Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Feb. 28, 2014 | 29-May-14 | Aug. 31, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 28-Feb-14 | ' | ' |
Entity Registrant Name | 'REPRO MED SYSTEMS INC | ' | ' |
Entity Central Index Key | '0000704440 | ' | ' |
Current Fiscal Year End Date | '--02-28 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 36,661,667 | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Public Float | ' | ' | $5,707,548 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Feb. 28, 2014 | Feb. 28, 2013 |
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $2,227,398 | $1,930,321 |
Certificates of deposit | 258,590 | 257,009 |
Accounts receivable less allowance for doubtful accounts of $26,450 and $17,450 for February 28, 2014, and February 28, 2013, respectively | 1,744,813 | 1,114,847 |
Inventory | 818,723 | 1,150,129 |
Prepaid expenses | 245,767 | 180,651 |
Total Current Assets | 5,295,291 | 4,632,957 |
PROPERTY & EQUIPMENT, net | 839,059 | 875,986 |
OTHER ASSETS | ' | ' |
Patents, net of accumulated amortization of $119,436 and $112,090 at February 28, 2014 and February 28, 2013, respectively | 43,305 | 22,913 |
Other | 31,053 | 60,369 |
Total Other Assets | 74,358 | 83,282 |
TOTAL ASSETS | 6,208,708 | 5,592,225 |
CURRENT LIABILITIES | ' | ' |
Note payable - current portion | ' | 1,474 |
Notes payable to related parties - current portion | ' | 43,971 |
Deferred capital gain - current portion | 22,481 | 22,481 |
Accounts payable | 246,622 | 110,358 |
Accrued expenses | 263,465 | 169,790 |
Accrued payroll and related taxes | 72,976 | 50,195 |
Accrued income tax liability | 166,358 | 127,090 |
Total Current Liabilities | 771,902 | 525,359 |
OTHER LIABILITIES | ' | ' |
Notes payable to related parties - less current portion | ' | 393,861 |
Deferred capital gain - less current portion | 89,936 | 112,414 |
Deferred tax liability | 155,000 | 204,000 |
Total Other Liabilities | 244,936 | 710,275 |
Total Liabilities | 1,016,838 | 1,235,634 |
STOCKHOLDERS' EQUITY | ' | ' |
Common stock, $0.01 par value, 50,000,000 shares authorized, 38,936,667 shares issued, and 36,661,667 shares outstanding | 389,367 | 389,367 |
Additional paid-in capital | 3,512,294 | 3,512,294 |
Retained earnings | 1,483,959 | 780,530 |
Total Stockholders' Equity before Treasury Stock | 5,385,620 | 4,682,191 |
Less: Treasury stock, 2,275,000 shares at cost | -142,000 | -142,000 |
Less: Deferred compensation cost | -51,750 | -183,600 |
Total Stockholders' Equity | 5,191,870 | 4,356,591 |
Total Liabilities and Stockholders' Equity | $6,208,708 | $5,592,225 |
BALANCE_SHEETS_PARENTHETICAL
BALANCE SHEETS (PARENTHETICAL) (USD $) | Feb. 28, 2014 | Feb. 28, 2013 |
BALANCE SHEETS [Abstract] | ' | ' |
Accounts receivable, allowance for doubtful accounts | $26,450 | $17,450 |
Patents, accumulated amortization | $119,436 | $112,090 |
Common stock, par value per share | $0.01 | $0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 38,936,667 | 38,936,667 |
Common stock, shares outstanding | 36,661,667 | 36,661,667 |
Treasury stock, shares | 2,275,000 | 2,275,000 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
STATEMENTS OF OPERATIONS [Abstract] | ' | ' |
NET SALES | $8,698,852 | $7,763,953 |
Costs and Expenses | ' | ' |
Cost of goods solds | 3,388,774 | 2,819,113 |
Selling, general and administrative | 3,851,298 | 3,543,889 |
Research and development | 218,150 | 147,576 |
Depreciation and amortization | 232,959 | 190,971 |
Total Costs and Expenses | 7,691,181 | 6,701,549 |
Net Operating Profit | 1,007,671 | 1,062,404 |
Other Income/(Expenses) | ' | ' |
Interest expense | -4,547 | -28,280 |
Gain / (Loss) foreign currency exchange | -97 | -4,095 |
Interest and other income | 7,426 | 8,081 |
Total Other Income (Expenses) | 2,782 | -24,294 |
INCOME BEFORE TAXES | 1,010,453 | 1,038,110 |
Income Tax Expense | -307,024 | -312,347 |
NET INCOME | $703,429 | $725,763 |
NET INCOME PER SHARE | ' | ' |
Basic | $0.02 | $0.02 |
Diluted | $0.02 | $0.02 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ' | ' |
Basic | 36,661,667 | 36,011,448 |
Diluted | 36,661,667 | 36,036,362 |
STATEMENT_OF_STOCKHOLDERS_EQUI
STATEMENT OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Deferred Compensation Cost [Member] |
Balance at Feb. 29, 2012 | $3,550,728 | $374,717 | $3,263,244 | $54,767 | ($142,000) | ' |
