Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Nov. 30, 2014 | Jan. 14, 2015 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Nov-14 | |
Entity Registrant Name | REPRO MED SYSTEMS INC | |
Entity Central Index Key | 704440 | |
Current Fiscal Year End Date | -26 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 38,081,667 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $2,247,919 | $2,227,398 |
Certificates of deposit | 259,470 | 258,590 |
Accounts receivable less allowance for doubtful accounts of $32,864 and $26,450 for November 30, 2014 and February 28, 2014, respectively | 1,708,908 | 1,744,813 |
Inventory | 1,571,096 | 818,723 |
Prepaid expenses | 244,792 | 245,767 |
Total Current Assets | 6,032,185 | 5,295,291 |
PROPERTY & EQUIPMENT, net | 1,196,029 | 839,059 |
OTHER ASSETS | ||
Patents, net of accumulated amortization of $126,570 and $119,436 at November 30, 2014 and February 28, 2014, respectively | 127,897 | 43,305 |
Other | 31,053 | 31,053 |
Total Other Assets | 158,950 | 74,358 |
TOTAL ASSETS | 7,387,164 | 6,208,708 |
CURRENT LIABILITIES | ||
Deferred capital gain - current portion | 22,481 | 22,481 |
Accounts payable | 678,542 | 246,622 |
Accrued expenses | 426,186 | 263,465 |
Accrued payroll and related taxes | 65,218 | 72,976 |
Accrued tax liability | 166,358 | |
Total Current Liabilities | 1,192,427 | 771,902 |
OTHER LIABILITIES | ||
Deferred capital gain - less current portion | 73,076 | 89,936 |
Deferred tax liability | 130,299 | 155,000 |
Total Other Liabilities | 203,375 | 244,936 |
TOTAL LIABILITIES | 1,395,802 | 1,016,838 |
SHAREHOLDERS' EQUITY | ||
Common stock, $0.01 par value, 50,000,000 shares authorized, 40,356,667 and 38,936,667 shares issued; 38,081,667 and 36,661,667 shares outstanding at November 30, 2014, and February 28, 2014, respectively | 403,567 | 389,367 |
Additional paid-in capital | 3,855,094 | 3,512,294 |
Retained earnings | 1,937,701 | 1,483,959 |
Stockholders' equity before treasury stock | 6,196,362 | 5,385,620 |
Less: Treasury stock, 2,275,000 shares at cost | -142,000 | -142,000 |
Deferred compensation cost | -63,000 | -51,750 |
Total Stockholders' Equity | 5,991,362 | 5,191,870 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $7,387,164 | $6,208,708 |
BALANCE_SHEETS_PARENTHETICAL
BALANCE SHEETS (PARENTHETICAL) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
BALANCE SHEETS [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $32,864 | $26,450 |
Patents, accumulated amortization | $126,570 | $119,436 |
Common stock, par value per share | $0.01 | $0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 40,356,667 | 38,936,667 |
Common stock, shares outstanding | 38,081,667 | 36,661,667 |
Treasury stock, shares | 2,275,000 | 2,275,000 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | |
STATEMENTS OF OPERATIONS [Abstract] | ||||
NET SALES | $2,655,155 | $2,179,921 | $7,797,030 | $6,064,265 |
COST AND EXPENSE | ||||
Cost of goods sold | 1,075,158 | 854,734 | 3,054,246 | 2,370,062 |
Selling, general and administrative | 1,257,134 | 975,731 | 3,439,258 | 2,890,679 |
Research and development | 116,885 | 50,864 | 406,705 | 131,734 |
Depreciation and amortization | 71,544 | 57,979 | 202,224 | 170,506 |
TOTAL COSTS AND EXPENSES | 2,520,721 | 1,939,308 | 7,102,433 | 5,562,981 |
NET OPERATING PROFIT | 134,434 | 240,613 | 694,597 | 501,284 |
OTHER INCOME/(EXPENSES) | ||||
Gain (Loss) currency exchange | -23,483 | 3,910 | -33,198 | -7,080 |
Interest expense | -512 | -4,547 | ||
Interest and other income | 1,143 | 1,166 | 4,058 | 5,612 |
TOTAL OTHER INCOME (EXPENSE) | -22,340 | 5,076 | -29,652 | -6,015 |
NET PROFIT BEFORE TAXES | 112,094 | 245,689 | 664,945 | 495,269 |
Provision for Income Taxes | -19,402 | -83,735 | -211,203 | -169,252 |
NET INCOME | $92,692 | $161,954 | $453,742 | $326,017 |
NET INCOME PER SHARE | ||||
Basic | $0.01 | $0.01 | ||
Diluted | $0.01 | $0.01 | ||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||
Basic | 38,081,667 | 36,661,667 | 37,499,849 | 36,661,667 |
Diluted | 38,081,667 | 36,661,667 | 37,499,849 | 36,661,667 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income | $453,742 | $326,017 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of deferred compensation cost | 72,750 | 105,975 |
Depreciation and amortization | 202,224 | 170,506 |
Deferred capital gain - building lease | -16,860 | -16,858 |
Deferred Taxes | -24,701 | |
Changes in operating assets and liabilities: | ||
Decrease (Increase) in accounts receivable | 35,905 | -163,483 |
(Increase) decrease in inventory | -752,373 | 194,121 |
Decrease (Increase) in prepaid expense | 975 | -72,462 |
Decrease in other assets | 29,316 | |
