Proceeds from debt | $ 221,400 |
INVESTMENT IN THE HONG KONG J_3
INVESTMENT IN THE HONG KONG JOINT VENTURE (Details) - Hong Kong Joint Venture [Member] | Mar. 31, 2019USD ($) |
Current assets | $ 13,953,342 |
Property and other assets | 5,949,528 |
Total assets | 19,902,870 |
Current liabilities | 2,344,644 |
Non-current liabilities | 388,437 |
Equity | 17,169,789 |
Total liabilities and equity | $ 19,902,870 |
INVESTMENT IN THE HONG KONG J_4
INVESTMENT IN THE HONG KONG JOINT VENTURE - Financial statements of the Hong Kong Joint Venture (Details) - Hong Kong Joint Venture [Member] - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net sales | $ 8,054,070 | $ 13,252,710 |
Gross profit | 276,787 | 1,716,392 |
Net loss | $ (3,235,107) | $ (1,791,405) |
INVESTMENT IN THE HONG KONG J_5
INVESTMENT IN THE HONG KONG JOINT VENTURE - Additional Information (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||
Accounts Payable, Related Parties | $ 2,758,960 | |
Unsecured long-term interest only note payable | ||
Schedule of Equity Method Investments [Line Items] | ||
Trade accounts payable converted to an unsecured long-term interest only note payable | $ 839,831 | |
Effective interest rate (as a percent) | 5.25% | |
Principal balance due and payable | $ 839,831 | |
Unsecured long-term interest only note payable | Prime Rate | ||
Schedule of Equity Method Investments [Line Items] | ||
Spread on variable interest rate (as a percent) | 2.00% | |
Hong Kong Joint Venture [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Net carrying value prior to the sale | $ 2,472,620 | |
Equity Method Investment, Aggregate Cost | $ 2,472,620 | |
Hong Kong Joint Venture [Member] | Disposed by sale | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest disposed | 50 | |
Consideration for disposal of joint venture | $ 4,000,000 | $ 8,441,889 |
Hong Kong Joint Venture [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investment, Ownership Percentage | 50.00% | |
Related Party Transaction, Purchases from Related Party | $ 7,335,646 | $ 10,982,518 |
Related Party Transaction, Rate | 82.70% | 87.20% |
Accounts Payable, Related Parties | $ 4,962,023 | |
Long-term Line of Credit | $ 4,000,000 | |
Line of Credit Facility, Interest Rate at Period End | 5.50% | |
Dividends | $ 0 |
SHORT-TERM BORROWINGS AND CRE_2
SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Short-term Debt [Line Items] | ||
Line of Credit, Current | $ 1,561,665 | $ 1,851,591 |
Line of Credit Facility, Borrowing Capacity, Description | Under the modified Agreement the Company may borrow eighty percent (80%) of eligible accounts receivable. Additional funding, characterized by Merchant as an over advance, may be provided up to one hundred percent (100%) of eligible accounts receivable. The over advance portion, if any, may not exceed fifty percent (50%) of eligible inventory up to a maximum of $500,000. | |
Line of Credit Facility, Interest Rate Description | Collected cash maintained on deposit at March 31, 2020 and 2019 with the factor earns interest at the factor's prime rate of interest less 2.5 percent (effective rate of 0.75% and 3.00% at March 31, 2020 and 2019, respectively.) | |
Factoring Agreement Receivables Sold | $ 14,162,999 | 16,868,324 |
Due From Factor | 2,300,109 | 2,549,986 |
Merchant Factors Corporation [Member] | ||
Short-term Debt [Line Items] | ||
Long-term Line of Credit | 738,000 | 605,000 |
Line of Credit, Current | $ 1,561,665 | $ 1,851,591 |
Line of Credit Facility, Interest Rate Description | bear interest at the prime commercial rate of interest, as published, plus two percent (effective rate 5.25% at March 31, 2020 and 7.50% at March 31, 2019). | |
Accounts Receivables Factoring Agreement Expiration Date | Jan. 6, 2022 | |
Accounts Receivables Factoring Agreement Term | 2 years |
PROPERTY AND EQUIPMENT - NET (D
PROPERTY AND EQUIPMENT - NET (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Property, Plant and Equipment, Gross | $ 1,406,996 | $ 921,048 |
Less accumulated depreciation and amortization | (1,060,519) | (901,050) |
Property, Plant and Equipment, Net, Total | 346,477 | 19,998 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment, Gross | 652,670 | 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 -
PROPERTY AND EQUIPMENT - NET - Estimated useful lives for financial reporting purposes (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Non Cash Right of Use Assets, Depreciation | $ 156,250 | $ 15,587 |
Depreciation, Depletion and Amortization | 7,690 | $ 20,058 |
Depreciation, Amortization and Accretion, Net | 159,469 | |
Right-of-use assets | $ 329,698 | |
Leasehold Improvements [Member] | ||
Property Plant And Equipment Useful Life Description | Shorter of term of lease or useful life of asset | |
Right-of-use assets | $ 329,698 | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment, Useful Life | 10 years | |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment, Useful Life | 15 years | |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Computer Equipment [Member] | ||