Balance, shares at Feb. 29, 2012 | ' | 37,471,667 | ' | ' | ' | ' |
Issuance of common stock for employee stock awards | 80,100 | 14,650 | 249,050 | ' | ' | -183,600 |
Issuance of common stock for employee stock awards, shares | ' | 1,465,000 | ' | ' | ' | ' |
Net income | 725,763 | ' | ' | 725,763 | ' | ' |
Balance at Feb. 28, 2013 | 4,356,591 | 389,367 | 3,512,294 | 780,530 | -142,000 | -183,600 |
Balance, shares at Feb. 28, 2013 | ' | 38,936,667 | ' | ' | ' | ' |
Amortization of deferred compensation cost | 131,850 | ' | ' | ' | ' | 131,850 |
Net income | 703,429 | ' | ' | 703,429 | ' | ' |
Balance at Feb. 28, 2014 | $5,191,870 | $389,367 | $3,512,294 | $1,483,959 | ($142,000) | ($51,750) |
Balance, shares at Feb. 28, 2014 | ' | 38,936,667 | ' | ' | ' | ' |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net income | $703,429 | $725,763 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Amortization of deferred compensation cost | 131,850 | 80,100 |
Depreciation and amortization | 232,959 | 190,971 |
Deferred capital gain - building lease | -22,478 | -22,481 |
Deferred taxes | -49,000 | 82,637 |
Changes in operating assets and liabilities: | ' | ' |
Increase in accounts receivable | -629,966 | -230,120 |
Decrease in inventory | 331,406 | 17,327 |
Decrease (Increase) in prepaid expense | -65,116 | 8,251 |
Decrease (Increase) in other assets | 29,316 | -32,213 |
Increase (Decrease) in accounts payable | 136,264 | -89,169 |
Increase in accrued payroll and related taxes | 22,781 | 8,644 |
Increase in accrued expense | 93,675 | 15,990 |
Increase in accrued income tax liability | 39,268 | 29,090 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 954,388 | 784,790 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Payments for property and equipment | -188,686 | -563,567 |
Payments for patents | -27,738 | -2,850 |
Purchase of certificates of deposit | -1,581 | -1,781 |
NET CASH USED IN INVESTING ACTIVITIES | -218,005 | -568,198 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Payments to note payable to related parties | -437,832 | -41,417 |
Payments on notes payable | -1,474 | -2,077 |
NET CASH USED IN FINANCING ACTIVITIES | -439,306 | -43,494 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 297,077 | 173,098 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 1,930,321 | 1,757,223 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 2,227,398 | 1,930,321 |
Supplemental Information | ' | ' |
Cash paid during the years for: Interest | 4,547 | 28,280 |
Cash paid during the years for: Taxes | 317,773 | 213,793 |
NON-CASH FINANCING AND INVESTING ACTIVITIES | ' | ' |
Issuance of common stock as incentives | ' | $263,700 |
NATURE_OF_OPERATIONS_AND_SUMMA
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||
NOTE 1 | NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
NATURE OF OPERATIONS | |||||||||
REPRO-MED SYSTEMS, INC. (the "Company") designs, manufactures and markets proprietary medical devices primarily for the ambulatory infusion market and emergency medical applications. The FDA regulates these products. The Company is in one line of business. | |||||||||
CASH AND CASH EQUIVALENTS | |||||||||
For purposes of the statement of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. Occasionally, the Company has cash held in excess of $250,000 at a single depository, which exceeds the FDIC insurance limits and is, therefore, uninsured. | |||||||||
At February 28, 2014, cash equivalents consisted of money market funds aggregated to $1,655,554. | |||||||||
CERTIFICATES OF DEPOSIT | |||||||||
The certificates of deposit are recorded at cost plus accrued interest. The certificates of deposit earn interest at a rate of 0.4% to 0.55% and mature in September 2014 and February 2015. | |||||||||
INVENTORY | |||||||||
Inventories of raw materials are stated at the lower of standard cost, which approximates average cost, or market value including allocable overhead. Work-in-process and finished goods are stated at the lower of standard cost or market value and include direct labor and allocable overhead. | |||||||||
PATENTS | |||||||||
Costs incurred in obtaining patents have been capitalized and are being amortized over seventeen years. | |||||||||
INCOME TAXES | |||||||||
Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. | |||||||||
