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<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"><b>NOTE B — ORGANIZATION</b></p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">The Company is a distributor and supplier of batteries and related power accessories to a diverse range of industries, and a provider of third-party fulfillment and logistics services and value-added solutions.  The Company’s primary logistics center is located in Coppell, Texas and regional logistic centers are located in Las Vegas, Nevada and Atlanta, Georgia.  The Company’s customers are primarily located in the United States.  A small portion of the Company’s sales is to customers located in the United Kingdom, Australia, Ireland, Japan, China, Canada and Latin America.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">Until December 20, 2006, the Company was a wholly owned consolidated subsidiary of Zunicom, Inc. (“Zunicom”), a Texas corporation, whose stock is quoted on the OTC Markets under the symbol “ZNCM.”  On December 20, 2006, the SEC declared effective a registration statement filed by the Company registering the sale of 3,000,000 shares of its common stock, including 1,000,000 shares owned by Zunicom (the “IPO”).  As a result of the IPO, Zunicom’s interest in the Company was reduced to 40%.  Zunicom no longer owns a controlling interest in UPG; however, as the largest shareholder, Zunicom does have significant influence over UPG.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">On January 8, 2009, the Company formed a limited liability company under the name Monarch Outdoor Adventures LLC d/b/a Monarch Hunting (“Monarch”), through which it acquired all of the tangible and intangible assets of a manufacturer and retailer of high-quality hunting products including battery and solar powered deer feeders, hunting blinds, stands and accessories for approximately $892,000.  Monarch is located in Arlington, Texas and has customers throughout the United States.  Monarch’s revenue and assets are not material to the Company’s consolidated financial statements. At March 31, 2012, the carrying value of Monarch’s assets was approximately $400,000. On May 4, 2012, the Company sold Monarch for $130,000.  See Note K.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">On April 20, 2011, the Company completed an acquisition of substantially all of the business assets of Progressive Technologies, Inc. (“PTI”), a North Carolina company that designs and builds custom battery packs.  The acquisition consideration totaled approximately $3,300,000.  PTI’s expertise in lithium-ion battery packs, among other chemistries, further enhances the Company’s product and service offerings.  In addition, PTI’s products will strengthen the Company’s position in the medical field and other market segments.  On September 1, 2011, PTI changed its legal name to ProTechnologies, Inc. </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">        On January 9, 2013, the Company became the sole member of a newly formed entity, SAM Security, LLC (“SAM”).  SAM provides a do-it-yourself (“DIY”) home security system to retailers throughout the U.S. </p>
<div align="left" style="font: 13.6px/normal 'times new roman'; color: #000000; text-transform: none; text-indent: 0pt; letter-spacing: normal; margin-right: 0pt; margin-left: 0pt; word-spacing: 0px; display: block; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman'; font-size: 10pt; font-weight: bold; display: inline;">NOTE E — LINE OF CREDIT</font></div>
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<div style="font: 13.6px/normal 'times new roman'; color: #000000; text-transform: none; text-indent: 0pt; letter-spacing: normal; word-spacing: 0px; display: block; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman'; font-size: 10pt; font-weight: bold; display: inline;"> </font></div>
<div align="left" style="font: 13.6px/normal 'times new roman'; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; margin-right: 0pt; margin-left: 0pt; word-spacing: 0px; display: block; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman'; font-size: 10pt; display: inline;">The credit agreement contains customary negative covenants restricting the Company’s ability to take certain actions without Comerica’s consent, including incurring additional indebtedness, transferring or encumbering assets, and acquiring other businesses.  If there is an “event of default”, including failure to pay, bankruptcy, breach of covenants and breach of representations and warranties, all amounts outstanding under the Credit Agreement will become immediately due and payable.  In addition, the Company must maintain certain financial covenants on a quarterly basis.</font></div>
<div align="left" style="font: 13.6px/normal 'times new roman'; color: #000000; text-transform: none; text-indent: 0pt; letter-spacing: normal; margin-right: 0pt; margin-left: 0pt; word-spacing: 0px; display: block; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman'; font-size: 10pt; display: inline;">  </font></div>
<div align="left" style="font: 13.6px/normal 'times new roman'; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; margin-right: 0pt; margin-left: 0pt; word-spacing: 0px; display: block; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman'; font-size: 10pt; font-style: italic; display: inline;">Interest Rate Swap</font></div>
<div style="font: 13.6px/normal 'times new roman'; color: #000000; text-transform: none; text-indent: 0pt; letter-spacing: normal; word-spacing: 0px; display: block; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;"> </div>
