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                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 June 30, 2004

                                       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 August 3, 2004, the number of shares  outstanding of the registrant's  common
stock was 1,580,729.
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<PAGE>

                               TABLE OF CONTENTS




Part I - Financial Information                                              Page

         Item 1. Consolidated Financial Statements (unaudited):

                 Consolidated Balance Sheets at June 30, 2004
                 and March 31, 2004                                           3

                 Consolidated Statements of Earnings for the Three
                 Months Ended June 30, 2004 and 2003                          4

                 Consolidated Statements of Cash Flows for the Three
                 Months Ended June 30, 2004 and 2003                          5

                 Notes to Consolidated Financial Statements                   6

         Item 2. Management's Discussion and Analysis of Financial
         ------- Condition and Results of Operations                          8

         Item 3. Quantitative and Qualitative Disclosure About Market
         ------- Risk                                                        11

         Item 4. Controls and Procedures                                     11
         -------



Part II - Other Information

        Item 6.  Exhibits and Reports on Form 8-K                            12
        -------

                 Signatures                                                  13


                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                                    ASSETS                                         June 30, 2004         March 31, 2004
                                                                                   -------------         --------------

CURRENT ASSETS
<S>                                                                                <C>                    <C>
Cash                                                                               $    45,610            $   188,190
Accounts receivable:
  Trade (less allowance for doubtful accounts of $15,000 at June 30 and
  March 31, 2004, respectively)                                                        366,894                 90,852
Employees                                                                               24,199                 23,770
                                                                                   -----------            -----------
                                                                                       391,093                114,622
Amount due from factor                                                               2,068,836              3,111,003
Inventory                                                                            3,427,754              2,867,650
Prepaid expenses                                                                       442,260                107,052
                                                                                   -----------            -----------

TOTAL CURRENT ASSETS                                                                 6,375,553              6,388,517

DEFERRED TAX ASSET                                                                      56,899                 56,899

INVESTMENT IN JOINT VENTURE                                                          5,374,225              4,832,286

PROPERTY, PLANT AND EQUIPMENT - NET                                                     89,526                 93,431

OTHER ASSETS                                                                            15,486                 15,486
                                                                                   -----------            -----------

TOTAL ASSETS                                                                       $11,911,689            $11,386,619
                                                                                   ===========            ===========

                     LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable                                                                    $1,143,358             $1,517,305
Accrued liabilities                                                                    756,069                663,818
Current obligations under capital lease                                                  4,436                  7,224
                                                                                   -----------            -----------
TOTAL CURRENT LIABILITIES                                                            1,903,863              2,188,347
                                                                                   -----------            -----------

COMMITMENTS AND CONTINGENCIES                                                                -                      -

SHAREHOLDERS' EQUITY
Common stock, $.01 par value per share; authorized 20,000,000 shares;
  issued and outstanding 1,577,063 and 1,552,896 shares at June 30, 2004
  and March 31, 2004, respectively                                                      15,771                 15,529

Additional paid-in capital                                                          11,231,918             11,188,903
Accumulated deficit                                                                 (1,239,863)            (2,006,160)
                                                                                   -----------            -----------
TOTAL SHAREHOLDERS' EQUITY                                                          10,007,826              9,198,272
                                                                                   -----------            -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                        $11,911,689            $11,386,619
                                                                                   ===========            ===========

          See accompanying notes to consolidated financial statements.

</TABLE>


                                       3
<PAGE>



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

<CAPTION>
                                                          Three Months Ended June 30,
                                                            2004               2003
                                                            ----               ----

<S>                                                     <C>                 <C>
 Net sales                                              $4,874,782          $4,431,950
 Cost of good sold                                       3,390,069           2,971,705
                                                        ----------          ----------

 GROSS PROFIT                                            1,484,713           1,460,245

 Research and development expense                           66,226              64,617
 Selling, general and administrative expense             1,181,358           1,217,240
                                                        ----------          ----------

 Operating income                                          237,129             178,388

 Other (expense):
    Interest expense                                       (12,771)            (32,710)
                                                        ----------          ----------

 INCOME BEFORE EARNINGS FROM JOINT VENTURE
                                                           224,358             145,678

 Earnings from Joint Venture:
    Equity in earnings of Joint Venture                    541,939             706,820
                                                        ----------          ----------

 NET INCOME                                              $ 766,297           $ 852,498
                                                         =========           =========

 Net income per common share amounts:
   Basic                                                     $0.49               $0.57
   Diluted                                                   $0.44               $0.51
 Weighted average number of common shares outstanding
   Basic                                                 1,564,702           1,497,365
   Diluted                                               1,757,283           1,666,921

</TABLE>



          See accompanying notes to consolidated financial statements.



                                       4
<PAGE>



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

<CAPTION>
                                                                                        Three Months Ended June 30,
                                                                                          2004              2003
                                                                                          ----              ----
OPERATING ACTIVITIES
<S>                                                                                    <C>               <C>
Net income                                                                             $ 766,297         $ 852,498
Adjustments to reconcile net income to net cash (used in) provided by operating
activities:
   Depreciation and amortization                                                           8,095             8,540
   Earnings of the Joint Venture                                                        (541,939)         (706,820)
   Change in allowance for doubtful accounts                                                   -            40,000
   Changes in operating assets and liabilities:
      Decrease (increase) in accounts receivable and amounts due from factor             765,696          (527,927)
      Increase (decrease) in inventories and prepaid expenses                           (895,312)          505,481
      Decrease in accounts payable and accrued expenses                                 (281,696)         (199,715)
                                                                                       ---------         ---------

NET CASH USED IN OPERATING ACTIVITIES                                                   (178,859)          (27,943)

INVESTING ACTIVITIES:
    Purchase of property, plant and equipment                                             (4,190)           (3,787)
                                                                                       ---------         ---------

NET CASH USED IN INVESTING ACTIVITIES                                                     (4,190)           (3,787)

FINANCING ACTIVITIES:
    Proceeds from issuance of common stock from exercise of employee stock                43,257             4,500
      options
    Principal payments on capital lease                                                   (2,788)           (3,793)
                                                                                       ---------         ---------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                                 40,469               707
                                                                                       ---------         ---------

DECREASE IN CASH                                                                        (142,580)          (31,023)

Cash at beginning of period                                                              188,190            51,112

CASH AT END OF PERIOD                                                                  $  45,610         $  20,089

Supplemental information:
  Interest paid                                                                        $  12,771         $  32,710
  Income tax paid                                                                              -                 -

</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>



              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,  2004
audited financials  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 quarter ended June 30, 2004 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 (Hong Kong 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 quarters ended June 30, 2004
and 2003:

<TABLE>
<CAPTION>
                                                        2004                       2003
                                                    -----------                -----------
<S>                                                 <C>                        <C>
      Net sales                                     $ 6,843,904                $ 6,761,546
      Gross profit                                    2,214,058                  1,976,146
      Net income                                      1,238,336                  1,276,037
      Total current assets                            6,789,802                 10,867,013
      Total assets                                   13,841,081                 13,263,518
      Total current liabilities                       4,547,686                  4,444,823

</TABLE>
During the three months ended June 30, 2004 and 2003, respectively,  the Company
purchased  $2,693,179  and  $1,448,693  of  products  from the Hong  Kong  Joint
Venture.  At June 30, 2004 and 2003, the Company had amounts payable to the Hong
Kong Joint  Venture of  $341,451  and  $382,462,  respectively.  The Company has
adjusted  its  equity  in  earnings  of the Joint  Venture  to  reflect  certain
adjustments  required by US GAAP, such as intercompany  profit and recording the
investment  in bonds at cost  instead of market  value as  required by Hong Kong
GAAP.

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 month periods
ended June 30, 2004 and 2003 is as follows:


                                       6
<PAGE>

<TABLE>
<CAPTION>
                                                     Three months ended June 30,
                                                       2004               2003
                                                     --------           --------

Weighted average number of common
<S>                                                 <C>                <C>
  shares outstanding for basic EPS                  1,564,702          1,497,365

Shares issued upon the assumed
  exercise of outstanding stock
  options                                             192,581            169,556
                                                    ---------          ---------
Weighted average number of common
  and common equivalent shares
  outstanding for diluted EPS                       1,757,283          1,666,921
                                                    =========          =========

</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 June 30,
                                                     2004               2003
                                                   --------           --------


<S>                                                <C>                <C>
Net income, as reported                            $766,297           $852,498

Deduct: Total  stock-based employee compensation
        expense determined under fair value based
        method for all awards, net of related tax
        effects                                     (14,531)           (20,985)
                                                   --------           --------

Pro forma net income                               $751,766           $831,513
                                                   ========           ========

Earnings per share:
Basic - as reported                                   $0.49              $0.57
                                                      =====              =====
Basic - pro forma                                     $0.48              $0.56
                                                      =====              =====

Diluted - as reported                                 $0.44              $0.51
                                                      =====              =====
Diluted - pro forma                                   $0.43              $0.50
                                                      =====              =====

All  share  and  per  share  amounts  included  in  the  consolidated  financial
statements  have been  retroactively  adjusted  to  reflect  the  4-for-3  stock
dividend paid on April 5, 2004 to shareholders of record on March 15, 2004.

