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UNIVERSAL SAFETY PRODUCTS, INC._March 31, 2026

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Commission file number: 001-31747

UNIVERSAL SAFETY PRODUCTS, INC.

(Exact name of registrant as specified in its charter)

(State or other jurisdiction (I.R.S. Employer

of incorporation or organization) Identification No.)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock UUU NYSE American LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Act). Yes ☐No☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes☒ No ☐

Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-Accelerated Filer ☒

Smaller Reporting Company ☒ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of September 30, 2025 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the registrant’s common stock, $0.01 par value per share, held by non-affiliates of the registrant was $8.4 million based on the closing sale price on September 30, 2025 as reported on the NYSE American of $3.99.Shares of the registrant’s common stock held by executive officers, directors or 10% beneficial owners and by each other person who may be deemed to be an affiliate of the registrant have been excluded from this computation. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose.

The number of shares of common stock outstanding as of July 2, 2026, was 3,028,463.

Documents incorporated by reference: None

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UNIVERSAL SAFETY PRODUCTS, INC.

2026 ANNUAL REPORT ON FORM 10-K

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Page

PART I

Item 1. Business 4

Item 1A. Risk Factors 10

Item 1B. Unresolved Staff Comments 26

Item 1C. Cybersecurity 26

Item 2. Properties 27

Item 3. Legal Proceedings 27

Item 4. Mine Safety Disclosures 27

PART II

Item 6. [Reserved] 28

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 34

Item 8. Financial Statements and Supplementary Data 34

Item 9A. Controls and Procedures 34

Item 9B. Other Information 35

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 35

PART III

Item 10. Directors, Executive Officers and Corporate Governance 36

Item 11. Executive Compensation 40

Item 14. Principal Accountant Fees and Services 45

PART IV

Item 15. Exhibits and Financial Statement Schedules 46

Signatures 48

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CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (the “Annual Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date this Annual Report is filed, and we do not intend to update any of the forward-looking statements after the date that this Annual Report is filed to confirm these statements to actual results, unless required by law.

This Annual Report also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this Annual Report and, accordingly, we cannot guarantee their accuracy or completeness, though we do generally believe the data to be reliable. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and elsewhere in this Annual Report. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

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PART I

ITEM 1. BUSINESS

General

Universal Safety Products, Inc., (“we” or “the Company”) designs and markets a variety of popularly priced safety products which, during the period covered by this Annual Report, consisted primarily of smoke alarms, carbon monoxide alarms and related products. Most of our products require minimal installation and are designed for easy installation by the consumer without professional assistance and are sold through retail stores. We also market products to the electrical distribution trade through our wholly owned subsidiary, Universal Safety Electric, Inc. The electrical distribution trade includes electrical and lighting distributors as well as manufactured housing companies. Products we sell usually require professional installation.

In October 2024, we entered into an Asset Purchase Agreement with Feit Electric Company, Inc. (“Feit”) pursuant to which Feit agreed to acquire the smoke and carbon monoxide alarm portion of our business and our intangible assets, including but not limited to the trade name of Universal Security Instruments, Inc. and Universal Electric, Inc. On May 22, 2025, we closed on the asset sale to Feit pursuant to the terms of the Asset Purchase Agreement. We intend to continue importing and marketing our product lines other than smoke alarms and carbon monoxide alarms.

Our sales for the year ended March 31, 2026, were $4,847,163 compared to $23,563,554 for the year ended March 31, 2025. We reported a net loss of $2,485,763 in fiscal 2026 compared to net income of $500,684 in fiscal 2025, a decrease of $2,986,447. The decrease in net income from the prior year and the net loss for the fiscal year ended March 31, 2026, is attributed primarily to the sale of smoke and carbon monoxide portion of the business to Feit.

In July 2025, we formed a wholly owned subsidiary called Universal DeFi LLC (“Universal DeFi”) as a new venture to diversify the business and explore new paths for revenue and stockholder value. Universal DeFi is pursuing two lines of business. First, Universal DeFi is developing and intends to own and operate a tokenization platform. Second, subsequent to the last fiscal year end, Universal DeFi acquired and commenced limited operations running licensed nodes and a validator on the Ault Blockchain, as described further herein. To date, Universal DeFi has not generated any revenue.

The Company was incorporated in Maryland in 1969. Our principal executive office is located at 11407 Cronhill Drive, Suite A, Owings Mills, Maryland 21117, and our telephone number is 410-363-3000. Information about us may be obtained from our website www.universalsafetyprod.com. Copies of our Annual Report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, are available free of charge on our website as soon as they are filed with the Securities and Exchange Commission (SEC) through a link to the SEC’s EDGAR reporting system. Simply select the “Investor Relations” menu item, and then click on the “SEC Filings” link. The SEC’s EDGAR reporting system can also be accessed directly at www.sec.gov.

Safety Products

During the period covered by this Annual Report, we marketed a line of residential smoke and carbon monoxide alarms under the trade names “UNIVERSAL” and “USI Electric” both of which were manufactured by Eyston Company Limited (Eyston) in the Peoples Republic of China (PRC), a principal supplier of the Company’s products. Our line of safety alarms consisted of units powered by replaceable batteries, ten-year sealed batteries, or 120-volt units with a battery backup. Our replaceable battery products contained different types of batteries with different battery lives, and some included alarm silencers. The smoke alarms marketed to the electrical distribution trade also included hearing impaired and heat alarms with a variety of features. On May 22, 2025, the Company closed on the sale of the smoke and carbon monoxide portion of the Company’s business to Feit pursuant to the terms of the Asset Purchase Agreement as previously discussed.

We also market door chimes, ventilation products, ground fault circuit interrupters (GFCI’s), and other electrical devices. The Company currently intends to continue importing and marketing its product lines other than smoke alarms and carbon monoxide alarms and is exploring other business opportunities to drive long-term value for our shareholders.

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Import Matters

We import all our products. As an importer, we are subject to numerous tariffs which vary depending on types of products and country of origin, changes in economic and political conditions in the country of manufacture, potential trade restrictions, and currency fluctuations. Substantially all our safety products are imported from the People’s Republic of China. Certain of these products are currently subject to tariffs of twenty-five percent (25%). During the period covered by this Annual Report there has been unprecedented activity involving the implementation and imposition of global tariffs, the invalidation of those tariffs by the U.S. Supreme Court, and the subsequent implementation of new tariffs under different statutes. The imposition of and modification of tariffs has increased uncertainty as to the short-term sustainability of importing products from our principal suppliers. If the Company is unable to import products at a competitive price point our sales could be adversely affected.

We have attempted to protect ourselves from fluctuations in currency exchange rates to the extent possible by negotiating commitments in U.S. dollars. Our inventory purchases are also subject to delays in delivery due to problems with shipping and docking facilities, as well as other problems associated with purchasing products abroad.

Sales and Marketing; Customers

We sell our products to various customers, and our total sales market can be divided generally into two categories; sales by the Company to retailers, including wholesale distributors, chain, discount, television retailers and home center stores, catalog and mail order companies and other distributors (“retailers”), and sales by our Universal Safety Electric subsidiary to the electrical distribution trade (primarily electrical and lighting distributors and manufactured housing companies) and foreign customers. Products marketed by the Company have historically been retailed to “do-it-yourself” consumers by these retailers. Products marketed by our Universal Safety Electric subsidiary to the electrical distribution trade typically require professional installation. We do not currently market a significant portion of our products directly to end users.

During the period covered by this Annual Report a significant portion of our sales were made by approximately 40 independent sales organizations, compensated by commission, which represents approximately 100 sales representatives, some of which have warehouses where Universal Electric products are maintained for sale. In addition, the Company maintained a national distribution system with eight regional stocking warehouses throughout the United States which generally enabled customers to receive their orders the next day without paying for overnight freight charges. Our agreements with these sales organizations are generally cancelable by either party upon 30 days notice. We do not believe that the loss of any one of these organizations would have a material adverse effect upon our business. Sales are also made directly by the officers and certain full-time employees of the Company and our Universal Safety Electric subsidiary, some of whom have other responsibilities for the Company. Sales outside the United States are made through exporters and amounted to less than five percent of total net sales in fiscal years 2026 and 2025. We expect that, as a result of the previously discussed sale of a portion of the Company’s business operations, there will be significant changes in the number and make up of independent sales organizations engaged by the Company.

We also marketed our products through our website and through our own sales catalogs and brochures, which were mailed directly to customers. Our customers, in turn, may advertise our products in their own catalogs and brochures and in their ads in newspapers and other media. We also exhibit and sell our products at various trade shows, including the annual National Hardware Show.

Our backlog of orders as of March 31, 2026, was $0. Our backlog as of March 31, 2025, was approximately $2,142,000. The decrease in the backlog of orders from the prior year and the net loss for the fiscal year ended March 31, 2026, is attributed primarily to the sale of smoke and carbon monoxide portion of the business as previously discussed.

Suppliers

During the period covered by this Annual Report the majority of our products have been manufactured for us by Eyston and amounted to approximately 82.6% and 96.3% of our purchases for the fiscal years ended March 31, 2026, and 2025, respectively. Certain other private label products are also manufactured for us by foreign suppliers. We believe that our relationships with our suppliers are good. The loss of any of our other suppliers would have a short-term adverse effect on our operations, but replacement sources for these suppliers could be developed.

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Competition

Sales of safety products accounted for substantially all of our total sales. In the sale of smoke alarms and carbon monoxide alarms, we competed in all of our markets with First Alert and Walter Kidde Portable Equipment, Inc. These companies have greater financial resources and financial strength than we have. However, we believe that these products compete favorably in the market primarily on the basis of styling, features, and pricing.

The safety industry in general involves changing technology. The success of our products may depend on our ability to improve and update our products in a timely manner and to adapt to new technological advances.

Decentralized Finance Services

In July 2025, we formed Universal DeFi LLC as a new venture to diversify the business and explore new paths for revenue and stockholder value. Universal DeFi is pursuing two lines of business. First, Universal DeFi is developing and intends to own and operate a tokenization platform, which has not yet commenced operations. Tokenization is the process of representing ownership of real-world or financial assets as a digital token recorded on a blockchain, which is a shared digital record-keeping system maintained across many computers simultaneously, with no single controlling authority. The platform will provide technology and infrastructure for issuers to tokenize their assets. Second, subsequent to the last fiscal year end, Universal DeFi has acquired and commenced limited operations running licensed nodes and a validator on the Ault Blockchain, as described under “Ault Node Operations” below.

Tokenization Platform

Universal DeFi intends to offer issuers a single integrated service for tokenizing assets, combining issuer onboarding with the technology to create and issue the resulting tokens. The platform is being designed to support a wide range of asset types, which may include securities, commodities such as precious metals, and other assets such as collectibles, however, initially, the platform intends to focus on a limited number of real world assets that we believe will be easier to tokenize. Universal DeFi does not currently intend to provide brokerage, custody, fund administration, transfer agent, or trading venue services, although the services it offers may change over time.

Before an asset is tokenized, Universal DeFi intends to conduct an onboarding due diligence process designed to satisfy know-your-customer (“KYC”) and anti-money laundering (“AML”) compliance regulations, whereby we verify the identity of the issuer, screen the issuer for illicit activity, and confirm the issuer’s ownership of the asset to be tokenized. Onboarding will not be a continuing assessment, and Universal DeFi does not currently intend to guarantee, insure, or vouch for the ongoing performance, value, or legitimacy of any tokenized asset following issuance.

