DeFi Capital Markets, Inc 10-Q, filed Feb 20, 2024

DeFi Capital Markets, Inc. (DCM)

10-Q 2024-02-20 For: 2023-12-31

Added on April 07, 2026

About this 10-Q

DeFi Capital Markets, Inc filed this 10-Q on February 20, 2024, covering the quarter ended December 31, 2023.

Headline figures

Quarter ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.65M; down 19.2% from $5.76M a year earlier
Net income: $102.18K; down 70.1% from net income of $341.31K a year earlier
Diluted EPS: $0.04; down 73.3% from $0.15 a year earlier

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Maryland		52-0898545
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

11407 Cronhill Drive, Suite A
Owings Mills, Maryland		21117
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	UUU	NYSE MKT LLC

Part I - Financial Information			Page

	Item 1.	Condensed Consolidated Financial Statements:

		Condensed Consolidated Balance Sheets at December 31, 2023 (unaudited) and March 31, 2023	3

		Condensed Consolidated Statements of Income for the Three Months Ended December 31, 2023, and 2022 (unaudited)	4

		Condensed Consolidated Statements of Income for the Nine Months Ended December 31, 2023, and 2022 (unaudited)	5

		Condensed Consolidated Statements of Shareholders’ Equity for the Nine Months Ended December 31, 2023, (unaudited)	6

		Condensed Consolidated Statements of Shareholders’ Equity for the Nine Months Ended December 31, 2022, (unaudited)	7

		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2023, and 2022 (unaudited)	8

		Notes to Condensed Consolidated Financial Statements (unaudited)	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

	Item 4.	Controls and Procedures	16

Part II - Other Information

	Item 1.	Legal Proceedings	17

	Item 5.	Other Information	17

	Item 6.	Exhibits	17

		Signatures	19


ASSETS	(unaudited)		(audited)
	December 31, 2023		March 31, 2023
CURRENT ASSETS
Cash	$	39,178	$	151,502

Accounts receivable:
Trade, less provision for credit losses of $157,012		646,920		414,689
Other receivables		5,000		305,889
		651,920		720,578


Amount due from factor		2,701,207		2,944,370
Inventories – finished goods		4,880,508		4,063,632
Prepaid expenses		399,318		165,378

TOTAL CURRENT ASSETS		8,672,131		8,045,460

INTANGIBLE ASSETS - NET		32,419		35,773
PROPERTY AND EQUIPMENT – NET		199,404		318,641

TOTAL ASSETS	$	8,903,954	$	8,399,874

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Line of credit - factor	$	1,121,064	$	1,459,350
Short-term portion of operating lease liability		156,851		151,230
Accounts payable - trade		1,361,366		293,465
Accounts payable – Eyston Company Ltd.		517,624		655,000
Accrued liabilities:
Accrued payroll and employee benefits		155,124		125,415
Accrued commissions and other		98,938		184,525

TOTAL CURRENT LIABILITIES		3,410,967		2,868,985

LONG-TERM PORTION OF OPERATING LEASE LIABILITY		53,289		172,072

TOTAL LONG-TERM LIABILITIES		53,289		172,072

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, 2023 and March 31, 2023		23,129		23,129
Additional paid-in capital		12,885,841		12,885,841
Accumulated Deficit		(7,469,272)		(7,550,153)

TOTAL SHAREHOLDERS’ EQUITY		5,439,698		5,358,817
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	8,903,954	$	8,399,874


	Three Months Ended December 31,
	2023		2022

Net sales	$	4,654,978	$	5,758,661

Cost of goods sold		3,153,071		4,060,422

GROSS PROFIT		1,501,907		1,698,239

Selling, general and administrative expense		1,310,872		1,178,502

Engineering and product development expense		77,295		101,670

Operating income		113,740		418,067

Other income (expense):
Interest income		24,746		—
Interest expense		(36,310)		(76,755)

NET INCOME	$	102,176	$	341,312

Earnings per share:
Basic and diluted	$	0.04	$	0.15

Shares used in computing earnings per share:
Weighted average basic and diluted shares outstanding		2,312,887		2,312,887


	Nine Months Ended December 31,
	2023		2022

Net sales	$	15,071,204	$	16,251,106

Cost of goods sold		10,552,919		11,570,029

GROSS PROFIT		4,518,285		4,681,077

Selling, general and administrative expense		4,068,162		3,750,348
Engineering and product development expense		273,673		294,177

