================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly period ended September 30, 2003

                                       OR
          [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                          Commission file number 0-7885

                      UNIVERSAL SECURITY INSTRUMENTS, INC.

             (Exact name of registrant as specified in its charter)

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

7-A Gwynns Mill Court
Owings Mills, Maryland                                             21117
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code: (410) 363-3000

                                  Inapplicable
              (Former name, former address and former fiscal year
                         if changed from last report.)

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  X    No
                                      -----    -----

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act. Yes      No   X
                                              -----    -----

At November  12,  2003,  the number of shares  outstanding  of the  registrant's
common stock was 1,130,362.

================================================================================

<PAGE>

                               TABLE OF CONTENTS




Part I - Financial Information                                            Page
                                                                          ----

         Item 1. Consolidated Financial Statements (unaudited):
         ------  Consolidated Balance Sheets at September 30, 2003
                 and March 31, 2003                                         3

                 Consolidated Statements of Earnings for the Three
                 Months Ended September 30, 2003 and 2002                   4

                 Consolidated Statements of Earnings for the Six
                 Months Ended September 30, 2003 and 2002                   5

                 Consolidated Statements of Cash Flows for the Six
                 Months Ended September 30, 2003 and 2002                   6

                 Notes to Consolidated Financial Statements                 7

         Item 2. Management's Discussion and Analysis of Financial
         ------  Condition and Results of Operations                       10

         Item 3. Quantitative and Qualitative Disclosure About             13
         ------  Market Risk

         Item 4. Controls and Procedures                                   13
         ------

Part II - Other Information

         Item 1. Legal Proceedings                                         14
         ------

         Item 4. Submission of Matters to a Vote of Security Holders       15
         ------

         Item 6. Exhibits and Reports on Form 8-K                          15
         ------

                 Signatures                                                16


                                       2
<PAGE>

<TABLE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

             UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                  (unaudited)

<CAPTION>
                                    ASSETS                                      September 30,         March 31,
                                                                                --------------        ---------
                                                                                     2003                2003
                                                                                     ----                ----

CURRENT ASSETS
<S>                                                                             <C>                  <C>
Cash                                                                            $   690,873          $   51,112
Accounts receivable:
  Trade (less allowance for doubtful accounts of $70,000 and $10,000
  at September 30 and March 31, 2003, respectively)                                 225,405             207,539
Employees                                                                            15,940              16,303
                                                                                -----------          ----------

                                                                                    241,345             223,842
Amount due from factor                                                            1,141,935             623,566
Inventory                                                                         3,056,028           3,224,229
Prepaid expenses                                                                    322,856             136,343
                                                                                -----------          ----------


TOTAL CURRENT ASSETS                                                              5,453,037           4,259,092

INVESTMENT IN JOINT VENTURE                                                       4,492,665           3,831,583

PROPERTY, PLANT AND EQUIPMENT - NET                                                  94,337             279,896

OTHER ASSETS                                                                         11,472              11,472
                                                                                -----------          ----------
TOTAL ASSETS                                                                    $10,051,511          $8,382,043
                                                                                ===========          ==========

                     LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable                                                                $ 1,277,579          $1,173,175
Accrued liabilities                                                                 644,549             684,979
Current obligations under capital lease                                              22,888              23,250
                                                                                -----------          ----------
TOTAL CURRENT LIABILITIES                                                         1,945,016           1,881,404
                                                                                -----------          ----------

LONG-TERM CAPITAL LEASE OBLIGATIONS                                                       -               7,224

COMMITMENTS AND CONTINGENCIES                                                             -                   -

SHAREHOLDERS' EQUITY
Common stock, $.01 par value per share; authorized 20,000,000 shares; issued
    and outstanding 1,128,945 and 1,121,982 shares at September 30, 2003 and
    March 31, 2003, respectively                                                     11,289              11,220
Additional paid-in capital                                                       11,079,447          11,059,381
Accumulated deficit                                                              (2,984,241)         (4,577,186)
                                                                                -----------          ----------
TOTAL SHAREHOLDERS' EQUITY                                                        8,106,495           6,493,415
                                                                                -----------          ----------
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                     $10,051,511          $8,382,043
                                                                                ===========          ==========


          See accompanying notes to consolidated financial statements.

</TABLE>


                                       3
<PAGE>

<TABLE>
              UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)

<CAPTION>
                                                                              Three Months Ended
                                                                                 September 30,
                                                                             2003            2002
                                                                             ----            ----

<S>                                                                       <C>             <C>
           Net sales                                                      $4,988,483      $4,091,272
           Cost of goods sold                                              3,412,776       2,805,125
                                                                          ----------      ----------

           GROSS PROFIT                                                    1,575,707       1,286,147

           Research and development expense                                   65,860          72,581
           Selling, general and administrative expense                     1,243,860         954,505
                                                                          ----------      ----------


           Operating income                                                  265,987         259,061

           Other (expense):
              Interest expense                                               (30,663)        (36,332)
              Other                                                                -             750
                                                                          ----------      ----------

                                                                             (30,663)        (35,582)


           INCOME BEFORE EARNINGS FROM JOINT VENTURE                         235,324         223,479

           Earnings from Joint Venture:
              Equity in earnings of Joint Venture                            546,449         447,759
              Cost allocatable to Joint Venture                              (41,327)        (41,109)
                                                                          ----------      ----------

           NET INCOME                                                     $  740,446      $  630,129
                                                                          ==========      ==========

           Net income per common share amounts:
             Basic                                                             $0.66          $0.60
             Diluted                                                           $0.57          $0.55
           Weighted average number of common shares outstanding
             Basic                                                         1,127,593      1,054,205
             Diluted                                                       1,293,520      1,152,001




          See accompanying notes to consolidated financial statements.

</TABLE>


                                       4
<PAGE>

<TABLE>
              UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)

<CAPTION>
                                                                               Six Months Ended
                                                                                 September 30,
                                                                              2003          2002
                                                                              ----          ----

<S>                                                                       <C>            <C>
           Net sales                                                      $9,420,433     $7,842,198
           Cost of goods sold                                              6,384,481      5,472,826
                                                                          ----------     ----------

           GROSS PROFIT                                                    3,035,952      2,369,372

           Research and development expense                                  130,477        132,981
           Selling, general and administrative expense                     1,903,720      2,415,190
                                                                          ----------     ----------

           Operating income                                                  490,285        332,671

           Other (expense):
              Interest expense                                               (63,372)       (73,269)
              Other                                                                -            750
                                                                          ----------     ----------

                                                                             (63,372)       (72,519)
                                                                          ----------     ----------

           INCOME BEFORE EARNINGS FROM JOINT VENTURE
                                                                             426,913        260,152

           Earnings from Joint Venture:
              Equity in earnings of Joint Venture                          1,253,269      1,052,130
              Cost allocatable to Joint Venture                              (87,237)      (105,213)
                                                                          ----------     ----------

           NET INCOME                                                     $1,592,945     $1,207,069
                                                                          ==========     ==========

           Net income per common share amounts:
             Basic                                                             $1.42          $1.17
             Diluted                                                           $1.25          $1.09
           Weighted average number of common shares outstanding
             Basic                                                         1,125,309      1,034,488
             Diluted                                                       1,279,516      1,105,055




          See accompanying notes to consolidated financial statements.