Increase in accounts payable | 431,920 | 96,058 |
Decrease in accrued payroll and related taxes | -7,758 | -28,095 |
Increase in accrued expense | 162,721 | 48,510 |
Decrease in accrued tax liability | -166,358 | -90,503 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 392,187 | 599,102 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Payments for property and equipment | -552,060 | -146,908 |
Purchase of certificates of deposit | -880 | -1,231 |
Payments for patents | -91,726 | -20,539 |
NET CASH USED IN INVESTING ACTIVITIES | -644,666 | -168,678 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments on note payable to related parties | -437,832 | |
Payments on notes payable | -1,474 | |
Proceeds from sale of securities, net of legal and other fees of $15,000 | 273,000 | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 273,000 | -439,306 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 20,521 | -8,882 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 2,227,398 | 1,930,321 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 2,247,919 | 1,921,439 |
Supplemental Information | ||
Cash paid during the periods for Interest | 512 | 4,547 |
Cash paid during the periods for Taxes | 404,891 | 260,773 |
NON-CASH FINANCING AND INVESTING ACTIVITIES | ||
Issuance of common stock as compensation | $84,000 |
STATEMENTS_OF_CASH_FLOWS_PAREN
STATEMENTS OF CASH FLOWS (PARENTHETICAL) (USD $) | 9 Months Ended |
Nov. 30, 2014 | |
STATEMENTS OF CASH FLOWS [Abstract] | |
Legal and other fees, sale of securities | $15,000 |
NATURE_OF_OPERATIONS_AND_SUMMA
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Nov. 30, 2014 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
THE 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. We use the d/b/a (doing business as) name RMS Medical Products, and use RMS as part of the branding of some products. | |
BASIS OF PRESENTATION | |
The accompanying unaudited financial statements as of November 30, 2014, have been prepared in accordance with generally accepted accounting principles and with instructions to SEC regulation S-X for interim financial statements. | |
In the opinion of the Company's management, the financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company's financial position as of November 30, 2014, and the results of operations and cash flow for the three-month and nine-month periods ended November 30, 2014, and 2013. | |
The results of operations for the three months and nine months ended November 30, 2014, and 2013 are not necessarily indicative of the results to be expected for the full year. These interim financial statements should be read in conjunction with the financial statements and notes thereto of the Company and management's discussion and analysis of financial condition and results of operations included in the Company's Annual Report for the year ended February 28, 2014, as filed with the Securities and Exchange Commission on Form 10-K. | |
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS | |
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) 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. | |
EMPLOYEE STOCK AWARDS | |
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 was amortized into operations over the one to two year restriction on the shares. Amortization amounted to $0 and $25,875 for the three-months ended November 30, 2014, and November 30, 2013, respectively; and $51,750 and $105,975 for the nine-months ended November 30, 2014, and November 30, 2013, respectively. Vesting of all shares was completed on August 31, 2014. | |
CONSULTING AGREEMENT WITH DIRECTOR | |
On December 20, 2013, we executed an agreement effective March 1, 2014, with a Company director, Dr. Mark Baker, to provide clinical research and support services related to new and enhanced applications for the FREEDOM60® Syringe Infusion System. Authorized by the Board of Directors, the agreement provides for payment of 420,000 shares of common stock valued at $0.20 per share over a three-year period. Amortization amounted to $7,000 and $21,000 for the three-months and nine-months ended November 30, 2014, respectively. In August 2014, Dr. Baker was paid a previously approved bonus of $25,000 to assist him in covering taxes due on the grant of common stock. | |
SALE OF COMMON STOCK AND WARRANTS | |
On August 8, 2014, the Company executed an agreement with Horton Capital Partners Fund, an institutional investor based in Philadelphia, PA, to sell one million shares of our common stock and warrants to purchase an additional one million shares of common stock at an exercise price of $0.45 per share. The aggregate purchase price was $288,000. Fees associated with this transaction totaled $15,000, for net proceeds of $273,000. | |