Operating income		176,450		636,552

Other income (expense):
Interest income		24,746		—
Interest expense		(120,315)		(200,776)


NET INCOME	$	80,881	$	435,776

Earnings per share:
Basic and diluted	$	0.03	$	0.19

Shares used in computing earnings per share:
Weighted average basic and diluted shares outstanding		2,312,887		2,312,887


				Additional
	Common	Stock		Paid-In		Accumulated
	Shares	Amount		Capital		Deficit		Total

Balance at April 1, 2023	2,312,887	$	23,129	$	12,885,841	$	(7,550,153)	$	5,358,817

Net income							165,130		165,130

Balance at June 30, 2023	2,312,887	$	23,129	$	12,885,841	$	(7,385,023)	$	5,523,947

Net loss							(186,425)		(186,425)

Balance at September 30, 2023	2,312,887	$	23,129	$	12,885,841	$	(7,571,448)	$	5,337,522

Net income							102,176		102,176

Balance at December 31, 2023	2,312,887	$	23,129	$	12,885,841	$	(7,469,272)	$	5,439,698


	Three months ended				Nine months ended
	Dec. 31, 2023		Dec. 31, 2022		Dec. 31, 2023		Dec. 31, 2022
Sales of products acquired from Eyston	$	4,066,699	$	4,770,373	$	12,861,878	$	13,508,260
Sales of GFCI’s and ventilation fans		588,279		988,288		2,209,326		2,742,846
	$	4,654,978	$	5,758,661	$	15,071,204	$	16,251,106


2024	$	38,943
2025		160,567
2026		13,381
Total operating lease payments	$	212,891
Less: amounts representing interest		(2,751)
Present value of net operating lease payments	$	210,140
Less: current portion		156,851
Long-term portion of operating lease obligations	$	53,289


Exhibit No.
3.1		Articles of Incorporation (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 1988, File No. 1-31747)
3.2		Articles Supplementary, filed October 14, 2003 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 31, 2002, file No. 1-31747)
3.3		Bylaws, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed July 13, 2011, File No. 1-31747)
10.1		2011 Non-Qualified Stock Option Plan (incorporated by reference to the Company’s Proxy Statement with respect to the Company’s 2011 Annual Meeting of Shareholders, filed July 26, 2011, File No. 1-31747)
10.2		Discount Factoring Agreement between the Registrant and Merchant Factors Corp., dated January 6, 2015 (substantially identical agreement entered into by USI’s wholly-owned subsidiary, USI Electric, Inc.) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 16, 2015, file No. 1-31747)
10.3		Lease between Universal Security Instruments, Inc. and St. John Properties, Inc. dated November 4, 2008 for its office and warehouse located at 11407 Cronhill Drive, Suites A-D, Owings Mills, Maryland 21117 (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2008, File No. 1-31747)
10.4		Amendment to Lease between Universal Security Instruments, Inc. and St. John Properties, Inc. dated June 23, 2009 (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2009, File No. 1-31747)
10.5		Amended and Restated Employment Agreement dated July 18, 2007 between the Company and Harvey B. Grossblatt (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2007, File No. 1-31747), as amended by Addendum dated November 13, 2007 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 15, 2007, File No. 1-31747), by Addendum dated September 8, 2008 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 8, 2008, File No. 1-31747), by Addendum dated March 11, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 12, 2010, File No. 1-31747), by Addendum dated July 19, 2012 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 20, 2012, File No. 1-31747), by Addendum dated July 3, 2013 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 8, 2013, File No. 1-31747), and by Addendum dated July 21, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 21, 2014, File No. 1-31747) ), by addendum dated July 23, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 28, 2015, File No. 1-31747), by addendum dated July 12, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 12, 2016, File No. 1-31747), by addendum dated July 18, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July