</TABLE>


                                       5
<PAGE>

<TABLE>
              UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<CAPTION>
                                                                                      Six Months Ended September 30,
                                                                                          2003             2002
                                                                                          ----             ----
OPERATING ACTIVITIES
<S>                                                                                   <C>               <C>
Net income                                                                            $1,592,945        $1,207,069
Adjustments to reconcile net income to net cash (used in) provided by operating
activities:
   Depreciation and amortization                                                          17,013            19,463
   Stock issued in lieu of directors fee                                                       -            30,000
   Gain on sale of land                                                                 (175,965)                -
   Earnings of the Joint Venture                                                      (1,253,269)         (946,917)
   Change in allowance for doubtful accounts                                              60,000           (68,358)
   Changes in operating assets and liabilities:
      Increase in accounts receivable and amounts due from factor                       (595,872)         (760,937)
      (Increase) decrease in inventories and prepaid expenses                            (18,312)         (613,373)
      Decrease in other assets                                                                 -             1,801
      Increase in accounts payable and accrued expenses                                  656,162         1,012,206
                                                                                      ----------        ----------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                      282,702          (119,046)

INVESTING ACTIVITIES:
    Purchase of property, plant and equipment                                             (5,489)           (4,165)
    Gross proceeds from sale of land                                                     350,000                 -
                                                                                      ----------        ----------

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                      344,511            (4,165)

FINANCING ACTIVITIES:
    Proceeds from issuance of common stock from exercise of employee stock options        21,560             7,000
    Principal payments on capital lease                                                   (7,586)           (7,586)
    Retirement of common stock                                                            (1,426)                -
    Issue of common stock                                                                      -           250,000
                                                                                      ----------        ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                                 12,548           249,414
                                                                                      ----------        ----------

INCREASE IN CASH                                                                         639,761           126,203

Cash at beginning of period                                                               51,112            19,383
                                                                                      ----------        ----------

CASH AT END OF PERIOD                                                                 $  690,873        $  145,586
                                                                                      ===========       ==========

Supplemental information:
  Interest paid                                                                       $   63,372           $73,269
  Income tax paid                                                                              -                 -

Non-cash financing activities:
  Repayment of trade payables due the Joint Venture in lieu of cash distribution         592,188           708,566
  Issuance of 10,000 shares of common stock in satisfaction of amounts payable                 -            39,200
  Issuance of 6,974 shares of common stock as directors fee                           $        -           $30,000


     See accompanying notes to condensed consolidated financial statements.


                                       6
<PAGE>

</TABLE>

             UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

Statement of Management

The consolidated  financial  statements  include the accounts of the Company and
its  wholly   owned   subsidiaries.   Significant   intercompany   accounts  and
transactions  have been  eliminated  in  consolidation.  In the  opinion  of the
Company's management,  the interim consolidated financial statements include all
adjustments,  consisting of only normal recurring  adjustments,  necessary for a
fair  presentation of the results for the interim periods.  Certain  information
and footnote  disclosures  normally included in financial statements prepared in
accordance with generally accepted accounting principles in the United States of
America  have been  condensed  or omitted.  The interim  consolidated  financial
statements  should be read in  conjunction  with the  Company's  March 31,  2003
audited financial  statements filed with the Securities and Exchange  Commission
on Form 10-K. The interim  operating  results are not necessarily  indicative of
the operating results for the full fiscal year.

Income Taxes

No income tax  expense  has been  provided  for the three and six month  periods
ended  September  30,  2003 as a result  of the  carryforward  of  prior  years'
operating losses.

Joint Venture

The  Company  maintains  a 50%  interest  in a joint  venture  with a Hong  Kong
corporation ("Joint Venture") which has manufacturing facilities in the People's
Republic of China, for the manufacturing of consumer  electronic  products.  The
following represents  summarized balance sheet and income statement  information
of the Hong Kong Joint  Venture for the six months ended  September 30, 2003 and
2002:

                                                2003                2002
                                            -----------         -----------

      Net sales                             $13,078,644         $11,728,014
      Gross profit                            4,188,176           3,951,259
      Net income                              2,566,465           2,692,827
      Total current assets                    9,909,010           7,544,756
      Total assets                           12,694,320           9,949,335
      Total current liabilities               3,232,572           2,751,807

During the six months  ended  September  30,  2003 and 2002,  respectively,  the
Company purchased $4,159,596 and $3,615,994 of products from the Hong Kong Joint
Venture.  At September 30, 2003 and 2002, the Company had amounts payable to the
Hong Kong Joint Venture of $490,071 and $458,575,  respectively. The Company has
adjusted  its  equity  in  earnings  of the Joint  Venture  to  reflect  certain
adjustments required by US GAAP.

In 2002, the Company  amended its  employment  agreements so that bonus payments
are allocated  between  domestic  operations and joint venture  operations.  The
Company recorded  $41,327 and $87,237 of costs  allocatable to the joint venture
in the  accompanying  statement of operations for the three and six months ended
September 30, 2003 and $41,109 and $105,213 for the same periods last year.

Net Income Per Common Share

Basic earnings per common share is computed based on the weighted average number
of common shares outstanding during the periods presented.  Diluted earnings per
common share is computed  based on the weighted  average number of common shares
outstanding  plus the effect of stock  options  and other  potentially  dilutive
common  stock  equivalents.  The  dilutive  effect  of stock  options  and other
potentially  dilutive common stock  equivalents is determined using the treasury
stock method based on the Company's average stock price.

A reconciliation  of the weighted average shares of common stock utilized in the
computation of basic and diluted  earnings per share for the three and six month
periods ended September 30, 2003 and 2002 is as follows:


                                       7
<PAGE>

<TABLE>
<CAPTION>
                                                   Three Months Ended             Six months Ended
                                                      September 30,                 September 30,
                                                 2003            2002            2003          2002
                                                 ----            ----            ----          ----


<S>                                           <C>             <C>             <C>           <C>
Weighted average number of common             1,127,593       1,054,205       1,125,309     1,034,488
shares outstanding for basic EPS

Shares issued upon the assumed                  165,927          97,796         154,207        70,567
exercise of outstanding stock options         ---------       ---------       ---------     ---------

Weighted average number of common             1,293,520       1,152,001       1,279,516     1,105,055
and common equivalent shares
outstanding for diluted EPS

</TABLE>

Stock Based Compensation

The Company uses the intrinsic value method as defined by Accounting  Principles
Board  Opinion  No. 25 to account for  stock-based  employee  compensation.  The
Company  has  adopted  the  disclosure   requirements  of  Financial  Accounting
Standards   Board  (FASB)   Statement  No.  123,   Accounting  for   Stock-Based
Compensation, as amended by FASB No. 148 during fiscal 2003. The following table
illustrates the effect on net income and earnings per share as if the fair value
based method had been  applied to all  outstanding  and unvested  awards in each
period.

<TABLE>
<CAPTION>
                                                         Three Months Ended              Six months Ended
                                                            September 30,                  September 30,
                                                        2003            2002            2003           2002
                                                        ----            ----            ----           ----

<S>                                                   <C>             <C>           <C>            <C>
Net income, as reported                               $740,446        $630,129      $1,592,945     $1,207,069

Deduct:  Total stock-based  employee  compensation
expense  determined  under fair value based method
for all awards, net of related tax effects             (18,757)        (20,985)        (37,514)       (41,969)
                                                      --------        --------      ----------     ----------

  Pro forma net income                                $721,689        $609,144      $1,555,431     $1,165,100
                                                      ========        ========      ==========     ==========

Earnings per share:

Basic - as reported                                      $0.66          $0.60           $1.42          $1.17
                                                         =====          =====           =====          =====

Basic - pro forma                                        $0.64          $0.58           $1.38          $1.13
                                                         =====          =====           =====          =====

Diluted - as reported                                    $0.57          $0.55           $1.25          $1.09
                                                         =====          =====           =====          =====

Diluted - pro forma                                      $0.56          $0.53           $1.22          $1.05
                                                         =====          =====           =====          =====

</TABLE>

Recently Issued Accounting Standards

In  April  2003,  SFAS  No.  149,  "Amendment  of  Statement  133 on  Derivative
Instruments and Hedging  Activities,"  was issued which amends and clarifies the
accounting for derivative instruments,  including certain derivative instruments
embedded  in other  contracts,  and  hedging  activities  under SFAS No. 133. It
requires, among other things, that contracts with comparable  characteristics be
accounted for similarly and clarifies  under what  circumstances a contract with
an initial net investment  meets the  characteristic  of a derivative and when a
derivative contains a financing component that warrants special reporting in the
statement  of cash flows.  SFAS No. 149 is  effective  generally  for  contracts
entered into and modified  after June 30, 2003.  The adoption of this  statement
did not have any effect on the  Company's  financial  position or  statement  of
operations.