Property, Plant and Equipment, Useful Life | 5 years |
LEASES (Details)
LEASES (Details) | Mar. 31, 2020USD ($) |
LEASES | |
2021 | $ 171,462 |
2022 | 175,792 |
2023 | 14,670 |
Total operating lease payments | 361,924 |
Less: amounts representing interest | (32,226) |
Operating Lease, Liability | 329,698 |
Less: current portion | 158,578 |
Long-term portion of operating lease obligations | $ 171,120 |
LEASES - Additional Information
LEASES - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2018ft² | Jan. 31, 2009 | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | |
Description of Lessor Leasing Arrangements, Operating Leases | During January 2009, the Company entered into an operating lease for its office and warehouse location in Owings Mills, Maryland which was set to expire in March 2019 | |||
Operating Lease Rent Increment Percentage | (3.00%) | 2.50% | ||
Operating Leases, Rent Expense | $ 67,448 | $ 208,734 | ||
Non Cash Right Of Use Asset In Exchange For Operating Lease Liability | 485,000 | |||
Right-of-use assets | 329,698 | |||
Operating Lease, Liability | $ 329,698 | |||
Weighted-average remaining lease term | 2 years | |||
Weighted-average discount rate | 6.00% | |||
Cash paid for amounts included in measurement of lease liabilities | $ 160,605 | |||
Operating lease costs | $ 160,605 | |||
Office in Naperville [Member] | ||||
Land Subject to Ground Leases | ft² | 3,400 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
INCOME TAXES | ||
Federal benefit at statutory rate (21%) before loss carry-forward | $ (1,220,917) | $ (283,077) |
Non-repatriated loss of Hong Kong Joint Venture | 220,478 | |
Permanent and other differences | 7,646 | 14,581 |
State income tax benefit - net of federal effect | (72,000) | (8,437) |
Expiration of tax credits | 132,439 | |
Change in deferred tax asset valuation allowance | $ 1,285,271 | $ (75,984) |
INCOME TAXES - Company's deferr
INCOME TAXES - Company's deferred tax assets (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Deferred tax assets: | ||
Accruals and allowances | $ 39,112 | $ 42,055 |
Inventory uniform capitalization | 18,544 | 17,316 |
Net operating loss carry forward | 1,258,433 | 68,745 |
Foreign tax credit carry forward | 169,511 | 72,213 |
Research and development tax credit carry forward | 61,701 | 61,701 |
Allowance for unrealizable deferred tax assets | $ (1,547,301) | $ (262,030) |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
INCOME TAXES | ||
Operating Loss Carryforwards | $ 5,714,000 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% |
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2033 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - (Details) | Mar. 31, 2020USD ($) |
Maximum [Member] | |
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | $ 1,995,000 |
Minimum [Member] | |
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | $ 94,000 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
One Customer [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk, Percentage | 10.30% | 12.20% |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||
Net sales | $ 3,613,786 | $ 3,223,678 | $ 3,622,269 | $ 4,343,291 | $ 4,523,930 | $ 4,491,862 | $ 4,526,252 | $ 4,045,996 | $ 14,803,024 | $ 17,588,040 |
Gross profit | 653,687 | 769,992 | 1,090,346 | 1,244,829 | 1,796,217 | 1,061,378 | 1,456,492 | 1,240,144 | 3,758,854 | 5,554,231 |
Net loss | $ (3,492,290) | $ (1,011,833) | $ (700,814) | $ (608,954) | $ (270,836) | $ (516,993) | $ (121,324) | $ (438,833) | $ (5,813,891) | $ (1,347,986) |
Net loss per share: | ||||||||||
Basic and diluted (in dollars per share) | $ (1.51) | $ (0.44) | $ (0.30) | $ (0.26) | $ (0.12) | $ (0.22) | $ (0.05) | $ (0.19) | $ (2.51) | $ (0.58) |
RETIREMENT PLAN (Details)
RETIREMENT PLAN (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
RETIREMENT PLAN | ||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.00% | |
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 41,121 | $ 36,868 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Chief Executive Officer [Member] - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Related Party Transaction [Line Items] | ||
Related Party Transaction, Amounts of Transaction | $ 999,000 | $ 1,723,000 |
Due to Related Parties, Current | 27,102 | 55,321 |
Maximum [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Amounts of Transaction | $ 136,876 | $ 168,826 |
INTANGIBLE ASSETS - NET (Detail
INTANGIBLE ASSETS - NET (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Capitalization Finite Lived Intangible Assets Legal Expenses | $ 89,434 | |
Amortization of Intangible Assets | 4,471 | $ 4,472 |
Finite-Lived Intangible Assets, Accumulated Amortization | 40,245 | $ 35,774 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 4,475 | |
Patents [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 20 years |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) | Mar. 31, 2020shares |
SHAREHOLDERS' EQUITY | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 120,000 |