</TABLE>




                                       7
<PAGE>



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

     As used  throughout  this Report,  "we,"  "our," "the  Company" and similar
words refers to Universal Security Instruments, Inc.

FORWARD-LOOKING STATEMENTS

     When used in this discussion and elsewhere in this Quarterly Report on Form
10-Q,  the words or phrases  "will  likely  result,"  "are  expected  to," "will
continue," "is anticipated,"  "estimate,"  "project" or similar  expressions are
intended  to  identify  "forward-looking  statements"  within the meaning of the
Private  Securities  Litigation  Reform Act of 1995.  We caution  readers not to
place undue reliance on any such forward-looking statements, which speak only as
of the date made,  and readers  are  advised  that  various  factors,  including
regional and  national  economic  conditions,  unfavorable  judicial  decisions,
substantial  changes in levels of market interest rates,  credit and other risks
of lending and investment  activities  and  competitive  and regulatory  factors
could affect our financial  performance  and could cause our actual  results for
future periods to differ materially from those  anticipated or projected.  We do
not  undertake  and   specifically   disclaim  any   obligation  to  update  any
forward-looking statements to reflect occurrence of anticipated or unanticipated
events or circumstances after the date of such statements.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2004 Compared to Three Months Ended June 30, 2003

     Sales.  Net sales for the three months ended June 30, 2004 were  $4,874,782
compared to $4,431,950 for the comparable three months in the prior fiscal year,
an  increase  of  $442,832  (10%).  Net sales of safety  products  increased  by
$315,258  as compared to the  quarter  ended June 30,  2003.  Net sales of other
products increased by $127,574,  as compared to the quarter ended June 30, 2003.
The  primary  reason for the  increase  in safety  sales was higher  smoke alarm
sales. The major reason for higher other products sales was higher private label
sales, a trend which we do not anticipate will continue.

     Gross Profit  Margin.  The gross profit  margin is  calculated as net sales
less cost of goods sold expressed as a percentage of net sales. Our gross profit
margins were 30%  compared to 33% of sales for the quarter  ended June 30, 2003.
The primary reason for this decrease was higher safety product costs.

     Expenses.  Research, selling, general and administrative expenses decreased
by $34,273 from the  comparable  three months in the prior year. As a percentage
of sales, research,  selling,  general and administrative  expenses were 26% for
the three month  period  ended June 30, 2004 and 29% for the three month  period
ended June 30, 2003. The decrease in selling and general  administrative expense
as a percent of sales was due to higher sales  volume and  variable  costs which
did not increase at the same rate as sales.

     Interest Expense and Income. Our interest expense,  net of interest income,
decreased  from  $32,710 for the quarter  ended June 30, 2003 to $12,771 for the
quarter ended June 30, 2004. The lower interest expenses resulted primarily from
lower interest rates and lower outstanding loan balances.

     Net Income. We reported a net profit of $766,297 for the quarter ended June
30, 2004 compared to net profit of $852,498 for the corresponding quarter of the
prior fiscal year.  The primary reason for the decrease in profit was lower Hong
Kong Joint Venture  earnings,  partially  offset by higher operating profit from
Company sales.

FINANCIAL CONDITION AND LIQUIDITY

     Our cash needs are currently met by funds generated from operations and our
Factoring  Agreement  which supplies both  short-term  borrowings and letters of
credit to finance  foreign  inventory  purchases.  The maximum amount  available
under  the  Factoring  Agreement  is  currently  $7,500,000.  However,  based on
specified  percentages  of our accounts  receivable  and inventory and letter of
credit  commitments,  at June 30, 2004, we had  $3,956,734  available  under the
Factoring  Agreement,  of which  $1,208,734 had been utilized in connection with


                                       8
<PAGE>

outstanding  letters of credit as of June 30, 2004.  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 our  lender,  which  was  5.5%  at June  30,  2004.  Borrowings  are
collateralized by all of our accounts receivable and inventory.

     Operating  activities  used cash of $178,859 for the quarter ended June 30,
2004. This was primarily due to a decrease in accounts receivable and amount due
from factor of  $765,696,  and equity in the  earnings  from our Hong Kong Joint
Venture of $541,935, which were offset by an increase in inventories and prepaid
expenses of $895,312.  For the same period last year,  operating activities used
cash of $27,943.

     Investing  activities used cash of $4,190 in the current quarter and $3,787
cash in the prior quarter, primarily to acquire equipment.

     Financing activities provided cash of $40,469 primarily due to the exercise
of employee stock options.  For the same period last year,  financing activities
provided cash of $707.

     We believe  that funds  available  under the  Factoring  Agreement  and our
working capital provide us with  sufficient  resources to meet our  requirements
for  liquidity and working  capital in the ordinary  course of business over the
next twelve months.

     On  August 4, 2004  (subsequent  to the  period  covered  by this  Report),
Stephen C. Knepper, our Chairman and Chief Executive Officer,  died suddenly and
unexpectedly.  While Mr. Knepper's  contributions to the Company and our success
cannot be overstated,  management  believes that Mr. Knepper's  passing will not
have a material adverse effect on our growth and results of operations.

HONG KONG JOINT VENTURE

     Net Sales.  Net sales of the joint  venture for the three months ended June
30, 2004 were $6,843,904  compared to $6,761,546 for the comparable three months
in the prior fiscal year.  The increase in sales was  primarily due to increased
sales of smoke alarms to the Company.

     Net Income.  Net income was  $1,238,336 for the quarter ended June 30, 2004
compared to $1,276,037 in the comparable  quarter last year. The decrease in net
income resulted from higher selling, general and administrative costs.

     Gross Margins. Gross margins of the Hong Kong Joint Venture for the quarter
ended June 30,  2004  increased  to 32% from 29%  compared  to the prior  year's
period. The primary reason for this increase was higher selling prices and lower
purchase price of raw materials.

     Expenses.  Selling,  general and administrative  expenses were $864,871 for
the quarter  ended June 30,  2004,  compared to  $690,143  for the prior  year's
period, a 25% increase.  As a percentage of sales, expenses were 13% and 10% for
the quarters ended June 30, 2004 and 2003, respectively.  The primary reason for
the  increase in selling,  general  and  administrative  expense as a percent of
sales was the valuation of investment  bonds at fair market value as required by
Hong Kong GAAP.

     Interest Income and Expense.  Interest income, net of interest expense, was
$9,780 for the quarter ended June 30, 2004,  compared to interest income of $557
for  the  prior  year's  period.  The  increase  in  interest  income  is due to
purchasing of higher interest bearing bonds.

     Liquidity.  Cash needs of the Hong Kong Joint  Venture are currently met by
funds generated from operations. During the quarter ended June 30, 2004, working
capital increased by $923,459 from $1,318,657 on March 31, 2004 to $2,242,116 on
June 30, 2004. During the quarter ended June 30, 2003, working capital increased
by $839,407 from $5,582,783 on March 31, 2003 to $6,422,190 on June 30, 2003.



                                       9
<PAGE>

CRITICAL ACCOUNTING POLICIES

     Management's   discussion  and  analysis  of  our  consolidated   financial
statements  and results of operations  are based on our  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,  we evaluate  these  estimates,  including  those related to bad
debts,  inventories,  income taxes, and  contingencies  and litigation.  We base
these estimates on historical  experiences and on various other assumptions that
are believed to be reasonable under the circumstances, the results of which form
the  basis  for  making  judgments  about the  carrying  values  of  assets  and
liabilities  that are not readily  available from other sources.  Actual results
may differ from these estimates under different assumptions or conditions.

     We believe 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,
2004. Certain of our accounting  policies require the application of significant
judgment by management in selecting the appropriate  assumptions for calculating
financial estimates. By their nature, these judgments are subject to an inherent
degree of  uncertainty  and actual  results  could differ from these  estimates.
These  judgments  are  based on our  historical  experience,  terms of  existing
contracts, current economic trends in the industry,  information provided by our
customers,  and information available from outside sources, as appropriate.  Our
critical accounting policies include:

     Our 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  title  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.  We established  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. We have 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.

     We currently have 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.  We have
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,
we  established  a full  valuation  allowance for its remaining net deferred tax
assets at March 31, 2004.

     We are 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.




                                       10
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     No material  changes  have  occurred in our  quantitative  and  qualitative
market risk disclosures as presented in our Annual Report Form 10-K for the year
ended March 31, 2004.