The Company believes that it has no uncertain tax positions requiring disclosure or adjustment. Generally, tax years starting with 2010 are subject to examination by income tax authorities. | |||||||||
PROPERTY, EQUIPMENT, AND DEPRECIATION | |||||||||
Property and equipment is stated at cost and is depreciated using the straight-line method over the estimated useful lives of the respective assets. | |||||||||
STOCK-BASED COMPENSATION | |||||||||
The Company accounts for stock issued for services using the fair value method. The measurement date of shares issued for service is the date when the counterparty's performance is complete. | |||||||||
NET INCOME PER COMMON SHARE | |||||||||
Basic earnings per share are computed on the weighted average of common shares outstanding during each year. Diluted earnings per share include only an increase in the weighted average shares by the common shares issuable upon exercise of employee and director stock options (Note 7). | |||||||||
Fiscal Year Ended | |||||||||
28-Feb-14 | 28-Feb-13 | ||||||||
Net income | $ | 703,429 | $ | 725,763 | |||||
Weighted Average Outstanding Shares: | |||||||||
Outstanding shares | 36,661,667 | 36,011,448 | |||||||
Option shares includable | - | 24,914 | |||||||
36,661,667 | 36,036,362 | ||||||||
Net income per share | |||||||||
Basic | $ | 0.02 | $ | 0.02 | |||||
Diluted | $ | 0.02 | $ | 0.02 | |||||
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS | |||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Important estimates include but are not limited to, asset lives, valuation allowances, inventory, and accruals. | |||||||||
SUBSEQUENT EVENTS EVALUATION | |||||||||
The Company has evaluated subsequent events through May 29, 2014, the date on which the financial statements were issued. There were no material subsequent events that required recognition or additional disclosure in these financial statements. | |||||||||
REVENUE RECOGNITION | |||||||||
Sales of manufactured products are recorded when shipment occurs. The Company's revenue stream is derived from the sale of an assembled product. Other service revenues are recorded as the service is performed. Shipping and handling costs generally are billed to customers and are included in sales. The Company does not accept return of goods shipped unless it is a Company error. The only credits provided to customers are for defective merchandise. | |||||||||
EMERGING ACCOUNTING STANDARDS | |||||||||
Management does not believe that any of the standards adopted by the Financial Accounting Standards Board but are not yet effective will have a material effect on the Company's financial reporting. | |||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||
The carrying amounts reported in the balance sheet for cash, trade receivables, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. | |||||||||
ACCOUNTING FOR LONG-LIVED ASSETS | |||||||||
The Company reviews its long-lived assets for impairment at least annually or whenever the circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable. As of February 28, 2014, the Company does not believe that any of its assets are impaired. |
INVENTORY
INVENTORY | 12 Months Ended | |||||||
Feb. 28, 2014 | ||||||||
INVENTORY [Abstract] | ' | |||||||
INVENTORY | ' | |||||||
NOTE 2 | INVENTORY | |||||||
Inventory consists of: | ||||||||
28-Feb-14 | 28-Feb-13 | |||||||
Raw materials | $ | 306,881 | $ | 625,934 | ||||
Work in progress | 145,264 | 45,820 | ||||||
Finished goods | 366,578 | 478,375 | ||||||
$ | 818,723 | $ | 1,150,129 |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||||
Feb. 28, 2014 | |||||||||||
PROPERTY AND EQUIPMENT [Abstract] | ' | ||||||||||
PROPERTY AND EQUIPMENT | ' | ||||||||||
NOTE 3 | PROPERTY AND EQUIPMENT | ||||||||||
Property and equipment consists of the following at: | |||||||||||
28-Feb-14 | 28-Feb-13 | Estimated Useful Lives | |||||||||
Land | $ | 54,030 | $ | 54,030 | |||||||
Building | 171,094 | 171,094 | 20 years | ||||||||
Furniture, office equipment, and leasehold improvements | 967,483 | 844,747 | 3-10 years | ||||||||
Manufacturing equipment and tooling | 1,473,827 | 1,408,113 | 3-12 years | ||||||||
2,666,434 | 2,477,984 | ||||||||||
Less: accumulated depreciation | 1,827,375 | 1,601,998 | |||||||||
Property and equipment, net | $ | 839,059 | $ | 875,986 | |||||||