<div align="left" style="font: 13.6px/normal 'times new roman'; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; margin-right: 0pt; margin-left: 0pt; word-spacing: 0px; display: block; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman'; font-size: 10pt; display: inline;">The Company terminated an Interest Swap Agreement (“ISA”) it had with its previous lender in connection with a prior credit agreement and, consequently, discontinued hedge accounting as of December 16, 2009.  The Company continues to incur interest expense commensurate with its original, hedged risk, and there is currently no indication that interest payments on the hedged transaction would not continue.  Therefore, the realized losses related to the ISA will not be recognized immediately and will remain in accumulated other comprehensive income (loss).  These losses were reclassified into interest expense over the original contractual term of the ISA starting as of December 16, 2009 through July 5, 2012.</font></div>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"><b>NOTE H — INCOME TAXES</b></p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">The Company files income tax returns in the U.S. federal jurisdiction and various states.  With a few exceptions, the Company is no longer subject to U.S. state and local income tax examinations by tax authorities for years before 2008.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">The Company recorded income tax expense from continuing operations of approximately $157,000 and $216,000 for each of the three-month periods ended March 31, 2013 and 2012, respectively.  The Company's effective tax rate was 42.7% and 39.1% for the three-month periods ended March 31, 2013 and 2012, respectively.  The taxes were higher than the statutory rate of 34% primarily as a result of state income taxes and items not deductible for income tax reporting.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"><b>NOTE C — STOCK-BASED COMPENSATION</b></p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">At March 31, 2013, common shares reserved for future issuance include 1,980,000 shares issuable under the 2006 Stock Option Plan, as amended, as well as 20,000 shares issuable upon exercise of options not granted under the 2006 Stock Option Plan.  At March 31, 2013, there were 1,433,842 options outstanding under the 2006 Stock Option Plan, and 546,158 options are available for future grants.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">There were no options granted during the three months ended March 31, 2013 or 2012. </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">At March 31, 2013, the aggregate intrinsic value of options outstanding and exercisable was $124,889.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">  </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">At March 31, 2013, all outstanding options under the 2006 Stock Option Plan were fully vested with no remaining unrecognized compensation expense.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">On June 25, 2007, Zunicom issued restricted stock to certain employees of UPG for past and future services.  The Company amortized the fair value of 398,144 shares, which had not been forfeited, and compensation expense has been fully vested.  On June 24, 2011, Zunicom issued an additional 99,538 restricted shares of its common stock to the same Company employees who received the grant in June 2007 and who were still employed by the Company.  As a condition to this grant, the grantees agreed to extend the restricted period on the shares issued in June 2007 for an additional three years.  As a result, all 497,682 shares will vest on June 24, 2014.  The Company is amortizing the fair value as compensation expense over the 36-month vesting period in accordance with ASC Topic 718, Compensation – Stock Compensation.  Approximately $2,800 compensation expense related to these shares was recorded during the three-month periods ended for both March 31, 2013 and 2012.  At March 31, 2013, there is approximately $14,200 of remaining unrecognized compensation expense associated with this grant.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">On March 21, 2007, the Company issued stock options to non-employees to purchase 20,000 shares of the Company’s common stock at an exercise price of $7.00 per share vesting over three years and expiring December 19, 2016.  These stock options remain outstanding as of March 31, 2013. </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"><b>NOTE F — CONCENTRATIONS</b></p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">At March 31, 2013, the Company had receivables due from one customer of approximately $2.5 million and as of March 31, 2012, the Company had receivables due from a different customer of approximately $2.7 million.During the three months ended March 31, 2013, one customer accounted for 17.8% of net sales.  During the three months ended March 31, 2012, another customer accounted for 11% of net sales.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"><b>NOTE I— GOODWILL</b></p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets of the acquired business. Goodwill is tested annually for impairment and when events or circumstances change to suggest that the carrying amount may not be recoverable. For purposes of impairment testing, goodwill is allocated to reporting units, which are either at the operating segment level or one reporting level below the operating segment. Goodwill is recorded in the financial statements at cost less accumulated impairment losses.  In the second quarter of 2012, management performed the required annual impairment test under the qualitative assessment methodology and determined that goodwill was not impaired.</p>