ITEM 4. CONTROLS AND PROCEDURES

     We maintain a system of disclosure controls and procedures that is designed
to provide  reasonable  assurance  that  information,  which is  required  to be
disclosed by us in the reports that we file or submit under the  Securities  and
Exchange Act of 1934, as amended,  is accumulated and communicated to management
in a timely manner. Our 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 our internal control over financial  reporting during the most recent
fiscal  quarter  that have  materially  affected,  or are  reasonably  likely to
materially affect, our internal control over financial reporting.

     Management  is aware that there is a lack of  segregation  of duties at the
Company due to the small number of employees dealing with general administrative
and  financial  matters.  However,  at this time  management  has  decided  that
considering  the employees  involved and the control  procedures  in place,  the
risks  associated  with  such  lack of  segregation  are  insignificant  and the
potential  benefits  of adding  employees  to  clearly  segregate  duties do not
justify  the  expenses   associated   with  such   increases.   Management  will
periodically reevaluate this situation.

     We have also been advised that the independent registered public accounting
firm for the Hong Kong Joint Venture has  identified  certain  internal  control
deficiencies  at the Hong Kong Joint Venture  which the auditors  consider to be
"significant   deficiencies"  that,  in  the  aggregate,   constitute  "material
weaknesses"  under U.S.  accounting  standards.  The Hong Kong  Joint  Venture's
independent  auditors  have  advised  the Hong Kong  Joint  Venture  that  these
internal  control  deficiencies  do not affect the results  reported in the Hong
Kong Joint Venture's  consolidated financial statements as of June 30, 2004. The
Hong Kong Joint Venture is in the process of addressing  these  deficiencies and
Company  management  will  continue  to monitor  the Hong Kong  Joint  Venture's
progress in this area.



                                       11
<PAGE>



                           PART II - OTHER INFORMATION

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
10.1      Non-Qualified Stock Option Plan, as amended (incorporated by reference
          to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
          period ended September 30, 2003, File No. 0-7885)
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*
32.1      Section 1350 Certification*
99.1      Press Release dated August 13, 2004*
*Filed herewith

(b)       Reports on Form 8-K:

          On June 3, 2004,  the  Registrant  filed a Current  Report on Form 8-K
          reporting,  under Item 5, reporting the filing of an amended complaint
          in the  lawsuit  against  the  Company and the members of its Board of
          Directors by Michael Kovens.



                                       12
<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: August 16, 2004                      By:   /s/ Harvey B. Grossblatt
                                              ---------------------------------
                                              Harvey B. Grossblatt
                                              President, Chief Financial Officer




                                       13
<PAGE>


                                                                     Exhibit 3.3
                                                                     -----------

                                    BY-LAWS
                      UNIVERSAL SECURITY INSTRUMENTS, INC.
                        (As amended on August 12, 2004)


                                   ARTICLE I

                                  STOCKHOLDERS

        Section 1.  Annual Meeting.
                    --------------

          The annual meeting of the  stockholders  of the  Corporation  shall be
held at the principal  office of the Corporation in Owings Mills,  Maryland,  on
such date in the month of October as may be selected  by the Board of  Directors
at 10:30 o'clock a.m. (or such other time and place as may be fixed by the Board
of Directors)  for the election of directors and for the  transaction of general
business.  Such annual meetings shall be general meetings,  that is to say, open
for the transaction of any business within the powers of the Corporation without
special notice of such  business,  except in any case in which special notice is
required by statute.

          Section 2. Special Meetings.
                     ----------------

          (a) General.  Special  meetings of the stockholders of the Corporation
may be called at any time by either the  Chairman of the Board or the  President
and shall be called by the  President or the Secretary at the request in writing
of a majority  of the Board of  Directors,  or at the  request in writing of the
holders of a majority of all the shares outstanding and entitled to vote.

          (b) Stockholder Requested Special Meetings.

               (1) Any  stockholder  of  record  seeking  to  have  stockholders
request a special  meeting shall,  by sending written notice to the Secretary of
the Corporation (the "Record Date Request  Notice") by registered  mail,  return
receipt  requested,  request  the  Board of  Directors  to fix a record  date to
determine the  stockholders  entitled to request a special meeting (the "Request
Record Date"). The Record Date Request Notice shall set forth the purpose of the
meeting and the matters proposed to be acted on at it, shall be signed by one or
more  stockholders  of record as of the date of signature  (or their agents duly
authorized  in  writing),  shall  bear  the  date  of  signature  of  each  such
stockholder (or such agent) and shall set forth all information relating to each
such stockholder that must be disclosed in solicitations of proxies for election
of  directors  in an  election  contest  (even  if an  election  contest  is not
involved), or is otherwise required, in each case pursuant to Regulation 14A (or
any successor  provision) under the Securities  Exchange Act of 1934, as amended
(the "Exchange Act").  Upon receiving the Record Date Request Notice,  the Board
of Directors may fix a Request  Record Date.  The Request  Record Date shall not
precede  and shall not be more than ten days after the close of  business on the
date on which the  resolution  fixing the Request  Record Date is adopted by the
Board of Directors. If the Board of Directors, within ten days after the date on
which a  valid  Record  Date  Request  Notice  is  received,  fails  to  adopt a
resolution fixing the Request Record Date and make a public announcement of such
Request  Record Date,  the Request Record Date shall be the close of business on
the tenth day after the first date on which the Record  Date  Request  Notice is
received by the Secretary.

               (2) In order for any  stockholder  to request a special  meeting,
one or more written  requests for a special  meeting signed by  stockholders  of
record (or their  agents duly  authorized  in writing) as of the Request  Record
Date  entitled  to  cast  not  less  than  a  majority  (the  "Special   Meeting
Percentage")  of all of the  votes  entitled  to be cast at  such  meeting  (the
"Special Meeting Request") shall be delivered to the Secretary. In addition, the
Special  Meeting  Request  shall set forth the  purpose of the  meeting  and the
matters proposed to be acted on at it (which shall be limited to the matters set
forth in the Record Date Request Notice received by the  Secretary),  shall bear
the date of  signature  of each such  stockholder  (or such  agent)  signing the

                                     - i -
<PAGE>

Special Meeting Request, shall set forth the name and address, as they appear in
the Corporation's  books, of each stockholder  signing such request (or on whose
behalf the Special Meeting Request is signed),  the class,  series and number of
all shares of stock of the Corporation which are owned by each such stockholder,
and the nominee  holder for,  and number of,  shares  owned by such  stockholder
beneficially  but not of record,  shall be sent to the  Secretary by  registered
mail, return receipt requested, and shall be received by the Secretary within 60
days after the Request Record Date. Any requesting  stockholder  may revoke his,
her or its  request  for a special  meeting  at any time by  written  revocation
delivered to the Secretary.

               (3) The Secretary shall inform the requesting stockholders of the
reasonably  estimated  cost of  preparing  and  mailing  the  notice of  meeting
(including  the  Corporation's  proxy  materials).  The  Secretary  shall not be
required to call a special  meeting  upon  stockholder  request and such meeting
shall not be held unless, in addition to the documents required by paragraph (2)
of this  Section  2(b),  the  Secretary  receives  payment  of  such  reasonably
estimated cost prior to the mailing of any notice of the meeting.

               (4) Except as provided in the next sentence,  any special meeting
shall be held at such place,  date and time as may be designated by the Chairman
of the Board, the President or a majority of the Board of Directors, whoever has
called or requested the meeting.  In the case of any special  meeting  called by
the  Secretary  upon the  request  of  stockholders  (a  "Stockholder  Requested
Meeting"),  such  meeting  shall be held at such place,  date and time as may be
designated by the Board of Directors;  provided,  however,  that the date of any
Stockholder  Requested  Meeting  shall be not more than 90 days after the record
date for such meeting (the "Meeting Record Date");  and provided further that if
the Board of Directors fails to designate, within ten days after the date that a
valid  Special  Meeting  Request is  actually  received  by the  Secretary  (the
"Delivery Date"), a date and time for a Stockholder Requested Meeting, then such
meeting shall be held at 2:00 p.m.  local time on the 90th day after the Meeting
Record Date or, if such 90th day is not a Business  Day (as defined  below),  on
the first  preceding  Business Day; and provided  further that in the event that
the Board of Directors  fails to designate a place for a  Stockholder  Requested
Meeting within ten days after the Delivery Date, then such meeting shall be held
at the principal  executive office of the Corporation.  In fixing a date for any
special  meeting,  the  Chairman  of the Board,  the  President  or the Board of
Directors may consider such factors as he, she or it deems  relevant  within the
good faith exercise of business judgment,  including,  without  limitation,  the
nature of the matters to be considered,  the facts and circumstances surrounding
any request for the  meeting and any plan of the Board of  Directors  to call an
annual meeting or a special  meeting.  In the case of any Stockholder  Requested
Meeting,  if the Board of Directors fails to fix a Meeting Record Date that is a
date within 30 days after the Delivery  Date,  then the close of business on the
30th day after the Delivery Date shall be the Meeting Record Date.

