UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~For the fiscal year ended~~

For the Fiscal Year Ended February 29, 2016

Commission File Number 0-12305

~~FEBRUARY 28,2013~~

~~Commission File Number~~

~~0-12305~~

~~REPRO-MED~~REPRO MED SYSTEMS, INC.

(Exact ~~name~~Name of ~~registrant~~Registrant as ~~specified~~Specified in its ~~charter)~~Charter)


NEW YORK		13-3044880
(State or ~~other jurisdiction~~Other Jurisdiction of ~~incorporation~~Incorporation or ~~organization)~~Organization)		(IRS Employer Identification No.)

24 CARPENTER ROAD, CHESTER, NY		10918
(Address of ~~principal executive offices)~~Principal Executive Offices)		(Zip Code)

(845)-469-2042

Registrant’s Telephone Number, Including Area Code

~~Registrant’s telephone number, including area code~~

~~(845) 469-2042~~

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

COMMON STOCK, $.01 PAR VALUE

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes x No o

Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K, is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any amendment to this Form 10-K.xo

Indicate by check mark whether the registrant is a “large accelerated filer”, an “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filero	Accelerated filero
Non-accelerated filero	Smaller reporting companyx

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

Based on the closing sales price of August 31, ~~2012,~~2015, the aggregate market value of the voting and nonvoting common equity held by non-affiliates of the registrant was ~~$5,363,265.~~$10,424,264.

The number of issued and outstanding shares of the registrant’s common stock, $.01 par value was ~~36,661,667~~37,966,501 at May ~~29, 2013,~~13, 2016, which excludes ~~2,275,000~~2,521,031 shares of Treasury Stock.

~~REPRO-MED~~REPRO MED SYSTEMS, INC.

FORM 10-K

INDEX


		Page

PART I

Item 1-1.	Business	3

Item ~~1A-~~1A.	Risk Factors	9

Item ~~1B-~~1B.	Unresolved Staff Comments	9

Item 2-2.	Property	9

Item 3-3.	Legal Proceedings	9

Item 4-4.	Mine Safety Disclosures	910

PART II

Item 5-5.	Market for the Registrant’s Common Equity and Related ~~Shareholder~~Stockholder Matters and Issuer Purchases of Equity Securities	9

~~Item 6-~~	~~Selected Financial Data~~	10

Item 7-6.	Selected Financial Data	11

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1011

Item ~~7A-~~7A.	Quantitative and Qualitative Disclosures about Market Risk	1216

Item 8-8.	Financial Statements and Supplementary Data	1216

Item 9-9.	Changes inIn and Disagreements with Accountants on Accounting and Financial Disclosures	2430

Item ~~9A-~~9A.	Controls and Procedures	2530
	s
Item ~~9B-~~9B.	Other Information	2530

PART III

Item ~~10-~~10.	Directors, Executive Officers, and Corporate Governance	2631

Item ~~11-~~11.	Executive Compensation	2632

Item ~~12-~~12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	2733

Item ~~13-~~13.	Certain Relationships and Related Transactions and Director Independence	2834

Item ~~14-~~14.	Principal Accountant Fees and Services	2834

PART IV

Item ~~15-~~15.	Exhibits and Financial Statement Schedules	2935

Signatures		3036

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PART I

ITEM 1. BUSINESS

~~THE COMPANY~~OUR BUSINESS

~~BUSINESS OF REGISTRANT~~

~~REPRO-MED~~REPRO MED SYSTEMS, INC., (“~~REPRO-MED,~~REPRO MED,” or “RMS Medical ~~Products”~~Products,” “RMS” or the “Company”), ~~was incorporated in the State of New York in March of 1980. The Company~~ designs, manufactures and markets proprietary and innovative medical devices primarily for the ambulatory infusion market and emergency medical ~~applications. The FDA regulates these products.~~applications in compliance with the United States Food and Drug Administration (the “FDA”) quality and regulatory system and international standards for quality system management. The Company’s development and marketing focus ~~are~~is primarily concentrated on the ~~FREEDOM60(R)~~FREEDOM60® Syringe Infusion System and accessories, RMS HIgH-Flo™ Subcutaneous Safety Needle Sets and the ~~RES-Q-VAC(R) Emergency~~RES-Q-VAC® Portable Medical Suction System.

~~CORPORATE HISTORY~~

~~REPRO-MED SYSTEMS, INC.~~ The Company was incorporated ~~under the laws of~~in the State of New York in March 1980. ~~The corporate offices are located at 24 Carpenter Road, Chester, New York 10918. The telephone number is 845-469-2042, the fax is 845-469-5518, and the Internet site is www.rmsmedicalproducts.com.~~

OUR PRODUCTS

~~FREEDOM60(R)~~RMS is a cutting edge medical device manufacturer, collaborating closely within the industry to develop products with a focus on improving the lives of its patients. RMS’ unique infusion delivery system is improving the quality of life of more than 15,000 patients around the world. Many patients will need to be on their life saving therapy for the rest of their lives, with a number of patients having safely used RMS’ home care FREEDOM infusion system for more than 10 years.

RMS’ innovative pumps, flow controlled tubing and subcutaneous needle sets ensure these patients continue to experience their often weekly infusions as a non-event with no adverse reactions. The Company’s system gives patients the ability to continue with their daily activities with its easy to use, wearable and portable system. RMS relies on proven scientific principles to innovate and develop mechanical infusion systems by embracing a culture of continuous improvement. At RMS Medical Products, patients always come first, which is why health care professionals recommend the use of the FREEDOM system for most patients in the U.S. market.

There is a steady increase in patients being diagnosed with diseases that are remedied by the medicines that RMS’ FREEDOM system delivers, and the Company is well-positioned to continue to gain market share and help impacted patients gain “freedom” in their lives. Moreover, RMS is poised to expand its product distribution internationally in the near future. Steady U.S. growth forecasts and significant international opportunities ensure that RMS will continue its profitable revenue growth.

FREEDOM60 SYRINGE INFUSION SYSTEM

The FREEDOM60(R) Syringe Pump uses an innovative “engine” to create a constant pressure drive system which we believe results in substantially greater safety, reliability, reduced discomfort for subcutaneous applications, and an overall higher quality infusion than other devices on the market - all at a lower cost. The basic drive mechanism used in the FREEDOM60(R) represents the first of a line of products, which we intend to develop to broaden the product applications and appeal.

FREEDOM60(R) uses precision rate-controlled tubing with standard slide clamp and luer-lock connector on the patient end. Our patented luer disc connector ensures that only the Company’s FREEDOM60(R) tubing sets will function with the pump. Non-conforming tubing sets, without the patented disc connector, are ejected from the pump to prevent the danger of an overdose or runaway pump from injuring the patient. We are achieving our objective of building a product franchise with FREEDOM60(R) and the sale of patented disposable tubing sets.

Our proprietary technology employed in the FREEDOM60(R) uses constant pressure to administer drugs. FREEDOM60(R) avoids an important problem faced by electronic pumps currently on the market, which employ constant flow mechanisms that result in potentially dangerous, high pressure placed on indwelling catheters or under the skin. In order to protect the patients, these pumps must contain an overpressure sensor to shut the pump off when a potentially threatening pressure is detected. Some of these electronic pumps generate extremely high pressures exceeding 60psi before the overpressure system will activate. Also with these systems, the alarm can falsely trigger halting administration until a health professional can verify that the infusion is, in fact, safe and the pump may be reactivated. In either case, the patient is at risk from damaging pressures or not receiving the medication required.

Other unsafe conditions of conventional equipment include: runaway administrations, overdose due to programming errors or pump failure, and overpressure resulting in burst blood vessels or failed internal access devices. We believe that the increasing sales of pumps and tubing sets for the FREEDOM60(R) demonstrate that the FREEDOM60(R) eliminates these potential outcomes and ensures a safe, constant, controlled infusion. Electronic devices will increase infusion pressure while attempting to continue an infusion at the programmed rate, while the FREEDOM60(R) design maintains a safe constant pressure and thereby automatically reduces the flow rate as required, a process we refer to as “dynamic equilibrium,” if any problems of administration occur.

~~The FREEDOM60(R)~~FREEDOM60 Syringe Infusion System (“FREEDOM60”), comprised of the FREEDOM60 Syringe Infusion Pump and RMS Precision Flow Rate Tubing™, is designed for ambulatory medication infusions. Ambulatory infusion pumps are most prevalent in the home care market although we believe there is potential in the hospital setting as well. Other potential applications for the FREEDOM60(R) include pain control, the infusion of specialized drugs such as IgG, and chemotherapy. The home infusion therapy market is comprised of approximately 4,500 sites of service, including local and national organizations, hospital-affiliated organizations, and national home infusion organizations, and produces approximately $11 billion in revenue annually*. With insurance reimbursement in a severe decline, there is a tremendous need for a low-cost, effective alternative to electronic and expensive disposable IV administration devices for home care. The FREEDOM60(R) provides a high-quality delivery to the patient at costs comparable to gravity-driven infusions and is targeted for the home health care industry, patient emergency transportation, and for any time a low-cost infusion is required.

~~- 3 -~~

*Ref: www.nhia.org/faqs.cfm and http://www.gao.gov/new.items/d10426.pdf

For the home care patient, ~~FREEDOM60(R)~~FREEDOM60 is an easy-to-use, lightweight mechanical pump using a ~~60cc~~60ml syringe, completely portable ~~cost effective~~ and maintenance free, with no batteries to ~~replace~~replace. FREEDOM60 offers increased safety, greater reliability and ~~no cumbersome IV pole.~~an overall higher quality infusion. For the infusion professional, ~~FREEDOM60(R)~~FREEDOM60 delivers accurate infusion rates and ~~uniform~~class-leading flow ~~profiles providing consistent transfer of medication. The FDA approved~~performance. For the home infusion provider, FREEDOM60 is a ~~Form 510(k) Pre-market Notification~~cost-effective alternative to replace electronic and disposable pumps. Given FREEDOM60’s lower acquisition and operating costs, it frees up significant working capital for ~~initial design of~~growing the ~~FREEDOM60(R) as a Class II device in August 1994.~~

We have expanded the use of the FREEDOM60(R) to cover most antibiotics including the widely used and somewhat difficult to administer Vancomycin. We have also found a following for FREEDOM60(R) for use in treating thalassemia with the drug Desferal(R). In Europe, we found success in using the FREEDOM60(R) for pain control, specifically post-operative epidural pain administration. Our European market also uses the FREEDOM60(R) for chemotherapy and subcutaneous immune globulin.Company’s infusion businesses.