Once an asset is tokenized, the issuer is generally expected to retain sole control of the resulting token, including the ability to create additional tokens (a process called minting) and to permanently remove tokens from circulation (a process called burning). The platform is being designed to secure control of each token using multi-party computation, a method of securing a digital asset in which the authority to approve a transaction is divided among multiple parties or systems so that no single participant can act alone. This technology will be provided by a third-party digital asset security provider, with a dedicated environment maintained for each token project. Under the platform’s intended standard model, the issuer will control its own environment and hold the approvals necessary to authorize transactions affecting its token, and unless the issuer elects to contract with Universal DeFi to manage the token after issuance, Universal DeFi will not have any obligation, right or ability to mint, burn, freeze, transfer, or otherwise control the token after issuance. Universal DeFi is evaluating whether to offer administration of a token project’s environment on behalf of an issuer that engages it to do so; no determination has been made at this time whether or not to offer this service.

Control of a token will depend on the safeguarding of the approvals associated with its environment, and their loss or compromise may impair control of the token. The platform design is expected to include disaster recovery services provided by the third-party provider and is intended to support recovery of access to a token project’s environment in certain failure scenarios, although there can be no assurance that recovery would be available or successful. The operation of the platform’s token control layer will depend on the third-party provider, and a failure or termination of that relationship could disrupt the platform’s operations.

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Universal DeFi does not currently intend to perform any KYC or AML compliance verification on individual holders of tokens issued through the platform; responsibility for any holder-level compliance obligations will rest with the issuer, although Universal DeFi may make identity verification tools available to issuers if required in an issuer’s jurisdictions. Universal DeFi may assist issuers with listing tokenized assets on trading venues and may introduce issuers to third parties that provide market making or liquidity services, but Universal DeFi does not currently intend to act as a market maker or provide liquidity for tokenized assets, act as the issuer of tokenized assets, take ownership of underlying assets, or provide investment advice.

Ault Node Operations

Universal DeFi has acquired and operates licensed nodes (“Ault Nodes”) on the Ault Blockchain network. Ault DAO LLC, a Wyoming limited liability company that serves as the legal and corporate entity of record for the Ault DAO, which operates the Ault Blockchain network. Ault DAO LLC is an indirect, wholly owned subsidiary of Hyperscale Data, Inc., an issuer listed on the NYSE American (“Hyperscale Data”). Milton C. Ault, III, our Executive Vice Chairman, is the Executive Chairman of Hyperscale Data, and Henry Nisser, one of our directors, is the President and General Counsel of Hyperscale Data and the President and Chief Executive Officer of Ault DAO LLC.

Ault Blockchain

Blockchain Background

A blockchain is a shared digital record-keeping system with no single controlling authority. Validators, who use specialized computers in a blockchain network responsible for verifying transactions, ensuring network security, and maintaining the integrity of the ledger as well as full node operators - individuals or entities that manage the hardware and software (a node) required to support a blockchain network, thereby ensuring that the node stays online to validate transactions, stores the blockchain ledger, and propagate data, and are therefore crucial for maintaining network security and decentralization - maintain complete copies of the ledger and verify that new transactions comply with the network’s rules, a process governed by a defined set of rules called a consensus mechanism. Not all participants in a blockchain network maintain a full copy of the ledger; on the Ault Blockchain, licensed Mining Nodes (the “Licensed Mining Nodes”), for example, perform services off-chain and do not hold a full record of blockchain stake. Because no single entity controls the ledger, blockchains can enable transactions and agreements to be executed and recorded without relying on a bank, clearinghouse, or other intermediary. Universal DeFi operates as a validator and also owns Licensed Mining Nodes.

The Ault Blockchain is a Layer 1 network, meaning it is a foundational, standalone blockchain with its own security, transaction processing, and governance rules, as distinct from networks that are built on top of an existing blockchain. The network uses a hybrid architecture that combines two types of participation. Validators participate in a proof-of-stake consensus process, meaning they commit AULT tokens (the “AULT Tokens”) as economic collateral to qualify for and perform block production, and earn transaction fees in return. Licensed Mining Nodes perform off-chain work, meaning work that occurs outside the core consensus process, specifically verifiable randomness generation at launch, and earn newly distributed AULT Tokens in return. This separation is designed to allow the network to scale to a large number of node participants without creating bottlenecks in the consensus layer. Unlike proof-of-work networks such as Bitcoin, the Ault Blockchain’s consensus mechanism does not require energy-intensive computation; the proof-of-work component of the network is limited to the lightweight micro-proof-of-work performed by Licensed Mining Nodes in connection with verifiable randomness generation, which is computationally minimal by design.

The AULT Token

The native digital asset of the Ault Blockchain is the AULT Token. A digital token is a unit of value or utility created and tracked on a blockchain. The AULT Token serves three primary functions within the network: (i) paying transaction fees for all activity on the network; (ii) staking, meaning that validators commit AULT Tokens as economic collateral to participate in block production; and (iii) participation in the governance of the Ault Blockchain through the Ault DAO.

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The total supply of AULT Tokens is fixed at 100 billion, all minted at genesis. Approximately 99.9999% of total supply was allocated to what is referred to as the Emissions Supply, which is distributed to network participants over a ten-year schedule under a fixed mathematical formula. Of that Emissions Supply, 95% is allocated to Licensed Mining Node rewards and 5% is allocated to staking rewards for validators and their delegator (a delegator is a token holder who participates in proof-of-stake networks by assigning its stake to a validator to earn rewards without managing technical infrastructure). The Emissions Supply follows a declining schedule with approximately 9.4% annual decay, beginning at approximately 41 million Ault Tokens per day during the first year following the emission and declining to approximately 17 million such tokens per day by the tenth year. Universal DeFi operates only the nodes and validator it owns and does not currently intend to operate nodes or validators for third parties.

Block production on the Ault Blockchain is performed by validators, such as Universal DeFi, who are selected from the top one hundred nodes ranked by staked AULT Tokens. To qualify as a validator, Universal DeFi was required to self-bond a minimum of ten thousand AULT Tokens. As a validator, we earn transaction fees and priority tips from the blocks we produce, and earn a commission on staking rewards distributed to our delegators. Our participation as a validator carries economic risk in that we are subject to slashing, meaning a protocol-enforced reduction of our staked AULT Tokens, in the event of downtime beyond defined thresholds, double-signing, or censorship of transactions. Slashing events reduce our staked position as a validator and our delegators in proportion to our respective stakes.

Node License Program

A Node License is a right to operate a Licensed Mining Node, which is a software program that performs defined off-chain services for the network and earns AULT Token emissions through a work credit system. Each epoch, approximately every one minute, a set of licensed nodes is randomly selected to submit what is referred to as a Verifiable Random Function output, gated by a lightweight proof-of-work computation. Nodes whose outputs are accepted contribute to the network’s randomness beacon and earn work credits for that epoch. Daily emissions are then distributed to Licensed Mining Nodes pro-rata based on accumulated work credits. All licenses have an equal probability of selection in each epoch; what determines a node’s earnings over time is uptime and output correctness, not computational power or hardware resources.

Universal DeFi Ownership and Operations

On June 30, 2026, Universal DeFi entered into a node revenue sharing agreement (the “Revenue Sharing Agreement”) with Ault Capital Group, Inc. (“Ault Capital Group”), in its capacity as authorized agent for Ault DAO LLC. Ault Capital Group is a wholly owned subsidiary of Hyperscale Data. The Revenue Sharing Agreement acknowledges that on April 6, 2026, Ault Capital Group transferred, assigned, and activated, to Universal DeFi 125,000 Node Licenses and the right to operate one validator, together with the wallet holding all reward tokens earned by such Node Licenses and operating as a validator. In consideration of the transfer and delivery of the Node Licenses, Universal DeFi will pay Ault Capital Group a revenue share equal to 25% of net proceeds (as defined in the Revenue Sharing Agreement as the net cash, cryptocurrency, stablecoin, and other proceeds actually received by Universal DeFi from the sale of tokens and rewards generated by the Node Licenses, less applicable transaction fees), and Universal DeFi will retain the remaining 75% of net proceeds (the “Revenue Share”). The Revenue Share is payable solely from, and only to the extent of, net proceeds actually received by Universal DeFi, and in no event is Universal DeFi required to make any payments to Ault Capital Group other than from the net proceeds and pursuant to the revenue share. Ault Capital Group’s right to receive the Revenue Share, and Universal DeFi’s obligation to pay it, terminate once Ault Capital Group has received cumulative Revenue Share payments totaling $93,750,000.

Node Licenses are non-transferable for two years from the date of issuance. The total number of Node Licenses is fixed at one million. Each Node License confers one governance vote in the Ault DAO, subject to a per-member cap of two hundred thousand votes regardless of total licenses held. Universal DeFi performs the work directly with respect to its Ault Nodes. The day-to-day operation, maintenance, and hosting of the validator are currently performed by Ault Capital Group on Universal DeFi’s behalf, and Ault Capital Group currently bears the related costs, including the cost of the dedicated server. Universal DeFi expects to enter into a managed services agreement with Ault Capital Group or an affiliate of Ault Capital Group to formalize these services, under which the related costs would be charged to Universal DeFi as a service.

Universal DeFi operates only the nodes and validator it owns and does not currently intend to operate nodes or validators for third parties. As of July 1, 2026, Universal DeFi owned approximately 425 million AULT tokens. The AULT tokens do not currently have a market value, and there can be no assurance that tokens earned will ever have or retain any value; the value of any tokens earned will depend on the adoption and activity of the Ault Blockchain and the market value, if any, of its token.

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Business Model and Revenue

Universal DeFi’s tokenization platform has not yet commenced operations, and Universal DeFi has not generated revenue from either of its lines of business. Universal DeFi expects to generate revenue from several sources. From its tokenization platform, Universal DeFi expects to charge issuers an initial fee when an issuer and its asset are onboarded, then a separate fee for token that is issued representing a real world asset, as well as ongoing fees for continued use of the platform. In addition, Universal DeFi may also earn revenue from additional services, such as providing identity verification tools to issuers, from time to time.

From its node and validator operations, Universal DeFi earns digital tokens from the Ault Blockchain under the separate mechanisms described above: token emissions allocated to its licensed nodes in proportion to the work they perform, and a share of transaction fees, priority tips, and staking rewards attributable to its validator. These tokens currently have no market value and accordingly have generated no recognizable asset or revenue to date. If a market develops to the extent that the tokens have a measurable fair value, then at that time, we would begin to recognize revenue from the tokens we earn. The fair value of these tokens would be subsequently remeasured for reporting purposes on a quarterly basis and we would recognize a gain or loss, and the token value would be adjusted, in accordance with accounting principles generally accepted in the United States of America. Universal DeFi has incurred losses since inception and expects to continue to incur losses as it develops and launches its operations, and there can be no assurance that it will fully launch its operations or achieve or sustain profitability.

Regulatory Environment

Universal DeFi’s planned activities will be subject to extensive and evolving regulation, and the regulatory treatment of a tokenized asset is expected to depend principally on the nature of the underlying asset and the jurisdictions involved. The planned activities of the platform will require Universal DeFi, including licensed third parties, to perform regulated functions, including KYC and AML compliance regulations. To the extent an underlying asset is a security under the laws of a relevant jurisdiction, the resulting token is itself expected to be treated as a security, and activities involving it may be subject to securities regulation, including registration, licensing, and disclosure requirements. At this time, we do not intend to tokenize any asset that would be treated as a security, however, we reserve the right to do so in the future.

To the extent an underlying asset is a commodity, such as a precious metal, activities involving the token may be subject to commodities regulation, including anti-fraud and anti-manipulation requirements. Other assets, such as collectibles, may not be subject to an asset-specific regulatory regime but remain subject to laws of general application, including consumer protection and anti-fraud laws. The same asset may be classified differently in different jurisdictions, and that classification will generally determine the requirements that apply to the token, the issuer, and potentially to Universal DeFi’s services. In addition, Universal DeFi’s planned issuer onboarding activities may be subject to anti-money laundering and counter-terrorist financing requirements, and its receipt of digital tokens from node operations may be subject to further regulatory and tax regimes.