LEGAL PROCEEDINGS | |
We 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 we believe are without merit. We 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. | |
SUBSEQUENT EVENTS EVALUATION | |
The Company has evaluated subsequent events through January 14, 2015, the date on which the financial statements were issued. There were no material subsequent events that required recognition or additional disclosure in the financial statements. | |
EMERGING ACCOUNTING STANDARDS | |
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”. The update gives entities a single comprehensive model to use in reporting information about the amount and timing of revenue resulting from contracts to provide goods or services to customers. The ASU, which would apply to any entity that enters into contracts to provide goods or services, would supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, the update would supersede some cost guidance included in Subtopic 605-35, Revenue Recognition – Construction-Type and Production-Type Contracts. The update removes inconsistencies and weaknesses in revenue requirements and provides a more robust framework for addressing revenue issues and more useful information to users of financial statements through improved disclosure requirements. In addition, the update improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on its results of operations, cash flows or financial condition. | |
Management does not believe that any of the other standards adopted by the Financial Accounting Standards Board, but which are not yet effective, will have a material effect on the Company's financial reporting. | |
LEASED AIRCRAFT | |
The Company leases an aircraft from a company controlled by the president. The lease payments aggregated were $5,375 for the three months ended November 30, 2014, and November 30, 2013, and $16,125 for the nine months ended November 30, 2014, and November 30, 2013. The original lease agreement has expired and the Company is currently on a month-to-month basis for rental payments. | |
NATURE_OF_OPERATIONS_AND_SUMMA1
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy) | 9 Months Ended |
Nov. 30, 2014 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
THE NATURE OF OPERATIONS | THE 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. We use the d/b/a (doing business as) name RMS Medical Products, and use RMS as part of the branding of some products. | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION |
The accompanying unaudited financial statements as of November 30, 2014, have been prepared in accordance with generally accepted accounting principles and with instructions to SEC regulation S-X for interim financial statements. | |
In the opinion of the Company's management, the financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company's financial position as of November 30, 2014, and the results of operations and cash flow for the three-month and nine-month periods ended November 30, 2014, and 2013. | |
The results of operations for the three months and nine months ended November 30, 2014, and 2013 are not necessarily indicative of the results to be expected for the full year. These interim financial statements should be read in conjunction with the financial statements and notes thereto of the Company and management's discussion and analysis of financial condition and results of operations included in the Company's Annual Report for the year ended February 28, 2014, as filed with the Securities and Exchange Commission on Form 10-K. | |
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 (“GAAP”) 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. | |
EMPLOYEE STOCK AWARDS | EMPLOYEE STOCK AWARDS |
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 was amortized into operations over the one to two year restriction on the shares. Amortization amounted to $0 and $25,875 for the three-months ended November 30, 2014, and November 30, 2013, respectively; and $51,750 and $105,975 for the nine-months ended November 30, 2014, and November 30, 2013, respectively. Vesting of all shares was completed on August 31, 2014. | |
CONSULTING AGREEMENT WITH DIRECTOR | CONSULTING AGREEMENT WITH DIRECTOR |
