|  |   |  **For                  Immediate                  Release**Contact:                Harvey                Grossblatt, President Universal                Security Instruments, Inc.410-363-3000,                Ext. 224orDon                Hunt, Jeff Lambert Lambert,                Edwards & Associates, Inc. 616-233-0500 |
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**Universal      Security Instruments Reports Record**

**Second      Quarter Earnings**

***Earnings      Rise to $0.59/Share on 12.6% Increase in Sales***

**—      more—**

**7-A      GWYNNS MILL COURT • OWINGS MILLS, MARYLAND 21117, USA**

**(410)      363-3000 • **
**www.universalsecurity.com**

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**Universal/Page      2**

**UNIVERSAL      SECURITY INSTRUMENTS, INC.**

**CONSOLIDATED      STATEMENTS OF EARNINGS**

|                                                                           |   | Three                Months Ended September 30, |      |
|--------------------------------------------------------------------------------|--------|-------------------------------------------------|-----------|
|                                                                           |   | 2006                                            |      | 2005 |   |
| Sales                                                                          |   | $                                               | 8,018,088 |   | $ | 7,119,100 |   |
| Net                income                                                      |   |                                            | 1,416,204 |   |   | 1,162,695 |   |
| Income              per              share                                     |   |                                            |      |   |   |   |   |
| Basic                                                                          |   | $                                               | 0.59      |  | $ | 0.52 |   |
| Diluted                                                                        |   | $                                               | 0.57      |   | $  | 0.48 |   |
| Weighted              average              number of common shares outstanding |   |                                            |      |   |   |   |   |
| Basic                                                                          |   |                                            | 2,412,340 |   |   | 2,231,331 |   |
| Diluted                                                                        |   |                                            | 2,490,647 |   |   | 2,433,249 |   |

|                                                                                     |   | Six                Months Ended September 30, |       |
|------------------------------------------------------------------------------------------|--------|-----------------------------------------------|------------|
|                                                                                     |   | 2006                                          |       | 2005 |   |
| Sales                                                                                    |   | $                                             | 16,056,525 |   | $ | 14,042,910 |   |
| Net                income                                                                |   |                                          | 2,993,672  |   |   | 2,052,465 |   |
| Income                per share                                                          |   |                                          |       |   |   |   |   |
| Basic                                                                                    |   | $                                             | 1.27       |   | $ | 0.93 |   |
| Diluted                                                                                  |   | $                                             | 1.20       |   | $ | 0.85 |   |
|  Weighted                average number of common shares                outstanding |   |                                          |       |   |   |   |   |
| Basic                                                                                    |   |                                          | 2,361,155  |   |   | 2,217,757 |   |
| Diluted                                                                                  |   |                                          | 2,487,715  |   |   | 2,423,679 |   |

|                                                                                                                                                                                                                                                                   |   | September                30, |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|------------|
|                                                                                                                                                                                                                                                              |   |  2006                   |       |  2005 |   |
| ASSETS                                                                                                                                                                                                                                                            |   |                         |       |   |   |
| Cash                                                                                                                                                                                                                                                              |   | $                            | 3,069,981  |   | $ | 3,015,491 |   |
| Accounts                receivable and amount due from factor                                                                                                                                                                                                     |   |                         | 5,881,341  |   |   | 5,389,222 |   |
| Inventory                                                                                                                                                                                                                                                         |   |                         | 6,320,688  |   |   | 4,062,086 |   |
| Prepaid                expenses                                                                                                                                                                                                                                   |   |                         | 332,365    |   |   | 196,863 |   |
| TOTAL                CURRENT ASSETS                                                                                                                                                                                                                               |   |                         | 15,604,375 |   |   | 12,663,662 |   |
| INVESTMENT                IN HONG KONG JOINT VENTURE                                                                                                                                                                                                              |   |                         | 8,603,010  |   |   | 7,140,859 |   |
| PROPERTY,                PLANT AND EQUIPMENT - NET                                                                                                                                                                                                                |   |                         | 56,015     |   |   | 62,212 |   |
| DEFERRED                TAXES AND OTHER ASSETS                                                                                                                                                                                                                    |   |                         | 642,870    |   |   | 491,870 |   |
| TOTAL                ASSETS                                                                                                                                                                                                                                       |   | $                            | 24,906,270 |   | $ | 20,358,603 |   |
|                                                                                                                                                                                                                                                              |
| LIABILITIES                AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                                         |   |                         |       |   |   |   |   |
| Accounts                payable                                                                                                                                                                                                                                   |   | $                            | 1,315,296  |   | $ | 1,604,845 |   |
| Accrued                liabilities                                                                                                                                                                                                                                |   |                         | 1,909,400  |   |   | 1,147,189 |   |
| TOTAL                CURRENT LIABILITIES                                                                                                                                                                                                                          |   |                         | 3,224,696  |   |   | 2,752,034 |   |
| LONG                TERM DEBT                                                                                                                                                                                                                                     |   |                         | -          |   |   | - |   |
| SHAREHOLDERS’                EQUITY                                                                                                                                                                                                                         |   |                         |       |   |   |   |   |
| Common                stock, $.01 par value per share; authorized 20,000,000 shares; issued                and                outstanding 2,412,408 and 2,258,409 shares at September 30, 2006                and                September 30, 2005, respectively |   |                         | 18,095     |   |   | 16,940 |   |
| Additional                paid-in capital                                                                                                                                                                                                                         |   |                         | 12,657,760 |   |   | 11,577,583 |   |
| Retained                earnings                                                                                                                                                                                                                                  |   |                         | 9,005,719  |   |   | 6,012,046 |   |
| TOTAL                SHAREHOLDERS’ EQUITY                                                                                                                                                                                                                   |   |                         | 21,681,574 |   |   | 17,606,569 |   |
| TOTAL                LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                                   |   | $                            | 24,906,270 |   | $ | 20,358,603 |   |

*All      shares have been adjusted to reflect the 4-for-3 stock dividend payable on      October 16, 2006.*

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