The regulation of tokenized assets and digital assets varies significantly from jurisdiction to jurisdiction. The same activity may be permitted in one jurisdiction, require a license or registration in another, and be restricted or prohibited in a third, and these approaches continue to change. Universal DeFi expects to evaluate the requirements applicable to its services on a jurisdiction-by-jurisdiction basis, and it may be required to obtain licenses or registrations in certain jurisdictions, to restrict or condition its services in others, or to decline to operate where its services cannot be lawfully provided.

The legal and regulatory framework for tokenized assets and blockchain network participation is new and unsettled, and there can be no assurance that Universal DeFi’s planned activities will not become subject to requirements that could materially restrict, increase the cost of, or prohibit its business in one or more jurisdictions.

Human Capital Resources

We are committed to attracting and retaining the brightest and best talent, so investing in human capital is critical to our success. The employee traits we value include industriousness, intellectual curiosity, growth mindset and deeply caring about the quality of work. The human capital measures and objectives that we focus on in managing our business include employee safety, talent acquisition and retention, employee engagement, development and training, diversity and inclusion, and compensation and pay equity. None of our employees is represented by a collective bargaining unit or is a party to a collective bargaining agreement. We believe that our relationship with our employees is good.

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Employee Profile

As of March 31, 2026, we had seven full-time employees located in the U.S., of whom five were engaged in sales and marketing and two in general administration and finance. None of our employees is currently represented by a trade union. We consider our relations with our employees to be good.

As of March 31, 2026, approximately 43% of our current workforce is female, 57% male, and our average tenure is 21 years, an increase of 10.5% from an average tenure of 19 years as of March 31, 2025.

Talent

A core tenet of our talent system is to both develop talent from within and supplement with external hires. This approach has yielded loyalty and commitment in our employee base which in turn grows our business, our products, and our customers, while adding new employees and external ideas supports a continuous improvement mindset and our goals of a diverse and inclusive workforce.

We believe we materially comply with all applicable state, local and international laws governing nondiscrimination in employment in every location in which we operate. All applicants and employees are treated with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status.

Employee Engagement and Development

Our employee engagement efforts include our frequent and transparent “all-hands” meetings and executive communications, through which we aim to keep our employees well-informed and to increase transparency. We believe in continual improvement and use employee feedback to drive and improve processes that support our customers and ensure a deep understanding of our employees’ needs. We plan to conduct annual confidential employee surveys as we believe that ongoing performance feedback encourages greater engagement in our business and improves individual performance. Our employees will participate in a 360-degree evaluation process to identify critical capabilities for development and establish new stretch goals.

Pay Equity

Our employee compensation strategy supports three primary objectives: attract and retain the best team members; reflect and reinforce our most important values; and align team member interests with stockholder interests in building enduring value. We believe people should be paid for what they do and how they do it, regardless of their gender, race or other personal characteristics. To deliver on that commitment, we benchmark and set pay ranges based on market data and consider factors such as an employee’s role and experience, the location of their job, and their performance. We also regularly review our compensation practices, both in terms of our overall workforce and individual employees, to ensure our pay is fair and equitable.

ITEM 1A. RISK FACTORS

An investment in our common stock involves significant risks. You should carefully consider the following risks and all other information set forth in this Annual Report before deciding to invest in our common stock. If any of the events or developments described below occurs, our business, financial condition and results of operations may suffer. In that case, the value of our common stock may decline and you could lose all or part of your investment.

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You should consider each of the following risk factors and any other information set forth in this Annual Report and the other reports filed by the Company with the SEC, including the Company’s financial statements and related notes, in evaluating the Company’s business and prospects. The risks and uncertainties described below are not the only ones that impact on the Company’s operations and business. Additional risks and uncertainties not presently known to the Company, or that the Company currently considers immaterial, may also impair its business or operations. If any of the following risks actually occurs, the Company’s business and financial condition, results or prospects could be harmed. Please also read carefully the section entitled “Cautionary Note About Forward-Looking Statements” at the beginning of this Annual Report.

Risks Related to Our Company

We have an evolving business model, which increases the complexity of our business.

Our business model has evolved in the past and continues to do so. In prior years we have added, modified and/or discontinued various services and product offerings. As discussed elsewhere in this Annual Report, we are expanding into decentralized finance (DeFi) services, which are services that we do not have any prior experience providing. We intend to continue to try to offer new products or services, and we do not know whether any of them will be successful. The additions and modifications to our business have increased the complexity of our business and placed significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. Future additions to or modifications of our business are likely to have similar effects. Further, any new business or applications we launch that is not favorably received by the market could damage our reputation or our brand. The occurrence of any of the foregoing could have a material adverse effect on our business.

We are heavily dependent on our senior management, and a loss of a member of our senior management team could cause our stock price to suffer.

If we lose the services of Harvey Grossblatt, our President and Chief Executive Officer or Milton C. Ault, III, our Executive Vice Chairman, and/or certain key employees, we may not be able to find appropriate replacements on a timely basis, and our business could be adversely affected. Our existing operations and continued future development depend to a significant extent upon the performance and active participation of these individuals and certain key employees. Although we have entered into an employment agreement with Mr. Grossblatt, and we may enter into employment agreements with additional key employees in the future, we cannot guarantee that we will be successful in retaining the services of these individuals. If we were to lose any of these individuals, we may not be able to find appropriate replacements on a timely basis and our financial condition and results of operations could be materially adversely affected.

We rely on highly skilled personnel and the continuing efforts of our executive officers and, if we are unable to retain, motivate or hire qualified personnel, our business may be severely disrupted.

Our performance largely depends on the talents, knowledge, skills, know-how and efforts of highly skilled individuals and in particular, the expertise held by our Executive Vice Chairman, Milton C. Ault, III. In particular, we are relying upon Mr. Ault’s knowledge and expertise in the DeFi industry, as we look to pivot and expand our operations and services into that space. His absence, were it to occur, would materially and adversely impact the development and implementation of our projects and businesses. Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly skilled personnel for all areas of our organization. Our continued ability to compete effectively depends on our ability to attract, among others, new technology developers and to retain and motivate our existing contractors. If one or more of our executive officers are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all. Therefore, our business may be severely disrupted, and we may incur additional expenses to recruit and retain new officers. In addition, if any of our executives joins a competitor or forms a competing company, we may lose some customers.

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Risks Related to Universal DeFi

Risks Related to Universal DeFi – General

Universal DeFi has a limited operating history, which makes it difficult to evaluate its business and prospects.

Universal DeFi was formed in July 2025 and has a limited operating history. Its tokenization platform has not commenced operations, and although its node and validator operations on the Ault Blockchain have commenced, the digital tokens those operations receive do not currently have a market value. As a result, there is limited information on which to evaluate its business, and its prospects must be considered in light of the risks and uncertainties encountered by early-stage companies in new and rapidly evolving markets.

Universal DeFi will require substantial additional capital, which may not be available when needed.

The development of Universal DeFi’s tokenization platform and the operation and expansion of its node and validator activities are expected to require substantial capital. Universal DeFi does not currently generate cash revenue and expects to depend on outside funding to support its operations for the foreseeable future. There can be no assurance that additional capital will be available when needed on acceptable terms or at all. If Universal DeFi is unable to obtain adequate funding, it may be required to delay, reduce, or abandon the development of its tokenization platform or the operation of its business, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Universal DeFi has limited personnel and must build the operational, compliance, and information security functions necessary to operate its business.

To launch its tokenization platform and operate its business, Universal DeFi must develop and maintain operational, compliance, risk management, and information security functions appropriate for a business that performs issuer onboarding, handles tokenized assets, and operates blockchain infrastructure. Universal DeFi is in the early stages of building these functions and currently relies in part on the Company and its affiliates. If Universal DeFi is unable to recruit and retain qualified personnel, to build and maintain these functions, or to manage the demands of growth, it may be unable to launch or operate its business as planned, may fail to meet regulatory or security requirements, and may be exposed to operational failures or security incidents. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi’s planned services and business model may change materially before it commences full operations.

Universal DeFi’s business plan is at an early stage, and the descriptions of its planned services in this report reflect its current intentions rather than established operations. The services Universal DeFi ultimately offers, the markets in which it operates, and the manner in which it generates revenue may differ materially from its current plans in response to market conditions, regulatory developments, technological changes, or strategic decisions by management. If Universal DeFi modifies its business plan in ways that prove unsuccessful or that subject it to unanticipated costs or obligations, the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Risks Related to the Tokenization Business

Universal DeFi’s tokenization platform is not yet operational and may never launch or achieve market acceptance.

Universal DeFi’s tokenization platform, which is being developed to represent ownership of real-world or financial assets as digital tokens recorded on a blockchain remains in development and has not launched. Completing and launching the platform will depend on factors including the performance of third-party developers and service providers, the resolution of technical and operational challenges, and the availability of funding.

Even if the platform launches, there can be no assurance that issuers will choose to tokenize assets through it or that the platform will achieve market acceptance. If Universal DeFi fails to launch the platform, experiences significant delays, or launches a platform that does not attract issuers, the Company’s investment in Universal DeFi may be impaired, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

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The market for tokenized assets is new and unproven and may not develop as Universal DeFi expects.

The tokenization of real-world and financial assets is a new and rapidly evolving activity, and a large and sustainable market for tokenized assets may not develop. Demand for Universal DeFi’s tokenization services will depend on factors outside its control, including the willingness of asset owners to tokenize assets, the development of supporting market infrastructure such as trading venues and custodians, investor demand for tokenized assets, and the evolution of the regulatory environment. If the market for tokenized assets does not develop, develops more slowly than expected, or develops in ways that do not favor Universal DeFi’s services, Universal DeFi may be unable to attract issuers or generate revenue, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Universal DeFi faces competition in tokenization services, including from larger and better-resourced providers.

The market for tokenization services is attracting a range of participants, including technology companies, financial institutions, and other blockchain-based ventures, some of which have greater financial, technical, and marketing resources, more established relationships, and longer operating histories than Universal DeFi. Competitors may offer services that are more advanced, less costly, more widely supported, or better aligned with regulatory requirements. There can be no assurance that Universal DeFi will be able to compete effectively. If Universal DeFi is unable to attract and retain issuers in the face of competition, the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Universal DeFi’s issuer onboarding occurs before issuance and is not ongoing, and it may not detect issuer misconduct or asset problems that arise after issuance.

Before an asset is tokenized, Universal DeFi intends to conduct an onboarding process designed to verify the identity of the issuer, screen the issuer for illicit activity, and confirm the issuer’s ownership of the asset to be tokenized. This onboarding is performed at a point in time before issuance of the token and is not a continuing assessment, and Universal DeFi does not intend to guarantee, insure, or vouch for the ongoing performance, value, or legitimacy of any tokenized asset after issuance. Because the onboarding review is not ongoing, Universal DeFi may not detect issuer misconduct, the loss or impairment of an underlying asset, the issuance of tokens not backed by the represented asset, or other problems that arise after an asset has been tokenized. An issuer that passes onboarding may subsequently act in ways that harm token holders without Universal DeFi’s knowledge and outside its control. Problems with assets tokenized through the platform could result in claims against Universal DeFi, regulatory scrutiny, and reputational harm, any of which could materially and adversely affect the Company’s business, financial condition, and results of operations.

Under the platform’s design, issuers control their own tokens after issuance, and the loss or compromise of an issuer’s approvals may permanently impair control of a token, which Universal DeFi may be unable to remedy.