The FREEDOM60(R) use for Primary Immune Deficiency by injecting immune globulin (IgG) under the skin as a subcutaneous administration (SCIG) has continued to increase during the past year. This method has provided patients with vastly improved quality of life with much fewer unpleasant side effects over the traditional intravenous route. The FREEDOM60(R) is an ideal system for this administration since the patient is able to self-medicate at home, the pump is easily configured for this application, and the FREEDOM60(R) is the lowest cost infusion system available in a heavily cost constrained market. We have begun to promote one of the main benefits of the FREEDOM60(R) for use with IgG, which is that itFREEDOM60 operates in “dynamic ~~equilibrium”; that is~~equilibrium,” which means the pump ~~finds~~operates at a safe, low pressure and maintains a balance between what a patient’s subcutaneous tissues are able to manage and what the pump infuses. This balance is created by a safe, limited and controlled pressure, which adjusts the flow rate automatically to the patient’s needs providing a reliable, faster and more comfortable administration with fewer side effects for ~~these~~those patients. Electronic devices will increase infusion pressure while attempting to continue an infusion at the programmed rate, while the FREEDOM60 design maintains a safe, constant pressure and thereby automatically reduces the flow rate as required, if problems of administration occur.

~~THE MARKET FOR INFUSION PUMPS & DISPOSABLES~~Ambulatory infusion pumps are most prevalent in the outpatient and home care market although RMS believes there is potential in the hospital setting as well. Applications for the FREEDOM60 have been expanded to a wide spectrum by the medical and nursing communities due to its unique constant flow design, fluid dynamics functionality and safety profile. The usage includes the infusion of specialized drugs such as Immunoglobulin G (“IgG”), pain control and chemotherapy. Applications are also being increased for intravenous antibiotics including the widely used yet challenging to administer Vancomycin, and beta lactams which require longer infusion times as a part of antimicrobial stewardship. In Europe, RMS has observed additional patient success with the use of the FREEDOM60 for pain control, specifically post-operative epidural pain administration.

- 3 -

The FREEDOM60 provides a high-quality delivery to the patient at costs comparable to gravity-driven infusions and is designed for the home health care industry, patient emergency transportation and for any time a low-cost infusion is required. RMS continues to meet milestones in building a product franchise with FREEDOM60 and the sale of RMS Precision Flow Rate Tubing. This positions the Company well to expand on the technology of dynamic equilibrium for other home infusion devices.

The use of the FREEDOM60 for treatment of primary immune deficiencies by administering IgG under the skin, a subcutaneous administration (“SCIg”), has continued to increase over the past several years and remains the leading pump in the U.S. for these infusions. For patients with Primary Immunodeficiency, Multifocal Motor Neuropathy, Idiopathic thrombocytopenic purpura and Chronic Inflammatory Demyelinating Polyneuropathy, this method has vastly improved quality of life with much fewer unpleasant side effects experienced in comparison to the traditional intravenous route. There is evidence that indications for SCIg therapy will continue to expand to other disease states. The FREEDOM60 is an ideal system for this administration because:


·	the patient is able to self-medicate at home

·	the pump is easily configured for this application

·	it is the best value infusion system available in a heavily cost constrained market

·	it has demonstrated ultimate effectiveness and an impeccable safety profile without any concerns

In March, 2015, at the National Home Infusion Association Show in Phoenix, Arizona, RMS introduced the FreedomEdge™ Syringe Infusion Pump (“FreedomEdge”). The FreedomEdge uses all of the trusted technology of the FREEDOM60 in a new, smaller package ideal for use with 20ml or 30ml syringe sizes. Similar to the FREEDOM60, the FreedomEdge utilizes the existing RMS Precision Flow Rate Tubing and provides a great alternative and benefits to the patients who do not need the larger dose capacity.

RMS HIGH-FLO™ SUBCUTANEOUS SAFETY NEEDLE SETS

RMS HIgH-Flo Subcutaneous Safety Needle Sets (“HIgH-Flo”) are designed for self-administration of medicine under the skin. RMS’ needles feature unique design elements specific to subcutaneous self-administration, including a 5-bevel back-cut needle designed for more comfort and less tissue damage. Its needle set design permits drug flows which are the same or faster than those achieved with larger gauge needles currently on the market. This proprietary fluid dynamics engineering, compatible with the FREEDOM60 and FreedomEdge, guarantees the sensitivity of the system’s dynamic equilibrium.

Reflecting RMS’ dedication to clinician safety, the sets’ butterfly wing closures encase needles after use and help to protect against accidental needle stick injuries, an area of concern to the medical community. The sets are called safety needle sets to reflect this integral feature.

The Company expanded the range of HIgH-Flo sets available, including a 24 gauge set for very high flow rates, to meet the delivery demands of new drugs on the market. HIgH-Flo sets are also being used in clinical trials worldwide for a number of medications and therapies.

RES-Q-VAC® PORTABLE MEDICAL SUCTION

The RES-Q-VAC Portable Medical Suction System (“RES-Q-VAC”) is a lightweight, portable, hand-operated suction device that removes fluids from a patient’s airway by attaching the RES-Q-VAC pump to various proprietary sterile and non-sterile single-use catheters sized for adult and pediatric suctioning. The bottom-hinged, one-hand operation makes it extremely effective and the product is generally found in emergency vehicles, hospitals, disaster kits, mass casualty trailers and wherever portable aspiration is a necessity, including backup support for powered suction systems. Additional markets include nursing homes, hospice, sub-acute, dental and military applications. The Full Stop Protection® filter and disposable features of the RES-Q-VAC reduce the risk of exposing the health professional to human immunodeficiency virus (“HIV”) or Tuberculosis (“TB”) when suctioning a patient or during post treatment cleanup. All of the parts that connect to the pump are disposable.

A critical component and significant advantage of the RES-Q-VAC system is our Full Stop Protection® filter, a patented filtering system that both prevents leakage and overflow of the aspirated fluids, even at full capacity, and traps many air- and fluid-borne pathogens and potentially infectious materials within the sealable container. This protects users from potential exposure to disease and contamination. Full Stop Protection meets the requirement of the Occupational Safety and Health Administration (“OSHA”) ‘Occupational Exposure to Blood Borne Pathogens” Code of Federal Regulations 29 1910.1030. The Company has received a letter from OSHA confirming that the RES-Q-VAC with Full Stop Protection falls under the engineering controls of the blood borne pathogen regulation and that the product’s use would fulfill the regulatory requirements.

- 4 -

The Centers for Disease Control (“CDC”) and World Health Organization continue to emphasize the importance of minimizing aerosol production during suctioning, in order to reduce the spread of pandemic and epidemic diseases such as Ebola and Influenza. At the current time, we believe that the RES-Q-VAC with Full Stop Protection is the only portable, hand-operated device to comply with CDC directives from 2003.

Hospitals are required under the Emergency Medical Treatment and Labor Act (“EMTALA”) regulations to provide emergency treatment to patients anywhere in the primary facility and up to 250 yards away. The RES-Q-VAC ensures full compliance with these regulations and helps minimize unfavorable outcomes and potential lawsuits. We provide special hospital kits, which are fully stocked to meet all hospital applications, both adult and pediatric.

RMS is actively pursuing a direct sales effort into the hospital market, working with direct sales and several regional distributors in the respiratory market. It is also working internationally with distributors who are well represented in the hospital and emergency markets.

ON-LINE CALCULATOR

In March 2016, the Company introduced its new On-Line Calculator, a tool to help determine which of the Company’s Precision Flow Rate Tubing and RMS HIgH-Flo Subcutaneous Needle Sets to use based on the medication being administered and desired time of infusion. Customers responded well to the new calculator and expressed that the new format of the On-Line Calculator, which can be used on any computer, tablet or mobile device, was easy to use and very helpful.

SALES AND DISTRIBUTION

FREEDOM60 systems are sold domestically through both direct sales efforts concentrated on large national accounts and through a network of medical device distributors. Most of our sales are through distributors, one of which represents approximately 55.3% of our total revenue.

Internationally, we have FREEDOM60 distribution in Australia, Canada, Denmark, Estonia, Finland, France, Italy, Latvia, Lithuania, Norway, the Benelux countries, Saudi Arabia, South Africa, Germany, Sweden and the United Kingdom. We believe that a single distributor in each country will be more predisposed to advertising, promoting, and building the product franchise, and we work closely with our distributors to promote our products. Since February 2014, we have employed a sales representative based in Sweden to expand our efforts to add distributors in other countries. In October 2015, we hired an additional sales representative based in Germany.

RES-Q-VAC is sold domestically and internationally by emergency medical device distributors in approximately 25 countries and represents about 5% of our revenue. These distributors generally sell to the end user and advertise these products in relevant publications and in their catalogs. We also sell directly to some physician offices, hospitals and other institutional customers. We market the hospital RES-Q-VAC system through regional distributors specializing in the hospital respiratory care market. We are expanding support in international markets where we believe RES-Q-VAC has higher potential.

During the fiscal year, we have expanded our efforts to market both of our main product lines at national and international trade shows. We support shows attended by our primary customers such as MEDICA, Arab Health, EMS Today, National Home Infusion Association Conference, Infusion Nurses Society, European Society for Immunodeficiencies and the Immune Deficiency Foundation’s regional meetings.

