UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION 
                            WASHINGTON, DC 20549 

                                 FORM 10-Q 

(X)  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the Quarter ended December 31, 1997

( )  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the transition period from _______________ to _______________

Commission file number 0-7885

                   UNIVERSAL SECURITY INSTRUMENTS, INC.                    
          (Exact name of registrant as specified in its charter)
 
       Maryland                                     52-0898545             
State of Incorporation                I.R.S. Employer Identification Number

10324 S. Dolfield Road, Owings Mills, MD                            21117  
(Address of principal executive offices)                         (Zip Code)
 
Registrant's telephone number, including area code 410-363-3000
 
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section 13 and 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to
the filing requirements for at least the past 90 days. 
 
                        YES   X      NO _____
 
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 
 
      Date                        Class                  Shares Outstanding
February 23, 1998      Common Stock, $.01 par value          3,245,587
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          UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES 



                                   INDEX 
 


Part  I - FINANCIAL INFORMATION

          Item 1.   Financial Statements

          Consolidated balance sheets at December 31, 1997 and March 31,
          1997 

          Consolidated statements of operations for the nine months ended
          December 31, 1997 and 1996 and three months ended December 31,
          1997 and 1996

          Consolidated statements of cash flows for the nine months ended
          December 31, 1997 and 1996

          Notes to consolidated financial statements

          Item 2.  Management's discussion and analysis of results of
                   operations and financial condition
 
Part II -     OTHER INFORMATION

          Item 4.  Submission of Matters to a Vote of Security Holders
 
          Item 6.  Exhibits and Reports 
 
                                  - 2 -
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UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS 
(unaudited) 

ASSETS 

<TABLE>
<S>                                        <C>              <C>
                                           Dec 31, 1997     March 31, 1997
CURRENT ASSETS 
  Cash                                      $   98,978         $  150,452
  Accounts receivable: 
    Trade (less allowance for doubtful 
      accounts of $50,000 at December 31,
      1997 and March 31, 1997)               1,073,992          1,723,979
    Officers and employees                       1,595              1,545

                                             1,075,587          1,725,524

  Inventories:
    Finished goods                           2,501,863          2,900,910
    Raw materials-foreign locations            125,502            127,656

                                             2,627,365          3,028,566

  Prepaid expenses                             189,339            369,439

TOTAL CURRENT ASSETS                         3,991,269          5,273,981

INVESTMENT IN JOINT VENTURE                  2,341,841          2,508,957

PROPERTY, PLANT AND EQUIPMENT                1,642,117          1,757,488

OTHER ASSETS                                    18,690             16,690

                                            $7,993,917         $9,557,116
</TABLE>

See notes to consolidated financial statements.

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

LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<S>                                          <C>            <C>
                                             Dec 31, 1997   March 31, 1997 
CURRENT LIABILITIES
  Short-term borrowings                      $   841,672      $ 1,363,641 
  Current maturity of long-term debt              89,655           89,655 
  Accounts payable                               866,729        1,502,193 
  Accrued liabilities:
    Payroll, commissions and payroll taxes        70,309           45,991 
    Other                                          1,513           18,948 


TOTAL CURRENT LIABILITIES                      1,869,878        3,020,428 


LONG-TERM DEBT, less current portion           1,277,167        1,344,211 


SHAREHOLDERS' EQUITY
  Common stock, $.01 par value per share;
    authorized 20,000,000 shares; issued
    3,245,587 shares at December 31, 1997
    and March 31, 1997                            32,456           32,456 
  Additional paid-in capital                  10,429,588       10,429,588 
  Retained deficit                            (5,615,172)      (5,269,567) 


TOTAL SHAREHOLDERS' EQUITY                     4,846,872        5,192,477 


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 7,993,917      $ 9,557,116 

</TABLE>

See notes to consolidated financial statements.

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UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

<TABLE>
<S>                                            <C>            <C>
                                                For the Nine Months Ended 
                                               Dec 31, 1997   Dec 31, 1996 

Net sales                                      $ 8,979,319    $13,261,441 

Cost of goods sold                               7,440,586     10,983,858 

                                                 1,538,733      2,277,583

Research and development expense                   214,043        177,008

Selling, general and administrative expense      1,541,812      2,584,133 

Operating loss                                    (217,122)      (483,558)

Other income (expense):
  Interest income                                    2,287          2,177
  Interest expense                                (210,176)      (340,781)
  Other                                             (3,477)      (115,128)

                                                  (211,366)      (453,732)

LOSS BEFORE EQUITY IN EARNINGS
(LOSS) OF JOINT VENTURE                           (428,488)      (937,290)

Equity in earnings (loss) of joint venture          82,883        (26,144)

NET LOSS                                       $  (345,605)   $  (963,434)




Per common share amounts:
  Primary                                      $      (.11)   $      (.30)
  Fully diluted                                       (.11)          (.30)

Weighted average number of common
  shares outstanding
    Primary                                      3,245,587      3,245,587
    Fully diluted                                3,245,587      3,245,587

</TABLE>

See notes to consolidated financial statements.