The platform is being designed to secure control of each token using multi-party computation (a method of securing a digital asset in which the authority to approve a transaction is divided among multiple parties or systems so that no single participant can act alone). Under the platform’s intended standard model, the issuer controls its own token and holds the approvals necessary to authorize transactions affecting it, and Universal DeFi does not hold approvals sufficient to control a token after issuance. Control of a token therefore depends on the issuer safeguarding its approvals. The loss, theft, or compromise of an issuer’s approvals may impair or permanently eliminate the ability to control the affected token, including the ability to create or remove tokens from circulation. Because Universal DeFi does not hold sufficient approvals under its standard model, it may be unable to assist an issuer that loses control of its approvals, and any disaster recovery measures may not restore access in all circumstances. Loss of control of tokens issued through the platform could result in disputes, claims against Universal DeFi, and reputational harm, any of which could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi’s association with assets tokenized through its platform could expose it to reputational harm and claims if those assets prove fraudulent, unbacked, or impaired.

Universal DeFi provides the technology and onboarding services used to tokenize assets, but it does not act as the issuer of tokenized assets, take ownership of underlying assets, or guarantee their value or legitimacy. Notwithstanding this, Universal DeFi may be associated, in the view of investors, counterparties, or regulators, with the assets tokenized through its platform. If assets tokenized through the platform prove to be fraudulent, unbacked, impaired, or otherwise problematic, Universal DeFi could suffer reputational harm, lose the confidence of issuers and other participants, and become the subject of claims or regulatory scrutiny, even where it did

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not cause and could not have prevented the problem. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

If Universal DeFi elects to administer token environments on behalf of issuers, its responsibilities and risk profile would change materially.

Universal DeFi is evaluating whether to offer administration of a token project’s environment on behalf of an issuer that engages it to do so. No determination has been made to offer this service. Under Universal DeFi’s intended standard model, the issuer controls its own environment and holds the approvals necessary to authorize transactions affecting its token. If Universal DeFi elects to administer environments on behalf of issuers, it would hold or control approvals capable of authorizing transactions affecting issuer tokens. This would expose Universal DeFi directly to the risk of loss, theft, or compromise of those approvals, to potential liability for unauthorized or erroneous transactions, and to the operational burden of safeguarding control of multiple issuers’ tokens. Holding such control could also cause Universal DeFi to be characterized as providing custodial or other regulated services, subjecting it to requirements it does not currently satisfy. If Universal DeFi offers environment administration and is unable to manage the associated security and regulatory risks, the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Risks Related to Node and Validator Operations and Digital Assets

Universal DeFi’s node and validator operations, and its tokenization platform, depend on the Ault Blockchain, a new network developed by an affiliated organization that may not achieve adoption or operate as intended.

Universal DeFi’s node and validator operations are conducted on the Ault Blockchain, and its tokenization platform is being built initially to issue tokens on that network. The Ault Blockchain is a new blockchain network developed by Ault DAO, and its success depends on achieving adoption by users, applications, and other participants. Universal DeFi does not control the development, operation, security, or governance of the Ault Blockchain. If the Ault Blockchain fails to launch fully, fails to achieve or sustain adoption, experiences a decline in activity, or is discontinued, the value of the tokens Universal DeFi earns could decline or disappear, demand for its node and validator services could fall, and its tokenization platform could be impaired. Because both of Universal DeFi’s lines of business depend on this single network, Universal DeFi has concentrated exposure to the network’s success. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

The digital tokens Universal DeFi earns from its node and validator operations have no current market value, are non-cash and illiquid, and may never have value.

The rewards Universal DeFi earns from its node and validator operations are paid in the Ault Blockchain’s native digital token. That token does not currently have a market value, and there can be no assurance that a market for it will develop or that it will have any value in the future. These tokens are a non-cash, illiquid asset. The value of these tokens, if any, will depend on the development, adoption, and activity of the Ault Blockchain and on the existence of a market in which the tokens can be sold, none of which is assured. Universal DeFi may be unable to convert the tokens into cash, may be subject to restrictions on transferring them, and may never realize any value from them. Digital asset prices, where markets exist, have historically been highly volatile. If the tokens Universal DeFi earns do not have or do not retain value, Universal DeFi may be unable to generate meaningful revenue from its node and validator operations, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Universal DeFi’s validator must stake tokens and is subject to penalties, including the loss of staked tokens, for downtime or improper operation.

To operate its validator, Universal DeFi must commit, or stake, a quantity of the Ault Blockchain’s native token; staking is the locking up of tokens to support a blockchain network and to qualify to perform validation. Validators on the Ault Blockchain are subject to penalties, commonly referred to as slashing, for failures such as downtime, improperly approving invalid transactions, or other misbehavior, which can result in the loss of a portion of the staked tokens. If Universal DeFi’s validator experiences downtime, is misconfigured, is compromised, or otherwise fails to operate correctly, including as a result of acts or omissions by the affiliate that currently operates it, Universal DeFi could lose staked tokens, forfeit rewards, or be removed from the set of active validators. Any of the foregoing could reduce the value Universal DeFi derives from its validator and could materially and adversely affect the Company’s business, financial condition, and results of operations.

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Universal DeFi’s validator is operated by an affiliate under an arrangement that has not been formalized, which involves conflicts of interest and may be disrupted.

The day-to-day operation, maintenance, and hosting of Universal DeFi’s validator are currently performed by an affiliate of the Company on Universal DeFi’s behalf, and that affiliate currently bears the related costs. Universal DeFi expects to enter into a managed services agreement with that affiliate to formalize these services, but no such agreement has been executed, and the terms on which the services are provided, including their cost and duration, are not fixed. Because this arrangement is with an affiliate, it involves conflicts of interest and is not the result of arm’s-length negotiation, and the terms ultimately agreed may be less favorable to Universal DeFi than those it could obtain from an unaffiliated provider. If the affiliate ceases to provide these services, if the services are disrupted or provided improperly, or if Universal DeFi is unable to operate the validator itself or obtain equivalent services elsewhere on acceptable terms, its validator operations could be impaired. Any disruption of these arrangements could result in the loss of rewards or staked tokens and could materially and adversely affect the Company’s business, financial condition, and results of operations.

The rewards Universal DeFi earns from its Ault Nodes depend on the continued performance of work and on a selection process, and may be less than Universal DeFi expects.

Universal DeFi’s Ault Nodes earn rewards by performing verifiable off-chain work for the network, currently the generation of verifiable randomness, and rewards are allocated among licensed nodes in proportion to the verified work each node performs. The work is performed through a process in which nodes are selected to contribute, and rewards depend on factors including a node’s uptime, the correctness of its work, and the total amount of work performed across the network. If Universal DeFi’s nodes experience downtime, perform incorrectly, or are selected to contribute less frequently, or if the total work performed across the network increases such that Universal DeFi’s proportional share declines, the rewards Universal DeFi earns could be lower than expected. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi acquired its node licenses at a cost, the licenses are subject to transfer restrictions, and they may decline in value or be impaired.

Universal DeFi operates its Ault Nodes under licenses it acquired from the entity that issues node licenses for the Ault Blockchain. The licenses were acquired at a cost, are subject to a period during which they cannot be transferred, and confer the right to operate a node and earn rewards, together with associated governance rights. The value of these licenses depends on the success and economics of the Ault Blockchain, including the value, if any, of the rewards they generate. If the network does not succeed, if rewards decline or have no value, or if the rights associated with the licenses are changed, the licenses may decline in value or become impaired, and Universal DeFi may be unable to sell or otherwise realize value from them, including during the period in which they cannot be transferred. Any resulting impairment could materially and adversely affect the Company’s business, financial condition, and results of operations.

Affiliates of the Company are involved in the Ault Blockchain as its developer and as network participants, which creates conflicts of interest and concentration.

The Ault Blockchain was developed by Ault DAO, and affiliates of the Company participate in the network, including through the operation of Universal DeFi’s validator by an affiliate and through the holding of node licenses and associated governance rights. As a result, the interests of the Company and its affiliates are concentrated in the Ault Blockchain, and decisions affecting the network may be made by, or influenced by, parties affiliated with the Company. These relationships create conflicts of interest, including in the development, governance, and economics of the network, and there can be no assurance that decisions affecting the Ault Blockchain will be made in the best interests of Universal DeFi. The concentration of the Company’s and its affiliates’ interests in a single network also increases the effect on the Company if the network does not succeed. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Technology Risk Factors

Universal DeFi depends on a third-party developer to build and maintain its tokenization platform.

Universal DeFi’s tokenization platform is being developed by a third-party developer rather than by Universal DeFi itself. As a result, the timely completion, functionality, and security of the platform depend on the developer’s performance, on the continuation of the relationship, and on the quality of the software the developer delivers. Universal DeFi may also depend on the developer for

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ongoing maintenance, updates, and support after launch. If the developer fails to deliver the platform on the expected timeline or to the expected specifications, fails to remediate defects or vulnerabilities, or if the relationship is interrupted or terminated, Universal DeFi could experience significant delays and additional costs, and the launch or continued operation of the platform could be impaired. There can be no assurance that Universal DeFi could transition development to itself or another provider without disruption. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

The platform’s token control depends on a single third-party security provider, and a failure of that provider could disrupt the platform.

The platform is being designed to secure control of issued tokens using multi-party computation provided by a single third-party digital asset security provider, which is also expected to provide disaster recovery services. The platform’s token control layer is therefore expected to depend on a single provider. A failure, outage, security breach, insolvency, or termination of that provider, or a defect in its technology, could disrupt the operation of the platform, impair the ability of issuers to control their tokens, or render token environments inaccessible, and disaster recovery services may not be available or successful in all circumstances. Further, the provider contractually disclaims liability for digital asset loss, caps its liability, and may suspend or disconnect the network. Transitioning to a different provider may be difficult, time-consuming, or impossible without disrupting existing token projects. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Smart contracts and software underlying the platform and the Ault Blockchain may contain vulnerabilities that could be exploited.

Universal DeFi’s tokenization platform and the Ault Blockchain rely on smart contracts (self-executing software programs stored on a blockchain that automatically carry out their terms) and other software. Such software may contain bugs, errors, or vulnerabilities, and once deployed on a blockchain, smart contracts may be difficult or impossible to modify. If vulnerabilities in the platform’s or the network’s software are exploited, tokens or other digital assets could be lost, stolen, or rendered inaccessible, transactions could be processed incorrectly, and the platform or the network could be disrupted. The discovery of vulnerabilities, even if they are not exploited, could undermine confidence in the platform or the network. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

A cybersecurity breach, or the loss or theft of cryptographic keys, could result in the loss of assets or the disruption of Universal DeFi’s operations.

Universal DeFi’s operations depend on the security of its systems and of the cryptographic keys and approvals used to control digital assets and to operate its nodes and validator. Digital assets and blockchain infrastructure are frequent targets of cyberattacks, and the theft, loss, or compromise of keys or approvals can result in the permanent and irreversible loss of assets. A cybersecurity breach, a failure of security controls, or the loss, theft, or compromise of keys or approvals, whether affecting Universal DeFi, the affiliate that operates its validator, or its third-party providers, could result in the loss of digital assets, the disruption of operations, liability, and reputational harm. There can be no assurance that the security measures of Universal DeFi or of the parties it relies on will be sufficient. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

The Ault Blockchain is a new network that may experience outages, forks, congestion, or technical failures.

The Ault Blockchain is a new network, and new blockchain networks may experience technical problems including outages, software defects, congestion that slows transactions or increases costs, and forks, which are situations in which a network splits into competing versions. The network’s ability to operate reliably and at scale has not been established over a sustained period. If the Ault Blockchain experiences technical failures, becomes congested or prohibitively expensive to use, or splits into competing versions, Universal DeFi’s node and validator operations and its tokenization platform could be disrupted, and the value of the tokens it holds could decline. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Technological change or obsolescence could render Universal DeFi’s platform or operations uncompetitive.