                                       8
<PAGE>

In May 2003, SFAS No. 150,  "Accounting for Certain  Financial  Instruments with
Characteristics  of both  liabilities  and Equity" was  issued.  This  statement
establishes  new standards  for how an issuer  classifies  and measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances).  This statement is effective
for  financial  instruments  entered into or modified  after May 31,  2003,  and
otherwise is effective at the  beginning of the first interim  period  beginning
after June 15, 2003.  The adoption of this  Statement did not have any effect on
the Company's financial position or statement of operations.




                                       9
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS RESULTS OF OPERATIONS

     This  Quarterly  Report  on  Form  10-Q  contains  certain  forward-looking
statements  reflecting the Company's  current  expectations  with respect to its
operations,  performance,  financial  condition,  and other developments.  These
forward-looking  statements  may generally be identified by the use of the words
"may", "will", "believes", "should", "expects", "anticipates",  "estimates", and
similar  expressions.  Such statements are necessarily  estimates reflecting the
Company's best judgment based upon current  information  and involve a number of
risks and  uncertainties.  While it is  impossible  to identify all such factors
which could cause actual results to differ materially from expectations are: (i)
the  Company's  and the Hong Kong  Joint  Venture's  ability,  respectively,  to
maintain operating  profitability,  (ii) competitive practices in the industries
in which  the  Company  competes,  (iii) the  Company's  dependence  on  current
management,  (iv) the  impact  of  current  and  future  laws  and  governmental
regulations  affecting the Company and the Hong Kong Joint Venture,  (v) general
economic  conditions,  (vi) other factors  which may be identified  from time to
time in the  Company's  Securities  and  Exchange  Commission  filings and other
public announcements, and (vii) currency fluctuations. There can be no assurance
that  these  and  other   factors   will  not  affect  the   accuracy   of  such
forward-looking statements.

Three Months Ended September 30, 2003 and 2002

     Sales.  Net  sales for the  three  months  ended  September  30,  2003 were
$4,988,483  compared to $4,091,272 for the comparable  three months in the prior
fiscal year, an increase of $897,211.  Net sales of safety products increased by
$894,818 as compared to the quarter ended September 30, 2002. Net sales of other
products  increased by $2,393,  as compared to the quarter  ended  September 30,
2002. The primary reason for the increase in safety sales was higher smoke alarm
and carbon monoxide alarm sales.

     Gross Profit  Margin.  The gross profit  margin is  calculated as net sales
less cost of goods sold  expressed as a percentage  of net sales.  The Company's
gross  profit  margins  increased  3%,  to 32% of sales  for the  quarter  ended
September  30,  2003  from 31% for the  corresponding  quarter  last  year.  The
increase resulted from higher sales and increased productivity and efficiency.

     Expenses.   Selling,  general  and  administrative  expenses  increased  by
$289,355 from the comparable  three months in the prior year. As a percentage of
sales, selling, general and administrative expenses were 25% for the three month
period  ended  September  30,  2003 and 23% for the  three  month  period  ended
September 30, 2002. The increase in selling, general and administrative expenses
was  mainly due to higher  commission  and  freight  costs  associated  with the
Company's  higher sales and higher legal costs  associated with defending patent
and the other litigation discussed below, listing on the American Stock Exchange
and  partially  offset  by a gain on the sale of a 1.5 acre  parcel  of land for
gross sale proceeds of $350,000.  Selling,  general and administrative  expenses
have been reduced by $146,836, which was the gain, net of selling expenses, from
the sale of the parcel of land.

     Interest  Expense  and  Income.  The  Company's  interest  expense,  net of
interest income, decreased from $36,332 for the quarter ended September 30, 2002
to $30,663 for the quarter ended September 30, 2003. The lower interest expenses
resulted primarily from lower interest rates.

     Net Income.  The Company  reported a net profit of $740,446 for the quarter
ended   September   30,  2003  compared  to  net  profit  of  $630,129  for  the
corresponding  quarter of the prior  fiscal  year.  The primary  reasons for the
increase in profit were higher Joint Venture earnings,  higher gross profit from
Company  sales,  and the  gain  on the  sale of the 1.5  acre  parcel  of  land,
partially  offset  by  higher  selling,   general  and  administrative  expenses
associated with increased sales and higher legal costs associated with defending
patent and other litigation discussed below.

Six Months Ended September 30, 2003 and 2002

     Sales.  Net  sales  for  the six  months  ended  September  30,  2003  were
$9,420,433  compared to $7,842,198  for the  comparable  six months in the prior
fiscal year, an increase of $1,578,235.  Net sales of safety products  increased


                                       10
<PAGE>

by $1,673,748 as compared to the quarter ended  September 30, 2002. Net sales of
other  products  decreased  by  $95,513,  as  compared  to the six months  ended
September  30,  2002.  The primary  reason for the  increase in safety sales was
higher smoke alarm and carbon monoxide alarm sales. The primary reason for lower
sales of other products was lower sales of speakers.

     Gross Profit  Margin.  The gross profit  margin is  calculated as net sales
less cost of goods sold  expressed as a percentage  of net sales.  The Company's
gross  profit  margins  increased  7%, to 32% of sales for the six months  ended
September 30, 2003 from 30% for the corresponding period last year. The increase
resulted from increased sales and improved productivity and efficiencies.

     Expenses.   Selling,  general  and  administrative  expenses  increased  by
$511,470  from the  comparable  six months in the prior year. As a percentage of
sales, selling,  general and administrative  expenses were 26% for the six month
period ended September 30, 2003 and 24% for the six month period ended September
30,  2002.  The  increase in selling,  general and  administrative  expenses was
mainly due to higher  commission and freight costs associated with the Company's
higher sales and higher legal costs  associated with defending  patent and other
litigation discussed below, listing on the American Stock Exchange and partially
offset  by a gain on the  sale of a 1.5  acre  parcel  of land  for  gross  sale
proceeds of $350,000.  Selling,  general and  administrative  expenses have been
reduced by $146,836,  which was the gain, net of selling expenses, from the sale
of the parcel of land.

     Interest  Expense  and  Income.  The  Company's  interest  expense,  net of
interest  income,  decreased from $73,269 for the six months ended September 30,
2002, to $63,372 for the six months ended September 30, 2003. The lower interest
expenses resulted primarily from lower interest rates.

     Net Income.  The Company  reported a net profit of  $1,592,945  for the six
months ended  September 30, 2003  compared to net profit of  $1,207,069  for the
corresponding  period of the prior  fiscal  year.  The  primary  reasons for the
increase in profit were higher Joint Venture earnings,  higher gross profit from
Company  sales,  and the  gain  on the  sale of the 1.5  acre  parcel  of  land,
partially  offset  by  higher  selling,   general  and  administrative  expenses
associated with increased sales and higher legal costs associated with defending
patent and other litigation discussed below.

FINANCIAL CONDITION AND LIQUIDITY

     Cash  needs  of the  Company  are  currently  met by funds  generated  from
operations and the Company's  Factoring Agreement which supplies both short-term
borrowings and letters of credit to finance  foreign  inventory  purchases.  The
Company's  maximum amount  available under the Factoring  Agreement is currently
$7,500,000.  However,  based on specified  percentages of the Company's accounts
receivable  and  inventory  and letter of credit  commitments,  at September 30,
2003, the Company had $1,946,000  available under the Factoring  Agreement as of
September  30, 2003.  The  interest  rate under the  Factoring  Agreement on the
uncollected factored accounts receivable and any additional  borrowings is equal
to 1% in excess of the prime rate of interest  charged by the Company's  lender,
which was 5% at September 30, 2003.  Borrowings  are  collateralized  by all the
Company's accounts receivable and inventory. On August 1, 2003, the Company sold
a 1.5 acre parcel of land which until then had also secured the borrowings under
the  Factoring  Agreement  and used  the  proceeds  to  reduce  the  outstanding
principal balance due under the Factoring Agreement.