               (5) If written  revocations  of requests for the special  meeting
have been  delivered to the  Secretary  and the result is that  stockholders  of
record (or their agents duly  authorized in writing),  as of the Request  Record
Date,  entitled to cast less than the Special Meeting Percentage have delivered,
and not revoked,  requests for a special meeting to the Secretary, the Secretary
shall:  (i) if the notice of meeting has not already been  mailed,  refrain from
mailing the notice of the meeting and send to all  requesting  stockholders  who
have not revoked such requests written notice of any revocation of a request for
the special meeting, or (ii) if the notice of meeting has been mailed and if the
secretary  first  sends to all  requesting  stockholders  who  have not  revoked
requests for a special meeting written notice of any revocation of a request for
the special  meeting and written notice of the  Secretary's  intention to revoke
the notice of the  meeting,  revoke the notice of the meeting at any time before
ten days  before the  commencement  of the  meeting.  Any  request for a special
meeting  received  after a revocation  by the Secretary of a notice of a meeting
shall be considered a request for a new special meeting.

               (6) The  Chairman  of the Board,  the  President  or the Board of
Directors may appoint regionally or nationally recognized independent inspectors
of elections to act as the agent of the  Corporation for the purpose of promptly
performing a ministerial review of the validity of any purported Special Meeting
Request received by the Secretary.  For the purpose of permitting the inspectors
to perform such review,  no such purported  request shall be deemed to have been
delivered to the  Secretary  until the earlier of (i) five  Business  Days after
receipt by the  Secretary  of such  purported  request and (ii) such date as the
independent  inspectors  certify  to the  Corporation  that the  valid  requests
received  by the  Secretary  represent  at least a  majority  of the  issued and
outstanding  shares of stock that  would be  entitled  to vote at such  meeting.

                                     - ii -
<PAGE>

Nothing contained in this paragraph (6) shall in any way be construed to suggest
or imply  that the  Corporation  or any  stockholder  shall not be  entitled  to
contest the validity of any request,  whether during or after such five Business
Day period,  or to take any other action  (including,  without  limitation,  the
commencement, prosecution or defense of any litigation with respect thereto, and
the seeking of injunctive relief in such litigation).

               (7) For purposes of these Bylaws,  "Business  Day" shall mean any
day other than a Saturday,  a Sunday or a day on which banking  institutions  in
the State of Maryland are  authorized or obligated by law or executive  order to
close.

      Section 3.   Notice of Meetings.
                   ------------------

          Not less than ten (10) days and not more than ninety (90) days written
or printed  notice of every annual  meeting and of every special  meeting of the
stockholders  shall be given to each holder of stock having  voting rights whose
name  appears  as a holder of record  upon the books of the  Corporation  at the
close  of  business  on the  date  fixed  by the  Board  of  Directors  for  the
determination  of  stockholders  entitled to notice of such meeting,  and, if no
such date  shall  have been  fixed by the  Board for such  purpose,  then to the
holders of record on the date when such notice  shall be given.  Such notices of
annual or special  meetings shall state the place, day and hour of such meeting,
and, in the case of special meetings,  shall also state the business proposed to
be transacted thereat.  Such notice shall be given to each stockholder either by
mail,  by  presenting it to such  stockholder  personally,  by leaving it at the
stockholder's  residence  or  usual  place of  business  or by any  other  means
permitted  by Maryland  law. If mailed,  such notice shall be deemed to be given
when  deposited in the United States mail  addressed to the  stockholder  at the
stockholder's  address  as it appears on the  records of the  Corporation,  with
postage thereon prepaid.  No notice of the time, place or purpose of any meeting
of stockholders, whether prescribed by law, by the Charter, or by these By-Laws,
need be given to any stockholder who attends in person,  or by proxy, or who, in
writing  executed  and filed with the  records of the meeting  either  before or
after the holding thereof, waives such notice. No notice of any meeting, regular
or special, be given to any stockholder who is not entitled to vote thereat.

          Section 4. Quorum.
                     ------

          At any meeting of stockholders,  the presence,  in person or by proxy,
of shareholders  entitled to cast a majority of votes thereat shall constitute a
quorum for the election of directors or for the  transaction of other  business;
but, in the absence of a quorum, the stockholders  entitled to vote who shall be
present in person or by proxy at any meeting (or adjournment  thereof),  may, by
vote of a majority  of shares so  present  and  entitled  to vote,  adjourn  the
meeting from time to time,  but not for a period of over thirty (30) days at any
one time, by  announcement  at the meeting  until a quorum shall attend.  At any
such adjourned  meeting at which a quorum shall be present,  any business may be
transacted at the meeting as originally notified.

        Section 5.  Organization and Conduct.
                    ------------------------

          Every  meeting of  stockholders  shall be conducted  by an  individual
appointed  by the Board of  Directors  to be  chairman of the meeting or, in the
absence of such  appointment,  by the Chairman of the Board or, in the case of a
vacancy in the office or absence  of the  Chairman  of the Board,  by one of the
following  officers  present at the meeting:  the Vice Chairman of the Board, if
there be one,  the  President,  the Vice  Presidents  in their order of rank and
seniority,  or,  in the  absence  of such  officers,  a  chairman  chosen by the
stockholders by the vote of a majority of the votes cast by stockholders present
in  person or by proxy.  The  Secretary,  or,  in the  Secretary's  absence,  an
Assistant  Secretary,  or in the  absence of both the  Secretary  and  Assistant
Secretaries,  an  individual  appointed  by the  Board of  Directors  or, in the
absence of such  appointment,  an  individual  appointed  by the chairman of the
meeting  shall act as secretary.  In the event that the Secretary  presides at a
meeting  of the  stockholders,  an  Assistant  Secretary,  or in the  absence of
Assistant Secretaries,  an individual appointed by the Board of Directors or the
chairman of the meeting,  shall record the minutes of the meeting.  The order of
business and all other matters of procedure at any meeting of stockholders shall
be  determined  by the chairman of the meeting.  The chairman of the meeting may
prescribe such rules, regulations and procedures and take such action as, in the
discretion  of such  chairman,  are  appropriate  for the proper  conduct of the
meeting,  including,  without limitation,  (a) restricting admission to the time
set for the commencement of the meeting;  (b) limiting attendance at the meeting

                                     - iii -
<PAGE>

to stockholders of record of the Corporation,  their duly authorized proxies and
other such  individuals  as the  chairman  of the  meeting  may  determine;  (c)
limiting participation at the meeting on any matter to stockholders of record of
the Corporation  entitled to vote on such matter,  their duly authorized proxies
and other such  individuals  as the chairman of the meeting may  determine;  (d)
limiting  the time  allotted  to  questions  or comments  by  participants;  (e)
maintaining  order and security at the meeting;  (f) removing any stockholder or
any other  individual  who refuses to comply with meeting  procedures,  rules or
guidelines  as set forth by the  chairman of the meeting;  and (g)  recessing or
adjourning  the  meeting  to a later  date and time and place  announced  at the
meeting. Unless otherwise determined by the chairman of the meeting, meetings of
stockholders  shall not be required to be held in  accordance  with the rules of
parliamentary procedure.

          Section 6. Proxies.
                     -------

          Stockholders may vote either in person or by proxy, but no proxy which
is dated more than eleven months before the meeting at which it is offered shall
be accepted  unless such proxy shall on its face name a longer  period for which
it is to remain in force. Every proxy shall be executed by the stockholder or by
the  stockholder's  duly authorized  agent in any manner  permitted by law. Such
proxy or  evidence  of  authorization  of such  proxy  shall  be filed  with the
Secretary of the Corporation before or at the meeting.

        Section 7.  Voting.
                    ------

          At  every  meeting  of  the  stockholders,  every  stockholder  of the
Corporation  shall be  entitled  to one (1) vote for each share of voting  stock
registered  in his  name on the  books  of the  Corporation  on the date for the
determination of voting rights thereat. The affirmative vote of the holders of a
majority  of the stock  issued  and  entitled  to vote shall be  sufficient  and
necessary to elect directors or for the taking or authorization of any action by
the stockholders.

        Section 8. Advance Notice of Stockholder Nominees for Director and Other
                   Stockholder Proposals.
                   -------------------------------------------------------------

          (a) Annual Meetings of Stockholders.

               (1)  Nominations  of  individuals  for  election  to the Board of
Directors  and  the  proposal  of  other   business  to  be  considered  by  the
stockholders  may be made at an annual meeting of  stockholders  (i) pursuant to
the Corporation's notice of meeting, (ii) by or at the direction of the Board of
Directors or (iii) by any  stockholder of the  Corporation who was a stockholder
of record  both at the time of giving of notice by the  stockholder  as provided
for in this Section 8(a) and at the time of the annual meeting,  who is entitled
to vote at the meeting and who has complied with this Section 8(a).

