INVESTMENT IN THE HONG KONG JOINT VENTURE

12 Months Ended

Mar. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Joint Ventures Disclosure [Text Block]

NOTE C – INVESTMENT IN THE HONG KONG JOINT VENTURE

The Company holds a 50% interest in a joint venture with a Hong Kong corporation, which has manufacturing facilities in the People’s Republic of China, for the manufacturing of consumer electronic products. As of March 31, 2019 and 2018, the Company has an investment balance of $8,441,889 and $10,023,275, respectively for its 50% interest in the Hong Kong Joint Venture. There are no material differences between US-GAAP and those used by the Hong Kong Joint Venture.

The following represents summarized financial information derived from the financial statements of the Hong Kong Joint Venture as of March 31, 2019 and 2018.

	March 31,
	2019		2018
Current assets	$	13,953,342	$	12,515,645
Property and other assets		5,949,528		10,687,962
Total assets	$	19,902,870	$	23,203,607
Current liabilities	$	2,344,644	$	2,707,429
Non-current liabilities		388,437		389,961
Equity		17,169,789		20,106,217
Total liabilities and equity	$	19,902,870	$	23,203,607

	For the Year Ended March 31,
	2019			2018
Net sales	$	13,252,710		$	14,010,358
Gross profit		1,716,392			1,211,742
Net loss		(1,791,405	)		(2,864,061	)

During the years ended March 31, 2019 and 2018, the Company purchased $10,982,518 and $10,505,864, respectively, of finished product from the Hong Kong Joint Venture, which represents 87.2% and 97.8%, respectively, of the Company’s total finished product purchases.

At March 31, 2019 and 2018, the Company had outstanding $4,962,023 and $3,838,627 under an extended payment term agreement with the Hong Kong Joint Venture. The agreement provides extended payment terms for the purchase of inventory from the Hong Kong Joint Venture. Purchases under the agreement are limited to $4,000,000, bear interest at 5.50%, are for a term of one hundred-twenty (120) days, and are unsecured. Dividends declared and paid by the Hong Kong Joint Venture, which amounted to $0 and $0 for the fiscal years ended March 31, 2019 and 2018, respectively, are first used to repay any outstanding balance on the agreement. The balance outstanding under this agreement at March 31, 2019 is $4,962,023 with $2,758,960 of this amount being beyond agreed repayment terms.

The Company’s investment in the Hong Kong Joint Venture as recorded on the Company’s consolidated balance sheets has been adjusted for the effect of intercompany profit of the Hong Kong Joint Venture in the ending inventory of the Company.