Depreciation expense was $225,613 and $186,521 for the years ended February 28, 2014, and February 28, 2013, respectively. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended | |
Feb. 28, 2014 | ||
RELATED PARTY TRANSACTIONS [Abstract] | ' | |
RELATED PARTY TRANSACTIONS | ' | |
NOTE 4 | RELATED PARTY TRANSACTIONS | |
LEASED AIRCRAFT | ||
The Company leases an aircraft from a company controlled by the President. The lease payments aggregated $21,500 for both the years ended February 28, 2014, and February 28, 2013. The original lease agreement has expired and the Company is currently on a month-to-month basis for rental payments. | ||
BUILDING LEASE | ||
In February 2011, the Company elected Mr. Mark Pastreich as a Director. Mr. Pastreich is a principal in the entity that owns the building leased by REPRO-MED SYSTEMS, INC. The Company is in year fifteen of a twenty-year lease. There have been no changes to lease terms since his directorship and none are expected through the life of the current lease. |
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | |
Feb. 28, 2014 | ||
LONG-TERM DEBT [Abstract] | ' | |
LONG-TERM DEBT | ' | |
NOTE 5 | LONG-TERM DEBT | |
In February 2009, the Company was granted a loan from a director of the Company for $672,663, payable in 144 monthly installments of $5,754 at a rate of 6.00% interest. The Company issued the director 755,000 shares of common stock at the price of $0.11 per share in June 2009 further to reduce the debt. The loan was repaid in full in May, 2013. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | |
Feb. 28, 2014 | ||
STOCKHOLDERS' EQUITY [Abstract] | ' | |
SHAREHOLDERS' EQUITY | ' | |
NOTE 6 | STOCKHOLDERS' EQUITY | |
In July 2012, 1,465,000 shares were authorized to issue to employees as share compensation valued at $0.18 per share, the market value on the date of the board authorization. The value of these shares will be amortized into operations over the one to two year restriction on the shares. Amortization amounted to $131,850 and $80,100 for the years ended February 28, 2014, and February 28, 2013, respectively. |
STOCK_OPTIONS
STOCK OPTIONS | 12 Months Ended | |
Feb. 28, 2014 | ||
STOCK OPTIONS [Abstract] | ' | |
STOCK OPTIONS | ' | |
NOTE 7 | STOCK OPTIONS | |
There are no outstanding options as of February 28, 2014, and February 28, 2013. |
SALELEASEBACK_TRANSACTION_OPER
SALE-LEASEBACK TRANSACTION - OPERATING LEASE | 12 Months Ended | ||||
Feb. 28, 2014 | |||||
SALE-LEASEBACK TRANSACTION - OPERATING LEASE [Abstract] | ' | ||||
SALE-LEASEBACK TRANSACTION - OPERATING LEASE | ' | ||||
NOTE 8 | SALE-LEASEBACK TRANSACTION - OPERATING LEASE | ||||
On February 25, 1999, the Company entered into a sale-leaseback arrangement whereby the Company sold its land and building at 24 Carpenter Road in Chester, New York and leased it back for a period of 20 years. The leaseback is accounted for as an operating lease. The gain of $449,617 realized in this transaction has been deferred and is amortized to income in proportion to rental expense over the term of the related lease. | |||||
At February 28, 2014, minimum future rental payments are: | |||||
Year | Minimum Rental Payments | ||||
2015 | $ | 132,504 | |||
2016 | 132,504 | ||||
2017 | 132,504 | ||||
2018 | 132,504 | ||||
2019 | 132,504 | ||||
$ | 662,520 | ||||
Rent expense for the years ended February 28, 2014, and February 28, 2013, aggregated $132,504. |
FEDERAL_AND_STATE_INCOME_TAXES
FEDERAL AND STATE INCOME TAXES | 12 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
FEDERAL AND STATE INCOME TAXES [Abstract] | ' | ||||||||
FEDERAL AND STATE INCOME TAXES | ' | ||||||||
NOTE 9 | FEDERAL AND STATE INCOME TAXES | ||||||||
The provision for income taxes consisted of at February 28, 2014, and February 28, 2013: | |||||||||
2014 | 2013 | ||||||||
State income tax: | |||||||||
Current, net of refund | $ | 984 | $ | (11,173 | ) | ||||
Federal income tax: | |||||||||
Deferred | (49,000 | ) | 82,637 | ||||||
Current | 355,040 | 240,883 | |||||||
Total | $ | 307,024 | $ | 312,347 | |||||
The reconciliation of income taxes shown in the financial statements and amounts computed by applying the Federal expected tax rate of 34% is as follows: | |||||||||
2014 | 2013 | ||||||||
Income before tax | $ | 1,010,453 | $ | 1,038,110 | |||||