               (2) For  nominations  or other  business to be  properly  brought
before an annual meeting by a stockholder  pursuant to clause (iii) of paragraph
(1) of this Section 8(a), the stockholder  must have given timely notice thereof
in writing to the  Secretary of the  Corporation  and such other  business  must
otherwise be a proper  matter for action by the  stockholders.  To be timely,  a
stockholder's notice shall set forth all information required under this Section
8 and shall be delivered to the Secretary at the principal  executive  office of
the Corporation not less than 120 days nor more than 150 days prior to the first
anniversary of the date of mailing of the notice for the preceding year's annual
meeting;  provided,  however,  that in the event that the date of the mailing of
the notice for the annual  meeting is  advanced  or delayed by more than 30 days
from  the  first  anniversary  of the  date of  mailing  of the  notice  for the
preceding year's annual meeting,  notice by the stockholder to be timely must be
so delivered  not earlier than the 150th day prior to the date of mailing of the
notice for such  annual  meeting and not later than the close of business on the
later of the 120th  day  prior to the date of  mailing  of the  notice  for such
annual  meeting or the tenth day following the day on which public  announcement
of the date of mailing of the notice for such meeting is first made. In no event
shall the public  announcement  of a  postponement  or  adjournment of an annual
meeting  commence a new time period for the giving of a stockholder's  notice as
described  above.  Such  stockholder's  notice  shall  set  forth (i) as to each
individual whom the stockholder  proposes to nominate for election or reelection
as a director, (A) the name, age, business address and residence address of such

                                     - iv -
<PAGE>

individual,  (B) the  class,  series  and  number of any  shares of stock of the
Corporation  that are beneficially  owned by such individual,  (C) the date such
shares were acquired and the investment  intent of such  acquisition and (D) all
other  information  relating to such individual that is required to be disclosed
in  solicitations  of proxies for election of  directors in an election  contest
(even if an election contest is not involved), or is otherwise required, in each
case pursuant to Regulation 14A (or any successor  provision) under the Exchange
Act and the rules  thereunder  (including such  individual's  written consent to
being named in the proxy  statement as a nominee and to serving as a director if
elected);  (ii) as to any other business that the stockholder  proposes to bring
before the meeting,  a description of such  business,  the reasons for proposing
such business at the meeting and any material  interest in such business of such
stockholder   and  any  Stockholder   Associated   Person  (as  defined  below),
individually  or in the  aggregate,  including  any  anticipated  benefit to the
stockholder and the Stockholder  Associated  Person  therefrom;  (iii) as to the
stockholder giving the notice and any Stockholder  Associated Person, the class,
series and number of all shares of stock of the  Corporation  which are owned by
such  stockholder and by such  Stockholder  Associated  Person,  if any, and the
nominee holder for, and number of, shares owned  beneficially  but not of record
by such stockholder and by any such Stockholder  Associated  Person;  (iv) as to
the stockholder giving the notice and any Stockholder  Associated Person covered
by clauses (ii) or (iii) of this  paragraph (2) of this Section  8(a),  the name
and  address of such  stockholder,  as they  appear on the  Corporation's  stock
ledger and current  name and  address,  if  different,  and of such  Stockholder
Associated  Person;  and (v) to the extent known by the  stockholder  giving the
notice, the name and address of any other stockholder supporting the nominee for
election or  reelection  as a director or the proposal of other  business on the
date of such stockholder's notice.

               (3)  Notwithstanding  anything  in  this  subsection  (a) of this
Section 8 to the  contrary,  in the event the Board of  Directors  increases  or
decreases the maximum or minimum number of directors in accordance  with Article
II,  Section 1 of these  Bylaws,  and there is no  public  announcement  of such
action at least 100 days prior to the first  anniversary  of the date of mailing
of the notice of the preceding  year's annual meeting,  a  stockholder's  notice
required by this Section  8(a) shall also be  considered  timely,  but only with
respect to nominees for any new positions created by such increase,  if it shall
be  delivered  to  the  Secretary  at  the  principal  executive  office  of the
Corporation  not later than the close of business on the tenth day following the
day on which such public announcement is first made by the Corporation.

               (4) For  purposes  of this  Section  8,  "Stockholder  Associated
Person" of any stockholder  shall mean (i) any person  controlling,  directly or
indirectly,  or acting in concert with,  such  stockholder,  (ii) any beneficial
owner of shares of stock of the  Corporation  owned of record or beneficially by
such stockholder and (iii) any person controlling, controlled by or under common
control with such Stockholder Associated Person.

          (b) Special  Meetings of  Stockholders.  Only such  business  shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting  pursuant to the  Corporation's  notice of meeting.  Nominations  of
individuals  for  election  to the Board of  Directors  may be made at a special
meeting of stockholders at which directors are to be elected (i) pursuant to the
Corporation's  notice of meeting,  (ii) by or at the  direction  of the Board of
Directors or (iii)  provided  that the Board of Directors  has  determined  that
directors  shall be elected at such special  meeting,  by any stockholder of the
Corporation  who is a stockholder of record both at the time of giving of notice
provided  for in this Section 8 and at the time of the special  meeting,  who is
entitled to vote at the meeting and who complied with the notice  procedures set
forth in this Section 8. In the event the Corporation calls a special meeting of
stockholders for the purpose of electing one or more individuals to the Board of
Directors,  any such  stockholder  may nominate an individual or individuals (as
the case may be) for election as a director as  specified  in the  Corporation's
notice of meeting,  if the stockholder's  notice required by paragraph (a)(2) of
this Section 8 shall be delivered to the  Secretary at the  principal  executive
office of the  Corporation  not earlier than the 150th day prior to such special
meeting  and not later than the close of  business on the later of the 120th day
prior to such special meeting or the tenth day following the day on which public
announcement  is  first  made of the  date  of the  special  meeting  and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event  shall the public  announcement  of a  postponement  or  adjournment  of a
special  meeting  commence a new time  period for the giving of a  stockholder's
notice as described above.

                                     - v -
<PAGE>

          (c) General.

               (1)  Upon  written  request  by the  Secretary  or the  Board  of
Directors or any  committee  thereof,  any  stockholder  proposing a nominee for
election  as a  director  or any  proposal  for other  business  at a meeting of
stockholders  shall  provide,  within  five  Business  Days of  delivery of such
request (or such other  period as may be  specified  in such  request),  written
verification,  satisfactory,  in the discretion of the Board of Directors or any
committee thereof or any authorized  officer of the Corporation,  to demonstrate
the accuracy of any information  submitted by the  stockholder  pursuant to this
Section 8. If a stockholder  fails to provide such written  verification  within
such period, the information as to which written  verification was requested may
be deemed not to have been provided in accordance with this Section 8.

               (2) Only such  individuals  who are nominated in accordance  with
this  Section 8 shall be  eligible  for  election  as  directors,  and only such
business  shall be  conducted  at a meeting of  stockholders  as shall have been
brought  before the meeting in  accordance  with this Section 8. The chairman of
the meeting shall have the power to determine  whether a nomination or any other
business proposed to be brought before the meeting was made or proposed,  as the
case may be, in accordance with this Section 8.

               (3) For  purposes of this  Section 8, (a) the "date of mailing of
the notice" shall mean the date of the proxy  statement for the  solicitation of
proxies for  election of  directors  and (b)  "public  announcement"  shall mean
disclosure  (i) in a press  release  reported  by the Dow  Jones  News  Service,
Associated Press or comparable news service or (ii) in a document publicly filed
by the Corporation with the Securities and Exchange  Commission  pursuant to the
Exchange Act.

               (4) Notwithstanding the foregoing provisions of this Section 8, a
stockholder shall also comply with all applicable  requirements of state law and
of the Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this  Section 8.  Nothing in this Section 8 shall be deemed
to affect any right of a stockholder to request  inclusion of a proposal in, nor
the right of the  Corporation to omit a proposal from, the  Corporation's  proxy
statement pursuant to Rule 14a-8 (or any successor provision) under the Exchange
Act.


                                   ARTICLE II

                               BOARD OF DIRECTORS

        Section 1.  Election and Powers.
                    -------------------

          The business and property of the  Corporation  shall be conducted  and
managed by its Board of Directors which shall consist of not less than three (3)
members nor more than fifteen (15) members.  The Board of Directors may increase
or decrease  the number of directors  (but the number of Directors  shall not be
more than 15 or less than 3) at any meeting called for that purpose. The members
of the Board of Directors shall be elected at the annual meeting of stockholders
by  holders  of stock  represented  in  person or by proxy at such  meeting  and
entitled to vote thereat. Each director elected at any annual meeting shall hold
office until his  successor  shall have been  elected and  qualified or until he
shall die or resign, or shall have been removed.