RAW MATERIALS

Raw materials, consisting of components, molded parts and tubing, essential to our business are purchased from numerous suppliers worldwide in the ordinary course of business. Although most of these materials are generally available, we may at times experience shortages of supply. In an effort to manage risk associated with raw materials supply, we work closely with suppliers to help ensure availability and continuity of supply while maintaining high quality and reliability. The company also seeks to develop new and alternative sources of supply where beneficial to its overall raw materials procurement strategy.

The Company also utilizes long-term supply contracts with some suppliers to help maintain continuity of supply and manage the risk of price increases. RMS is not always able to recover cost increases for raw materials through customer pricing due to contractual limits and market forces.

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RESEARCH AND DEVELOPMENT

We recognize the importance of innovation and renovation to our long-term success and are focused on and committed to research and new product development activities. Our product development team engages in consumer research, product development, current product improvement and testing activities, and also leverages our development capabilities by partnering with a network of outside resources.

We recently completed development of the FreedomEdge, a smaller version of the FREEDOM60, and introduced it at the National Home Infusion Association show in Phoenix, AZ, in March, 2015. There is no assurance that this product, or any others under development, will result in net revenue or profit increases for the Company. At the National Home Infusion Association show in New Orleans, LA, in March 2016, the Company introduced its new On-Line Calculator, a tool to help determine which of the Company’s Precision Flow Rate Tubing™ and RMS HIgH-Flo Subcutaneous Needle Sets™ to use based on the medication being administered and desired time of infusion. Customers responded well to the new calculator and expressed that the new format of the On-Line Calculator, which can be used on any computer, tablet, or mobile device, was easy to use and very helpful.

QUALITY ASSURANCE

RMS’ success depends upon the quality of its products. Our quality management system plays an essential role in determining and meeting customer requirements, preventing defects, facilitating continuous improvement of the Company’s processes, products and services, and assuring the safety and efficacy of the Company’s products.

Each product that we market is required to meet specific quality standards, both in packaging and in product integrity and quality. If either of those is determined to be compromised at any time, we take corrective and preventive actions designed to ensure compliance with regulatory requirements and to meet customer expectations.

MARKETS

The domestic home infusion therapy market is comprised of approximately 4,500 sites of service, including local and national organizations, hospital-affiliated organizations, and national home infusion organizations, and produces approximately $9 - $11 billion in revenue annually*. With insurance reimbursement for medical devices in decline, we believe that there is a need for a low-cost, effective alternative to electronic and expensive disposable intravenous (“IV”) administration devices for home care.

The ambulatory infusion market has been rapidly changing due to reimbursement issues. Insurance reimbursement has drastically reduced the market share of high-end electronic type delivery systems as well as high-cost disposable non-electric devices, providing an opportunity for the ~~FREEDOM60(R).~~FREEDOM60. We believe market pressures have moved specialty pharmacies to consider alternatives to expensive electronic systems especially for new subcutaneous administrations, which usually cannot be done with gravity. For cost concerns, some patients have been trained to administer intravenous drugs through IV push where the drug is pushed into the vein directly from a syringe. This is a low-cost option but has been associated with complications and is considered by many to be a ~~high-risk~~higher-risk procedure. Thus, the overall trend has been towards syringe pumps due to the low-cost of disposables.

~~IMPORTANCE OF~~ There is evidence that indications for SCIg therapy will continue to expand to other disease states. Manufacturers of various IgG medications have conducted, and are in process of conducting, trials of their drugs for applications other than primary immune deficiency diseases. To the extent that these trials are successful and the FDA approves these new indications for use, we could see additional sales opportunities in the future.

On May 21, 2010, the Department of Health and Human Services (“HHS”) announced the addition of Severe Combined Immune Deficiency (“SCID”), a primary immunodeficiency disease, to the recommended uniform screening of newborns. The Immune Deficiency Foundation (IDF) has strongly supported and worked tirelessly toward this goal for many years. As of April 1, 2016, 37 states have added SCID to their uniform newborn screening**. As more states add this screening, we could see additional sales opportunities in the future.

*Ref: www.nhia.org/faqs.cfm and http://www.gao.gov/new.items/d10426.pdf

** Ref: http://primaryimmune.org/idf-advocacy-center/idf-scid-newborn-screening-campaign/

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INSURANCE REIMBURSEMENT ~~TO FREEDOM60(R) SALES~~

There can be no assurance that Medicare will continue to provide reimbursement for the FREEDOM60. They may allow reimbursement for other infusion pumps that are currently in the market or new ones that may enter shortly, which could adversely affect our sales into this market.

In order to receive more favorable Medicare reimbursement for ~~our FREEDOM60(R) Syringe Infusion System,~~the FREEDOM60, we ~~had~~ submitted a formal request for a ~~HCPCS~~Healthcare Common Procedures Coding System (“HCPCS”) coding verification with the Statistical Analysis Durable Medical Equipment Regional Carrier ~~(SADMERC)~~(“SADMERC”). It was the determination ~~of the Centers for Medicare & Medicaid Services~~ that the Medicare HCPCS code(s) to bill the four Durable Medical Regional Carriers ~~(DMERCs)~~(“DMERC’s”) should be: ~~E0779~~“E0779 Ambulatory infusion pump, mechanical, reusable, for infusion 8 hours or greater. ~~The new~~” This code ~~significantly increases the~~provides reimbursement for the ~~FREEDOM60(R)~~FREEDOM60 for billable syringe pump ~~applications~~application approved by Medicare. Current approved uses under Medicare include among others, subcutaneous immune globulin, antivirals, antifungals, and chemotherapeutics. ~~In June 2007, Medicare issued a letter of clarification stating in part:~~

“The FREEDOM60(R) Syringe Infusion Pump is the only allowable pump to be billed with the Subcutaneous Immune Globulin (SCIG). The code for this pump for dates of service 1/1/00 - 5/16/07 is E0780. For dates of service on or after 5/17/07, the correct code is E0779 per SADMERC. The items being billed must be supported by corresponding documentation. All other pumps or modifiers will result in a denial.”

~~All possible effects,~~Effects, if any, of the federal government’s Public Law 111-148, The Patient Protection and Affordable Care Act, on reimbursements for infusion pumps and related supplies and services cannot be stated with certainty at this time.

~~ECONOMIC BENEFITS OF FREEDOM60(R) PUMP AND DISPOSABLE SALES~~We are also closely watching for the effects of the Medicare Home Infusion Site of Care Act of 2015, which intends to amend the Social Security Act to allow the home to be a covered infusion site of care for Medicare beneficiaries. If passed, it would take effect starting in 2016. Currently, it appears the bill would encourage greater utilization of home infusion, increasing the potential market for FREEDOM60.

We have shipped approximately 28,000 pumps since March 2000 including approximately 5,600 pumps in the last year. We sell directly to health care providers in the US, and to distributors in both the domestic and foreign markets. The FREEDOM60(R) pump is designed for a minimum use of 4,000 times which at our list price is amortized at $.16 per use.

~~- 4 -~~

We estimate that each FREEDOM60(R) pump, when used for immune globulin administration, uses an average of four to six tubing sets per month per patient. Antibiotics may be administered much more frequently, occasionally up to four times per day. In some cases, a tubing set may be used for as long as 72 hours. We estimate tubing set usage for antibiotics to be as much as 10 sets per month per patient.COMPETITION

The pump has a minimum expected life of 4,000 operations. Thus, if the pump is operated up to four times per day as for some administrations of antibiotics, anticipated pump life may be more than six and one-half years. For immune globulin applications, an expected use of four to five times per month results in an anticipated life span of decades for the FREEDOM60(R) pump.

~~COMPETITION FOR THE FREEDOM60(R)~~FREEDOM60

Competition for the ~~FREEDOM60(R)~~FREEDOM60 for IgG includes electrically powered infusion devices, which are more costly and can create high pressures during delivery, which can cause complications for the administration of IgG. However, there can be no assurance that other companies, including those with greater resources, will not enter the market with competitive products which will have an adverse effect on our sales.

There is the potential for new drugs to enter the market which might change the market conditions for devices such as ~~using~~the FREEDOM60 and RMS HIgH-Flo Subcutaneous Safety Needle Sets (e.g. Hyaluronidase, which can facilitate absorption of IgG, making multiple site infusions ~~unnecessary and changing the market conditions for devices such as the FREEDOM60(R)~~unnecessary). We believe dynamic equilibrium (the principle behind the ~~FREEDOM60(R)~~FREEDOM60) is ideal for ~~all these~~ new drug combinations, and that they might increase the size of the subcutaneous market, but there can be no assurance that ~~these~~ newer drugs will have the same needs and requirements as the current drugs being used.

~~There can be no assurance that Medicare will continue to provide reimbursement for the FREEDOM60(R), or that their policy regarding reimbursement for other infusion pumps that~~We are currently involved in ~~the market or new ones~~legal proceedings with a competitor who has been offering accessories that ~~may enter shortly will not change, which could adversely affect our sales into this market.~~

We have become aware of a new mechanical pump entry on the market which we do not believe to have FDA approval. The new pump uses a prior design of a simple coil spring which does not create a constant pressure and which had been removed from the market several years ago. The company offering this product is also representing that it is capable of manufacturing lower cost accessories which can be used with the ~~FREEDOM60(R)~~FREEDOM60 (see Item 3 – Legal Proceedings). We have issued Safety Bulletins to all customers advising them that any non-RMS product used on our FREEDOM60(R) Systems may be unsafe, can create a health risk to the patient, including death and would void the warranty of the pump.

~~NEW PRODUCT ENHANCEMENTS FOR THE FREEDOM60(R)~~

During January 2010, a new subcutaneous immune globulin called Hizentra(R) with a greater concentration was approved by the FDA. We have performed significant testing of the drug with the FREEDOM60(R) and have been recognized by the drug manufacturer for use with their drug. Based on initial reactions, the new formulation appears to be an improved drug at higher concentrations, and is expected to replace the previous offerings. We believe that Hizentra(R) will continue to create additional opportunities for the FREEDOM60(R) system for our fiscal year ending 2014. There are also other IgG drugs for subcutaneous route of administration being introduced into the market, which may expand the market for the FREEDOM60(R) and its accessories.