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UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

<TABLE>
<S>                                           <C>             <C>
                                               For the Three Months Ended 
                                              Dec 31, 1997    Dec 31, 1996 

Net sales                                      $2,326,044     $3,677,423

Cost of goods sold                              2,059,124      2,972,936 

                                                  266,920        704,487 

Research and development expense                   71,649         59,176 

Selling, general and administrative expense       499,156        747,911 

Operating loss                                   (303,885)      (102,600)

Other income (expense):
  Interest income                                     345            619 
  Interest expense                                (63,294)      (100,793)
  Other                                            (4,901)        23,252 

                                                  (67,850)       (76,922)

LOSS BEFORE EQUITY IN LOSS OF JOINT VENTURE      (371,735)      (179,522)

Equity in loss of joint venture                   (13,281)      (107,435)

NET LOSS                                       $ (385,016)    $ (286,957)




Per common share amounts:
  Primary                                      $     (.12)    $     (.09)
  Fully diluted                                      (.12)          (.09) 

Weighted average number of common
  shares outstanding
    Primary                                     3,245,587      3,245,587  
    Fully diluted                               3,245,587      3,245,587  

</TABLE>

See notes to consolidated financial statements.

                                  - 6 -
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UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

<TABLE>
<S>                                                <C>            <C>
                                                    For the Nine Months Ended 
                                                   Dec 31, 1997   Dec 31, 1996
OPERATING ACTIVITIES
  Net loss                                           $(345,605)   $  (963,434)
  Adjustments to reconcile net loss to net
    cash provided by operating activities:
    Depreciation and amortization                      117,165        123,268 
    Provision for losses on accounts receivable                        24,229
    Distributed earnings of joint venture              167,117      1,132,649
    Gain on sale of property, plant & equipment                      (311,287)
    Legal settlement                                                  300,000
    Changes in operating assets and liabilities:
      Decrease (increase) in accounts receivable       649,937        (67,178)
      Decrease in inventories and prepaid expenses     581,301      1,160,447
      Decrease in accounts payable and
        and accrued expenses                          (628,581)       (68,947)
      (Increase) decrease in other assets               (2,000)        13,261 

NET CASH PROVIDED BY OPERATING ACTIVITIES              539,324      1,343,008

INVESTING ACTIVITIES
  Purchases of property, plant and equipment            (1,785)       
  Proceeds from sale of property, plant
    and equipment                                                     407,880
  Decrease in commercial paper and time deposits                        8,748 


NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES     (1,785)       416,628


FINANCING ACTIVITIES
  Net repayment of short-term debt                    (521,969)    (1,466,480)
  Principal payments on long-term debt                 (10,794)       (47,560)
  Payment on legal settlement                          (56,250)      (100,000)


NET CASH USED IN FINANCING ACTIVITIES                 (589,013)    (1,614,040)


(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS       (51,474)       145,596 


Cash and cash equivalents at beginning of period       150,452         97,793 


CASH AND CASH EQUIVALENTS AT END OF PERIOD          $   98,978    $   243,389 


Supplemental information:
  Interest paid                                     $  243,389    $   340,780 
  Income taxes paid                                       -               -   

</TABLE>

See notes to consolidated financial statements.

                                    - 7 -
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UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 


 
Statement of Management - The financial information included
herein is unaudited and does not include all disclosures normally
included in financial statements presented in accordance with
generally accepted accounting principles. The interim financial
information should be read in connection with the financial
statements and related notes in the Company's annual report on
Form 10-K for the year ended March 31, 1997. The results for the
interim period are not necessarily indicative of the results
expected for the year. The accompanying interim information
reflects all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods.

Per Share Data - Primary and fully diluted net income per share
is computed by dividing net income (loss) by the weighted average
number of common and common equivalent shares outstanding. Common
equivalent shares include the dilutive effect of outstanding stock
options calculated under the treasury stock method.

The Company will adopt Statement of Financial Accounting Standard
No. 128, "Earnings Per Share" ("SFAS 128") effective April 1,
1998, as required. The standard specifies the computation,
presentation and disclosure requirements for earnings per share.
The pro forma basic loss per common share and the pro forma
diluted earnings per common share, as computed under the
provision of SFAS 128 for the quarter and nine months ended
December 31, 1997, were ($0.12) and ($0.11) respectively. Basic
and diluted pro forma earnings per share, as computed under the
provisions of SFAS 128, as previously reported were ($0.09) and
($0.30) for the quarter and nine months ended December 31, 1996.