        Section 2.  First Regular Meeting.
                    ---------------------

          After each meeting of stockholders at which a Board of Directors shall
have been elected,  the Board of Directors so elected shall meet for the purpose
or organization and the transaction of other business, at such time and place as
may be designated by the Chairman of the Board,  or in the absence of a Chairman
of the Board, the President.

                                     - vi -
<PAGE>

        Section 3.  Additional Regular Meetings.
                    ---------------------------

          Regular meetings of the Board of Directors shall be held at such times
as may be fixed by resolution of the Board.

        Section 4. Special Meetings.
                   ----------------

          Special  meetings  of the Board of  Directors  shall be held  whenever
called by the  Chairman  of the Board,  the  President,  or by a majority of the
Directors either in writing or by vote.

        Section 5. Place of Meetings.
                   -----------------

          Subject to the  provisions  of Section 2 of this Article II, the Board
of  Directors  may hold its  regular  meetings at such place or places as it may
from time to time  determine.  Each  special  meeting of the Board of  Directors
shall be held at such place as shall be designated in the notice of the meeting.

        Section 6. Notice of Meeting.
                   -----------------

          Notice  of any  special  meeting  of the Board of  Directors  shall be
delivered personally or by telephone,  electronic mail, facsimile  transmission,
United  States  mail or  courier  to each  director  at his or her  business  or
residence  address.  Notice by personal  delivery,  telephone,  electronic mail,
facsimile  transmission or courier shall be given at least 24 hours prior to the
meeting.  Notice by United States mail shall be given at least two days prior to
the meeting.  Telephone  notice shall be deemed to be given when the director or
his or her agent is  personally  given such notice in a telephone  call to which
the  director or his or her agent is a party.  Electronic  mail notice  shall be
deemed to be given  upon  transmission  of the  message to the  electronic  mail
address given to the Corporation by the director.  Facsimile transmission notice
shall be deemed to be given upon  completion of the  transmission of the message
to the  number  given  to the  Corporation  by the  director  and  receipt  of a
completed answer-back indicating receipt.  Notice by United States mail shall be
deemed to be given when deposited in the United States mail properly  addressed,
with postage thereon prepaid. Notice by courier shall be deemed to be given when
deposited  with or  delivered  to a  courier  properly  addressed.  Neither  the
business to be transacted at, nor the purpose of, any annual, regular or special
meeting  of the  Board  of  Directors  need  be  stated  in the  notice,  unless
specifically  required by statute or these Bylaws. No notice of any meeting need
be given to any director, who, in writing executed and filed with the records of
the meeting either before or after the holding thereof, waives such notice.

      Section 7. Quorum.
                 ------

          A majority of the Board of Directors shall be necessary and sufficient
to constitute a quorum for the  transaction  of business at every meeting of the
Board of Directors.

      Section 8. Voting.
                 ------

          The  affirmative  vote of a majority of the  directors  present at any
meeting  of the  Board  of  Directors  at  which a quorum  is  present  shall be
sufficient  and necessary for the taking or  authorization  of any action by the
Board of Directors.

      Section 9. Organization.
                 ------------

          At all meetings of the Board of  Directors  the Chairman of the Board,
or in his absence, the President shall preside. The Secretary of the Corporation
shall act as  Secretary  at all  meetings  of the Board,  and in his absence the
Chairman of the meeting may designate any person to act as Secretary.

                                     - vii -
<PAGE>

      Section 10. Removal.
                  -------

          Any director,  or the entire Board of  Directors,  may be removed from
office at any time, but only for cause and then only by the affirmative  vote of
at least two thirds of the votes  entitled to be cast  generally in the election
of directors.

      Section 11.  Vacancies.
                   ---------

          If for any reason any or all of the  directors  cease to be directors,
such event shall not  terminate  the  Corporation  or affect these Bylaws or the
powers of the remaining  directors hereunder (even if fewer than three directors
remain).  Any vacancy on the Board of Directors may be filled only by a majority
of the remaining directors,  even if the remaining directors do not constitute a
quorum.  Any director elected to fill a vacancy shall serve for the remainder of
the full term of the class in which the vacancy  occurred  and until a successor
is elected and qualifies.

      Section 12.  Compensation.
                   ------------

          Directors,  as such,  shall not  receive any stated  compensation  for
their services,  but by resolution of the Board of Directors and a fixed sum and
expenses of attendance,  if any, may be allowed for attendance at any regular or
special meeting thereof.  Nothing in this Section shall be construed to preclude
a director  from serving the  Corporation  in any other  capacity and  receiving
compensation therefor.

      Section 13.  Executive Committee.
                   -------------------

          The Board of  Directors  may  designate  by vote of a majority  of the
whole Board, three or more directors to constitute an executive  committee,  and
may designate one of such members to act as Chairman. Vacancies in the Executive
Committee may be filled by the remaining members of the Executive Committee at a
meeting at which a quorum is present.  The Executive Committee may exercise such
powers of the Board of  Directors in the  management  of business and affairs of
the  Corporation  as the Board may from time to time  confer  upon it, and shall
have the power to  authorize  the seal of the  Corporation  to be affixed to all
papers  which  may  require  it. A  majority  of the  members  of the  Executive
Committee  may  determine  its action and fix the time and place of its meetings
unless otherwise provided by the Board of Directors.

      Section 14.  Other Committees.
                   ----------------

          The Board of  Directors  may  designate,  by  resolution,  one or more
directors to  constitute a committee,  other than an executive  committee,  such
other committee to serve at the pleasure of the Board of Directors.

      Section 15.  Nomination of Directors.
                   -----------------------

          Nominations  for directors to be elected at the  Corporation's  annual
meeting  of  stockholders  shall  be  made  by the  Board  of  Directors  of the
Corporation. Nominations for directors to be elected at the Corporation's annual
meeting of  stockholders  may be made by  stockholders  in  accordance  with the
procedures set forth in Article I Section 9 of these By-Laws.  Only such persons
who are nominated in accordance  with the  procedures set forth in these By-Laws
shall be eligible to serve as directors.

      Section 16. Qualification of Directors.
                  --------------------------

          Unless waived by the affirmative  vote a majority of directors then in
office,  no individual may be nominated or serve as a director unless:  (i) such
individual has continuously  been the record and beneficial owner (as defined in
Rule 13d-3  promulgated  under the Exchange  Act) of at least one percent of the
issued and outstanding shares of voting stock of the Corporation for a period of
at least one year  immediately  preceding the nomination of such individual as a
director;  and (ii) such  individual's  principal  residence was in the State of

                                     - viii -
<PAGE>

Maryland  during the entire year  immediately  preceding the  nomination of such
individual  as a director.  The Board of Directors  may require such evidence of
any proposed nominee's  satisfaction of each of the foregoing  qualifications as
it deems necessary.


                                  ARTICLE III

                                    OFFICERS

      Section 1.  Officers.
                  --------

          The officers of the  Corporation  shall be a Chairman of the Board (if
elected by the Board of Directors),  a Vice Chairman of the Board (if elected by
the Board of Directors), a President, one or more Vice Presidents (if elected by
the Board of  Directors),  a  Secretary  and a  Treasurer,  all of whom shall be
elected  by, and be  subject to the  control  of,  the Board of  Directors.  The
officers  shall be  elected  annually  by the  Board of  Directors  at its first
meeting  following  the annual  meeting of  stockholders,  subject to changes or
additions at other regular or special  meetings of the Board of Directors.  Each
of such officers shall hold office for a term of one year, and thereafter  until
his  successor  is elected  and  qualified  or until his death,  resignation  or
removal.  The Board of Directors  may appoint such other  officers and assistant
officers as it deems  necessary,  who shall have such authority and perform such
duties as the Board may from time to time prescribe.

      Section 2.  Chairman of the Board.
                  ---------------------

          The Chairman of the Board (if elected by the Board of Directors) shall
be a  director  of the  Corporation  and  the  chief  executive  officer  of the
Corporation.  He shall  preside at all meetings of the  stockholders  and of the
Board of Directors.  He shall supervise,  control and direct all of the business
and affairs of the  Corporation.  He shall have authority to sign and execute in
the  name  of  the  Corporation  all  authorized  deeds,   contracts  and  other
instruments.

      Section 3.  Vice Chairman of the Board.
                  --------------------------

          The Vice  Chairman of the Board (if elected by the Board of Directors)
shall be a  director  of the  Corporation.  In the event of the  absence  of the
Chairman of the Board,  the Vice Chairman shall perform all of the duties of the
Chairman  and when so acting  have all of the powers of the  Chairman.  He shall
have authority to sign and execute in the name of the Corporation all authorized
deeds, contracts and other instruments.