~~RMS HIGH-FLO™ SAFETY NEEDLE SETS~~

The ~~introduction of RMS HIgH-Flo™ Subcutaneous Safety Needle Sets allows us~~RES-Q-VAC

We believe that the RES-Q-VAC is currently the performance leader for manual, portable suction instruments. In the emergency market, the primary competition is the V-VAC™ from Laerdal Medical. The V-VAC™ is more difficult to ~~offer all of the elements needed for a complete subcutaneous infusion system, when combined with our FREEDOM60(R) pump~~use, cannot suction infants, and ~~flow rate tubing. The needle sets received FDA approval for marketing~~cannot be used while wearing heavy gloves such as in chemical warfare or in the ~~U.S.~~extreme cold. Another competitor is the Ambu® Res-Cue Pump™, ~~on May 20, 2011. They were~~a lower-cost product similar to our design, made in ~~the overseas market at~~China. We believe that ~~time.~~

The design of RMS HIgH-Flo™ Subcutaneous Needle Sets provides maximum flow rates during the subcutaneous infusion of high viscosity immune globulin, such as the thickest 20% IgG medications, offering even flows of medication to each site. The performance of HIgH-Flo™ provides what we believe is an advantage over competitive needle sets of comparable gauges for SCIg use. In addition, our manufacturing process includes numerous quality controls, resulting in consistent needle sharpness and smooth finish.

~~- 5 -~~

~~RES-Q-VAC(R) PORTABLE MEDICAL SUCTION~~

The RES-Q-VAC(R) Emergency Airway Suction System is a lightweight, portable, hand-operated suction device that removes fluids from a patient’s airway by attaching the RES-Q-VAC(R) pump to various proprietary sterile and non-sterile single-use catheters sized for adult and pediatric suctioning. The one-hand operation makes it extremely effective and the product is ~~generally found in emergency vehicles, hospital crash carts~~not as well made, as ergonomic, nor as versatile, and ~~wherever portable aspiration is a necessity, including backup support for powered suction systems. The Full Stop Protection(R) filter (FSP) and disposable features~~may not be purchased by the military segment of the ~~RES-Q-VAC(R) reduce the risk~~market due to lines of ~~exposing the health professional to HIV or SARS when suctioning a patient or during post treatment cleanup. All of the parts~~supply concerns. We believe that ~~connect to the pump are disposable.~~

We have introduced new, updated features including the FSP filter, new pediatric connectors, new graduated canister, new adult catheters, and new convenient carry pouch. It is also available with a flexible, portable LED white light source, which is attached to the top of the canister system and provides illumination for the medical professional during nighttime or low light conditions.

~~A critical component and advantage of the RES-Q-VAC(R) system is our~~ Full Stop Protection ~~filter,~~substantially separates the RES-Q-VAC from competitive units, which tend to leak fluid when becoming full or could pass airborne pathogens during use. There is a patented filtering system that both prevents leakage and overflow of the aspirated fluids, even at full capacity, and traps virtually all air- and fluid-borne pathogens and potentially infectious materials within the sealable container. This protects usersheightened concern from ~~potential~~health care professionals concerning exposure to disease and ~~contamination. The~~ we believe the RES-Q-VAC provides improved protection for these users.

GOVERNMENT REGULATION

Full Stop Protection meets the requirement of ~~the Occupational Safety and Health Administration ‘Occupational Exposure to Bloodborne Pathogens’ CFR29 1910.1030. The Company has received a letter from~~ OSHA confirming that the RES-Q-VAC(R) with the Full Stop Protection falls under the engineering controls of the Bloodborne Pathogen regulation and that the Products use would fulfill the regulatory requirements.

Recent concerns are for diseases that are easily transmitted by small aerosolized droplets such as Asian Bird Flu, Swine Flu, and resistant tuberculosis. Other concerns are hepatitis and HIV, among others.

On April 29, 2003, the Centers for Disease Control (CDC) issued additional guidelines for the control of SARS (Sudden Acute Respiratory Syndrome), which requires all suction systems to have filtration equivalent to a HEPA filter to prevent the spread of this disease. At the current time, we believe that the RES-Q-VAC(R) with Full Stop Protection(R) is the only portable device to comply with these CDC directives.

The new connectors added to our pediatric catheters allow them to connect directly to the adult canisters, enabling pediatric suctioning with the benefit of the Full Stop Protection(R) device as well as with sterile catheters. Many infants are born with contagious diseases and the new system eliminates this concern among paramedics during an emergency delivery.

~~One advantage of our RES-Q-VAC(R) airway suction system is versatility. With the addition of Full Stop Protection(R), we created specific custom RES-Q-VAC(R) kits for various vertical markets:~~

Emergency Medicine - we make several special kits for emergency use, which contain all the catheters necessary to treat adults as well as infants or children. These first responder kits are generally non-sterile. We also have special attachments available for the advanced paramedic to treat patients who are intubated.

Respiratory - in-home care, long-term care, situations requiring frequent suctioning such as cystic fibrosis patients, patients with swallowing disorders, elderly, patients on ventilators and with tracheostomies all benefit from the portability, cost and performance of the RES-Q-VAC(R). In hospitals, the RES-Q-VAC(R) provides emergency backup due to power loss or breakdown of the wall suction system.

Hospital Use - for crash carts, the emergency room, patients in isolation, patient transport (e.g., from ICU to Radiology) and backup for respiratory, RES-Q-VAC(R) is available sterile with Full Stop Protection(R) for the ultimate in performance and to meet all the OSHA regulations and CDC guidelines for use in treating patients in isolation, and in any location. Hospitals are required under the EMTALA regulations to provide emergency treatment to patients anywhere in the primary facility and up to 250 yards away. The RES-Q-VAC(R) ensures full compliance with these regulations and helps minimize unfavorable outcomes and potential lawsuits. We provide special hospital kits, which are fully stocked to meet all hospital applications for both adult and pediatric.

Nursing homes, hospice, sub-acute - we provide special configurations for dining areas and portable suctioning for outside events and travel. Chronic suction can be accommodated with RES-Q-VAC(R), which can be left by the bedside for immediate use during critical times.

~~- 6 -~~

Dental applications - we offer a version of the RES-Q-VAC(R), called DENTAL-EVAC(R), which addresses the needs of oral surgeons for emergency backup suction during a procedure. DENTAL-EVAC(R) is supplied with the dental suction attachments such as saliva ejector and high volume evacuator.

Military Applications -due to its lightweight, portability, and rapid deployment, we believe that the RES-Q-VAC(R) is ideal for any military situation. In addition, exposure to chemical weapons of mass destruction such as Sarin is best treated by rapid, aggressive, and repeated suctioning. We believe that the RES-Q-VAC(R)’s compact size, powerful pump, and full protection of the user from any contamination, gives us a competitive edge in this market.

We are actively pursuing a direct sales effort into the hospital market and continue our effort into nursing homes working with direct sales and several regional distributors in the respiratory market. We also work with national regional distributors who are well represented in the hospital respiratory market.

~~RES-Q-VAC(R) DISTRIBUTION~~

RES-Q-VAC(R) is sold domestically and internationally by emergency medical device distributors. These distributors generally sell to the end user and advertise these products in relevant publications and in their catalogs. We market the hospital RES-Q-VAC(R) system through regional distributors specializing in the hospital respiratory care market.

~~OSHA AND CDC REQUIREMENTS~~

~~The Full Stop Protection(R) meets the requirement of the Occupational Safety and Health Administration as~~ described below. The Company has received a letter from OSHA confirming that the ~~RES-Q-VAC(R)~~RES-Q-VAC with ~~the~~ Full Stop ~~Protection(R)~~Protection falls under the engineering controls of the ~~Bloodborne Pathogen~~blood borne pathogen regulation and that the ~~Products~~products use would fulfill the regulatory requirements.

- 7 -

OSHA 29 ~~CFR~~Code of Federal Regulations 1910.1030 - Occupational Exposure to ~~Bloodborne~~Blood borne Pathogens requires that employers of “... emergency medical technicians, paramedics, and other emergency medical service providers; fire fighters, law enforcement personnel, and correctional officers ... must consider and implement devices that are appropriate [to contain ~~blood-borne~~blood borne pathogens], commercially available and effective.” These first responders risk exposure to serious disease, and the employers may risk OSHA violations and lawsuits if they fail to consider protective measures such as ~~Repro-Med’s~~our Full Stop ~~Protection(R)~~Protection for ~~RES-Q-VAC(R).~~RES-Q-VAC. The Company has received a letter from OSHA indicating ~~the RES-Q-VAC(R)~~that RES-Q-VAC meets the intent of this regulation.

~~COMPETITION FOR THE RES-Q-VAC(R)~~

~~We believe that the RES-Q-VAC(R) is currently the performance leader for manual, portable suction instruments. In the emergency market, the primary competition is the V-Vac(TM) from Laerdal.~~ The V-Vac(TM) is more difficult to use, cannot suction infants, and cannot be used while wearing heavy gloves such as in chemical warfare or in the extreme cold. Laerdal had more resources than REPRO-MED SYSTEMS and had begun marketing the V-Vac(TM) before RES-Q-VAC(R) entered the market. Another competitor is Ambu, with the Res-Cue brand pump, a product similar to our design, made in China. We believe that the product is not as well made or as versatile, and may not be purchased by the military segment of the market due to lines of supply concerns. We believe that the addition of Full Stop Protection(R) substantially separates the RES-Q-VAC(R) from competitive units, which tend to leak fluid when becoming full or could pass airborne pathogens during use. There is a heightened concern from health care professionals concerning exposure to disease and we believe the RES-Q-VAC(R) provides improved protection for these users.

~~SALES AND DISTRIBUTION~~

FREEDOM60(R) systems are sold through both direct sales efforts concentrated on large national accounts and a network of medical device distributors. In recent years, our emergency medical products are sold through a wide network of domestic and international distributors in over 40 countries. Gynecological instruments are sold from the corporate offices primarily through repeat business.