The technologies underlying tokenization, blockchain networks, and digital asset security are developing rapidly. New technologies, standards, or competing platforms could emerge that are faster, less costly, more secure, more widely adopted, or better aligned with regulatory requirements than those Universal DeFi uses. If Universal DeFi’s platform or operations become obsolete or

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uncompetitive, or if Universal DeFi is unable to adapt to technological change on a timely basis or at acceptable cost, it may be unable to attract or retain issuers or to operate profitably, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Regulatory Risk Factors

The regulatory framework for tokenized and digital assets is new, unsettled, and evolving.

The legal and regulatory framework governing tokenized assets, digital assets, and blockchain network participation is new and unsettled, and it continues to develop and change, often unpredictably, across the jurisdictions in which Universal DeFi may operate. Regulators and courts may interpret existing laws in new ways, and new laws and regulations specific to digital assets may be adopted. This uncertainty makes it difficult for Universal DeFi to determine the requirements applicable to its activities and to plan its business. Changes in law, regulation, or interpretation could subject Universal DeFi to new or additional requirements, restrict its activities, or render aspects of its business impermissible, any of which could materially and adversely affect the Company’s business, financial condition, and results of operations.

The classification of a tokenized asset as a security, a commodity, or another type of asset is uncertain and varies by underlying asset and jurisdiction.

The regulatory treatment of a tokenized asset generally depends on the nature of the underlying asset and the jurisdiction involved. To the extent an underlying asset is a security, the resulting token is expected to be treated as a security and to be subject to securities regulation; to the extent it is a commodity, the token may be subject to commodities regulation; and other assets may be subject to other regimes or to laws of general application. The same asset may be classified differently in different jurisdictions. This classification will generally determine the requirements that apply to the token, the issuer, and potentially to Universal DeFi’s services, and the classification of a particular token may be uncertain or may be challenged. If tokens issued through the platform are determined to be subject to regulatory regimes that Universal DeFi or its issuers cannot satisfy, Universal DeFi may be required to restrict or cease tokenizing certain assets, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Regulatory requirements applicable to tokenized assets could materially limit, delay, or prevent Universal DeFi from offering its tokenization services, and could require it to curtail or cease that business.

The tokenization of assets is subject to extensive and evolving regulation, and the requirements that apply depend on the nature of the underlying asset and the jurisdictions involved. Tokenizing securities, commodities, and certain other assets may require Universal DeFi or the issuers it serves to comply with registration, licensing, disclosure, and other regulatory requirements, and the regulatory treatment of these activities is uncertain and continues to change. If regulatory requirements applicable to tokenized assets are more burdensome than anticipated, if Universal DeFi or its issuers are unable to satisfy them, or if regulators determine that Universal DeFi’s tokenization activities are impermissible or require authorizations that Universal DeFi does not hold, Universal DeFi may be required to limit the assets it tokenizes, restrict the jurisdictions in which it operates, or curtail or cease its tokenization business altogether. Any of the foregoing could prevent Universal DeFi from generating revenue from tokenization, could render its tokenization business unviable, and could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi may be required to obtain licenses or registrations, and may be deemed to be acting as a broker-dealer, transfer agent, money transmitter, or other regulated entity.

Depending on how its activities are characterized and on the jurisdictions in which it operates, Universal DeFi may be required to obtain licenses or registrations, and regulators could determine that it is acting as a broker-dealer, transfer agent, money transmitter, money services business, or other regulated entity, even though it does not currently intend to provide such services. Universal DeFi does not currently hold these licenses or registrations. Obtaining and maintaining licenses or registrations can be costly and time-consuming, and there can be no assurance that Universal DeFi could obtain those it requires. If Universal DeFi is required to obtain authorizations it does not hold, is found to have operated without a required authorization, or becomes subject to the requirements applicable to regulated entities, it could be subject to penalties, be required to change or curtail its operations, and incur significant costs, any of which could materially and adversely affect the Company’s business, financial condition, and results of operations.

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Regulation varies by jurisdiction and may restrict, condition, or prohibit Universal DeFi’s services in markets that are material to its business.

The regulation of tokenized assets, digital assets, and blockchain network participation varies significantly from jurisdiction to jurisdiction. The same activity may be permitted in one jurisdiction, require a license or registration in another, and be restricted or prohibited in a third, and these approaches continue to change. Universal DeFi expects to evaluate the requirements applicable to its services on a jurisdiction-by-jurisdiction basis.

Universal DeFi may be required to obtain licenses or registrations in certain jurisdictions, to restrict or condition its services in others, or to decline to operate where its services cannot be lawfully provided. If regulation restricts, conditions, or prohibits Universal DeFi’s services in markets that are material to its business, the Company’s business, financial condition, and results of operations could be materially and adversely affected.

International regulatory regimes impose additional and differing requirements that could increase Universal DeFi’s costs or restrict its operations.

Universal DeFi intends to make its services available internationally where lawful. A number of jurisdictions have adopted or are developing comprehensive regulatory regimes for digital assets and markets in those assets, including regimes that impose licensing, disclosure, capital, governance, and conduct requirements on participants, and these regimes differ from one another and from the requirements applicable in the United States.

Complying with multiple and differing international regimes could be costly and complex, and Universal DeFi may be unable to comply with all applicable requirements or may be required to restrict its operations in certain jurisdictions. Failure to comply could subject Universal DeFi to penalties and enforcement. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi relies on issuers to perform holder-level identity verification, and it may nonetheless face anti-money-laundering liability for the misuse of tokens issued through its platform.

Universal DeFi does not currently intend to perform identity verification on individual holders of tokens issued through the platform, and it intends for responsibility for holder-level compliance obligations, including any applicable know-your-customer and anti-money-laundering requirements (regulatory requirements to verify the identities of customers and to prevent illegal financial activity), to rest with the issuer. This allocation depends on issuers performing their obligations, which Universal DeFi may have limited ability to verify.

If issuers fail to perform required holder-level compliance, if tokens issued through the platform are used to facilitate money laundering, sanctions evasion, terrorist financing, or other illicit activity, or if regulators conclude that Universal DeFi cannot disclaim responsibility for holder-level compliance notwithstanding its intended allocation of that responsibility to issuers, Universal DeFi could be subject to enforcement, penalties, and reputational harm. There can be no assurance that Universal DeFi’s allocation of these responsibilities will be respected by regulators in all jurisdictions. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi may become subject to enforcement actions, investigations, or litigation.

Given the unsettled and evolving regulation of tokenized and digital assets and the novelty of Universal DeFi’s activities, Universal DeFi may become subject to investigations, enforcement actions, or litigation by regulators, governmental authorities, or private parties, including in connection with the tokens issued through its platform, its node and validator operations, or its compliance with applicable law. Responding to investigations, enforcement actions, or litigation can be costly and time-consuming, can divert management’s attention, and can result in penalties, restrictions on Universal DeFi’s activities, or reputational harm, regardless of outcome. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

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Risks Related to Our Indebtedness and Liquidity

We have incurred losses and we may not be able to manage our business on a profitable basis.

We reported net sales of $4,847,163 for the year ended March 31, 2026 versus $23,563,554 for the comparable period last year. We reported a net loss of $(2,485,763), or $(1.04) per basic and diluted share, for the year ended March 31, 2026, compared to net income of $500,684, or $0.22 per basic and diluted share for the same period last year. Included in the March 31, 2026 results was a non-recurring gain of $2,820,668 from the sale of our smoke and carbon monoxide alarm segment (the “Feit Asset Sale”).

The revenue and income potential of our business and market are unproven. This makes an evaluation of our company difficult and highly speculative. We require additional working capital and there can be no assurances that we will (i) be able to develop products or services on a timely and cost-effective basis, (ii) be able to generate any increase in revenues, (iii) obtain adequate financing on reasonably acceptable bases, if at all, or resources to continue operating our business and to provide products to customers and (iv) ever earn a profit. There can also be no assurance that we will raise sufficient capital to support operations by attaining profitability, or that we can satisfy future liabilities.

Our losses from operations and liquidity conditions raise substantial doubt regarding our ability to continue as a going concern.

We reported a net loss of $2,485,763 for the fiscal year ended March 31, 2026, resulting primarily from lower sales during the March 31, 2026 fiscal year since we sold our smoke and carbon monoxide alarm segment during the first fiscal quarter of the fiscal year. In addition, we had an accumulated deficit of $12,543,809 as of March 31, 2026. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date of the issuance of the audited consolidated financial statements included in this Annual Report on Form 10-K. Our ability to continue as a going concern is dependent on our ability to generate cash flows from operations and find additional sources of funding through either equity offerings, debt financings, or a combination of any such transactions.

In June 2026, we entered into a securities purchase agreement to sell up to $10 million of convertible notes, of which $1.0 million has been funded to date. However, the closing of the remaining $9.0 million is subject to various contingencies, some of which are outside our control. As such, there is no assurance that this financing will be available when needed or that management will be able to obtain other financing on terms acceptable to us, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, there is substantial doubt that we will be able to continue as a going concern. If the foregoing plans are unsuccessful and we are unable to continue as a going concern, you could lose all or part of your investment in our company.

To service any future indebtedness and other obligations, we will require a significant amount of cash.

Our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt service obligations, of which we currently have very few but may in the future incur, including our obligations under our indebtedness, could harm our business, financial condition and results of operations. Our ability to make payments on and to refinance any indebtedness and to fund working capital needs and planned capital expenditures will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, business, legislative, regulatory and other factors that are beyond our control.

If our business does not generate sufficient cash flow from operations or if future borrowings are not available to us in an amount sufficient to enable us and our subsidiaries to pay our indebtedness or to fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness, on or before the maturity thereof, sell assets, reduce or delay capital investments or seek to raise additional capital, any of which could have a material adverse effect on us.

In addition, we may not be able to effect any of these actions, if necessary, on commercially reasonable terms or at all. Our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of future debt instruments may limit or prevent us from taking any of these actions. In addition, any failure to make scheduled payments of interest and principal on any future outstanding indebtedness could harm our ability to incur additional indebtedness or otherwise raise capital on commercially reasonable terms or at all. Our inability to generate sufficient cash flow to satisfy any future debt service and other obligations, or to refinance or restructure our obligations on

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commercially reasonable terms or at all, would have an adverse effect, which could be material, on our business, financial condition and results of operations.

We will need to raise additional capital to fund our operations in furtherance of our business plan.

Until we are profitable, we will need to raise additional capital in order to fund our operations in furtherance of our business plan. The proposed financing may include shares of common stock, shares of preferred stock (if authorized in the future), warrants to purchase shares of common stock or preferred stock, debt securities, units consisting of the foregoing securities, equity investments from strategic development partners or some combination of each. Any additional equity financings may be financially dilutive to, and will be dilutive from an ownership perspective to, our stockholders, and such dilution may be significant based upon the size of such financing. Additionally, we cannot assure that such funding will be available on a timely basis, in needed quantities, or on terms favorable to us, if at all.

Risks Related to our Business and Operations

If we are unable to sell our remaining electrical products after the Feit Asset Sale at acceptable prices relative to our costs including import tariffs, or if we fail to develop and introduce on a timely basis new electrical products from which we can derive additional sales, our financial results will suffer and may negatively impact our ability to achieve our business objectives.

Sales were lower during the March 31, 2026 fiscal year since we sold our smoke and carbon monoxide alarm segment in the Feit Asset Sale during the first fiscal quarter. Sales were further negatively impacted by the increased import tariffs on all our products. Our plans are to continue operations in the wiring device and bath fan segments of our business, develop our DeFi products and services and look for other opportunities to grow stockholder value. However, following the sale of our smoke and carbon monoxide alarm segment, there can be no assurance that our future operations will result in net income. Our failure to make up those sales that were previously accounted for by the alarm segment will harm our business. We may not be able to sustain or increase net income on a quarterly or annual basis in the future. If our sales grow more slowly than we anticipate, our gross margins fail to improve or our operating expenses exceed our expectations, our operating results will suffer. The prices we charge for our electrical products may decrease in a competitive market, which would reduce our sales and harm our business. If we are unable to sell our remaining electrical products after the Feit Asset Sale at acceptable prices relative to our costs including import tariffs, or if we fail to develop and introduce on a timely basis new products from which we can derive additional sales, our financial results will suffer and may negatively impact our ability to achieve our business objectives.