      Section 4.  President.
                  ---------

          If the Board of Directors does not elect a Chairman of the Board,  the
President  shall be the  chief  executive  officer  of the  Corporation.  In the
absence of the  Chairman and Vice  Chairman of the Board,  the  President  shall
preside at all meetings of the  stockholders  and of the Board of Directors.  He
shall be responsible for the day-to-day operations of the Corporation subject to
the  supervision  and control of the Board of Directors  and the Chairman of the
Board.  He  shall  have  authority  to  sign  and  execute  in the  name  of the
Corporation all authorized deeds, contracts and other instruments.

      Section 5.  Vice President.
                  --------------

          In the absence of the  President,  the Vice  Presidents  (in the order
designated at the time of their election,  or in the absence of any designation,
in the order of their  election)  shall  perform all the duties of the President
and when so acting, shall have the powers of the President.  The Vice Presidents
shall also have such additional  powers and duties as may be assigned to each of
them by the Board of Directors.

                                     - ix -
<PAGE>

      Section 6.  Secretary.
                  ---------

          The  Secretary   shall  keep  the  minutes  of  the  meetings  of  the
stockholders and of the Board of Directors in books provided for the purpose; he
shall see that all notices are duly given in accordance  with the  provisions of
the By-Laws or as required by law; he shall be the  custodian of the records and
of the  corporate  seal or  seals  of the  Corporation;  he  shall  see that the
corporate seal is affixed to all documents,  the execution of which on behalf of
the  Corporation  under its seal is duly  authorized,  and when so  affixed  may
attest the same;  he may sign,  with the  President  or  Chairman  of the Board,
certificates of stock of the Corporation;  and, in general, he shall perform all
duties  ordinarily  incident to the office of a Secretary of a corporation,  and
such other duties as, from time to time,  may be assigned to him by the Board of
Directors, or by the President.

      Section 7.  Treasurer.
                  ---------

          The Treasurer  shall have charge of and be responsible  for all funds,
securities, receipts and disbursements of the Corporation, and shall deposit, or
cause  to be  deposited,  in the name of the  Corporation  all  moneys  or other
valuable effects in such banks, trust companies, or other depositories as shall,
from time to time, be selected by the Board of Directors; he shall render to the
President and to the Board of Directors,  whenever requested,  an account of the
financial  condition of the  Corporation;  he may sign,  with the President,  or
Chairman  of the  Board,  certificates  of stock  of the  Corporation;  and,  in
general,  shall  perform  all  duties  ordinarily  incident  to the  office of a
treasurer of a  corporation,  and such other duties as may be assigned to him by
the Board of Directors or by the President.

      Section 8.  Assistant Officers.
                  ------------------

          The Board of Directors may elect one or more Assistant Secretaries and
one or more Assistant  Treasurers.  Each such Assistant  Secretary and Assistant
Treasurer  shall hold office for such period and shall have such  authority  and
perform such duties as the Board of Directors may prescribe.

      Section 9.  Compensation.
                  ------------

          The Board of Directors shall have power to fix the compensation of all
officers of the Corporation. It may authorize any officer upon whom the power of
appointing  subordinate officers may have been conferred to fix the compensation
of such subordinate officers.

      Section 10.  Reimbursement.
                   -------------

          Any payments made to an officer of the  Corporation  such as a salary,
commission,  bonus,  interest or rent, or entertainment expense incurred by him,
which shall be  disallowed  in whole or in part as a  deductible  expense by the
Internal Revenue Service, shall be reimbursed by such officer to the Corporation
to the full extent of such disallowance.  It shall be the duty of the directors,
as a Board, to enforce payment of each amount disallowed.  In lieu of payment by
the  officer,  subject  to the  determination  of the  directors,  proportionate
amounts may be withheld from his future  compensation  payments until the amount
owed to the Corporation has been recovered.

      Section 11.  Officers Holding More Than One Office.
                    -------------------------------------

          Two or more  officers  (except that of President  and Vice  President,
Secretary and Assistant Secretary, and Treasurer and Assistant Treasurer) may be
held by the same person, but no officer shall execute, acknowledge or verify any
instrument in more than one capacity.

                                     - x -
<PAGE>

      Section 12.  Removal.
                   -------

          The Board of  Directors  shall  have  power at any  regular or special
meeting to remove any officer  with or without  cause,  and such action shall be
conclusive  on the officer so removed.  The Board of Directors may authorize any
officer to remove subordinate officers.

      Section 13.  Vacancies.
                   ---------

          The Board of  Directors at any regular or special  meeting  shall have
power to fill a vacancy occurring in any office for the unexpired portion of the
term.


                                   ARTICLE IV

                                     STOCK

      Section 1.  Certificates.
                  ------------

          In the event that the Corporation  issues shares of stock  represented
by  certificates,  each  stockholder  shall  be  entitled  to a  certificate  or
certificates  which  shall  represent  and  certify the number of shares of each
class of stock held by him, her or it in the Corporation. Each certificate shall
be signed by the Chairman of the Board,  the  President or a Vice  President and
countersigned by the Secretary or an Assistant  Secretary or the Treasurer or an
Assistant Treasurer and may be sealed with the seal, if any, of the Corporation.
The  signatures  may be  either  manual  or  facsimile.  Certificates  shall  be
consecutively  numbered;  and if the Corporation shall, from time to time, issue
several  classes  of  shares,  each  class  may have its own  number  series.  A
certificate  is valid and may be issued  whether or not an officer who signed it
is still an officer  when it is issued.  Each  certificate  representing  shares
which are restricted as to their  transferability  or voting  powers,  which are
preferred or limited as to their dividends or as to their  allocable  portion of
the  assets  upon  liquidation  or which  are  redeemable  at the  option of the
Corporation, shall have a statement of such restriction,  limitation, preference
or  redemption  provision,   or  a  summary  thereof,   plainly  stated  on  the
certificate. In lieu of such statement or summary, the Corporation may set forth
upon the face or back of the certificate a statement that the  Corporation  will
furnish to any stockholder, upon request and without charge, a full statement of
such information.

      Section 2.  Transfer.
                  --------

          Transfer of shares of the Corporation  shall be made only on the stock
transfer  books of the  Corporation  by the  holder of record  thereof or by his
legal  representative,  or by his  attorney  thereunto  authorized  by  power of
attorney duly exercised and filed with the Secretary of the Corporation,  and on
surrender for cancellation of the certificate for such shares.

     Section 3.  Rules and Regulations.
                 ---------------------

          The Board of Directors shall have authority to make all such rules and
regulations  as they may deem  expedient  concerning  the  issue,  transfer  and
registration  of stock  certificates  and may  appoint  a  transfer  agent and a
registrar of transfers.

      Section 4.   Closing of Transfer Books or Fixing of Record Date.
                   --------------------------------------------------

          The Board of Directors may fix, in advance,  a date as the record date
for the purpose of  determining  shareholders  entitled to notice of, or to vote
at, any meeting of shareholders,  or shareholders entitled to receive payment of
any dividend or the allotment of any rights, or in order to make a determination
of shareholders for any other proper purpose.  Such date, in any case, shall not
be more than sixty (60) days, and in case of a meeting of shareholders  not less
than ten (10) days, prior to the date on which the meeting or particular  action
requiring such determination of shareholders is to be held or taken.


                                     - xi -
<PAGE>

                                   ARTICLE V

                               SUNDRY PROVISIONS

      Section 1.   Dividends.
                   ---------

          Subject to the  applicable  provisions of law and of the Charter,  the
Board of Directors may in its discretion  declare what, if any,  dividends shall
be paid or upon any class of such stock,  the date when such dividends  shall be
payable,  and the date for the  determination  of holders of record to whom such
dividends shall be payable.

      Section 2.   Working Capital.
                   ---------------

          The  Board  of  Directors  shall,  from  time  to  time,  and  in  its
discretion,  fix and vary the amount of working  capital of the  Corporation and
determine  what portion of the surplus  shall be reserved as working  capital or
declared as dividends and distributed to the stockholders.

      Section 3.   Negotiable Instruments and Other Evidences of Indebtedness.
                   ----------------------------------------------------------

          All checks, drafts or orders for the payment of money, notes and other
evidences  of  indebtedness,  issued  in the name of the  Corporation,  shall be
signed by such  officer or  officers as may be  designated  from time to time by
resolution of the Board of Directors. No checks shall be signed in blank.

      Section 4.  Fiscal Year.
                  -----------

          The fiscal year of the  Corporation  shall be as provided by the Board
of Directors.

      Section 5.  Seal.
                  ----

          The seal of the  Corporation  shall be circular in form, with the name
of the  Corporation  inscribed  around the outer edge,  and in the center  shall
inscribed the words "MARYLAND" and the year of incorporation.