     Operating  activities  provided  cash of  $282,702  for the  quarter  ended
September 30, 2003. This was primarily due to an increase in accounts receivable
and amount due from  factor of  $595,872,  and equity in the  earnings  from the
Company's  Joint  Venture of  $1,253,269,  which were  offset by an  increase in
accounts  payable and accrued  expenses  of  $656,162.  For the same period last
year, operating activities used cash of $119,046.

     Investing  activities  provided  cash of $344,511  in the current  quarter,
primarily from the sale of the 1.5 acre parcel of land. For the same period last
year, investing activities used cash of $4,165.

     Financing  activities  provided cash of $12,548 primarily from the exercise
of employee stock options.  For the same period last year,  financing activities
provided  cash of  $249,414,  primarily  from the  issuance of common  stock for
$250,000.

     The Company  believes that funds available  under the Factoring  Agreement,
distributions from the Hong Kong Joint Venture,  and working capital provide the
Company with  sufficient  resources to meet its  requirements  for liquidity and
working  capital in the  ordinary  course of its  business  over the next twelve
months.



                                       11
<PAGE>

     In August 2003,  the Company had announced that  Underwriters  Laboratories
(UL) had identified  certain ground fault circuit  interrupter (GFCI) units sold
by the Company,  as potentially  hazardous and recommending  their return.  (See
Part  II,  Item 1,  "Legal  Proceedings",  below.)  At that  time,  the  Company
voluntarily stopped sales of its GFCI unit inventory.  The U.S. Consumer Product
Safety Commission  reviewed the matter and closed its inquiry into the Company's
GFCI units. The costs, if any, to the Company related to these GFCI units is not
presently determinable.  The Company is working towards a possible resolution of
any remaining UL concerns. The GFCI units accounted for approximately 17% of the
Company's sales in the first six months of the current year.

HONG KONG JOINT VENTURE

     Net Sales.  Net sales of the Hong Kong Joint  Venture for the three and six
months ended September 30, 2003 were $6,317,099 and  $13,078,644,  respectively,
compared to $6,717,026 and $11,728,014,  respectively,  for the comparable three
months in the prior fiscal  year.  The  increase in sales was  primarily  due to
increased sales of smoke alarms to non-related customers.

     Net Income.  Net income for the three and six months  ended  September  30,
2003 was $1,290,429  and  $2,566,465,  respectively,  compared to $1,312,301 and
$2,692,827, respectively, in the comparable periods last year.

     Gross  Margins.  Gross margins of the Hong Kong Joint Venture for the three
month period  ended  September  30, 2003  increased to 35% from 34% for the 2002
period.  For the six month  period  ended  September  30,  2003,  gross  margins
decreased to 32% from 34% for the 2002  period.  Since gross  margins  depend on
sales  volume of various  products,  changes in product  sales mix caused  these
changes in gross margins.

     Expenses.  Selling,  general and administrative  expenses were $880,139 and
$1,570,281,  respectively,  for the three and six month periods ended  September
30, 2003,  compared to $528,354 and $1,074,146,  in the prior year's  respective
periods. As a percentage of sales, expenses were 14% and 12%, respectively,  for
the three and six month periods ended September 30, 2003, compared to 8% and 9%,
respectively,  for the three and six month periods ended September 30, 2002. The
increase in selling,  general and  administrative  expense as a percent of sales
was due to  increases  in the Joint  Venture's  management  fees and  management
bonuses.

     Interest Income and Expense.  Interest income, net of interest expense, was
$298 and $854, respectively, for the three and six month periods ended September
30, 2003, compared to interest expense of $4,264 and $8,413,  respectively,  for
the prior year's periods.

     Liquidity.  Cash needs of the Hong Kong Joint  Venture are currently met by
funds generated from operations. During the six months ended September 30, 2003,
working  capital  increased by $1,093,655  from  $5,582,783 on March 31, 2003 to
$6,676,438 on September 30, 2003.

CRITICAL ACCOUNTING POLICIES

     Management's   discussion  and  analysis  of  the  Company's   consolidated
financial  statements  and results of  operations  are based upon the  Company's
Consolidated  Financial  Statement  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,  the Company  evaluates these estimates,
including  those  related  to  bad  debts,   inventories,   income  taxes,   and
contingencies  and  litigation.  The Company bases 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.

     The Company  believes 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  on  these  and  other  accounting   policies  see  Note  A  to  the
consolidated  financial  statements  included in Item 8 of the Form 10-K for the
year ended  March 31,  2003.  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


                                       12
<PAGE>

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:

     The Company's  revenue  recognition  policies are in compliance  with Staff
Accounting  Bulletin No. 101,  "Revenue  Recognition  in  Financial  Statements"
issued by the Securities and Exchange  Commission.  Revenue is recognized at the
time product is shipped and titled passes pursuant to the terms of the agreement
with the customer,  the amount due from the customer is fixed and collectibility
of the  related  receivable  is  reasonably  assured.  The  Company  establishes
allowances  to  cover  anticipated   doubtful  accounts  based  upon  historical
experience.

     Inventories  are valued at the lower of market or cost.  Cost is determined
on the  first-in  first-out  method.  The  Company  has  recorded a reserve  for
obsolescence or unmarketable  inventory equal to the difference between the cost
of inventory and the estimated market value based upon assumptions  about future
demand and market conditions. Management reviews the reserve quarterly.

     The Company  currently has significant  deferred tax assets  resulting from
tax credit  carryforwards,  net  operating  loss  carryforwards  and  deductible
temporary  differences,  which will reduce taxable income in future periods. The
Company  has  provided a  valuation  allowance  on future tax  benefits  such as
foreign  tax  credits,  foreign net  operating  losses,  capital  losses and net
operating losses.

     A valuation  allowance is required when it is more likely than not that all
or a portion of a deferred tax assets will not be realized. Forming a conclusion
that a valuation  allowance is not needed is difficult  when there is a negative
evidence such as cumulative losses and losses in recent years. Cumulative losses
weigh heavily in the overall assessment. As a result of management's assessment,
the  Company  established  a full  valuation  allowance  for its  remaining  net
deferred tax assets at March 31, 2003.

     The Company is subject to lawsuits and other claims, related to patents and
other  matters.  Management is required to assess the  likelihood of any adverse
judgments or outcomes to these matters,  as well as potential ranges of probable
losses.  A determination of the amount of reserves  required,  if any, for these
contingencies  is based on a careful  analysis of each individual issue with the
assistance of outside  legal  counsel.  The required  reserves may change in the
future due to new  developments  in each matter or changes in approach such as a
change in settlement strategy in dealing with these matters.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     No material  changes  have  occurred in the  quantitative  and  qualitative
market risk  disclosures  of the Company as  presented in the  Company's  Annual
Report Form 10-K for the year ended March 31, 2003.


ITEM 4.  CONTROLS AND PROCEDURES

     The Company  maintains a system of disclosure  controls and procedures that
is designed to provide reasonable assurance that information,  which is required
to be disclosed by the Company in the reports that it files or submits under the
Securities and Exchange Act of 1934, as amended, is accumulated and communicated
to management in a timely  manner.  The Company's  Chief  Executive  Officer and
Chief  Financial  Officer have evaluated this system of disclosure  controls and
procedures as of the end of the period  covered by this  quarterly  report,  and
believe  that  the  system  is  operating   effectively  to  ensure  appropriate
disclosure.  There have been no changes in the Company's  internal  control over
financial  reporting  during the most recent fiscal quarter that have materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial reporting.