		20, 2017, File No. 1-31747), and by addendum dated July 9, 2018 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 9, 2018, File No. 1-31747), by addendum dated July 12, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 16, 2019, file No. 1-31747), by addendum dated July 27, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 27, 2020, file No. 1-31747). by addendum dated July 18, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 28, 2021, file No. 1-31747), by addendum dated July 22, 2022 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 28, 2022, file No. 1-31747). and by addendum dated June 12, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 13, 2023, file No. 1-31747).
31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer*
31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer*
32.1		Section 1350 Certifications*
99.1		Press Release dated February 20, 2024
101		Interactive data files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2023 in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of December 31, 2023 and March 31, 2023, (ii) Condensed Consolidated Statements of Income for the three and nine months ended December 31, 2023 and 2022, (iii) Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2023 and 2022, (v) Condensed Consolidated Statements of Shareholders’ Equity for the nine months ended December 31, 2023 and 2022, and (vi) Notes to Condensed Consolidated Financial Statements*


	UNIVERSAL SECURITY INSTRUMENTS, INC.
	(Registrant)

Date: February 20, 2024	By:	/s/ Harvey B. Grossblatt
		Harvey B. Grossblatt
		President, Chief Executive Officer

	By:	/s/ James B. Huff
		James B. Huff
		Vice President, Chief Financial Officer


February 20, 2024	/s/ Harvey B. Grossblatt
	Harvey B. Grossblatt
	Chief Executive Officer


	Three Months Ended December 31,
	2023		2022
Sales	$	4,654,978	$	5,758,661
Net income		102,176		341,312
Earnings per share:
Basic and diluted	$	0.04	$	0.15

Weighted average number of common shares outstanding:
Basic and diluted		2,312,887		2,312,887


	Nine Months Ended December 31,
	2023		2021
Sales	$	15,071,204	$	16,251,106
Net income		80,881		435,776
Earnings per share:
Basic and diluted	$	0.03	$	0.19

Weighted average number of common shares outstanding:
Basic and diluted		2,312,887		2,312,887


	Nine Months Ended December 31,
	2023		2022

OPERATING ACTIVITIES:
Net Income	$	80,881	$	435,776
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,426		14,846

Changes in operating assets and liabilities:
Decrease in accounts receivable and amount due from factor		311,821		98,698
(Increase) Decrease in inventories, prepaid expenses		(1,050,814)		1,719,546
Increase (Decrease) in accounts payable and accrued expenses		874,648		(1,921,596)

NET CASH PROVIDED BY OPERATING ACTIVITIES		225,962		347,270

FINANCING ACTIVITIES:
Net (repayment) borrowing - Line of Credit – Factor		(338,286)		314,150
Repayment of Note Payable – Eyston Company Ltd		—		(900,000)

NET CASH USED IN FINANCING ACTIVITIES		(338,286)		(585,850)

NET DECREASE IN CASH		(112,324)		(238,580)

Cash at beginning of period		151,502		438,735

CASH AT END OF PERIOD	$	39,178	$	200,155

SUPPLEMENTAL INFORMATION:
Interest paid	$	120,315	$	200,776



	Dec. 31, 2023		Dec. 31, 2022
ASSETS
Cash	$	39,178	$	200,155

Accounts receivable and amount due from factor		3,353,127		3,991,415
Inventory		4,880,508		4,437,580
Prepaid expense		399,318		313,277

TOTAL CURRENT ASSETS		8,672,131		8,942,427

PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS–NET		231,823		395,278
OTHER ASSETS		—		4,000
TOTAL ASSETS	$	8,903,954	$	9,341,705

LIABILITIES AND SHAREHOLDERS’ EQUITY

Line of credit – factor	$	1,121,064	$	2,471,236
Note payable – Eyston Company Ltd.		—		181,440
Short-term portion of operating lease liability		156,851		149,408
Accounts payable		1,878,990		1,061,517
Accrued liabilities		254,062		193,783
TOTAL CURRENT LIABILITIES		3,410,967		4,057,384

LONG TERM PORTION OF OPERATING LEASE LIABILITY		53,289		210,139
TOTAL LONG-TERM LIABILITIES		53,289		210,139

COMMITMENTS AND CONTINGENCIES		—		—

SHAREHOLDERS’ EQUITY:
Common stock, $.01 par value per share; authorized 20,000,000 shares; issued and outstanding 2,312,887 at December 31, 2023 and 2022		23,129		23,129
Additional paid-in capital		12,885,841		12,885,841
Accumulated Deficit		(7,469,272)		(7,834,788)

TOTAL SHAREHOLDERS’ EQUITY		5,439,698		5,074,182
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	8,903,954	$	9,341,705