      Section 6. Amendments.

          The Board of Directors shall have the exclusive power to adopt,  alter
or repeal any provision of these  By-Laws and to make new By-Laws,  by vote of a
majority of all the directors then in office.

      Section 7. Contracts.

          No contract or other  transaction  between  this  Corporation  and any
other corporation and no act of this Corporation shall in any way be affected or
invalidated  by the  fact  that any of the  directors  of this  Corporation  are
pecuniarily  or  otherwise  interested  in or are  directors or officers of such
other corporation; any director,  individually or any firm of which any director
may be a  member,  may  be a  party  to,  or may  be  pecuniarily  or  otherwise
interested in, any contract or transaction  of this  Corporation,  provided that
the fact that he or such firm is so interested  shall be disclosed or shall have
been known to the Board of Directors or a majority thereof;  and any director of
this Corporation who is also a director or officer of such other  corporation or
who is so interested may be counted in determining  the existence of a quorum at
any meeting of the Board of Directors of this Corporation, which shall authorize
any such  contract or  transaction,  and may vote thereat to authorize  any such
contract or  transaction,  with the like force and effect as if he were not such
director or officer of such other corporation or not so interested.

                                     - xii -
<PAGE>

      Section 8.   Voting Upon Stocks or Other Ownership Interests.
                   -----------------------------------------------

          Unless otherwise ordered by the Board of Directors,  the President and
the  Chairman  of the  Board,  or either  of them,  shall  have  full  power and
authority  on  behalf  of the  Corporation  to  attend  and to vote and to grant
proxies to be used at any meetings,  or for written consents, of stockholders or
other equity owners of any  corporation or other entity in which the corporation
may own an interest.


                                   ARTICLE VI

                                INDEMNIFICATION

      Section l.  Definitions.
                  -----------

          As used in this  Article  VI,  any word or words  that are  defined in
Section 2-418 of the Corporations and Associations Article of the Annotated Code
of Maryland (the "Indemnification Section"), as amended from time to time, shall
have the same meaning as provided in the Indemnification Section.

      Section 2.  Indemnification of Directors and Officers.
                  -----------------------------------------

          The Corporation  shall indemnify and advance expenses to a director or
officer of the Corporation in connection with a proceeding to the fullest extent
permitted by and in accordance with the Indemnification Section.


      Section 3.  Indemnification of Other Agents and Employees.
                  ---------------------------------------------

          With respect to an employee or agent, other than a director or officer
of the Corporation,  the Corporation may, as determined by and in the discretion
of the Board of Directors of the Corporation,  indemnify and advance expenses to
such employees or agents in connection with a proceeding to the extent permitted
by and in accordance with the Indemnification Section.


                                 END OF BY-LAWS






                                     - xiii -
<PAGE>






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

                                  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  officers 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  officers 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: August 16, 2004                           /s/ Harvey B. Grossblatt
                                            ------------------------------------
                                            Harvey B. Grossblatt
                                            Chief Executive Officer
                                            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 June 30,
2004 as filed with the  Securities  and  Exchange  Commission  and to which this
Certification is an exhibit (the "Report"),  the undersigned  hereby  certifies,
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: August 16, 2004                            /s/ Harvey B. Grossblatt
                                            ------------------------------------
                                            Harvey B. Grossblatt
                                            Chief Executive Officer
                                            Chief Financial Officer





<PAGE>




                                                                    Exhibit 99.1
                                                                    ------------


[GRAPHIC OMITTED]                                          For Immediate Release
                                          Contact:  Harvey Grossblatt, President
                                            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 Increased Sales For First Quarter
     ----------------------------------------------------------------------

OWINGS MILLS, MD, August 13, 2004: Universal Security  Instruments,  Inc. (AMEX:
UUU) today  announced  its results for its first  quarter  ended June 30,  2004,
including a 10% increase in sales.

The  Company  cited  increased  sales of its core  products  across  retail  and
electrical  wholesale  channels as the primary driver of top-line growth for the
period.  Earnings from U.S. operations  increased  approximately 54%, which were
partially offset by lower Joint Venture earnings.

The  Owings  Mills,  MD-based  designer  and  marketer  of safety  and  security
equipment  posted net  earnings of $766,297 or $0.49 per basic share  ($0.44 per
diluted share),  on net sales of $4,874,782 in the first quarter of fiscal 2004,
compared  with net  earnings of  $852,498,  or $0.57 per basic share  ($0.51 per
diluted share), on net sales of $4,431,950 in the same period of last year.

Universal also  announced that on August 12, 2004, its Board of Directors  voted
Harvey Grossblatt as CEO, filling the vacancy left following the recent untimely
passing of the Company's co-founder, CEO and Chairman, Steve Knepper.

"During the first  quarter,  we were very  successful in driving sales  activity
across the board.  We are continuing to gain market share in both the retail and
electrical wholesale sides of our business. Our new combination smoke and carbon
monoxide  alarm  has  been a major  element  in this  success  and has  exceeded
expectations  to date," said  Harvey  Grossblatt,  the  Company's  new CEO.  "In
addition,  we resumed shipping our GFCI units in April to strong customer demand
and are very pleased to have this product back in our product line.

"We are very pleased with our current position in the market as we head into the
fall - typically one of our most active selling seasons. Our people, our product
mix and our quality are where they need to be, and we have good momentum for the
remainder of the year."

UNIVERSAL SECURITY INSTRUMENTS,  INC. is a U.S.-based  manufacturer (through its
Hong Kong Joint Venture) and distributor of residential  smoke,  fire and carbon
monoxide  alarms.  Founded  in 1969,  the  Company  has a  35-year  heritage  of
developing innovative and easy-to-install safety and security devices, including
smoke, fire and carbon monoxide alarms. Universal Security has increased revenue
and earnings  while gaining  significant  new market share since 2001.  For more
information   on   Universal   Security   Instruments,   visit  the  website  at
www.universalsecurity.com.

                                    * more *

            7-A GWYNNS MILL COURT o OWINGS MILLS, MARYLAND 21117, USA
                   (410) 363-3000 o www.universalsecurity.com


<PAGE>


Universal/Page 2

                      UNIVERSAL SECURITY INSTRUMENTS, INC.
                        CONSOLIDATED STATEMENT OF INCOME

<TABLE>

<CAPTION>
                                                                                        (UNAUDITED)
                                                                                Three Months Ended June 30,
                                                                                    2004             2003
                                                                                    ----             ----
<S>                                                                             <C>              <C>
Sales                                                                           $ 4,874,782      $4,431,950
Net income                                                                          766,297         852,498
Income per share
      Basic                                                                            0.49            0.57
      Diluted                                                                          0.44            0.51
Weighted average number of common shares outstanding
      Basic                                                                       1,564,702       1,497,365
      Diluted                                                                     1,757,283       1,666,921


                           CONSOLIDATED BALANCE SHEET

                                             ASSETS                                         June 30,
                                                                                            --------
                                                                                    2004             2003
                                                                                    ----             ----
Cash                                                                            $    45,610       $   20,089
Accounts receivable and amount due from factor                                    2,459,929        1,335,335
Inventory                                                                         3,427,754        2,742,200
Prepaid expenses                                                                    442,260          112,891
                                                                                -----------       ----------

TOTAL CURRENT ASSETS                                                              6,375,553        4,210,515

INVESTMENT IN HONG KONG JOINT VENTURE                                             5,374,225        4,538,403

PROPERTY, PLANT AND EQUIPMENT - NET                                                  89,526          275,143
OTHER ASSETS AND DEFERRED TAX ASSET                                                  72,385           11,472
                                                                                -----------       ----------
TOTAL ASSETS                                                                    $11,911,689       $9,035,533
                                                                                ===========       ==========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable and accrued expenses                                           $ 1,143,358       $  931,585
Accrued liabilities                                                                 756,069          726,854
Current obligations under capital lease                                               4,436           23,250
                                                                                -----------       ----------
TOTAL CURRENT LIABILITIES                                                         1,903,863        1,681,689
                                                                                -----------       ----------
LONG TERM DEBT                                                                            -            3,431
SHAREHOLDERS' EQUITY
Common stock, $.01 par value per share; authorized 20,000,000 shares; issued
and outstanding ,577,063 and 1,552,896 shares at June 30, 2004 and
June 30, 2003, respectively                                                          15,771           15,529
Additional paid-in capital                                                       11,231,918       11,059,572
Accumulated deficit                                                              (1,239,863)      (3,724,688)
                                                                                -----------       ----------
TOTAL SHAREHOLDERS' EQUITY                                                       10,007,826        7,350,413
                                                                                -----------       ----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                      $11,911,689       $9,035,533
                                                                                ===========       ==========

</TABLE>
All shares have been  adjusted to reflect  the  4-for-3  stock split  payable on
April 5, 2004.



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.