                                       13
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     As previously  reported by the Company in a Current  Report on Form 8-K, on
September 3, 2003 the Company was advised that Michael Kovens,  a then-director,
principal stockholder and the former Chairman and chief executive officer of the
Company,  had  filed an action  in  Baltimore  County  Circuit  Court  (Case No.
C-03-9639)  against the Company and the other directors  seeking:  (i) to enjoin
the Company from holding its Annual Meeting of Stockholders on Monday, September
8, until Mr.  Kovens is able to nominate  directors  for  election at the Annual
Meeting;  (ii) to require  the  Company  to  provide  Mr.  Kovens  with  certain
confidential  information  to which  Mr.  Kovens  claims  he is  entitled  under
Maryland  law;  (iii) to enjoin the Company from voting any shares issued by the
Company  since Mr.  Kovens was  replaced as Chairman  and CEO;  (iv) to void the
employment  agreement  between the Company and its president,  and to enjoin the
Company  from  enforcing  a  "Change  of  Control"  provision  in the  Company's
president's  employment  agreement;  (v) to void all issuances by the Company of
restricted  stock and options from and after  October 1, 2001;  (vi) to void any
Bylaw amendments adopted by the Company from and after October 1, 2001; (vii) to
enforce the exercise of an option by Mr. Kovens which the Company  maintains has
expired;  (viii) to void the election by the  Company,  pursuant to the Maryland
General  Corporation Law, to be governed by certain  provisions of Maryland law;
and (ix) other unspecified relief.

     Following a hearing in on September 3, 2003,  the Court  refused to issue a
temporary  restraining  order  requested by Mr. Kovens to enjoin the Company and
the other  directors from holding the Annual  Meeting,  enforcing the "Change of
Control" provision in the Company's president's employment agreement, and taking
other unspecified actions. The Company and the other defendants were served with
the complaint on September 5, 2003.

     The Company has been advised by counsel that the action as filed is without
merit, and the Company intends to aggressively  defend the action. On October 2,
2003, the Court granted the parties joint motion to stay all proceedings in this
matter to allow the parties an  opportunity  to  negotiate a  resolution  of the
dispute,  and providing that the stay may be terminated  upon the request of any
party at any time if the negotiation and/or  implementation of the settlement is
not progressing satisfactorily.

     In the Company's Annual Report on Form 10-K for the fiscal year ended March
31,  2003,  the  Company  reported  on a suit filed on June 13,  2003 by Leviton
Manufacturing  Co., Inc. in the United States District Court for the District of
Maryland (Case No.  03-CV-1701).  The Company has since filed its answer in that
litigation. The Company and its counsel believe that the Company has meritorious
defenses to the claims and is aggressively defending the suit.

     In the Company's Annual Report on Form 10-K for the fiscal year ended March
31, 2003,  the also Company  reported on a suit filed on June 11, 2003 by Walter
Kidde Portable Equipment Inc. in the United States District Court for the Middle
District of North Carolina (Case No.  1:03CV00537).  The Company has since filed
its answer in that  litigation.  The Company and its  counsel  believe  that the
Company has meritorious defenses to the claims and is aggressively defending the
suit.

     On October 10, 2003,  Maple Chase Company filed a civil  complaint  against
the Company in the United  States  District  Court for the Northern  District of
Illinois (Case No.  03-CV-7205),  alleging that a feature  incorporated into the
Company's  existing battery powered fire and smoke detectors  infringes a patent
held by the plaintiff. The plaintiff is seeking injunctive relief and damages to
be determined at trial.  The Company has not yet answered and/or  counterclaimed
against the plaintiff, but the Company believes that it has meritorious defenses
to the claims and will aggressively defend the suit.

     In August 2003,  the Company had announced that  Underwriters  Laboratories
(UL) had  identified  certain  ground  fault  circuit  interrupter  (GFCI) units
manufactured  by  Shanghai  Meihao  Electric,  including  GFCI units sold by the
Company,  as potentially  hazardous and recommending  their return. The Company,
along  with the  manufacturer  and the  other  distributors  of the  GFCI  units
defended  the  safety of the GFCI  units  and  submitted  the  units to  various
independent  laboratories for testing.  Simultaneously,  the Company voluntarily
stopped  sales of its GFCI unit  inventory and began  discussions  with the U.S.
Consumer Product Safety  Commission  (CPSC) to determine what action, if any, is


                                       14
<PAGE>

necessary to protect  consumer safety.  After review of the independent  testing
results,  the CPSC closed its inquiry into the Company's GFCI units. The Company
is continuing its discussions  with UL to remedy any remaining UL concerns.  The
Company will continue its voluntary  hold on sales of these GFCI units until the
UL issues have been resolved.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     On September 8, 2003, the Company held its Annual Meeting of  Stockholders.
Reference  is made to the  Current  Report on Form 8-K filed by the  Company  on
September 9, 2003 with respect to the voting results of the Annual Meeting.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits:

Exhibit No.
-----------
3.1       Articles of Incorporation  (incorporated by reference to the Company's
          Quarterly  Report on Form 10-Q for the period ended December 31, 1988,
          File No. 0-7885)
3.2       Articles  Supplementary,  filed  October  14,  2003  (incorporated  by
          reference to Exhibit 3.1 to the Company's  Current  Report on Form 8-K
          filed October 31, 2002, file No. 0-7885)
3.3       Bylaws,  as amended  (incorporated  by  reference  to Exhibit 3 to the
          Company's Form 8-A/A filed July 24, 2003)
10.1      Non-Qualified  Stock  Option  Plan,  as amended*  10.2 Hong Kong Joint
          Venture  Agreement,  as amended  (incorporated by reference to Exhibit
          10.1 to the  Company's  Annual  Report on Form 10-K for the year ended
          March 31, 2003, File No. 0-7885)
10.3      Amended  Factoring  Agreement  with CIT Group  (successor  to Congress
          Talcott,  Inc.) dated November 14, 1999  (incorporated by reference to
          Exhibit 10.3 to the Company's  Annual Report on Form 10-K for the year
          ended March 31, 2003, File No. 0-7885)
10.4      Amendment  to  Factoring  Agreement  with CIT Group  (incorporated  by
          reference to Exhibit 10.4 to the  Company's  Quarterly  Report on Form
          10-Q for the period ended September 30, 2002, File No. 0-7885)
10.5      Lease  between  Universal  Security  Instruments,  Inc.  and  National
          Instruments  Company  dated  October  21,  1999  for  its  office  and
          warehouse  located at 7-A Gwynns Mill Court,  Owings  Mills,  Maryland
          21117  (incorporated  by reference to Exhibit  10.19 to the  Company's
          Annual  Report on Form 10-K for the Fiscal Year Ended March 31,  2000,
          File No. 0-7885)
10.6      Amended and Restated Employment  Agreement dated April 1, 2003 between
          the Company and Harvey B.  Grossblatt  (incorporated  by  reference to
          Exhibit 10.8 to the Company's  Annual Report on Form 10-K for the year
          ended March 31, 2003, File No. 0-7885)
31.1      Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer*
31.2      Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer*
32.1      Section 1350 Certifications*
99.1      Press Release dated November 12, 2003*

*Filed herewith

(b)      Reports on Form 8-K:

     On July  25,  2003,  the  Registrant  filed a  Current  Report  on Form 8-K
reporting,  under Item 5, the July 24, 2003 listing of the  Company's  shares of
Common Stock for trading on the American Stock Exchange.

     On September 5, 2003,  the  Registrant  filed a Current  Report on Form 8-K
reporting,  under Item 5, the September 3, 2003 filing of a lawsuit  against the
Company and the members of its Board of Directors by Michael Kovens.

     On September 9, 2003,  the  Registrant  filed a Current  Report on Form 8-K
reporting,  under Item 5, the voting results of the Company's  September 8, 2003
Annual Meeting of Stockholders.