Computed expected tax | $ | 343,554 | $ | 352,957 | |||||
State income and franchise tax/(refund) | 984 | (11,173 | ) | ||||||
Other | (37,514 | ) | (29,437 | ) | |||||
Provision for taxes | $ | 307,024 | $ | 312,347 | |||||
The components of deferred tax liabilities at February 28, 2014, and February 28, 2013, respectively, are as follows: | |||||||||
2014 | 2013 | ||||||||
Deferred compensation cost | $ | (17,595 | ) | $ | (62,424 | ) | |||
Depreciation and amortization | (137,405 | ) | (141,576 | ) | |||||
Deferred tax liabilities | $ | (155,000 | ) | $ | (204,000 | ) |
MAJOR_CUSTOMERS
MAJOR CUSTOMERS | 12 Months Ended | |
Feb. 28, 2014 | ||
MAJOR CUSTOMERS [Abstract] | ' | |
MAJOR CUSTOMERS | ' | |
NOTE 10 | MAJOR CUSTOMERS | |
For the year ended February 28, 2014, approximately, 39.9% of the Company's gross product revenue were derived from one major customer. At February 28, 2014, accounts receivable due from this customer was $690,102. | ||
For the year ended February 28, 2013, approximately, 27.4% and 12.2% of the Company's gross revenue were derived from two major customers. At February 28, 2013, accounts receivable due from these customers were $366,890 and $82,368, respectively. | ||
The largest customer in both years is a medical products and supplies distributor. Although a number of larger FREEDOM60® users have elected to consolidate their purchases through one or more distributors in recent years, we continue to maintain a strong direct relationship with them. We do not believe that their continued purchases of FREEDOM60® pumps, tubing, needle sets and related supplies is contingent upon the distributor. |
LEGAL_PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended | |
Feb. 28, 2014 | ||
LEGAL PROCEEDINGS [Abstract] | ' | |
LEGAL PROCEEDINGS | ' | |
NOTE 11 | LEGAL PROCEEDINGS | |
The Company commenced a declaratory judgment action in 2013 to establish the invalidity and non-infringement of claims of a patent of a competitor that alleged that our needle sets would infringe. The defendant answered the complaint and asserted various counterclaims that the Company believes are without merit. The Company subsequently added claims against the defendant to show that the defendant had engaged in various unfair business practices. The litigation is in early stage discovery. |
NATURE_OF_OPERATIONS_AND_SUMMA1
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy) | 12 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||
NATURE OF OPERATIONS | ' | ||||||||
NATURE OF OPERATIONS | |||||||||
REPRO-MED SYSTEMS, INC. (the "Company") designs, manufactures and markets proprietary medical devices primarily for the ambulatory infusion market and emergency medical applications. The FDA regulates these products. The Company is in one line of business. | |||||||||
CASH AND CASH EQUIVALENTS | ' | ||||||||
CASH AND CASH EQUIVALENTS | |||||||||
For purposes of the statement of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. Occasionally, the Company has cash held in excess of $250,000 at a single depository, which exceeds the FDIC insurance limits and is, therefore, uninsured. | |||||||||
At February 28, 2014, cash equivalents consisted of money market funds aggregated to $1,655,554. | |||||||||
CERTIFICATES OF DEPOSIT | ' | ||||||||
CERTIFICATES OF DEPOSIT | |||||||||
The certificates of deposit are recorded at cost plus accrued interest. The certificates of deposit earn interest at a rate of 0.4% to 0.55% and mature in September 2014 and February 2015. | |||||||||
INVENTORY | ' | ||||||||
INVENTORY | |||||||||
Inventories of raw materials are stated at the lower of standard cost, which approximates average cost, or market value including allocable overhead. Work-in-process and finished goods are stated at the lower of standard cost or market value and include direct labor and allocable overhead. | |||||||||
PATENTS | ' | ||||||||
PATENTS | |||||||||
Costs incurred in obtaining patents have been capitalized and are being amortized over seventeen years. | |||||||||
INCOME TAXES | ' | ||||||||
INCOME TAXES | |||||||||
Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. | |||||||||
The Company believes that it has no uncertain tax positions requiring disclosure or adjustment. Generally, tax years starting with 2010 are subject to examination by income tax authorities. | |||||||||
