universal security instruments appoints new auditor following acquisition

Universal Security Instruments Inc. (NYSE American:UUU), a small-cap company with annual revenue of $22.17 million, announced a change in its auditing firm due to an acquisition involving its previous auditor. According to InvestingPro data, the company maintains a healthy current ratio of 1.75, indicating sufficient liquidity to meet short-term obligations. On June 2, 2025, Marcum LLP resigned as the company’s audit firm following the acquisition of its attest business by CBIZ (NYSE:CBZ) CPAs P.C. The company’s Board of Directors’ Audit Committee approved the engagement of CBIZ as Universal Security’s new independent registered public accounting firm on the same day.

Marcum’s audit reports for the fiscal years ending March 31, 2024, and March 31, 2025, did not contain any adverse opinions or disclaimers, nor were they modified concerning uncertainty, audit scope, or accounting principles. During these periods, there were no disagreements with Marcum on accounting principles, financial statement disclosure, or auditing procedures.

The company reported material weaknesses in its internal controls over financial reporting for the fiscal year ending March 31, 2024. These weaknesses included issues in management review controls over financial statement classification, disclosure, and accounting for income taxes, as well as documentation supporting entries in the general ledger. These control issues come at a challenging time, as InvestingPro data shows the company is currently not profitable, with a negative EBITDA of $1.03 million in the last twelve months.

Universal Security has provided Marcum with a copy of the SEC Form 8-K filing and requested a letter from Marcum addressing whether they agree with the statements made in the filing. This letter, dated June 6, 2025, is attached as an exhibit to the report.

The appointment of CBIZ as the new auditor is effective immediately, covering the fiscal year ending March 31, 2025. The company has not consulted with CBIZ regarding any matters outlined in Item 304(a)(2)(i) and (ii) of Regulation S-K during the relevant periods.

This information is based on a press release statement filed with the U.S. Securities and Exchange Commission. Despite these challenges, the stock has shown remarkable resilience, delivering an 83.54% return over the past year. For deeper insights into UUU’s financial health and 12 additional exclusive ProTips, consider subscribing to InvestingPro.

In other recent news, Universal Security Instruments Inc. shareholders have approved the sale of the company’s significant assets to Feit Electric Company, Inc. This decision was made during a reconvened Special Meeting of Shareholders, where the asset sale received a substantial majority vote. However, the proposal for the company’s liquidation and dissolution did not secure the required approval. As a result, Universal Security Instruments is now considering alternative strategies, including potential dividends, acquisitions, or reverse mergers. Additionally, the company’s shareholders have approved a name change to "Universal Safety Products, Inc."

In a related development, the company has entered a Memorandum of Understanding with Ault & Company, Inc., which supports the asset sale and outlines potential future investments. The agreement includes a plan for Ault & Company to invest in Universal Security Instruments through a convertible note, providing operating capital and funding a dividend. Furthermore, the company’s Board of Directors has been restructured, reducing the maximum number of directors from fifteen to six. These strategic moves follow the company’s commitment to maintaining its NYSE listing and compliance with SEC regulations.

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