Changes in trade policy in the U.S. and other countries, specifically the People’s Republic of China, including the imposition of additional tariffs and the resulting consequences, may adversely impact our results of operations and financial condition.

We currently import virtually all of the safety and security products that we are continuing to sell. As an importer, we are subject to numerous tariffs which vary depending on types of products and country of origin, changes in economic and political conditions in the country of manufacture, potential trade restrictions and currency fluctuations. Substantially all our products are imported from the People’s Republic of China. Certain of these products such as wiring devices are currently subject to tariffs between 25% and 45% of their cost, though there can be no assurance that this percentage will not increase within the foreseeable future. The imposition of and modification of tariffs has increased uncertainty as to the short-term sustainability of importing products from our principal suppliers. We cannot determine at this time how tariffs will affect our future profitability and whether they will reduce the number of products that we sell or whether we could pass these tariff costs on to our customers through price adjustments. If we are unable to import products at a competitive price point, our sales would be adversely affected, resulting in a materially adverse effect on our business, results of operations, financial condition and future prospects.

Global economic and capital market conditions may cause our access to capital to be more difficult in the future and/or costs to secure such capital more expensive.

We may seek access to additional funding to provide liquidity to conduct our operations, expand our business or refinance existing indebtedness. Any sustained weakness in general economic conditions, or U.S. or global capital markets could adversely affect our ability to raise capital on acceptable terms, if at all; any failure to raise sufficient capital could require us to curtail or cease our operations. We may also rely in the future on access to financial markets as a source of liquidity for working capital requirements, acquisitions and general corporate purposes. Longer term volatility and continued disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation of financial institutions, reduced alternatives or failures of significant financial

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institutions could adversely affect our access to the liquidity needed for our businesses in the longer term. Such disruptions could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged.

Our overall sales are primarily dependent upon the strength of the U.S. housing market.

We currently market products such as door chimes, ventilation products, ground fault circuit interrupters and other electrical devices to the electrical distribution trade through our wholly owned subsidiary, Universal Safety Electric, Inc. Given the nature of these products, our overall sales are primarily dependent upon the strength of the U.S. housing market. Management believes that with an improved housing market, we will continue to improve profitability, but any downward changes in the housing market could adversely affect our sales.

Competition from a number of companies could result in price reduction, reduced revenue and loss of market share and could harm our results of operations.

Our product offerings, including ground fault circuit interrupter products, compete in functionality with similar products offered by our larger competitors. Prior to the imposition of tariffs, our products also competed favorably with similar products offered by our larger competitors. While we believe there will be market acceptance of our products, we cannot be assured you that our belief will prove accurate. Should our products not achieve the level of acceptance we anticipate from our customers, there could be a materially adverse effect on our future operations, and our sales and revenue could further decline.

Risks Related to Ownership of Our Common Stock and Future Offerings

If we do not continue to satisfy the NYSE American continued listing requirements, our common stock could be delisted from NYSE American.

The listing of our common stock on the NYSE American is contingent on our compliance with the NYSE American’s conditions for continued listing. While we are presently in compliance with all such conditions, we received a delinquency notice last year due to our failure to timely file our annual report on Form 10-K for the fiscal year ended March 31, 2025 with the SEC. While we cured that delinquency, it is possible that we will fail to meet one or more of these conditions in the future.

If we were to fail to meet any of the NYSE American’s listing requirements, we may be subject to delisting. In the event our common stock is no longer listed for trading on NYSE American, our trading volume and share price would almost certainly decrease and we may experience difficulties in raising capital which could materially affect our results of operations and financial condition. Further, being delisted from the NYSE American could also have other negative effects, including potential loss of confidence by partners, lenders, suppliers and employees. Finally, delisting could make it harder for us to raise capital and sell securities.

You may experience future dilution as a result of future equity offerings.

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exercisable or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock, or securities convertible into or exercisable or exchangeable for common stock, in future transactions may be higher or lower than the price per share paid by investors in this offering.

Our common stock price may be volatile.

Our common stock is listed on the NYSE American. In the past, our trading price has fluctuated, depending on many factors that may have little to do with our operations or business prospects. During the past 52-week period (through July 1, 2026), our stock closed at prices between $2.95 per share and $8.02 per share, as reported on NYSE.com. On July 1, 2026, the price of our common stock closed at $4.19 per share.

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Stock markets, in general, have experienced, and continue to experience, significant price and volume volatility, and the market price of our common stock may continue to be subject to similar market fluctuations unrelated to our operating performance or prospects. This increased volatility, coupled with depressed economic conditions, could continue to have a depressive effect on the market price of our common stock. The following factors, many of which are beyond our control, may influence our stock price:

● announcements of technological or competitive developments;

● announcements or expectations of additional financing efforts;

● our ability to market new and enhanced products on a timely basis;

● changes in laws and regulations affecting our business;

● commencement of, or involvement in, litigation involving us;

● regulatory developments affecting us, our customers or our competitors;

● changes in the market’s expectations about our operating results;

● changes in the economic performance or market valuations of our competitors;

● additions or departures of our executive officers;

Volatility in our common stock price may subject us to securities litigation.

In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted securities class action litigation against that company. If we were involved in a class action suit or other securities litigation, it would divert the attention of our senior management, require us to incur significant expense and, whether or not adversely determined, have a material adverse effect on our business, financial condition, results of operations and prospects.

We are controlled by current officers, directors and principal stockholders.

Our directors, executive officers, their affiliates, and our principal stockholders (5% or greater) beneficially own approximately 53.3% of our outstanding voting stock. Our directors, officers and principal stockholders, taken as a whole, have the ability to exert substantial influence over the election of our board of directors and the outcome of matters submitted to our stockholders for their approval.

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The issuance of shares of common stock upon the conversion of convertible notes could affect our stock price.

In June 2026, we entered into an agreement to issue up to $10.6 million of convertible notes. The market price for the shares of common stock that the convertible note holder may receive upon conversion of the convertible notes will fluctuate based on a number of factors beyond our control, however, the convertible note holder may not convert the convertible notes into shares of common stock at a price per share less than $1.00 (the “Floor Price”). If the convertible notes were all converted at the Floor Price, we would issue an aggregate of 10.6 million shares of common stock, not including any accrued but unpaid interest. The issuance of common stock pursuant to the convertible notes at conversion price lower than market price could increase the volatility of the market price of our common stock or result in a significant decline in the public trading price of our common stock.

If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our shares of common stock, the price of our common stock and trading volume could decline.

The trading market for our common stock may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our common stock would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our common stock and the trading volume to decline.

General Risk Factors

Deterioration of global economic conditions could adversely affect our business.

The global economy and capital and credit markets have experienced exceptional turmoil and upheaval over the past several years. Ongoing concerns about the systemic impact of potential long-term and widespread recession and potentially prolonged economic recovery, volatile energy costs, fluctuating commodity prices and interest rates, volatile exchange rates, geopolitical issues, including the conflicts between Russia and Ukraine as well as the one between the United States and Israel against Iran, natural disasters and pandemic illness, instability in credit markets, cost and terms of credit, consumer and business confidence and demand, a changing financial, regulatory and political environment, and substantially increased unemployment rates have all contributed to increased market volatility and diminished expectations for many established and emerging economies, including those in which we operate. Furthermore, austerity measures that certain countries may agree to as part of any debt crisis or disruptions to major financial trading markets may adversely affect world economic conditions and have an adverse impact on our business. These general economic conditions could have a material adverse effect on our cash flow from operations, results of operations and overall financial condition.

The availability, cost and terms of credit also have been and may continue to be adversely affected by illiquid markets and wider credit spreads. Concern about the stability of the markets generally, and the strength of counterparties specifically, has led many lenders and institutional investors to reduce credit to businesses and consumers. These factors have led to a decrease in spending by businesses and consumers over the past several years, and a corresponding slowdown in global infrastructure spending.

Continued uncertainty in the U.S. and international markets and economies and prolonged stagnation in business and consumer spending may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our customers, including our ability to access capital markets and obtain capital lease financing to meet liquidity needs.

If we fail to establish and maintain an effective system of internal control over financial reporting, we may not be able to report our financial results accurately or prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. As a result, our small size and any current internal control deficiencies may adversely affect our financial condition, results of operations and access to capital. We have carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the most recent period covered by this report. Based on the foregoing, our principal executive officer and principal financial

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officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weakness described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weakness which has caused management to conclude that as of March 31, 2026, our internal control over financial reporting (“ICFR”) was not effective.

A material weakness arose with respect to a lack of segregation of duties relating to substantially all accounting functions including review controls and account reconciliation over significant transaction classes inclusive of the income tax provision, lack of documentation to support journal entries, lack of proper IT general controls, incomplete footnote disclosures, and resulting in material audit adjustments.

A material weakness arose in managements controls surrounding complex financial instruments which include the evaluation of the fair value of the convertible debentures and the related derivative component of convertible debentures, in conjunction with the August 13, 2025 and September 25, 2025 note transactions upon inception and at March 31, 2026, and the calculation of stock option expense which required a material adjustment during the review of Form 10-K for the year ended March 31, 2026.

We are currently working to improve and simplify our internal processes and implement enhanced controls to address the material weakness in our internal control over financial reporting and to remedy the ineffectiveness of our disclosure controls and procedures. This material weakness will not be considered to be remediated until the applicable remediated controls are operating for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

If our accounting controls and procedures are circumvented or otherwise fail to achieve their intended purposes, our business could be seriously harmed.

We evaluate our disclosure controls and procedures as of the end of each fiscal quarter, and annually review and evaluate our internal control over financial reporting in order to comply with the SEC’s rules relating to internal control over financial reporting adopted pursuant to the Sarbanes-Oxley Act of 2002. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. If we fail to maintain effective internal control over financial reporting or our management does not timely assess the adequacy of such internal control, we may be subject to regulatory sanctions, and our reputation may decline.

Our internal computer systems may fail or suffer security breaches, which could result in a material disruption of our operations.

Like any other business, we rely on e-mail and other digital communications methods as part of our normal operations. As such, our internal computer systems and servers could fail or suffer security breaches, possibly resulting in a material disruption to our operations. The secure operation of our IT networks and systems as well as the secure processing and maintenance of information is critical to our operations and business strategy. Notwithstanding these priorities, we have experienced attempts at cybercrime such as phishing and other electronic fraud. We also maintain an insurance policy to cover any losses or injuries suffered from cybercrime of this nature; however, it may not be sufficient to cover all damages. Despite our efforts, attempts at fraud such as spoofed e-mails, requests for payment and similar deceptions have become commonplace in the world of e-commerce and are expected to continue. If we are unable to prevent such security breaches in the future, these events or circumstances could materially and adversely affect our operations, financial condition and operating results and impair our ability to execute our business strategy.

Many of our competitors are larger and have greater financial and other resources than we do.