PROPERTY, EQUIPMENT, AND DEPRECIATION | ' | ||||||||
PROPERTY, EQUIPMENT, AND DEPRECIATION | |||||||||
Property and equipment is stated at cost and is depreciated using the straight-line method over the estimated useful lives of the respective assets. | |||||||||
STOCK-BASED COMPENSATION | ' | ||||||||
STOCK-BASED COMPENSATION | |||||||||
The Company accounts for stock issued for services using the fair value method. The measurement date of shares issued for service is the date when the counterparty's performance is complete. | |||||||||
NET INCOME PER COMMON SHARE | ' | ||||||||
NET INCOME PER COMMON SHARE | |||||||||
Basic earnings per share are computed on the weighted average of common shares outstanding during each year. Diluted earnings per share include only an increase in the weighted average shares by the common shares issuable upon exercise of employee and director stock options (Note 7). | |||||||||
Fiscal Year Ended | |||||||||
28-Feb-14 | 28-Feb-13 | ||||||||
Net income | $ | 703,429 | $ | 725,763 | |||||
Weighted Average Outstanding Shares: | |||||||||
Outstanding shares | 36,661,667 | 36,011,448 | |||||||
Option shares includable | - | 24,914 | |||||||
36,661,667 | 36,036,362 | ||||||||
Net income per share | |||||||||
Basic | $ | 0.02 | $ | 0.02 | |||||
Diluted | $ | 0.02 | $ | 0.02 | |||||
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS | ' | ||||||||
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS | |||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Important estimates include but are not limited to, asset lives, valuation allowances, inventory, and accruals. | |||||||||
SUBSEQUENT EVENTS EVALUATION | ' | ||||||||
SUBSEQUENT EVENTS EVALUATION | |||||||||
The Company has evaluated subsequent events through May 29, 2014, the date on which the financial statements were issued. There were no material subsequent events that required recognition or additional disclosure in these financial statements. | |||||||||
REVENUE RECOGNITION | ' | ||||||||
REVENUE RECOGNITION | |||||||||
Sales of manufactured products are recorded when shipment occurs. The Company's revenue stream is derived from the sale of an assembled product. Other service revenues are recorded as the service is performed. Shipping and handling costs generally are billed to customers and are included in sales. The Company does not accept return of goods shipped unless it is a Company error. The only credits provided to customers are for defective merchandise. | |||||||||
EMERGING ACCOUNTING STANDARDS | ' | ||||||||
EMERGING ACCOUNTING STANDARDS | |||||||||
Management does not believe that any of the standards adopted by the Financial Accounting Standards Board but are not yet effective will have a material effect on the Company's financial reporting. | |||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' | ||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||
The carrying amounts reported in the balance sheet for cash, trade receivables, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. | |||||||||
ACCOUNTING FOR LONG-LIVED ASSETS | ' | ||||||||
ACCOUNTING FOR LONG-LIVED ASSETS | |||||||||
The Company reviews its long-lived assets for impairment at least annually or whenever the circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable. As of February 28, 2014, the Company does not believe that any of its assets are impaired. |
NATURE_OF_OPERATIONS_AND_SUMMA2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||
Schedule of Net Income Per Common Share | ' | ||||||||
Fiscal Year Ended | |||||||||
28-Feb-14 | 28-Feb-13 | ||||||||
Net income | $ | 703,429 | $ | 725,763 | |||||
Weighted Average Outstanding Shares: | |||||||||
Outstanding shares | 36,661,667 | 36,011,448 | |||||||
Option shares includable | - | 24,914 | |||||||
36,661,667 | 36,036,362 | ||||||||
Net income per share | |||||||||
Basic | $ | 0.02 | $ | 0.02 | |||||
Diluted | $ | 0.02 | $ | 0.02 |
INVENTORY_Tables
INVENTORY (Tables) | 12 Months Ended | |||||||
Feb. 28, 2014 | ||||||||
INVENTORY [Abstract] | ' | |||||||
Schedule of Inventory | ' | |||||||
Inventory consists of: | ||||||||
28-Feb-14 | 28-Feb-13 | |||||||
Raw materials | $ | 306,881 | $ | 625,934 | ||||
Work in progress | 145,264 | 45,820 | ||||||
Finished goods | 366,578 | 478,375 | ||||||
$ | 818,723 | $ | 1,150,129 |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||||