The domestic emergency medical market has softened somewhat due to a decrease in Federal reimbursement to the states and cities for firefighters, police, and emergency services. We have concluded that we can have more effective market penetration with major master distributors who are able to better support our products.

For FREEDOM60(R), we have distributors in United Kingdom, Norway, Sweden, Denmark, Iceland, Finland, Estonia, Latvia, and Lithuaniaand are expanding into other countries. We believe that one distributor in each country will be more predisposed to advertising, promotion, and building the product franchise. We are adding distributors in other European countries to expand our sales efforts. We work closely with our distributors to promote our products in each country.

~~- 7 -~~

During our fiscal year, we have expanded our efforts to market both of our main product lines at national and international trade shows. We support shows attended by our primary customers such as EMS Today, National Home infusion Association Conference, Infusion Nurses Society, Immune Deficiency Foundation Annual Meeting, and MEDICA.

~~The table below presents the product mix for the last two fiscal years.~~

FY 2013

FY 2012

Percentage of Sales

Percentage of Sales

Infusion Therapy

90.0
%

86.4
%

Medical Suction

9.8
%

12.3
%

Other

0.2
%

1.3
%

~~MANUFACTURING AND EMPLOYEES~~

The Company’s employees perform at the Company’s facility electromechanical assembly, calibration, pre- and post-assembly quality control inspection and testing, and final packaging for all products. Products are assembled using molded plastic parts acquired from several U.S. vendors and one supplier located in Taipei, Taiwan. The availability of parts has not been a problem. The cost and time required to fabricate molds to manufacture parts can slow the development of new products and might temporarily limit supply if we determine it is advisable to seek alternate sources of supply for existing products. Our policy has been to have multiple vendors as suppliers, where practicable, that also offer mold-building capabilities as a service.

As of February 28, 2013, we had 60 employees, 40 assigned to manufacturing operations, 10 to sales and customer support, 6 to administrative functions, 2 to quality assurance functions, and 2 officers (CEO/President, CFO). The Company is dependent on the services of Andrew Sealfon who serves as President, head of Research and Development and is instrumental in sales, marketing, and finance.

While the Company did not have insurance on the life of Andrew Sealfon on February 28, 2013, a “key man” policy on the President was bound on May 17, 2013, providing a death benefit of $3.1 Million. There is no assurance that this sum will be adequate to replace the services of Mr. Sealfon in the event of his death.

~~REGULATIONS GOVERNING THE MANUFACTURING OPERATIONS~~

~~The Food, Drug, and Cosmetic Act~~FDA governs the development and manufacturing of all medical products. The ~~Act~~FDA requires us to register ~~the~~our manufacturing facility, list our devices, file notice of intent to market new products, track the locations of certain products and to report any incidents of death or serious injury relating to the products with the FDA. We ~~are~~could become subject to civil and criminal penalties and/or recall seizure or injunctions if we fail to comply with regulations of the FDA.

We are required to comply with federal, state, and local environmental laws; however, there is no significant effect of compliance on capital expenditures, earnings, or competitive position. We do not use significant amounts of hazardous materials in the assembly of these products.

Periodically we are subject to inspections and audits by FDA ~~inspectors.~~inspectors and could be impacted by adverse findings. The last quality review by the FDA was in ~~July 2012,~~June 2015, which included, among ~~others,~~other items, a review of complaints, quality controls, and documentation. The ~~primary complaints for~~FDA inspection was expanded as a consequence of an extensive “trade complaint” which resulted in the ~~FREEDOM60(R) relate~~issuance of an FDA FORM 483 in June 2015. Eight months later, on February 29, 2016 we then received a Warning Letter. The Company responded and replied to ~~a lack~~the Warning Letter on March 18, 2016 and continues to have correspondence and dialog with the agency in order to satisfy all of ~~training on~~FDA’s concerns cited in the ~~part~~Warning Letter. The timeframe to close out all of the ~~patient and medical support staff. The~~items in the letter with the FDA ~~inspection did not find any violations and no DD483 was issued. The Company always is subject to further audits~~could take at least six months. As explained by the FDA in its Regulatory Procedure Manual Chapter 4, an FDA Warning Letter “…is informal and ~~could~~advisory”; “does not commit FDA to taking enforcement action”; and “FDA does not consider Warning Letters to be ~~impacted by adverse findings.~~final agency action.”

The Company is International Organization for Standardization (“ISO”) 13845:2003 certified. Our new registrar is BSI.

MANUFACTURING

The Company’s employees perform the following operations at the Company’s Chester, NY facility: electromechanical assembly, calibration, pre- and post-assembly quality control inspection and testing, and final packaging for all products. Products are assembled using molded plastic parts acquired from several U.S. vendors and two suppliers located in Taiwan. We also have a contractor, operating in Nicaragua, which makes certain subassemblies that we subsequently incorporate into final products in our Chester, NY, facility. The availability of parts has not been a problem. The cost and time required to fabricate molds to manufacture parts can slow the development of new products and might temporarily limit supply if we determine it is advisable to seek alternate sources of supply for existing products. Our policy has been to have multiple sources of supply, where practicable, that also offer mold-building capabilities as a service.

EMPLOYEES

As of February 29, 2016, we had 55 full time employees.

The Company carries insurance on the life of Andrew Sealfon, Chief Executive Officer, providing a death benefit of $3.1 million.

PATENTS AND TRADEMARKS

We have filed and received U.S. protection for many of our products and, in some cases where it was no longer deemed economically beneficial, we have allowed certain patent protections to lapse. The RES-Q-VAC(R) is susceptible in the international market to imitation. In 2002, a competitor had introduced a competitive product to the RES-Q-VAC(R) into the market. We responded with the introduction of new innovative features for the RES-Q-VAC(R) that enhanced the product and placed it well above the competition in safety.

~~- 8 -~~

On June 10, 2003, we received patent #6,575,946 for our new Full Stop Protection(R). This addition to the RES-Q-VAC(R) system prevents any fluids from exiting the system. It also serves to trap airborne and fluid pathogens. We believe that the addition of the flow block design substantially separates the RES-Q-VAC(R) from competitive units, which tend to leak fluid when becoming full or could pass airborne pathogens during use. There is a heightened concern from health care professionals concerning exposure to disease, and the filtered RES-Q-VAC(R) provides improved protection for these users.

The patent position of small companies is highly uncertain and involves complex legal and factual questions. Consequently, there can be no assurance that patent applications relating to products or technology will result in patents being granted or that, if issued, the patents will afford protection against competitors with similar technology. Furthermore, some patent licenses held may be terminated upon the occurrence of certain events or become non-exclusive after a specified period. There can be no assurance that we will have the financial resources necessary to enforce any patent rights we may hold. See Item 3. Legal Proceedings for details regarding our patent litigation.

~~There can be no assurance that patents or trademarks will provide competitive advantages for the products covered or that they will not be challenged or circumvented by competitors.~~- 8 -

We have become aware that a competitor is marketing a product in competition with our FREEDOM60(R) tubing that may infringe on one or more of our patents. At this time, it does not appear that this product is clinically acceptable for use on FREEDOM60(R) pumps. We have retained a law firm in the area of patent law and are reviewing all options, including litigation.

ITEM 1A. RISK FACTORS

Not ~~applicable as the Company is a smaller reporting Company.~~applicable.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not ~~applicable as the Company is a smaller reporting Company.~~applicable.

ITEM 2. PROPERTY

We currently rent a masonry and steel frame building erected on 3.27 acres of land located at 24 Carpenter Road, Chester, New York 10918. This facility is used as our headquarters, for manufacturing operations and for ~~manufacturing operations.~~research & development.

Currently, we are in year 14seventeen of a ~~20-year~~twenty-year lease and are responsible for all repairs, maintenance, and upkeep of the space occupied. The terms of the lease call for monthly lease payments of $11,042, and we contribute payments of 65% of the building’s annual property taxes, amounting to ~~$46,989~~$47,408 for the year ended February ~~28, 2013.~~29, 2016.

We also lease 2,500 square feet of warehouse space in a nearby industrial ~~park.~~park on a year-to-year basis. In Fiscal 2016, we paid $23,222 in rent and common charges for this space.

~~In August, 2012 we acquired~~The Company owns a residence adjacent to our facility for use as additional office and ~~R&D~~research and development space. We paid cash for the property in the amount of $0.2 million.

ITEM 3. LEGAL PROCEEDINGS

~~We are,~~In 2013, the Company commenced in the United States District Court for the Eastern District of California a declaratory judgment action against competitor, EMED Technologies Corp. (“EMED”) to establish the invalidity of one of EMED’s patents and non-infringement of the Company’s needle sets. EMED answered the complaint and asserted patent infringement and unfair business practice counterclaims. The Company responded by asserting its own unfair business practice claims against EMED. On June 16, 2015, the Court issued what it termed a “narrow” preliminary injunction against the Company from ~~time~~making certain statements regarding some of EMED’s products. The Company is complying with that order. On March 24, 2016, EMED filed a motion for a second preliminary injunction regarding sales of RMS products in California. The Company is opposing that motion and briefing for this motion, as well as case discovery is ongoing.

On June 25, 2015, EMED filed a claim of patent infringement for the second of its patents, also directed to ~~time, subject~~the Company’s needle sets, in the United States District Court for the Eastern District of Texas. This second patent is related to the one concerning the Company’s declaratory judgment action. Given the close relationship between the two patents, the Company has requested that the Texas suit be transferred to California. The Court has not yet ruled on the Company’s transfer request. Discovery in the Texas suit is ongoing.

On September 11, 2015, the Company requested an ex parte reexamination of the patent in the first filed case, and on September 17, 2015 the Company requested an inter partes review (“IPR”) of the patent in the second filed case. On November 20, 2015, the U.S. Patent and Trademark Office (“USPTO”) instituted the ex parte reexamination request having found a substantial new question of patentability concerning EMED’s patent in the first filed case. A decision to institute the IPR for EMED’s patent in the second filed case was ordered by the USPTO on February 19, 2016 having determined a reasonable likelihood all claims of the patent may be found to be unpatentable. Based on the grant of the IPR, the Company intends to request the Court stay proceedings of the second filed case until conclusion of the IPR.