                                       15
<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                           UNIVERSAL SECURITY INSTRUMENTS, INC.
                                           (Registrant)


Date: November 14, 2003                    By:    /s/ Harvey B. Grossblatt
                                              ---------------------------------
                                              Harvey B. Grossblatt
                                              President, Chief Financial Officer







                                       16
<PAGE>

                                                                    Exhibit 10.1
                                                                    ------------

                      UNIVERSAL SECURITY INSTRUMENTS, INC.
                         NON-QUALIFIED STOCK OPTION PLAN

1.  Purpose - The purpose of this Plan is to further the  interests of UNIVERSAL
SECURITY  INSTRUMENTS,  INC.  (hereinafter  called the  "Company")  by providing
incentives  for  employees,  officers  and  directors  of the  Company  and  its
subsidiaries,  who may be designated  for  participation  therein and to provide
additional means of attracting and retaining competent personnel.

2. Administration - The Plan shall be administered by a committee  consisting of
the Board of Directors  of the Company or such lesser  number of such Board (but
not less than three persons) as is designated by the Board. Such committee shall
hereinafter be referred to as the "Non-Qualified  Stock Option Committee" or the
"Committee".  Subject to the  provisions  of the Plan and  applicable  law,  the
Committee  is  authorized  to  interpret  the Plan and to  prescribe,  amend and
rescind rules and  regulations  relating to the Plan and to any options  granted
thereunder,  and to make al other determinations  necessary or advisable for the
administration of the Plan.

3.  Participants  and Allotments - The Committee  shall  determine and designate
from time to time those  employees  and directors of the Company to whom options
are to be granted and who thereby become participants in the Plan. The Committee
shall allot to such  participants  options to purchase shares in such amounts as
the  Committee  shall  from  time to time  determine.  Employees,  officers  and
directors of the Company or its subsidiaries shall be eligible to participate in
the Plan. No member of the Committee shall have any right to vote or decide upon
any matter  relating  solely to himself or a member of his  immediate  family or
solely to any of his rights or  benefits  (or rights or  benefits of a member of
his immediate family) under the Plan. Participation in the Plan shall not confer
any right of  continuation  of service as an employee,  officer or a director of
the Company or its subsidiary.

4. Shares  Subject to the Plan - Under this Plan, the Committee may from time to
time grant options to  employees,  officers and directors of the Company and its
subsidiaries,  entitling the holders thereof to purchase shares of the Company's
authorized  and  unissued  common  stock,  par value $.01 per share (the "Common
Stock"),  or shares of the Company's  treasury Common Stock, or a combination of
both,  up to an aggregate  of 493,750  shares of Common  Stock.  Notwithstanding
anything herein to the contrary, no member of the Committee shall be eligible to
vote on the granting of any option under the Plan if the option is to be granted
to such member of the Committee or to a member of his immediate  family.  If any
option granted under the Plan shall terminate or expire unexercised, in whole or
in  part,  the  shares  so  released  from  option  may be made the  subject  of
additional  options  granted under the Plan.  The Company shall reserve and keep
available such number of shares of stock as will satisfy the requirements of all
outstanding  options granted under the Plan. In the event there is any change in
the Company's shares of Common Stock, as by stock splits,  reverse stock splits,
stock dividends or  recapitalization,  the number of shares available for option
and the  shares  subject  to  option  shall  be  appropriately  adjusted  by the
Committee.

5. Option  Price - The option  price or prices  shall be as  established  by the
Committee  when such  option is  granted  on the date or dates the  options  are
granted.  In the event there is any change in the  Company's  shares as by stock
splits, reverse stock splits, stock dividends or recapitalization,  the purchase
price of  shares  subject  to  option  shall be  appropriately  adjusted  by the
Committee.

6. Other  Provisions  - Each option shall be subject to all  provisions  of this
Plan and to the following terms and conditions:


          (a) Options will be granted  under the Plan which will be  exercisable
     for a period of five years from the date of grant. The Committee may in its
     discretion impose additional restrictions as to the time of exercise and/or
     number of shares that may be purchased upon any exercise of options.



                                       1
<PAGE>

          (b) No option shall be transferable by the optionee  otherwise than by
     will or the laws of  descent  and  distribution  and  shall be  exercisable
     during his lifetime only by the optionee.

          (c) All  unexercised  options will  terminate,  be forfeited  and will
     lapse immediately if (i) the optionee's  employment with the Company or its
     subsidiaries   is  terminated   because  the  optionee  is  discharged  for
     dishonesty,  commission of a felony or the intentional committing of an act
     which has a  material  adverse  effect or impact  upon the  Company  or its
     subsidiaries,  such as his disclosing Company  confidential  information or
     trade secrets to an  unauthorized  person or persons,  or (ii) the optionee
     agrees  to  accept  employment  with a  competitor  of the  Company  or its
     subsidiaries without the consent of the Company.

          (d) If the optionee's  employment with the Company or its subsidiaries
     is terminated  for any reason other than as set forth in  subparagraph  (c)
     above,  or if the  optionee  ceases to be a director  of the Company or its
     subsidiaries,  the  Optionee may  exercise,  subject to the  provisions  of
     subparagraph (a) and (c) above,  any option which has accrued  hereunder as
     of the date his employment with the Company or its subsidiaries  terminated
     or as of the date he  ceases  to be a  director  (as may be the case) for a
     period  of  ninety  (90)  days  after  the date of the  termination  of his
     employment  with, or his  termination  as a director of, the Company or its
     subsidiaries;  provided,  however,  that if the  optionee's  employment (or
     being a director,  as may be the case) with the Company or its subsidiaries
     is   terminated   by  reason  of  his  death,   the   optionee's   personal
     representatives, estate or heirs (as the case may be) may exercise, subject
     to the provisions of subparagraph  (a) above,  any option which has accrued
     hereunder  as of the  date of the  optionee's  death  for a  period  of one
     hundred eighty (180) days after the date of the optionee's death.

          (e) Except as  otherwise  provided  in  subparagraph  (d)  above,  all
     unexercised  options will  terminate,  be forfeited and will lapse upon the
     termination  of  the  optionee's   employment   with  the  Company  or  its
     subsidiaries  (or upon  the  termination  of his  being a  director  of the
     Company or its subsidiaries, as the case may be).

7.  Exercise of Options - To exercise the option,  the optionee or his successor
shall  give  written  notice to the  Company's  Chief  Financial  Officer at the
Company's  principal  office  in Owings  Mills,  Maryland,  accompanied  by full
payment for the shares being  purchased and a written  statement that the shares
are purchased for investment and not with a view to distribution.  However, this
statement will not be required in the event the shares subject to the option are
registered  with the  Securities  and  Exchange  Commission.  If the  option  is
exercised by the successor of the optionee,  following his death, proof shall be
submitted,  satisfactory  to the  Committee,  of the right of the  successor  to
exercise the option.

     Shares of stock issued pursuant to this Plan which have not been registered
with the Securities and Exchange Commission shall bear the following legend:

               "The shares  represented by this  certificate
          have not been registered  under the Securities Act
          of  1933  and  may be  offered  or  sold  only  if
          registered  under the provisions of that Act or if
          an exemption from registration is available.

The Company  shall not be required  to  transfer or deliver any  certificate  or
certificates  for shares  purchased  upon any such exercise of said option:  (a)
until after  compliance  with all then  applicable  requirements of law; and (b)
prior to admission of such shares to listing on any stock  exchange on which the
stock may then be listed.  In no event  shall the  Company be  required to issue
fractional shares to the employee, officer or director.

8.  Registration - If the Company shall be advised by its counsel that shares of
stock  deliverable  upon any exercise of an option are required to be registered
under the Securities Act of 1933, or that the consent of any other  authority is
required for the issuance of same, the Company may effect registration or obtain
consent,   and  delivery  of  shares  by  the  Company  may  be  deferred  until
registration is effected or consent obtained.  However, the Company reserves the
right to revoke the option if it  determines  that,  in the best interest of the
Company,  the shares  should not be  registered  or that  consent  should not be
obtained.



                                       2
<PAGE>

9. Issuance of Stock - No stock will be issued until full payment for such stock
has been made. The Optionee  shall have no rights as a shareholder  with respect
to optioned shares until the date of the issuance of a stock  certificate to him
for  such  shares.  No  adjustment  shall  be made for  dividends  (ordinary  or
extraordinary,  whether in cash,  securities or other property) or distributions
or other rights for which the record date is prior to the date such  certificate
is issued, except as provided in Paragraphs 4 and 5.

