Infinite Reality, Inc. entered into a definitive merger agreement to acquire Universal Security Instruments, Inc. (NYSEAM:UUU) in a reverse merger transaction on February 25, 2022. Pursuant to the Merger Agreement, Infinite Reality shareholders acquire the right to convert their Infinite Reality common stock held immediately prior to the Merger into Universal Security Instruments, Inc. (USI) common stock. Each share of Infinite Reality common stock will convert into the right to receive 0.437608078 shares of USI common stock at the Effective Time, subject to certain adjustments, floors, and ceilings, as specified in the Merger Agreement, based on an enterprise valuation of the combined entity of $500 million. As part of the transaction, USI announced that it is evaluating strategic alternatives to maximize the value of its safety and security device operating business. Immediately following the closing of the merger, the Infinite Reality shareholders will hold approximately 97% of USI's outstanding common stock and the shareholders of USI prior to the merger will retain ownership of approximately 3% of USI's outstanding shares.

As a result of the transaction, USI will change its name to Infinite Reality, Inc. and the Infinite Reality board of directors and management will lead the merged company, while USI's current management will continue to manage the USI assets and operating business. If USI or Infinite Reality accepts a superior offer and terminates the Merger Agreement, the terminating party will pay a breakup fee to the non-terminating party covering its out-of-pocket expenses, subject to a cap of $0.1 million plus 4% of the market capitalization of USI as of the Effective Date. On March 8, 2022, Infinite Reality has entered into a Standby Equity Purchase Agreement with Yorkville Global Advisors, LP for up to $200 million of equity financing upon completion of the announced merger with Universal Security.

The transaction is subject to approval by shareholders of both Infinite Reality and USI, as well as SEC clearance and stock exchange approval. The Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger, have been approved by the boards of directors of USI and Infinite Reality. The transaction is expected to close in the second quarter of 2022.

Infinite Reality, Inc. cancelled the acquisition of Universal Security Instruments, Inc. (NYSEAM:UUU) in a reverse merger transaction on December 12, 2022.