Income Taxes - No income tax provision has been provided for the
quarter and nine months ended December 31, 1997 because of the
Company's unrecognized deferred income tax benefits related to
the carryforward of prior years' operating losses.

Cash Equivalents - The Company considers all highly liquid
investments with a maturity of three months or less when
purchased to be cash equivalents.

Long-Term Debt - In addition to the mortgage on the Company's
headquarters, the Company agreed to pay the sum of $300,000 in
conjunction with the settlement of litigation with Black &
Decker. The repayment terms are $100,000 paid in July 1996 and
$200,000 payable in 32 equal monthly installments without
interest starting September 1, 1996.

Sale of Property - On July 26, 1996, the Company sold undeveloped
real estate adjacent to its plant which resulted in a gain of
approximately $311,000.

                             - 8 -
<PAGE>
Joint Venture - The Company maintains a 50% interest in a joint
venture with a Hong Kong corporation (Hong Kong joint venture)
which has facilities in the People's Republic of China, for the
manufacturing of consumer electronic products. Additionally, the
Hong Kong joint venture has a 30% interest in a separate joint
venture with a People's Republic of China company to manufacture
and sell a portable cellular telephone primarily in China.  The
contract is being accounted for under the percentage of
completion method. The following represents summarized income
statement information of the Hong Kong joint venture for the nine
months ended December 31, 1997 and 1996:

<TABLE>
<S>                           <C>              <C>
                                  1997            1996   

        Sales                 $5,420,912       $5,467,731
        Gross Profit           1,084,021          704,519
        Net Income (Loss)        165,767          (52,288)

</TABLE>

Commitments - The Company has employment agreements with two of
its officers, both expiring on March 31, 1998. The combined
fixed aggregate annual remuneration under these agreements is
$500,000 per year. In addition, the agreements provide incentive
compensation to these officers based on the Company's achievement
of certain levels of earnings. However, in September 1996, one
of the officers voluntarily agreed to a non-reimbursable
reduction in remuneration of $200,000.

                             - 9 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS AND FINANCIAL CONDITION 

Nine Months Ended December 31, 1997 Compared to
Nine Months Ended December 31, 1996
 
Sales - Net sales for the nine months ended December 31, 1997
were $8,979,319 compared to $13,261,441 for the comparable nine
months in the prior fiscal year, a decrease of $4,282,122. Net
sales of security products decreased by $2,465,178,
telecommunications products decreased by $291,268 and video
products decreased by $1,525,676, from the comparable period of
the previous year. The decrease in security products sales was
due to lower sales of certain of the Company's security products.
The decrease in telecommunications sales was due to a decreased
demand by certain of its private label customers. The decrease in
video sales was due to decreased demand for certain of the
Company's video products by its private label customers.

Net Income - The Company reported a net loss of $345,605 for
the nine months ended December 31, 1997 compared to a net loss of
$963,434 for the corresponding nine months of the prior fiscal
year. The Company's gross margin declined by $738,850, which was
due to the decline in sales described above. Additionally,
expenses declined by $1,005,286 as described below.

Expenses - Research, selling, general and administrative expenses
decreased by $1,005,286 from the comparable nine months in the
prior year. As a percentage of sales, research, selling, general
and administrative expenses were 20% for the nine months ended
December 31, 1997 and 21% for the same period in the prior fiscal
year. The most significant reason for the decrease in expenses
was the savings resulting from the implementation of the
Company's cost reduction program.
 
Interest Expense and Income - The Company's interest expense, net
of interest income, decreased to $207,889 for the nine months
ended December 31, 1997 from $338,604 for the comparable period
in 1996. The decrease in interest expense is due largely to a
decrease in short-term debt.

Three Months Ended December 31, 1997 Compared to
Three Months Ended December 31, 1996
 
Sales - Net sales for the three months ended December 31, 1997
were $2,326,044 compared to $3,677,423 for the comparable three
months in the prior fiscal year, a decrease of $1,351,379. Net
sales of security products decreased by $170,685, as compared
to the quarter ended December 31, 1996. Net sales of
telecommunications products decreased by $633,844 and video
products decreased by $546,850 from the same quarter last year. 

                             - 10 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS AND FINANCIAL CONDITION 

The decrease in telecommunications sales was due to a decreased
demand for certain of the Company's telecommunications products
by its private label customers. The decrease in video sales was
due to lower demand for certain of the Company's video products
to private label customers. The decrease in security products was
due to decreased demand for certain of the Company's security
products.

Net Income - The Company reported a net loss of $385,016 for the
quarter ended December 31, 1997 compared to a net loss of
$286,957 for the corresponding quarter of the prior fiscal year.
The primary reasons for the increase in net loss were a reduction
in gross sales.