Although the Company believes it has meritorious claims and ~~suits arising~~defenses in ~~the ordinary course of business, including claims for damages for personal injuries, breach of management contracts,~~these litigations and ~~employment related claims.~~proceedings, their outcomes cannot be predicted with any certainty.

- 9 -

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED ~~SHAREHOLDER~~STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

We are authorized to issue 50,000,000 shares of Common Stock, $.01 par value. As of February ~~28, 2013, 36,661,667~~29, 2016, 37,966,501 shares were issued and outstanding and there were approximately ~~1,039 shareholders~~1,015 stockholders of record.

~~- 9 -~~

Our Common Stock is traded in the over-the-counter ~~market and is quoted through the National Daily Quotation Service.~~market. The following table sets forth the high and low closing bid quotations for the Common Stock, as reported by ~~Commodity Systems, Inc.,~~Nasdaq.com, for the periods indicated. These quotations do not include retail mark-up, markdown, or commission and may not represent actual transactions.

High

Low

2013 QUARTER ENDED

February 28, 2013

$
0.26

$
0.19

November 30, 2012

$
0.26

$
0.17

August 31, 2012

$
0.26

$
0.17

May 31, 2012

$
0.25

$
0.19

2012 QUARTER ENDED

February 29, 2012

$
0.30

$
0.22

November 30, 2011

$
0.36

$
0.20

August 31, 2011

$
0.42

$
0.28

May 31, 2011

$
0.36

$
0.15


	High		Low

2016 QUARTER ENDED
February 29, 2016	$	0.57	$	0.34
November 30, 2015	$	0.42	$	0.30
August 31, 2015	$	0.45	$	0.28
May 31, 2015	$	0.45	$	0.37

2015 QUARTER ENDED
February 28, 2015	$	0.49	$	0.38
November 30, 2014	$	0.42	$	0.29
August 31, 2014	$	0.36	$	0.23
May 31, 2014	$	0.25	$	0.16

On October 21, 2015, the Board of Directors of the Company approved director compensation of $25,000 each annually, to be paid quarterly half in cash and half in common stock, effective September 1, 2015. Directors include Dr. Mark Baker, Mr. Mark Pastreich, Mr. Arthur Radin and Mr. Cyril Narishkin. For purposes of director compensation, Mr. Narishkin will receive $25,000 annually in addition to his payments under his consulting agreement. As of February 29, 2016, each director was paid $12,500 of which half was paid in cash and half in common stock of which each director received 14,566 in common shares. Beginning March 1, 2016, all Directors, excluding Mr. Andrew Sealfon, the Company’s Chief Executive Officer, will receive director compensation.

On September 30, 2015, RMS’s Board of Directors authorized a stock repurchase program pursuant to which the Company will make open market purchases of up to 1,000,000 shares of the Company’s Outstanding Common Stock. The purchases will be made through a broker to be designated by the Company with price, timing and volume restrictions based on average daily trading volume, consistent with the safe harbor rules of the Securities and Exchange Commission for such repurchases. As of February 29, 2016, the Company had repurchased 180,406 shares at an average price of $0.45 under the program.

On September 30, 2015, the Board of Directors approved the 2015 Stock Option Plan authorizing the Company to grant awards to certain employees under the plan at fair market value, subject to shareholder approval at the Annual Meeting to be held on July 27, 2016. The total number of shares of common stock of the Company, par value $.01 per share (“Common Stock”), with respect to which awards may be granted pursuant to the Plan shall not exceed 2,000,000 shares. As of February 29, 2016, the Company awarded 1,060,000 options to certain executives and key employees under the plan.

On August 8, 2014, we 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 $0.3 million.

- 10 -

ITEM 6. SELECTED FINANCIAL DATA

Not ~~applicable as the Company is a smaller reporting company.~~applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Annual Report on Form 10-K contains certain “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and information relating to us that are based on the beliefs of the management, as well as assumptions made by management and information currently available.

Our actual results may vary materially from the forward-looking statements made in this report due to important factors such as ~~recent operating losses,~~ uncertainties associated with future operating results, unpredictability related to Food and Drug Administration regulations, introduction of competitive products, limited liquidity, reimbursement related risks, government regulation of the home health care industry, success of the research and development effort, expanding the market of ~~FREEDOM60(R),~~FREEDOM60, availability of sufficient capital to continue operations and dependence on key personnel. When used in this report, the words “estimate,” “project,” “believe,” “may,” “will,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. Such statements reflect current views with respect to future events based on currently available information and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. These statements involve risks and uncertainties with respect to the ability to raise capital to develop and market new products, acceptance in the ~~market place~~marketplace of new and existing products, ability to penetrate new markets, our success in enforcing and obtaining patents, obtaining required Government approvals and attracting and maintaining key personnel that could cause the actual results to differ materially. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. ~~Repro-Med~~The Company does not undertake any obligation to release publicly any revision to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

~~ACCOUNTING POLICIES~~INDUSTRY TRENDS

The healthcare industry has seen huge changes in reimbursement and medical insurance during the past decade. In the U.S., the Affordable Health Care Act was created in part to address the rising costs of medical care and ensure greater efficacy of treatments. One trend that is significantly impacting the costs of health care is moving treatments out of the hospital and into the home. Our products are specifically designed for home care infusions, and we expect this trend towards home care infusions to continue and to accelerate.

In Europe, governments have recognized that the increases in health care costs are unsustainable, and are moving towards home care health services as quickly as possible. Thus we expect the home care infusion market to continue to expand worldwide.

While many countries are attempting to reduce reimbursement and simply lower costs, there is also a trend towards proving efficacy. In the U.S., when patients require additional treatments for the same illness, the responsibility falls back onto the health care provider who must pick up the cost of any additional treatments. We believe that ~~we have no critical accounting estimates or assumptions. We do not believe that any~~health systems which consider the outcomes of the ~~standards adopted by the Financial Accounting Standards Board~~treatment will find that our infusion systems are not ~~yet~~only cost effective ~~will~~but also have ~~a material effect on~~proven favorable outcomes.

KEY PERFORMANCE INDICATORS

Management reviews and analyzes several key performance indicators in order to manage our ~~financial reporting.~~business and assess quality of, potential variability of, our earnings and cash flows. These key performance indicators include:


·	Net Sales – which is an indicator of our overall business growth:

·	Gross Profit – is a key factor in the relative strength of our products as gross profits enable us to generate cash to maintain marketing support and research and development, and therefore improve market share;

·	Operating Expenses – outright and as a percentage of net sales, which is an indicator of the efficiency of our business and our ability to manage to our business plan.

- 11 -

FISCAL YEAR END

The Company’s fiscal year end is February 29.

RESULTS OF OPERATIONS

~~2013 vs. 2012~~Fiscal Year Ended February 29, 2016 compared to Fiscal Year Ended February 28, 2015

~~Overall~~Net Sales

The following table summarizes our net sales for the years ended February 29, 2016 and February 28, 2015:

Net sales for the year ~~ending~~ended February ~~28, 2013~~29, 2016, increased ~~21.5%~~8.9% to ~~$7,763,953~~$12.2 million up from ~~$6,390,534~~$11.2 million for the same period last year. The domestic market grew at a strong pace of 12.2%, whereas our international market decreased by (4.8%) due to currency translation, higher sales at a single customer in fiscal 2015 due to temporary treatments and the interim loss of sales from a customer who has since returned to us as a customer. Helping to offset these declines was our success in gaining several new international customers.

~~- 10 -~~

~~We continue to focus our sales and marketing efforts mainly on our two core product lines,~~Our infusion products, which include the ~~FREEDOM60(R)~~FREEDOM60 Syringe Infusion System (“FREEDOM60”) and ~~the RES-Q-VAC(R) Medical Suction System.~~

The FREEDOM60(R) continues to lead our sales increases with an overall improvement of 29.7% going from gross sales of $5,333,000 in 2012 to gross sales of $6,918,000 for the current year. The increase is due to additional sales for use with immune globulin and antibiotics, and increased revenues from our line of RMS ~~HIgH-Flo™~~HIgH-Flo Subcutaneous Safety Needle ~~Sets.~~Sets drove this increase. We have concentrated the majority of our efforts in ~~the FREEDOM60(R) line,~~our infusion product lines, specifically towards ~~the~~ subcutaneous immune globulin ~~(SCIG) market.~~

(“SCIG”) applications in both domestic and international markets. We anticipate ~~these~~ sales to continue to increase as the SCIG market continues to develop and as we work on new enhancements to the ~~FREEDOM60(R)~~FREEDOM60 that we believe will expand this market even further. In addition, we expect many of the SCIG providers and others will see benefit in using the ~~FREEDOM60(R)~~FREEDOM60 system for additional uses, such as antibiotics, chemotherapeutics, and pain medications. Our efforts to reenter into the antibiotic market resulted in a large home care hospital system selecting the FREEDOM60 for all patients receiving this therapy.

Gross Profit

Our gross profit for the years ended February 29, 2016 and February 28, 2015 is as follows:


					Change from Prior Year
	2016		2015		$		%
Gross Profit	$	7,602,903	$	6,687,699	$	915,204	13.7%
Stated as a Percentage of Net Sales		62.1%		59.5%

Gross profit increased $0.9 million or 13.7% in 2016, as compared to 2015, driven by higher net sales and lower production costs.

Gross profit as a percentage of net sales improved 2.6% compared to 2015, mostly due to our lean manufacturing initiatives during the first half of our fiscal year which was partially offset by an accrual for costs associated with a voluntary market withdrawal related to a defect in the packaging supplied to us by a third party vendor. The second half of our fiscal year continued to have increased capacity, as well as lower direct assembly labor costs.