3000000
1000000
0.40
892000000
3300000000
40000000
30000000
34000000
4000000
47619
Monthly
12800000
3900000
0.0208
0.34
0.34
1433842
P36M
99538
P3Y
497682
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"><b>NOTE A — BASIS OF PRESENTATION</b></p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">The condensed consolidated interim unaudited financial statements of Universal Power Group, Inc. (“UPG” or the “Company”), a Texas corporation, included in this quarterly report have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included for the three-month periods ended March 31, 2013 and 2012.  The results for the three-month period ended March 31, 2013 are not necessarily indicative of the results that may be expected for the full year.  Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with GAAP have been condensed or omitted.  The unaudited condensed consolidated financial statements included in this filing should be read in conjunction with the Company's audited financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2012, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 29, 2013.  The condensed consolidated balance sheet of the Company as of December 31, 2012 has been derived from the audited consolidated balance sheet as of that date.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"><b>NOTE D — NET INCOME (LOSS) PER SHARE</b></p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding for the period.  The Company’s common stock equivalents include all common stock issuable upon the exercise of outstanding stock options and warrants.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">For the three-month period ended March 31, 2013, the dilutive effect of 852,592 stock options is included in the calculation and 601,250 stock options are excluded from the calculation as they are antidilutive.  For the three-month period ended March 31, 2012, the dilutive effect of 852,592 stock options is included in the calculation and 571,250 stock options are excluded from the calculation as they are antidilutive.  </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"><b>NOTE G — LEGAL PROCEEDINGS</b></p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 13.2pt 0pt 0cm; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">The Company is not currently party to any legal proceedings than those arising in the ordinary course of business, which management does not believe will have a material adverse effect on the Company’s financial position, operating results, or cash flows, regardless of the outcome.</p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"><b>NOTE J — SEGMENT AND GEOGRAPHIC INFORMATION</b></p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"> </p>
<p style="font: 10pt/normal times, serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="body">The accounting standard for segment reporting requires enterprises to report financial information and descriptive information about reportable operating segments.  It also establishes standards for related disclosures about products and services, geographic areas and major customers.  The Company evaluated the accounting standard for segment reporting and determined that the Company operates in only one segment.</p>
852592
852592
601250
1
84000
812000
3608000
4544000
896000
345000
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal"><b>NOTE K — DISCONTINUED OPERATIONS</b></p>
<p style="font: 10pt/normal times, serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="body"><b> </b></p>
<p style="font: 10pt/normal 'times new roman', serif; margin: 0cm 0cm 0pt; color: #000000; text-transform: none; text-indent: 18pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;" class="msonormal">On May 4, 2012, pursuant to a Securities Purchase Agreement, dated as of May 4, 2012 (the “Agreement”), the Company sold all of the issued and outstanding membership interests of Monarch for $130,000.  Of the purchase price, $50,000 was paid in cash at closing and $80,000 was evidenced by a 6% secured promissory note maturing May 1, 2014.  The principal amount of the note and all accrued interest thereon is payable in 24 equal monthly installments of $3,692 beginning on June 1, 2012.  The note is secured by a pledge of all of the membership interests in Monarch as well as a lien on all of Monarch’s assets.  The purchasers also agreed to sublet from the Company for a minimum term of two years the premises used by Monarch at an annual rental of $42,000.  The Agreement contains representations and warranties, covenants and indemnification provisions typical of those in these types of transactions.  UPG realized a pre-tax loss of approximately $600,000 related to the sale of Monarch including lease obligations retained for the manufacturing facility.  </p>
2700000
2500000
0.11
0.178
216000
157000
0.391
0.427
130000000
50000000
80000000
0.06
24
3692000
P2Y
42000000
400000000
398144
2800
2800
14200
1980000
546158
20000
124889000
0001372000upg:NonEmployeeStockOptionsMember2007-03-012007-03-21
P3Y
7.00
2016-12-19
0001372000us-gaap:StockOptionsMember2012-01-012012-03-31
571250
0.0208
0001372000us-gaap:LimitedLiabilityCompanyMember2012-05-012012-05-04
Monthly
600000000
20000