Our products and services compete and will compete with similar if not identical products or services produced by our competitors. These competitive products could be marketed by well-established, successful companies that possess greater financial, marketing, distribution personnel, and other resources than we do. Using said resources, these companies can implement extensive advertising and promotional campaigns, both generally and in response to specific marketing efforts by competitors. They can introduce new products and services to new markets more rapidly. In certain instances, competitors with greater financial resources may be able

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to enter a market in direct competition with us, offering attractive marketing tools to encourage the sale of products and services that compete with our products and services or present cost features that consumers may find attractive.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

We are a public company and subject to the reporting requirements of the Exchange Act, and the Sarbanes-Oxley Act of 2002. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. For example, Section 404 of the Sarbanes-Oxley Act requires that our management report on the effectiveness of our internal controls structure and procedures for financial reporting. Section 404 compliance may divert internal resources and will take a significant amount of time and effort to complete. If we fail to maintain compliance under Section 404, or if our internal control over financial reporting continues to not be effective as defined under Section 404, we could be subject to sanctions or investigations by the NYSE American, the SEC, or other regulatory authorities. Furthermore, investor perceptions of our company may suffer, and this could cause a decline in the market price of our common stock. Any failure of our internal controls could have a material adverse effect on our stated results of operations and harm our reputation. If we are unable to implement these changes effectively or efficiently, it could harm our operations, financial reporting or financial results and could result in an adverse opinion on internal controls from our independent auditors. We may need to hire a number of additional employees with public accounting and disclosure experience in order to meet our ongoing obligations as a public company, particularly if we become fully subject to Section 404 and its auditor attestation requirements, which will increase costs. Our management team and other personnel will need to devote a substantial amount of time to new compliance initiatives and to meeting the obligations that are associated with being a public company, which may divert attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations.

We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.

We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”). Section 404 requires that we document and test our internal control over financial reporting and issue management’s assessment of our internal control over financial reporting. Management assessed the effectiveness of our internal control over financial reporting as of March 31, 2026. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Based on our assessment, as of March 31, 2026, we concluded that our internal control over financial reporting contained material weaknesses.

The weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and our management has concluded, through testing, that these controls are operating effectively. If we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, the accuracy and timeliness of the filing of our annual and quarterly reports may be materially adversely affected and could cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock. In addition, a material weakness in the effectiveness of our internal control over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition.

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The elimination of monetary liability against our directors, officers and employees under law and the existence of indemnification rights for or obligations to our directors, officers and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees.

Our certificate of incorporation contains a provision permitting us to eliminate the personal liability of our directors to us and our stockholders for damages for the breach of a fiduciary duty as a director or officer to the extent provided by Maryland law. We have entered into indemnification agreements with each of our directors and executive officers and may also have contractual indemnification obligations under current and/or future employment agreements with other officers. The foregoing indemnification obligations could result in us incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and the resulting costs may also discourage us from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders against our directors and officers even though such actions, if successful, might otherwise benefit us and our stockholders.

We do not anticipate paying cash dividends on our common stock and, accordingly, stockholders must rely on stock appreciation for any return on their investment.

Except for a one-time special cash dividend after the Feit Asset Sale, we have never declared or paid cash dividends on our common stock and do not expect to do so in the foreseeable future. The declaration of dividends is subject to the discretion of our Board and will depend on various factors, including our operating results, financial condition, future prospects and any other factors deemed relevant by our Board. You should not rely on an investment in our company if you require dividend income from your investment in our company. The success of your investment will likely depend entirely upon any future appreciation of the market price of our common stock, which is uncertain and unpredictable. There is no guarantee that our common stock will appreciate in value.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C. CYBERSECURITY

We rely upon internally and externally managed information technology systems and networks for the collection and storage of sensitive data and business information. We approach cybersecurity risks with a comprehensive risk management and governance strategy designed to assess, identify, and manage cybersecurity risks to our business.

Risk Management and Strategy

Our cybersecurity program is designed to detect cybersecurity threats and vulnerabilities, protect our information systems from such threats, and ensure the confidentiality, integrity, and availability of systems and information used, owned, or managed by us. Our focus is on protecting sensitive information, such as the personal information of our customers and employees, and confidential business information that a competitor or a malicious actor could leverage. Our cybersecurity program has several components, including the adoption of information security protocols, standards, and guidelines consistent with industry best practices and engaging third-party service providers to conduct security assessments.

We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats and have integrated these processes into our overall risk management systems and processes. We conduct regular risk assessments to identify cybersecurity threats and assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats. These risk assessments include identifying reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks. Following these risk assessments, we implement and maintain reasonable safeguards to minimize identified risks, reasonably address any identified gaps in existing safeguards, and regularly monitor the effectiveness of our safeguards.

We have implemented technical solutions designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, antimalware and endpoint protection functionality, and access and identity controls. We regularly evaluate, monitor, and improve these solutions. As part of our overall risk management system, we monitor and test our safeguards and train our employees on these safeguards.

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We have not experienced any cybersecurity incidents that have been determined to affect us materially, our business strategy, results of operations, or financial condition. As external events evolve, we will continue to evaluate and address these conditions as needed.

Governance

One of the key functions of our Board of Directors is informed oversight of our risk management process, including risks from cybersecurity threats. Our Board of Directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face. Our Board of Directors administers its cybersecurity risk oversight function directly as a whole.

ITEM 2. PROPERTIES

Our operating lease for a 15,000 square foot office and warehouse located in Baltimore County, Maryland has been extended various times with the latest extension occurring subsequent to March 31, 2026, on May 14, 2026, extending the lease on a month-to-month basis through December 2026. No option to continue the lease beyond December 2026 has been provided in the lease extension. Monthly rental expense, with common area maintenance, is approximately $15,000. The Company believes that its current facilities are currently suitable and adequate.

ITEM 3. LEGAL PROCEEDINGS

From time to time the Company is involved in various claims and routine litigation matters. In the opinion of management, after consultation with legal counsel, the outcomes of such matters are not anticipated to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

Market Information

Our common stock is listed on the NYSE American under the symbol UUU.

Record Holders

As of July 2, 2026, 3,028,463 shares of our common stock were issued and outstanding and were owned by 103 holders of record. A number of holders of our common stock are “street name” or beneficial holders whose shares of record are held by banks, brokers, and other financial institutions.

Dividend Policy

During the fiscal year ended March 31, 2026, we paid a special, one-time dividend of $1.00 per common share from the proceeds of the sale of a portion of the Company’s business. We have not paid any other cash dividends on our common stock and we do not intend to pay any cash dividends in the foreseeable future. The declaration of dividends in the future, if any, will be at the discretion of our Board and will depend upon our earnings, capital requirements, and financial position.

Equity Compensation Information

The information required by this item regarding equity compensation plans is incorporated by reference to the information set forth in Item 12 of this Annual Report on Form 10-K.

Recent Sales of Unregistered Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 6. [RESERVED]

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Such forward-looking statements include statements regarding, among others, (a) our expectations about possible business combinations, (b) our growth strategies, (c) our future financing plans, and (d) our anticipated needs for working capital. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “approximate,” “estimate,” “believe,” “intend,” “plan,” “budget,” “could,” “forecast,” “might,” “predict,” “shall” or “project,” or the negative of these words or other variations on these words or comparable terminology. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found in this Annual Report.

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Forward-looking statements are based on our current expectations and assumptions regarding our business, potential target businesses, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” in this Annual Report, changes in local, regional, national or global political, economic, business, competitive, market (supply and demand) and regulatory conditions and the following:

● Adverse economic conditions;

● Our ability to effectively execute our business plan;

● Inability to raise sufficient additional capital to operate our business;

● Our ability to manage our expansion, growth and operating expenses;

● Other specific risks referred to in the section entitled “Risk Factors”.

We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. All forward-looking statements speak only as of the date of this Annual Report. We undertake no obligation to update any forward-looking statements or other information contained herein unless required by law.

Information regarding market and industry statistics contained in this Annual Report is included based on information available to us that we believe is accurate. It is generally based on academic and other publications that are not produced for purposes of securities offerings or economic analysis. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services. Except as required by U.S. federal securities laws, we have no obligation to update forward-looking information to reflect actual results or changes in assumptions or other factors that could affect those statements. See the section entitled “Risk Factors” for a more detailed discussion of risks and uncertainties that may have an impact on our future results.

In this Annual Report, the “Company,” “we,” “us” and “our” refer to Universal Safety Products, Inc., a Maryland corporation, and its subsidiaries.

General

During the period covered by this Annual Report, we were in the business of marketing and distributing safety and security products which are primarily manufactured in the Peoples Republic of China (PRC). Our consolidated financial statements detail our sales and other operational results. Accordingly, the following discussion and analysis of the fiscal years ended March 31, 2026, and 2025 relate to the operational results of the Company and its consolidated subsidiaries.

Our overall sales are primarily dependent upon the strength of the U.S. housing market. As stated elsewhere in this report, our Universal Electric subsidiary markets our products to the electrical distribution trade (primarily electrical and lighting distributors and manufactured housing companies); conditions that impact new home construction and new home sales directly impacts sales by our Universal Electric subsidiary. Our operating results for the fiscal years ended March 31, 2026, and 2025 continue to be dependent upon the economic conditions impacting the U.S. housing market.

The importation of certain wiring devices, carbon-monoxide alarms, and photo-electric alarms are currently subject to tariffs of twenty-five percent (25%). During the period covered by this Annual Report there has been unprecedented activity involving the implementation and imposition of global tariffs, the invalidation of those tariffs by the U.S. Supreme Court, and the subsequent implementation of new tariffs under different statutes. The imposition of and modification of tariffs has increased uncertainty as to the short-term sustainability of importing products from our principal suppliers. If the Company is unable to import products at a competitive price point our sales could be adversely affected.

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Subsequent to the May 22, 2025 sale of the smoke alarm and carbon monoxide portion of our business to Feit Electric Company, Inc. (“Feit”), we continue importing and marketing our other product lines. Our ability to sell those products at competitive prices depends, among other things, on the tariffs to which imports of those products will be subject. In July 2025, we formed a wholly owned subsidiary called Universal DeFi LLC (“Universal DeFi”) as a new venture to diversify the business and explore new paths for revenue and stockholder value. Universal DeFi is pursuing two lines of business. First, Universal DeFi is developing and intends to own and operate a tokenization platform. Second, Universal DeFi has acquired and commenced limited operations running licensed nodes and a validator on the Ault Blockchain, as described elsewhere in this Annual Report. To date, Universal DeFi has not generated any revenue.

Comparison of Results of Operations for the Years Ended March 31, 2026 and 2025

Sales. In fiscal year 2026, our net sales were $4,847,163 compared to sales in the prior year of $23,563,554, a decrease of $18,716,391 (79.4%). The decrease in sales for the fiscal year ended March 31, 2026, is attributed primarily to the sale of the smoke and carbon monoxide alarm portion of our business as previously discussed.

Gross Profit. Gross profit percentage is calculated as net sales less cost of goods sold expressed as a percentage of net sales. Our gross profit percentage for the fiscal year ended March 31, 2026, was 16.6% compared to 29.0% in fiscal 2025. Changes in gross margin are generally attributed to variations in the mix of products sold as certain products are subject to tariff charges that directly impact gross margin.

Selling, General and Administrative Expense. Selling, general and administrative expenses decreased to $5,233,428 in fiscal 2026 from $6,004,507 in fiscal 2025. As a percentage of net sales, these expenses were 108.0% for the fiscal year ended March 31, 2026, and 25.5% for the fiscal year ended March 31, 2025. These expenses increased as a percentage of net sales as they do not change in direct proportion to a change in sales. In addition, for the fiscal year ended March 31, 2026, these expenses included stock based compensation expense associated with the issuance of incentive stock options, insurance, and professional fees associated with the consideration of other business opportunities as previously discussed.

Engineering and Product Development. Engineering and product development expense for the fiscal year ended March 31, 2026, was $223,794. Engineering and product development expense for the fiscal year ended March 31, 2025, was $424,849. Engineering and product development expense decreased as a significant portion related to the business unit we sold in the first fiscal quarter of the 2026 fiscal year end.