- 12 -

Selling, general and administrative and Research and development

Our selling, general and administrative expenses and research and development costs for the years ended February 29, 2016 and February 28, 2015 are as follows:


					Change from Prior Year
	2016		2015		$			%
Selling, general and administrative	$	5,942,671	$	4,788,279	$	1,154,392		24.1%
Research and development		207,282		468,154		(260,872	)	(55.7%	)
	$	6,149,953	$	5,256,433	$	893,520
Stated as a Percentage of Net Sales		50.2%		46.7%

Selling, general and administrative expenses increased to $5.9 million in Fiscal 2016, up 24.1% from $4.8 million in Fiscal 2015. Of the $1.2 million increase, $0.2 million is due to legal fees incurred for our patent litigation, increased regulatory consulting fees incurred for FDA reporting requirements in the amount $0.1 million, our reorganization effort which increased net salaries and related expenses by $0.2 million and also included a severance charge of $0.2 million and recruiting and consulting fees of $0.3 million. Further adding to the increase was higher trade show expense of $0.1 million due to greater representation at certain shows such as the National Home Infusion Association, attendance at new shows, and the timing of others that are held every two years. Also adding to the increase was the addition of fees to compensate our board of directors in the aggregate of $50,000 for the year.

Research and development expenses decreased by $0.3 million in Fiscal 2016 compared to the same period last year mostly due to a reduction in outside consulting services and from attrition in the department. We recently added an engineer to our staff, as we continue to be committed to our research and development efforts in order to develop new products. We continue to actively pursue new product development and enhance existing product lines based on demand from the marketplace which includes feedback from sales and marketing at RMS and our distributors, the RMS clinical advisory panel, and our strategic business partners. We believe that such efforts have been useful in helping us to maintain our competitive position, increase revenue from our existing customer base and expand our market reach. Although our research and development efforts have allowed us to develop the Freedom60, our HIgH-Flo needle sets, and the FreedomEdge in 2015, there can be no assurance that our research and development will result in additional commercially successful products.

Depreciation and amortization

Depreciation and amortization expense decreased by 4.3% down to $0.27 million in Fiscal 2016 compared with $0.28 million in Fiscal 2015, mostly due to many assets reaching their useful lives, partially offset by capital purchases for our production lines and general facility needs and improvements.

Net Income


					Change from Prior Year
	2016		2015		$		%
Net Income	$	782,864	$	753,117	$	29,747	3.9%
Stated as a Percentage of Net Sales		6.4%		6.7%

Our net income for the ~~year ending February 28, 2013~~Fiscal 2016 was $725,763 as compared with net income of $815,893 for the previous year, a decline of 11.0%. We increased our sales and marketing investment by 66% with expansion of our trade show schedule, stepped up advertising and an increased presence in the field. In addition, we strengthened our sales management team by hiring a Director of Sales and Marketing and a Director of National Accounts, both of whom have many years of experience in our marketplaces. We believe that these efforts are necessary$0.8 million, 3.9% higher than Fiscal 2015. This increase is due to ~~maintain our customer base and increase our sales domestically and internationally for both the FREEDOM60(R) Syringe Infusion System and HIgH-Flo™ Safety Needle Sets.~~

~~We also awarded key personnel bonuses and restricted stock grants that vest over a period of time.~~

RES-Q-VAC(R) Hand Held Medical Suction sales decreased by 6.3% to $753,000 from $803,200. Our overall sales results in the domestic market increased over the prior year; however international sales continued to decline in 2013.

RES-Q-VAC(R) is sold domestically and internationally by emergency medical device distributors. These distributors generally sell to the end user and advertise these products in relevant publications and in their catalogs. We market the hospital RES-Q-VAC(R) Hand Held Medical Suction system through regional distributors specializing in the hospital respiratory care market.

Cost of goods sold increased 25.2%, from $2,251,398 for year ended February 29, 2012 to $2,819,113 for the current year primarily because of increased sales. Gross profit margin for the year ended February 28, 2013 decreased 1.1% to 63.7%, as compared with 64.8% for the previous year. Raw materials costs have been increasing as have production expenses.~~We also wrote-down $129,594 in slow-moving inventory~~.

The Cost of Goods Sold also reflects the effects of the 2.3% Medical Device Excise Tax imposed on medical products manufacturers and importers by the 2010 Patient Protection and Affordable Care Act, effective January 1, 2013. Due to marketplace pressures, we have been forced to absorb the tax.

~~Selling, General & Administrative Expenses (SG&A) increased by $888,221 year over year from $2,655,668 to $3,543,889,~~ an increase of ~~33.4%. We increased~~$1.0 million in net sales, improved gross margins due to our ~~sales~~lean initiatives throughout the fiscal year and marketing investment by 66% with expansion of our trade show schedule, stepped up advertising and an increased presence in the field. In addition, we strengthened our sales management team by hiring a Director of Sales and Marketing and a Director of National Accounts, both of whom have many years of experience in our marketplaces. We believe that these efforts are necessary to maintain our customer base and increase our sales domestically and internationally for both the FREEDOM60(R) Syringe Infusion System and HIgH-Flo™ Safety Needle Sets.

~~Research~~reduced research and development ~~expenses increased 63.4% from $90,329 to $147,576 primarily due to~~costs, partially offset by the ~~hiring of additional engineering staff to support development efforts. Our chief executive officer spends significant time on research and development. All of his compensation has been included~~increase in selling, general and administrative ~~costs.~~expenses of $1.2 million as described above.

Depreciation and amortization expense increased by 83.7% to $190,971 during the year ended February 28, 2013 as compared with $103,981 for the previous year 2012 as a result of increased investment in capital assets. Interest expense decreased from $31,540 to $28,280 due to lower debt levels.

~~- 11 -~~

LIQUIDITY AND CAPITAL RESOURCES

Our ~~net~~principal source of liquidity is our cash of $4.2 million as of February 29, 2016, and cash flows from operations. Our principal source of operating ~~profit~~cash inflows is from sales of our products to customers. Our principal cash outflows relate to the purchase and production of inventory and related costs, selling, general and administrative expenses, research and development costs, capital expenditures and patent costs.

- 13 -

We believe that as of February 29, 2016, cash on hand and cash expected to be generated from future operating activities will be sufficient to fund our operations, including further research and development and capital expenditures for the next 12 months. We believe the FREEDOM60® continues to find a solid following in the subcutaneous immune globulin market and this market is expected to continue to increase both domestically and internationally.

RMS HIgH-Flo™ Subcutaneous Safety Needle Sets have clearance for sale in Europe, Canada and the U.S. We believe that the RMS administration sets represent an improvement in performance and safety over competitive devices on the market. We believe we have sufficient resources to continue marketing the needle sets domestically and internationally.

Cash Flows

The following table summarizes our cash flows:


	Year Ended February 29, 2016			Year Ended February 28, 2015
Net cash provided by operating activities	$	1,914,813		$	826,099
Net cash used in investing activities		(189,522	)		(744,981	)
Net cash (used in) provided by financing activities		(80,577	)		248,719

Operating Activities

Net cash provided by operating activities of $1.9 million for the fiscal year ended February 29, 2016, was primarily attributable to our net income of $0.8 million, non-cash charges of $0.3 million for depreciation and amortization of long lived tangible and intangible assets, $28,000 of deferred compensation costs and $0.1 million of stock based compensation. Further adding to the improvement in net cash provided by operating activities was an increase in accounts payable and accrued expense of $0.3 million, a decrease in accounts receivable of $0.3 million and a decrease in inventory levels of $0.2 million. Inventory levels were also much lower than in the fiscal year ended February 28, ~~2013 was $1,062,404 as compared with $1,289,158~~2015 due to initial increases resulting from our outsourcing of subassemblies for our manufacturing process and increased finished good levels for needle sets in that period. Net cash provided by operating activities of $0.8 million for the ~~previous year. For the~~fiscal year ended February 28, ~~2013 Net Cash provided from Operations~~2015 was ~~$784,790~~primarily attributable to our net income of $0.8 million, non-cash charges of $0.3 million for depreciation and amortization of long lived tangible and intangible assets and $0.1 million of deferred compensation costs, all offset mostly by an increase in inventory levels of $0.4 million in the period as ~~compared with $560,601~~described above as well as a decrease in accrued tax liability.

Investing Activities

Our net cash used in investing activities of $0.2 million for the ~~prior year. This increase~~fiscal year ended February 29, 2016, was primarily attributable to capital expenditures related to purchases of ~~$224,189 compared~~manufacturing equipment and tooling and patent costs. Our net cash used in investing activities of $0.7 million for the fiscal year ended February 28, 2015, was primarily attributable to capital expenditures related to purchases of manufacturing equipment and tooling, installation of a new clean room and patent costs.

Financing Activities

Net cash used by financing activities of $0.1 million for the ~~prior~~fiscal year ended February 29, 2016, was made up of the repurchase of our common stock, mostly offset by the issuance of shares for board of director fees and consulting fees. Net cash provided by financing activities of $0.2 million for the fiscal year ended February 28, 2015, was due to ~~a small decrease in inventory (after write-down~~the sale of slow-moving inventory), an increase in depreciation and amortization, an increase in various accrued expenses/taxes and an increase of deferred compensation related to the restricted stock grant program for key personnel. These were partially offset by increases in accounts receivable and a decrease in accounts payable. In 2012, inventory had increased substantially as we ramped up for the domestic introduction of our new HIgH-Flow™ Subcutaneous Safety Needle Sets.common stock.