On December 20, 2013, we executed an agreement effective March 1, 2014, with a Company director, Dr. Mark Baker, to provide clinical research and support services related to new and enhanced applications for the FREEDOM60® Syringe Infusion System. Authorized by the Board of Directors, the agreement provides for payment of 420,000 shares of common stock valued at $0.20 per share over a three-year period. Amortization amounted to $7,000 and $21,000 for the three-months and nine-months ended November 30, 2014, respectively. In August 2014, Dr. Baker was paid a previously approved bonus of $25,000 to assist him in covering taxes due on the grant of common stock. | |
SALE OF COMMON STOCK AND WARRANTS | SALE OF COMMON STOCK AND WARRANTS |
On August 8, 2014, the Company executed an agreement with Horton Capital Partners Fund, an institutional investor based in Philadelphia, PA, to sell one million shares of our common stock and warrants to purchase an additional one million shares of common stock at an exercise price of $0.45 per share. The aggregate purchase price was $288,000. Fees associated with this transaction totaled $15,000, for net proceeds of $273,000. | |
LEGAL PROCEEDINGS | LEGAL PROCEEDINGS |
We 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 we believe are without merit. We 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. | |
SUBSEQUENT EVENTS EVALUATION | SUBSEQUENT EVENTS EVALUATION |
The Company has evaluated subsequent events through January 14, 2015, the date on which the financial statements were issued. There were no material subsequent events that required recognition or additional disclosure in the financial statements. | |
EMERGING ACCOUNTING STANDARDS | EMERGING ACCOUNTING STANDARDS |
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”. The update gives entities a single comprehensive model to use in reporting information about the amount and timing of revenue resulting from contracts to provide goods or services to customers. The ASU, which would apply to any entity that enters into contracts to provide goods or services, would supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, the update would supersede some cost guidance included in Subtopic 605-35, Revenue Recognition – Construction-Type and Production-Type Contracts. The update removes inconsistencies and weaknesses in revenue requirements and provides a more robust framework for addressing revenue issues and more useful information to users of financial statements through improved disclosure requirements. In addition, the update improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on its results of operations, cash flows or financial condition. | |
Management does not believe that any of the other standards adopted by the Financial Accounting Standards Board, but which are not yet effective, will have a material effect on the Company's financial reporting. | |
LEASED AIRCRAFT | LEASED AIRCRAFT |
The Company leases an aircraft from a company controlled by the president. The lease payments aggregated were $5,375 for the three months ended November 30, 2014, and November 30, 2013, and $16,125 for the nine months ended November 30, 2014, and November 30, 2013. The original lease agreement has expired and the Company is currently on a month-to-month basis for rental payments. |
NATURE_OF_OPERATIONS_AND_SUMMA2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 0 Months Ended | ||||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | Jul. 31, 2012 | Aug. 31, 2014 | Dec. 31, 2013 | Aug. 08, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Amortization of deferred compensation cost | $72,750 | $105,975 | ||||||
Aircraft lease expense | 5,375 | 5,375 | 16,125 | 16,125 | ||||
Payments for fees associated with equity issuance | 15,000 | |||||||
Net proceeds of stock issuance | 273,000 | |||||||
Employee Stock Awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized for issuance | 1,465,000 | |||||||
Price per share | $0.18 | |||||||
Shares authorized for issuance, period restriction, minimum | 1 year | |||||||
Shares authorized for issuance, period restriction, maximum | 2 years | |||||||
Amortization of deferred compensation cost | 0 | 25,875 | 51,750 | 105,975 | ||||
Consulting Agreement with Director [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Payment of common stock shares for services | 420,000 | |||||||
Price per share | $0.20 | |||||||
Agreement period | 3 years | |||||||
Amortization of deferred compensation cost | 7,000 | 21,000 | ||||||
Payments for taxes due on the grant of common stock | 25,000 | |||||||
Agreement With Horton Capital Partners Fund [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Price per share | $0.45 | |||||||
Stock issued, shares | 1,000,000 | |||||||
Stock issued, value | 288,000 | |||||||
Number of shares to be called by warrants | 1,000,000 | |||||||
Payments for fees associated with equity issuance | 15,000 | |||||||
Net proceeds of stock issuance | $273,000 |