Feb. 28, 2014 | |||||||||||
PROPERTY AND EQUIPMENT [Abstract] | ' | ||||||||||
Schedule of Property and Equipment | ' | ||||||||||
Property and equipment consists of the following at: | |||||||||||
28-Feb-14 | 28-Feb-13 | Estimated Useful Lives | |||||||||
Land | $ | 54,030 | $ | 54,030 | |||||||
Building | 171,094 | 171,094 | 20 years | ||||||||
Furniture, office equipment, and leasehold improvements | 967,483 | 844,747 | 3-10 years | ||||||||
Manufacturing equipment and tooling | 1,473,827 | 1,408,113 | 3-12 years | ||||||||
2,666,434 | 2,477,984 | ||||||||||
Less: accumulated depreciation | 1,827,375 | 1,601,998 | |||||||||
Property and equipment, net | $ | 839,059 | $ | 875,986 |
SALELEASEBACK_TRANSACTION_OPER1
SALE-LEASEBACK TRANSACTION - OPERATING LEASE (Tables) | 12 Months Ended | ||||
Feb. 28, 2014 | |||||
SALE-LEASEBACK TRANSACTION - OPERATING LEASE [Abstract] | ' | ||||
Schedule of Minimum Future Rental Payments | ' | ||||
At February 28, 2014, minimum future rental payments are: | |||||
Year | Minimum Rental Payments | ||||
2015 | $ | 132,504 | |||
2016 | 132,504 | ||||
2017 | 132,504 | ||||
2018 | 132,504 | ||||
2019 | 132,504 | ||||
$ | 662,520 |
FEDERAL_AND_STATE_INCOME_TAXES1
FEDERAL AND STATE INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
FEDERAL AND STATE INCOME TAXES [Abstract] | ' | ||||||||
Schedule of Income Tax Provision | ' | ||||||||
The provision for income taxes consisted of at February 28, 2014, and February 28, 2013: | |||||||||
2014 | 2013 | ||||||||
State income tax: | |||||||||
Current, net of refund | $ | 984 | $ | (11,173 | ) | ||||
Federal income tax: | |||||||||
Deferred | (49,000 | ) | 82,637 | ||||||
Current | 355,040 | 240,883 | |||||||
Total | $ | 307,024 | $ | 312,347 | |||||
Schedule of Income Tax Reconciliation | ' | ||||||||
The reconciliation of income taxes shown in the financial statements and amounts computed by applying the Federal expected tax rate of 34% is as follows: | |||||||||
2014 | 2013 | ||||||||
Income before tax | $ | 1,010,453 | $ | 1,038,110 | |||||
Computed expected tax | $ | 343,554 | $ | 352,957 | |||||
State income and franchise tax/(refund) | 984 | (11,173 | ) | ||||||
Other | (37,514 | ) | (29,437 | ) | |||||
Provision for taxes | $ | 307,024 | $ | 312,347 | |||||
Schedule of Deferred Tax Liabilities | ' | ||||||||
The components of deferred tax liabilities at February 28, 2014, and February 28, 2013, respectively, are as follows: | |||||||||
2014 | 2013 | ||||||||
Deferred compensation cost | $ | (17,595 | ) | $ | (62,424 | ) | |||
Depreciation and amortization | (137,405 | ) | (141,576 | ) | |||||
Deferred tax liabilities | $ | (155,000 | ) | $ | (204,000 | ) |
NATURE_OF_OPERATIONS_AND_SUMMA3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $) | 12 Months Ended |
Feb. 28, 2014 | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ' |
Cash balance insured by FDIC | $250,000 |
Money market funds | $1,655,554 |
Amortization period of patents | '17 years |
Minimum [Member] | ' |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ' |
Certificates of deposit, interest rate | 0.40% |
Maximum [Member] | ' |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ' |
Certificates of deposit, interest rate | 0.55% |
NATURE_OF_OPERATIONS_AND_SUMMA4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Net Income Per Common Share) (Details) (USD $) | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ' |
Net income | $703,429 | $725,763 |
Weighted Average Outstanding Shares: | ' | ' |
Outstanding shares | 36,661,667 | 36,011,448 |
Option shares includable | ' | 24,914 |
Weighted average number of shares outstanding | 36,661,667 | 36,036,362 |
Net income per share | ' | ' |
Basic | $0.02 | $0.02 |
Diluted | $0.02 | $0.02 |
INVENTORY_Details
INVENTORY (Details) (USD $) | Feb. 28, 2014 | Feb. 28, 2013 |
INVENTORY [Abstract] | ' | ' |
Raw materials | $306,881 | $625,934 |
Work in process | 145,264 | 45,820 |
Finished goods | 366,578 | 478,375 |
Total inventory | $818,723 | $1,150,129 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | $2,666,434 | $2,477,984 |
Less: accumulated depreciation | 1,827,375 | 1,601,998 |
Property and equipment, net | 839,059 | 875,986 |
Depreciation expense | 225,613 | 186,521 |
Land [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 54,030 | 54,030 |