Expenses - Research, selling, general and administrative expenses
decreased by $236,282 from the comparable three months in the
prior year. As a percentage of sales, research, selling, general
and administrative expenses were 25% for the three months ended
December 31, 1997 and 22% for the same period in the last fiscal
year. The decrease in selling, general and administrative
expenses was primarily due to the savings resulting from the
implementation of the Company's cost reduction program.

Interest Expense and Income - The Company's interest expense, net
of interest income, decreased from $100,174 for the three months
ended December 31, 1996 to $62,949 for the current quarter in
1997.

Financial Condition and Liquidity - Cash needs of the Company are
currently met by funds generated from operations and its line of
credit with a financial institution, which supplies both
short-term borrowings and letters of credit to finance foreign
inventory purchases. The Company's maximum line of credit is
currently the lower of $7,500,000 or specified percentages of the
Company's accounts receivable and inventory. Approximately
$959,885 has been utilized in letter of credit commitments and
short-term borrowings as of December 31, 1997. As of December
31, 1997, the amount available for borrowings under the line was
approximately $150,000, based on the specified percentages.

The outstanding principal balance of the revolving credit line is
payable upon demand. The interest rate on the revolving credit
line is equal to 1.5% in excess of the prime rate of interest
charged by the Company's lender. The loan is collateralized by
the Company's accounts receivable and inventory and a parcel of
undeveloped real estate. During the nine months ended December
31, 1997, working capital decreased by $132,162.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS AND FINANCIAL CONDITION 

Operating activities provided cash of $539,324 for the nine months
ended December 31, 1997. This was primarily due to the reduction of
inventories and prepaid expenses of $581,301 and accounts
receivable of $649,937, partially offset by a decrease in accounts
payable of $628,581. For the same period last year, operating
activities provided cash of $1,343,008. This was primarily due to
the reduction in inventories of $1,130,885.

Investing activities used cash of $1,785 in the current period and
provided cash of $416,628 in the same period last year. primarily
from the proceeds from the sale property, plant and equipment.

Financing activities used cash of $589,013, primarily due to net
repayment of short-term debt of $521,969. For the same period
last year, financing activities used cash of $1,614,040, primarily
due to the net repayment of short-term debt of $1,466,480.

The Company believes that its demand line of credit and its
working capital provide it with sufficient resources to meet its
current requirements for liquidity and working capital in the
ordinary course of its business. The Company's ability to retain
its financing may be dependent upon the Company's results of
operations. If the Company's losses continue, it may not be able
to retain its funding sources for as long as the next 12 months.

Hong Kong Joint Venture - Net sales of the joint venture for the
nine months and three months ended December 31, 1997 were
$5,420,912 and $1,247,285, respectively, compared to $5,467,731
and $944,076, respectively, for the comparable nine months and
three months in the prior fiscal year.

The net income for the nine months ended December 31, 1997 was
$165,767 and net loss for the three months ended December 31, 1997
was $26,562, compared to net loss of $52,288 and net loss of
$214,870, respectively, in the comparable nine months and three
months last year.

Selling, general and administrative expenses were $1,066,267 (20%
of sales) and $377,900 (30% of sales), respectively, for the nine
months and three months ended December 31, 1997 and were
$1,034,726 (19% of sales) and $115,199 (12% of sales) for the
comparable periods last year.

Cash needs of the Hong Kong joint venture are currently met by
funds generated from operations.  During the nine months ended
December 31, 1997, working capital decreased by $81,960 from
$1,648,274 on March 31, 1997 to $1,566,314 on December 31, 1997.

                             - 12 -
<PAGE>
UNIVERSAL SECURITY INSTRUMENTS, INC. AND SUBSIDIARIES 
PART II 

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

          On October 30, 1997, the Company held its Annual Meeting
          of Shareholders. The only matter submitted to the
          shareholders for a vote was the election of directors.

          The nominees submitted for election as directors were
          Michael L. Kovens, Steven C. Knepper and Harvey
          Grossblatt. At least 2,655,403 shares were voted in favor
          of each director, and no more than 9,973 shares were
          voted to withhold approval of any director. As a result,
          Messrs. Kovens, Knepper and Grossblatt were elected to
          serve as directors until the next annual meeting of
          shareholders of the Company and until their successors
          are duly elected and qualified. 


Item 6.   Exhibits and Reports on Form 8-K

          (b) No reports on Form 8-K were filed during the
              quarter for which this report is filed.
 
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UNIVERSAL SECURITY INSTRUMENTS, INC. 
SIGNATURE 
 
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. 
 
 
 
Dated:  February 23, 1998      Harvey Grossblatt            
                               HARVEY GROSSBLATT 
                               President, Chief Financial Officer

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