Interest Expense and Interest Income. For the fiscal years ended March 31, 2026 and 2025, we incurred interest expense of $345,918 and $262,365, respectively. Interest is related to borrowing costs associated with convertible debt and interest paid on amounts borrowed from our factor. We earned $134,320 on cash deposits for the fiscal year ended March 31, 2026. The increase in interest expense resulted primarily from increased borrowing associated with the issuance of convertible debentures during the fiscal year ended March 31, 2026.

Income Taxes. For the fiscal years ended March 31, 2026 and 2025, our statutory Federal tax rate was 20.0%. We had accumulated net operating losses and other income tax credits for which a partial valuation allowance has been established. Accordingly, income taxes or deferred income tax benefits indicated by the provision for income taxes as shown on the Consolidated Statements of Operations for the fiscal years ended March 31, 2026 and 2025, varies from the expected statutory rate. Footnote F to the financial statements provides a reconciliation of the amount of tax that would be expected at statutory rates and the amount of tax expense or benefit provided at the effective rate of tax for each fiscal period.

Net Income. We reported a net loss of $2,485,763 for the fiscal year 2026, compared to net income of $500,684 for fiscal 2025, a decrease in net income of $2,986,447 (596.5%). The decrease in the net income for the fiscal year ended March 31, 2026 is attributed to the decrease in sales associated with the sale of the smoke and carbon monoxide alarm portion of our business as previously discussed, and non-cash items including stock based compensation of $896,700, and an increase in the allowance for credit losses of $297,000, and partially offset by a gain on the sale of assets of $2,820,668.

Financial Condition, Liquidity, Capital Resources and Going Concern

We reported a net loss of $2,485,763 and net income of $500,684 for the years ended March 31, 2026 and 2025, respectively. As of March 31, 2026, working capital (computed as the excess of current assets over current liabilities) decreased by $1,927,705, from $5,163,711 on March 31, 2025 to $3,236,006 on March 31, 2026.

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Our operating activities provided cash of $536,185 for the year ended March 31, 2026. Operating activities provided cash principally by decreasing trade accounts receivable and amounts due from factor of $3,641,110, by decreasing inventories and assets held for sale by 2,543,262, and offset by decreasing accounts payable and accrued expenses by $2,179,879, increases to prepaid expenses of $197,300, and a net loss of $2,485,763. In addition, the following non-cash items are reflected in net cash provided by operating activities: stock based compensation of $896,700, a reversal of a provision for income tax benefits of $361,000, the change in the fair value of the derivative component of convertible debt of $75,000, the amortization of original issue discount on convertible debt of $309,053, a change in the allowance for credit losses of $297,000, an increase to the reserve for excess and obsolete inventory of $110,000, and a decrease in the operating lease liability of $13,330.

Our operating activities used cash of $1,048,612 for the year ended March 31, 2025. Operating activities used cash principally by increasing trade accounts receivable and amounts due from factor of $1,090,710, increased inventory of $227,396, by decreasing accounts payable, accrued expenses, and lease liability by $350,758, and offset by prepaid expenses of $81,442, and net income of $500,684. In addition, the following non-cash items are reflected in net cash used in operating activities: depreciation and amortization amounted to $164,126, the change in the allowance for excess and obsolete inventory of $300,000, and was offset by changes in the allowance for credit losses of $65,000, and an income tax benefit of $361,000.

Our investing activities provided cash of $4,502,605 resulting from proceeds from the sale of assets for the fiscal year ended March 31, 2026, and did not use or provide cash for the fiscal year ended March 31, 2025.

Financing activities during the fiscal year ended March 31, 2026 used cash of $1,913,245 resulting from the payment of dividends on common stock of $2,312,787, and the repayment of net borrowings from the factor of $2,100,458, and offset by the issuance of convertible debt of $2,500,000. Financing activities during the fiscal year ended March 31, 2025 provided cash of $1,331,605 reflecting the increase in net borrowing from the factor.

We prepared the financial statements included within this Annual Report on Form 10-K assuming we will continue operations, even though we reported a net loss of $2,485,763 for the fiscal year ended March 31, 2026, and had an accumulated deficit of $12,543,809, that creates substantial doubt about our ability to continue as a going concern. Sales were lower during the March 31, 2026 fiscal year since we sold our smoke and carbon monoxide alarm segment during the first fiscal quarter. Sales were further negatively impacted by the increased import tariffs on all our products. Our plans are to continue operations in the wiring device and bath fan segments of our business, and to develop an additional line of business, as more fully described herein, financed through the issuance of convertible debentures, of which $10,000,000 has been contracted subject to the lenders discretion. However, these plans are not certain to succeed and the financial statements do not include adjustments that would be necessary if we cannot continue.

Related Party Transactions

During the fiscal year ended March 31, 2026 and 2025, inventory purchases and other company expenses of approximately $162,000 and $1,097,000, respectively, were charged to credit card accounts of Harvey B. Grossblatt, our Chief Executive Officer and certain of his immediate family members. We subsequently reimbursed these charges in full. Mr. Grossblatt receives travel mileage and other credit card benefits from these charges. The maximum amount outstanding and due to Mr. Grossblatt at any point during the fiscal year ended March 31, 2026 and 2025 may include amounts submitted for personal expense reimbursement and amounts paid by Mr. Grossblatt for inventory purchases or other company expenses and amounted to approximately $23,000 and $285,000, respectively, and there were no amounts outstanding at March 31, 2026 or 2025.

Critical Accounting Policies

Management’s discussion and analysis of our consolidated financial statements and results of operations is based upon our consolidated financial statements included as part of this document. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates, including those related to credit losses, inventories, income taxes, and contingencies and litigation. We base these estimates on historical experiences and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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We believe that the following critical accounting policies affect management’s more significant judgments and estimates used in the preparation of its consolidated financial statements. For a detailed discussion on the application of these and other accounting policies, see Note A to the consolidated financial statements included in this Annual Report. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty and actual results could differ from these estimates. These judgments are based on our historical experience, terms of existing contracts, current economic trends in the industry, information provided by our customers, and information available from outside sources, as appropriate. Our critical accounting policies include:

Assets Held for Sale: As previously discussed in Part I, Item 1, the asset sale to Feit closed on May 22, 2025. Under the terms of the Asset Purchase Agreement, we sold finished good inventories of $1,655,000, and all of our fully amortized intangible assets including, but not limited to, all of our patents, trademarks, copyrights, and the trade name Universal Security Instruments, Inc. and USI Electric, Inc. Accordingly, the assets held for sale on March 31, 2025 pursuant to the terms of the Asset Purchase Agreement, are shown separately in the financial statements accompanying this Annual Report and are valued at the lower of the carrying value or fair value less selling cost.

Income Taxes: We recognize 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.

Further, after a review of projected taxable income, the remaining components of the deferred tax asset, and current global economic conditions, it was determined that it is more likely than not, that the tax benefits associated with the remaining components of deferred tax assets after the sale of a segment of the business, will not be realized. This determination was made based on our prior history of losses from operations and the uncertainty as to whether we 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 remaining deferred tax assets. Our ability to realize the tax benefits associated with the remaining 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.

We follow ASC 740-10 which provides guidance for 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 consolidated 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.

Fair Value Measurements: We account for fair value of financial instruments in accordance with ASC 820, Fair Value Measurement, which defines fair value and establishes a framework to measure fair value and the related disclosures about fair value measurements. The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. The Financial Accounting Standards Board, or FASB, establishes a fair value hierarchy used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1: Inputs based upon quoted market prices for identical assets or liabilities in active markets at the measurement date; Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and Level 3: Inputs that are management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instruments’ valuation. In addition, we will measure fair value in an inactive or dislocated market based on facts and circumstances and significant management judgment. We will use inputs based on management estimates or assumptions or adjust observable inputs to determine fair value when markets are not active and relevant observable inputs are not available.

ASC 825, Financial Instruments, requires disclosures about the fair value of financial instruments. The carrying amount of cash, accounts receivable and amounts due from factor, accounts payable, and accrued expenses, as presented in the balance sheet, approximates fair value due to the short-term nature of these instruments.

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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. We believe our estimates as to the collectability of trade accounts receivable and the amount of finished goods inventory that we consider to be excess or obsolete are critical estimates. On an ongoing basis, we evaluate these estimates, including those related to credit losses, inventories, income taxes, and contingencies and litigation. We base these estimates on historical experiences and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results could differ from those estimates.

Stock Based Compensation: We account for share-based payments using the fair value method. We recognize all share-based payments to employees and non-employee directors in our financial statements based on their effective date fair values, calculated using the Black-Scholes option pricing model. The expected term of stock options granted is estimated to be five years from the effective date of the grant based on the simplified safe harbor calculation provided under ASC 718-10-55-20 and 21. The expected volatility of the option is determined based on the Company’s stock price over a five-year look-back period. The risk-free interest rate is determined using the yield available for zero-coupon U.S. government issues with a remaining term equal to the expected term of the options.

Revenue Recognition: Our 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 we have 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, we do 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 cost of completing the sale and are recorded in selling, general and administrative expense.

The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for products sold. Revenue is recorded at the transaction price net of estimates of variable consideration. We use 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.

We have established a provision to cover anticipated credit losses based upon historical experience.

Inventories: Inventories are valued at the lower-of-cost or net realizable value. Cost is determined on the first in, first out method. We evaluate inventories on a quarterly basis and write down inventory that is deemed 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.

Off-Balance Sheet Arrangements. We have not created, and are not party to, any special-purpose or off balance sheet entities for the purpose of raising capital, incurring debt or operating parts of our business that are not consolidated into our financial statements and do not have any arrangements or relationships with entities that are not consolidated into our financial statements that are reasonably likely to materially affect our liquidity or the availability of our capital resources.

Concentrations

We are primarily a distributor of safety products for use in home and business. We had three customers during the fiscal year ended March 31, 2026 that represented 13.0%, 12.5%, and 10.8% of our net sales, and two customers during the fiscal year ended March 31, 2025 that represented 21.7% and 14.9% of our net sales, respectively. We had three customers during the fiscal year ended March 31, 2026 that represented 20.0%, 19.0%, and 10.0% of our accounts receivable, and two customers during the fiscal year ended March 31, 2025 that represented 17.3% and 13.8% of our accounts receivable, respectively. Products manufactured for us by Eyston amounted to approximately 82.6% and 96.3% of our purchases for the fiscal years ended March 31, 2026 and 2025, respectively. At March 31, 2026 and 2025, we had accounts receivable due from Eyston of $0 and $114,204, and trade accounts payable due to Eyston of approximately $0 and $1,146,000, respectively.

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New Accounting Standards

See Note A, Recently issued accounting pronouncements, in the Notes to the Consolidated Financial Statements for a discussion of recently adopted new accounting guidance and new accounting guidance not yet adopted.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Because we are a smaller reporting company, we are not required to provide the information otherwise required under this Item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary data required by this Item 8 are included in the Company’s Consolidated Financial Statements and set forth in the pages indicated in Item 15(a) of this Annual Report.

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

UUU US Equity

UUU · 10-K · period ended 2026-03-31

ITEM 1. BUSINESS

ITEM 1A. RISK FACTORS

ITEM 1B. UNRESOLVED STAFF COMMENTS

ITEM 1C. CYBERSECURITY

ITEM 2. PROPERTIES

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. MINE SAFETY DISCLOSURES

ITEM 6. [RESERVED]

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9A. CONTROLS AND PROCEDURES

UUU US Equity☆

UUU · 10-K · period ended 2026-03-31

ITEM 1. BUSINESS

ITEM 1A. RISK FACTORS

ITEM 1B. UNRESOLVED STAFF COMMENTS

ITEM 1C. CYBERSECURITY

ITEM 2. PROPERTIES

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. MINE SAFETY DISCLOSURES

ITEM 6. [RESERVED]

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9A. CONTROLS AND PROCEDURES

UUU US Equity