Building [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 171,094 | 171,094 |
Estimated Useful Lives | '20 years | ' |
Furniture, Office Equipment, and Leasehold Improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 967,483 | 844,747 |
Furniture, Office Equipment, and Leasehold Improvements [Member] | Minimum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Lives | '3 years | ' |
Furniture, Office Equipment, and Leasehold Improvements [Member] | Maximum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Lives | '10 years | ' |
Manufacturing Equipment and Tooling [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | $1,473,827 | $1,408,113 |
Manufacturing Equipment and Tooling [Member] | Minimum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Lives | '3 years | ' |
Manufacturing Equipment and Tooling [Member] | Maximum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Lives | '12 years | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
RELATED PARTY TRANSACTIONS [Abstract] | ' | ' |
Aircraft aggregate lease payments | $21,500 | $21,500 |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | 1 Months Ended | |
Jun. 30, 2009 | Feb. 28, 2009 | |
LONG-TERM DEBT [Abstract] | ' | ' |
Loan amount | ' | $672,663 |
Debt instrument, monthly principal payment | ' | $5,754 |
Debt instrument interest rate | ' | 6.00% |
Shares of common stock issued to reduce debt | 755,000 | ' |
Shares of common stock issued, price per share | $0.11 | ' |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2014 | Feb. 28, 2013 | Jul. 31, 2012 | |
STOCKHOLDERS' EQUITY [Abstract] | ' | ' | ' |
Shares authorized for issuance | ' | ' | 1,465,000 |
Shares authorized for issuance, per share | ' | ' | $0.18 |
Amortization expense | $131,850 | $80,100 | ' |
STOCK_OPTIONS_Details
STOCK OPTIONS (Details) | Feb. 28, 2014 | Feb. 28, 2013 |
STOCK OPTIONS [Abstract] | ' | ' |
Options outstanding | ' | ' |
SALELEASEBACK_TRANSACTION_OPER2
SALE-LEASEBACK TRANSACTION - OPERATING LEASE (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
Feb. 25, 1999 | Feb. 28, 2014 | Feb. 28, 2013 | |
SALE-LEASEBACK TRANSACTION - OPERATING LEASE [Abstract] | ' | ' | ' |
2015 | ' | $132,504 | ' |
2016 | ' | 132,504 | ' |
2017 | ' | 132,504 | ' |
2018 | ' | 132,504 | ' |
2019 | ' | 132,504 | ' |
Total future rental payments | ' | 662,520 | ' |
Sale leaseback transaction, lease term | '20 years | ' | ' |
Sale leaseback transaction, deferred gain recognized | 449,617 | ' | ' |
Sale leaseback transaction, rent expense | ' | $132,504 | $132,504 |
FEDERAL_AND_STATE_INCOME_TAXES2
FEDERAL AND STATE INCOME TAXES (Schedule of Income Tax Provision) (Details) (USD $) | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
State income tax: | ' | ' |
Current, net of refund | $984 | ($11,173) |
Federal income tax: | ' | ' |
Deferred | -49,000 | 82,637 |
Current | 355,040 | 240,883 |
Total income tax provision | $307,024 | $312,347 |
FEDERAL_AND_STATE_INCOME_TAXES3
FEDERAL AND STATE INCOME TAXES (Schedule of Income Tax Reconciliation) (Details) (USD $) | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
FEDERAL AND STATE INCOME TAXES [Abstract] | ' | ' |
Income before tax | $1,010,453 | $1,038,110 |
Computed expected tax | 343,554 | 352,957 |
State income and franchise tax/(refund) | 984 | -11,173 |
Other | -37,514 | -29,437 |
Total income tax provision | $307,024 | $312,347 |
Federal expected tax rate | 34.00% | ' |
FEDERAL_AND_STATE_INCOME_TAXES4
FEDERAL AND STATE INCOME TAXES (Schedule of Deferred Tax Liabilities) (Details) (USD $) | Feb. 28, 2014 | Feb. 28, 2013 |
FEDERAL AND STATE INCOME TAXES [Abstract] | ' | ' |
Deferred compensation cost | ($17,595) | ($62,424) |
Depreciation and amortization | -137,405 | -141,576 |
Deferred tax liabilities | ($155,000) | ($204,000) |
MAJOR_CUSTOMERS_Details
MAJOR CUSTOMERS (Details) (USD $) | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Revenue, Major Customer [Line Items] | ' | ' |
Accounts receivable | $1,744,813 | $1,114,847 |
Customer One [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Percentage of revenue from customers | 39.90% | 27.40% |
Accounts receivable | 690,102 | 366,890 |
Customer Two [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Percentage of revenue from customers | ' | 12.20% |
Accounts receivable | ' | $82,368 |