10.  Amendments  and  Termination - The Board of Directors  may amend,  suspend,
discontinue or terminate the Plan,  but no such action may,  without the consent
of the holder of any option  granted  hereunder,  alter or impair  such  option,
except as provided in Paragraphs 4 and 5.

11.  Option  Agreement - The  granting of an option shall take place only when a
written option agreement substantially in the form of the Option Agreement which
is  attached  hereto and  marked  Exhibit I is  executed  by or on behalf of the
Company and the employee,  officer or director to whom the option is granted and
such executed agreement is delivered to the Company.

12.  Period of Plan - The Plan,  which  initially  became  effective on April 5,
1978,  has been  extended by the Board of Directors  and will continue in effect
until and will expire on March 31, 2008.




                                       3
<PAGE>

                                    Exhibit I
                      UNIVERSAL SECURITY INSTRUMENTS, INC.
                      NON-QUALIFIED STOCK OPTION AGREEMENT

     THIS  AGREEMENT,  Made as of this  ____  day of  __________,  20__,  by and
between   UNIVERSAL   SECURITY   INSTRUMENTS,   INC.,  a  Maryland   corporation
(hereinafter called the "Company"), and (hereinafter called the "Optionee").

     WHEREAS,  the Board of Directors of the Company  considers it desirable and
in the  company's  best interest  that the Optionee be given an  opportunity  to
purchase shares of its Common Stock to provide an incentive for the Optionee and
to promote the success of the Company.

     NOW, THEREFORE, in consideration of the premises, it is agreed as follows:

     1.  Grant of Option.  The  Company  hereby  grants to  optionee  the right,
privilege and option to purchase from the Company ( ) shares of the Common Stock
of the  Company at a purchase  price of ($ ) per share in the manner and subject
to the conditions hereinafter provided.

     2. Period of Exercise of Option.

          (a) The option will be exercisable for a period of years from the date
     of grant,  except as provided in  subparagraphs  (b), (c) and (d) below, in
     accordance with the following schedule:

                           [INSERT EXERCISE SCHEDULE]

          (b) All  unexercised  options will  terminate,  be forfeited  and will
     lapse immediately if (i) the Optionee's  employment with the Company or its
     subsidiary is terminated because the Optionee is discharged for dishonesty,
     commission of a felony or the intentional  committing of an act which has a
     material adverse effect or impact upon the Company or its subsidiary,  such
     as his disclosing Company  confidential  information or trade secrets to an
     unauthorized  person or persons,  or (ii) the Optionee  accepts  employment
     with a competitor of the Company or its subsidiary,  without the consent of
     the Company.

          (c) If the Optionee's employment with the Company or its subsidiary is
     terminated  for any  reason  other  than as set forth in  subparagraph  (b)
     above,   the  Optionee  may   exercise,   subject  to  the   provisions  of
     subparagraphs  (a) and (b) above, any option which has accrued hereunder as
     of the date of his employment with the Company or its subsidiary terminated
     for a period of ninety (90) days after the date of the  termination  of his
     employment with the Company or its subsidiary;  provided,  however, that if
     the Optionee's  employment with the Company or its subsidiary is terminated
     by reason of his death, the Optionee's personal representatives,  estate or
     heirs  (as the case may be) may  exercise,  subject  to the  provisions  of
     subparagraph  (a) above,  any option which has accrued  hereunder as of the
     date of the Optionee's  death for a period of one hundred eighty (180) days
     after the date of the Optionee's death.

          (d) Except as  otherwise  provided  in  subparagraph  (c)  above,  all
     unexercised  options will  terminate,  be forfeited and will lapse upon the
     termination  of  the  Optionee's   employment   with  the  Company  or  its
     subsidiary.

     3. Method of Exercise.  In order to exercise the option the holder  thereof
must give written notice to the Chief Financial Officer of the Company at Owings
Mills, Maryland, accompanies by full payment of the shares being purchased and a
written  statement  that the shares are purchased for  investment and not with a
view to  distribution.  If the  option  is  exercised  by the  successor  of the
Optionee  following  his death,  proof  shall be  submitted  of the right of the
successor to exercise the option.  shares of stock issued  pursuant to this Plan
which have not been registered with the Securities and Exchange Commission shall
bear the following legend:

                                      - i -
<PAGE>

               "The shares  represented by this  Certificate
          have not been registered  under the Securities Act
          of  1933  and  may be  offered  or  sole  only  if
          registered  under the provisions of that Act or if
          an exemption from registration is available."

     The Company shall not be required to transfer or deliver any certificate or
certificates  for shares  purchased  upon any such exercise of said option:  (a)
until after  compliance  with all then  applicable  requirements of law; and (b)
prior to admission of such shares to listing on any stock  exchange on which the
stock may then be listed.  In no event  shall the  Company be  required to issue
fractional shares to the Optionee.

     4.  Limitation upon Transfer.  Except as otherwise  provided in paragraph 2
hereof,  the option and all rights granted hereunder shall not be transferred by
the Optionee, other than by will or by the laws of descent and distribution, and
may not be assigned, pledged or hypothecated in any way and shall not be subject
to execution,  attachment or similar  process.  Upon any attempt to transfer the
options,  other than by will or by the laws of descent and  distribution,  or to
assign, pledge, hypothecate or otherwise dispose of such option or of any rights
granted  hereunder,  contrary to the provisions  hereof, or upon the levy of any
attachment or similar  process upon such option or such rights,  such option and
such rights shall immediately become null and void.

     5.  Stock  Adjustment.  In the event  there is any  change in the number of
issued  shares of the Company by reason of stock  splits,  reverse stock splits,
stock dividends,  recapitalizations or other transactions,  the number of shares
remaining  subject  to the  option  and  the  option  price  per  share  shall e
proportionately adjusted.

     6. Corporate  Reorganization.  If there shall be any capital reorganization
or  consolidation  or  merger  of  the  Company  with  another   corporation  or
corporations,  or  any  sale  of  all or  substantially  all  of  the  Company's
properties  and assets to any other  corporation  or  corporations,  the Company
shall take such action as may be  necessary  to enable  Optionee to receive upon
any subsequent  exercise of such option,  in whole or in part, in lieu of shares
of Common  Stock,  securities  or other assets as were  issuable or payable upon
such reorganization, consolidation, merger or sale in respect of, or in exchange
for such shares of Common Stock.

     7. Rights of Stockholder. Neither Optionee, his legal representatives,  nor
any other person  entitled to exercise such option shall have any rights or be a
stockholder  in the Company in respect of the shares  issuable  upon exercise of
the option granted hereunder,  unless and until  certificates  representing such
shares shall have been delivered pursuant to the terms hereof.

     8. Stock  Reserved.  The Company shall at all times during the term of this
Agreement  reserve and keep  available such number of shares of its Common Stock
as will be sufficient to satisfy the terms of this Agreement.

     9. Binding  Effect.  This Agreement  shall be binding upon and inure to the
benefit of any successor or successors of the Company.

     IN WITNESS  WHEREOF,  the parties  hereby have caused this  Agreement to be
executed  the day and year  first  above  written.

ATTEST:                                 UNIVERSAL  SECURITY INSTRUMENTS, INC.
                                        (Company)


                                        By:                               (SEAL)
----------------------------------         -------------------------------------


WITNESS:                                    (Optionee)


                                        By:                               (SEAL)
----------------------------------         -------------------------------------

                                     - ii -
<PAGE>

                                                                    Exhibit 31.1
                                                                    ------------

                                  CERTIFICATION


     I, Stephen C. Knepper, certify that:

     1. I have reviewed this Quarterly Report on Form 10-Q of Universal Security
Instruments, Inc.;

     2. Based on my knowledge, this report does not contain any untrue statement
of a  material  fact or omit to  state a  material  fact  necessary  to make the
statements made, in light of the circumstances  under which such statements were
made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the Registrant as
of, and for, the periods presented in this report;

     4. The  Registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          Registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     (b)  Evaluated the  effectiveness of the Registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     (c)  Disclosed  in this  report  any  change in the  Registrant's  internal
          control over financial reporting that occurred during the Registrant's
          most recent fiscal quarter (the Registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  Registrant's  internal
          control over financial reporting; and

     5. The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,  to the
Registrant's auditors and the audit committee of Registrant's board of directors
(or persons performing the equivalent function):

     (a)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  Registrant's  ability to
          record, process, summarize and report financial information; and

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          control over financial reporting.


Date: November 14, 2003                          /s/ Stephen C. Knepper
                                            ------------------------------------
                                            Stephen C. Knepper
                                            Chief Executive Officer

<PAGE>


                                                                    Exhibit 31.2
                                                                    ------------

                                  CERTIFICATION


     I, Harvey B. Grossblatt, certify that:

     1. I have reviewed this Quarterly Report on Form 10-Q of Universal Security
Instruments, Inc.;

     2. Based on my knowledge, this report does not contain any untrue statement
of a  material  fact or omit to  state a  material  fact  necessary  to make the
statements made, in light of the circumstances  under which such statements were
made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the Registrant as
of, and for, the periods presented in this report;

     4. The  Registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          Registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     (b)  Evaluated the  effectiveness of the Registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     (c)  Disclosed  in this  report  any  change in the  Registrant's  internal
          control over financial reporting that occurred during the Registrant's
          most recent fiscal quarter (the Registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  Registrant's  internal
          control over financial reporting; and

     5. The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,  to the
Registrant's auditors and the audit committee of Registrant's board of directors
(or persons performing the equivalent function):

     (c)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  Registrant's  ability to
          record, process, summarize and report financial information; and

     (d)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          control over financial reporting.


Date: November 14, 2003                         /s/ Harvey B. Grossblatt
                                            ------------------------------------
                                            Harvey B. Grossblatt
                                            Chief Financial Officer


<PAGE>
                                                                    Exhibit 32.1
                                                                    ------------




                           SECTION 1350 CERTIFICATIONS


     In connection with the Quarterly Report of Universal Security  Instruments,
Inc. (the  "Company")  on Form 10-Q for the period ending  September 30, 2003 as
filed  with  the   Securities   and  Exchange   Commission  and  to  which  this
Certification  is an exhibit (the  "Report"),  the  undersigned  hereby certify,
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

          (1)  The Report fully complies with the  requirements of section 13(a)
               or 15(d) of the Securities Exchange Act of 1934; and

          (2)  The information  contained in the Report fairly presents,  in all
               material  respects,   the  financial   condition  and  result  of
               operations of the Company for the periods reflected therein.



Date: November 14, 2003                           /s/ Stephen C. Knepper
                                             -----------------------------------
                                             Stephen C. Knepper
                                             Chief Executive Officer


                                                 /s/ Harvey B. Grossblatt
                                             -----------------------------------
                                             Harvey B. Grossblatt
                                             Chief Financial Officer



<PAGE>
                                                                    Exhibit 99.1
                                                                    ------------

                                                           For Immediate Release
                                          Contact:  Harvey Grossblatt, President
[graphic omitted]                           Universal Security Instruments, Inc.
                                                          410-363-3000, Ext. 224
                                                                              or
                                                          Don Hunt, Jeff Lambert
                                             Lambert, Edwards & Associates, Inc.
                                                                    616-233-0500






                      Universal Security Instruments Posts
                 Sharply Higher Second-Quarter Sales & Earnings

                       Sales Grow 22%; Earnings Rise 18%

OWINGS  MILLS,  MD,  November 12, 2003 - Universal  Security  Instruments,  Inc.
(AMEX:  UUU) today  announced  significantly  higher  sales and earnings for its
second quarter and six months ended September 30, 2003.

The Company cited solid growth in the retail sales channel as a key contributing
factor  during  the  quarter,  as well as  strong  continuing  results  from its
Hong-Kong-based  joint  venture.  The  announcement  marked the  Company's  10th
consecutive quarter of profitability.

The  Owings  Mills,  MD-based  designer  and  marketer  of safety  and  security
equipment  posted net earnings  for the quarter of $740,446,  or $0.66 per basic
share  ($0.57 per diluted  share),  on net sales  which rose 22% to  $4,988,483,
compared  with net  earnings of  $630,129,  or $0.60 per basic share  ($0.55 per
diluted share) on net sales of $4,091,272 for last year's second quarter.

For the six months  ended  September  30,  2003,  sales rose 20% to  $9,420,433,
versus  $7,842,198  for the same period  last year.  The  Company  reported  net
earnings  of  $1,592,945,  or $1.42 per basic share  ($1.25 per diluted  share),
compared to net  earnings  of  $1,207,069,  or $1.17 per basic share  ($1.09 per
diluted share), for the same period last year.

As previously advised,  Underwriters  Laboratories (UL) had identified potential
problems   with  the  ground  fault  circuit   interrupters   (GFCI)  which  are
manufactured  by Shanghai  Meihao  Electric,  Inc.  As one of several  companies
distributing the units,  Universal voluntarily stopped sales in August following
concerns  announced  by UL. The Company and its  supplier  are working  toward a
possible  resolution of any remaining UL concerns.  The GFCI units accounted for
approximately  17% of the Company's sales in the first six months of the current
year.

"We are  pleased  with  our  results  for the  quarter  and  six-month  periods,
particularly on the retail side of our business,"  said Steve Knepper,  chairman
of the board and chief executive officer of Universal Security Instruments. "Our
team has worked hard to develop an expanded  sales  strategy aimed at increasing
market  share in retail  distribution  channels  for our core  smoke and  carbon
monoxide  alarms.  We are  encouraged  by the early  results of our new retailer
program and expect these  channels to represent a  significant  opportunity  for
growth going forward."

UNIVERSAL SECURITY  INSTRUMENTS,  INC.  (www.universalsecurity.com),  founded in
1969, is a  Maryland-based  manufacturer  and  worldwide  marketer of safety and
security products directly and through its 50%-owned Hong Kong joint venture.



<PAGE>

                                      (2)

<TABLE>
                      UNIVERSAL SECURITY INSTRUMENTS, INC.
                        CONSOLIDATED STATEMENT OF INCOME
                                  (UNAUDITED)

<CAPTION>
                                                                Three Months Ended September 30,
                                                                --------------------------------
                                                                    2003               2002
                                                                    ----               ----

<S>                                                              <C>                <C>
Sales                                                            $4,988,483         $4,091,272

Net income*                                                         740,446            630,129

Income per share
      Basic                                                             .66                .60
      Diluted                                                           .57                .55

Weighted average number of common shares outstanding
      Basic                                                       1,127,593          1,054,205
      Diluted                                                     1,293,520          1,152,001


                                                                  Six Months Ended September 30,
                                                                  ------------------------------
                                                                    2003               2002
                                                                    ----               ----

Sales                                                            $9,420,433        $7,842,198

Net income*                                                       1,592,945         1,207,069

Income per share
      Basic                                                            1.42              1.17
      Diluted                                                          1.25              1.09

Weighted average number of common shares outstanding
          Basic                                                   1,125,309         1,034,488
          Diluted                                                 1,279,516         1,105,055

* Due to  the tax benefit carryforward  of prior years' operating losses, no tax
  tax liability was incurred.

                 ----------------------------------------------

</TABLE>

Statements  contained in this press  release that are not  historical  facts are
forward-looking  statements  as that term is defined in the  Private  Securities
Litigation Reform Act of 1995.  Although  UNIVERSAL SECURITY  INSTRUMENTS,  INC.
believes that the expectations reflected in such forward-looking  statements are
reasonable;   the   forward-looking   statements   are   subject  to  risks  and
uncertainties  that could cause actual results to differ  materially  from those
projections.