Accounts Receivable, net of reserves, increased at February 28, 2013 to $1,114,847 as compared with $884,727 for the previous year because of our increased sales. Domestic sales are made primarily on net 30-day payment terms. A variety of terms continue to be employed for export sales including cash prepayments and net 45 days to allow for increased delays due to transportation and communications. Prepaid expenses decreased slightly to $180,651 from $188,902.- 14 -

Expenditures for capital property and equipment in 2013 were $563,567 as compared to $236,235 in the previous year, an increase of 139%. In 2013, we installed a new ERP system, purchased new equipment for implementation of a more efficient production process and for R&D, and acquired a residence adjacent to our facility for use as additional office and R&D space, among other capital investments.Lease commitments

We currently lease a masonry and steel frame building erected on 3.27 acres of land located at 24 Carpenter Road, Chester, New York 10918. This facility is used as our headquarters, ~~and~~ for manufacturing ~~operations.~~operations and research & development. We are in year 14seventeen of a ~~20-year~~twenty-year lease and are responsible for all repairs, maintenance, and upkeep of the space occupied. The terms of the lease call for a monthly lease payment of $11,042 per month. We also contribute payments of 65% of the building’s annual property taxes, amounting to ~~$46,989~~$47,408 for the year ended February ~~28, 2013.~~29, 2016.

We also lease 2,500 square feet of warehouse space in a nearby industrial ~~park.~~park on a year-to-year basis. In Fiscal 2016, we paid $23,222 in rent and common charges for this space.

~~RMS HIgH-Flo™ Subcutaneous Safety Needle Sets have approval~~ACCOUNTING POLICIES

Preparation in conformity with accounting principles generally accepted in the United States (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. These estimates are based on our best knowledge of current events and actions we may undertake in the future. Estimates used in accounting are, among other items, allowance for ~~Europe, Canada~~excess and obsolete inventory, useful lives for depreciation and amortization of long lived assets, contingencies and allowances for doubtful accounts. Actual results may ultimately differ from our estimates, although we do not generally believe such differences would materially affect the financial statements in any individual year.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-09 — Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU was issued as part of the FASB’s simplification initiative and under the ASU, the areas of simplification in the update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classifications of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. The amendment eliminates the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment. This should not result in a change in practice because the guidance that is being superseded was never effective. The amendment in this ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The main difference between the current requirement under GAAP and this ASU is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. This ASU requires that a lessee recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting. For lessors, the guidance modifies the classification criteria and the ~~United States.~~accounting for sales-type and direct financing leases. This is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. This ASU must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We ~~believe that~~are currently assessing the ~~RMS administration sets represent~~potential impact of this ASU and expect it will have a material impact on our consolidated financial condition and results of operations upon adoption.

In November 2015, the FASB issued ASU No. 2015-17 — Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Prior this ASU, GAAP required an ~~improvement in performance~~entity to separate deferred income tax asset and ~~safety over competitive devices~~liabilities into current and noncurrent amounts on the ~~market. We believe we have sufficient resources~~balance sheet. This ASU requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This ASU is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted. This ASU may be applied either prospectively to ~~continue marketing the needle sets domestically~~all deferred tax assets and ~~overseas.~~liabilities or retrospectively to all periods presented. The requirement that deferred tax liabilities and assets be offset and presented as a single amount was not affected by this amendment. The Company has adopted this ASU retrospectively.

~~We believe~~- 15 -

In July 2015, the ~~FREEDOM60(R) continues~~FASB issued Accounting Standards Update (“ASU”) No. 2015-11—Simplifying the Measurement of Inventory. The ASU was issued as part of the FASB’s simplification initiative and under the ASU, inventory is measured at the lower of cost and net realizable value, which would eliminate the other two options that currently exist for the market: (1) replacement cost and (2) net realizable value less an approximately normal profit margin. This ASU is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted and should be applied prospectively. The Company does not expect the adoption of the ASU to ~~find~~have any impact on its financial statements.

In May 2014, FASB issued ASU No. 2014-09—Revenue from Contracts with Customers. The ASU clarifies the principles for recognizing revenue and develops a ~~solid following~~common revenue standard for U.S. GAAP and International Financial Reporting Standards (“IFRS”) that removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, provides more useful information to users of the ~~subcutaneous immune globulin market~~financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The amendments in this ~~market~~update are effective for the annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Full or modified retrospective adoption is ~~expected~~required and early application is not permitted. On July 9, 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers (Topic 606); Deferral of the Effective Date, which (a) delays the effective date of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), by one year to ~~continue~~annual periods beginning after December 15, 2017 and (b) allows early adoption of the ASU by all entities as of the original effective date for public entities. In March 2016, the FASB issued ASU No. 2016-08 Revenue from Contracts with Customers (Topic 606); Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to ~~increase both domestically~~improve the operability and ~~internationally. We continued to experience an increase in sales during~~understandability of the ~~year ending February 28, 2013. With these increases~~implementation guidance on principal versus agent considerations and the ~~capital we currently have, we will continue~~effective date is the same as the requirements in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606); Identifying Performance Obligations and Licensing, which is intended to ~~meet or exceed~~clarify identifying performance obligations and the ~~company’s liquidity needs~~licensing implementation guidance, while retaining the related principles for those areas and the ~~next twelve months.~~effective date is the same as the requirements in ASU 2014-09. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not ~~applicable as the Company is a smaller reporting Company.~~applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

- 1216 -

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

~~Repro-Med~~Repro Med Systems, Inc.

Chester, New York

We have audited the accompanying balance sheets of ~~Repro-Med~~Repro Med Systems, Inc. as of February ~~28, 2013~~29, 2016 and February ~~29, 2012,~~28, 2015, and the related statements of operations, stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the ~~audits~~audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial ~~statements. An audit also includes~~statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ~~Repro-Med~~Repro Med Systems, Inc. as of February ~~28, 2013~~29, 2016 and February ~~29, 2012,~~28, 2015, and the results of its operations and its cash flows for the years then ended in conformity with ~~accounting principles~~U.S. generally accepted ~~in the United States of America.~~accounting principles.

/s/ ~~Radin, Glass~~McGrail, Merkel, Quinn & ~~Co., LLP~~Associates, P.C.

~~New York, New York~~Scranton, Pennsylvania

May ~~29, 2013~~

- 13, -

~~REPRO-MED SYSTEMS, INC.~~

~~BALANCE SHEETS~~

February 28,

February 29,

2013

2012

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$
1,930,321

$
1,757,223

Certificates of deposit

257,009

255,228

Accounts receivable less allowance for doubtful accounts of $17,450 and $17,718 for February 28, 2013, and February 29, 2012, respectively

1,114,847

884,727

Inventory

1,150,129

1,167,456

Prepaid expenses

180,651

188,902

Total Current Assets

4,632,957

4,253,536

PROPERTY & EQUIPMENT, net

875,986

498,940

OTHER ASSETS

Patents, net of accumulated amortization of $112,090 and $107,640 at February 28, 2013 and February 29, 2012, respectively

22,913

24,513

Other

60,369

28,156

Total Other Assets

83,282

52,669

TOTAL ASSETS

$
5,592,225

$
4,805,145

~~The accompanying notes are an integral part of these Financial Statements.~~

~~- 14 -~~

~~REPRO-MED SYSTEMS, INC.~~

~~BALANCE SHEETS~~

February 28,

February 29,

2013

2012

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Note payable - current portion

$
1,474

$
2,077

Notes payable to related parties - current portion

43,971

41,417

Deferred capital gain - current portion

22,481

22,481

Accounts payable

110,358

199,527

Accrued expenses

169,790

153,800

Accrued payroll and related taxes

50,195

41,551

Accrued income tax liability

127,090

98,000

Total Current Liabilities

525,359

558,853

OTHER LIABILITIES

Note payable - less current portion

—

1,474

Note payable to related parties - less current portion

393,861

437,832

Deferred capital gain -less current portion

112,414

134,895

Deferred tax liability

204,000

121,363

Total Other Liabilities

710,275

695,564

Total Liabilities

1,235,634

1,254,417

STOCKHOLDERS’ EQUITY

Common stock, $0.01 par value, 50,000,000 shares authorized and 38,936,667 and 37,471,667 shares issued; 36,661,667 and 35,196,667 shares outstanding at February 28, 2013 and February 29, 2012, respectively.

389,367

374,717

Additional paid-in capital

3,512,294

3,263,244

Retained earnings

780,530

54,767

4,682,191

3,692,728

Less: Treasury stock, 2,275,000 shares at cost

(142,000
)

(142,000
)
Less: Deferred compensation cost

(183,600
)

—

Total Stockholders’ Equity

4,356,591

3,550,728

Total Liabilities and Stockholders’ Equity

$
5,592,225

$
4,805,145

~~The accompanying notes are an integral part of these Financial Statements.~~

~~- 15 -~~

~~REPRO-MED SYSTEMS, INC.~~

~~STATEMENTS OF OPERATIONS~~

For the years ended

February 28,

February 29,

2013

2012

NET SALES

$
7,763,953

$
6,390,534

Cost and Expenses

Cost of goods sold

2,819,113

2,251,398

Selling, general and administrative

3,543,889

2,655,668

Research and development

147,576

90,329

Depreciation and amortization

190,971

103,981

Total Costs and Expenses

6,701,549

5,101,376

Net Operating Profit

1,062,404

1,289,158

Other Income/(Expenses)

Interest expense

(28,280
)

(31,540
)
Gain / (Loss) foreign currency exchange

(4,095
)

10,718

Interest and other income

8,081

12,848

Total Other Expenses

(24,294
)

(7,974
)

INCOME BEFORE TAXES

1,038,110

1,281,184

Income Tax Expense

(312,347
)

(465,291
)

NET INCOME

$
725,763

$
815,893

NET INCOME PER SHARE

Basic

$
0.02

$
0.02

Diluted

$
0.02

$
0.02

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

Basic

36,011,448

34,250,560

Diluted

36,036,362

35,102,446

~~The accompanying notes are an integral part of these financial statements.~~

~~- 16 -~~

~~REPRO-MED SYSTEMS, INC.~~

~~STATEMENT OF STOCKHOLDERS’ EQUITY~~

~~FOR THE YEARS ENDED FEBRUARY 28, 2013 AND FEBRUARY 29, 2012~~

Retained

Additional

Earnings

Deferred

Common Stock

Paid-in

(Accumulated

Treasury

Compensation

Shares

Amount

Capital

Deficit)

Stock

Cost

Total

BALANCE, FEBRUARY 28, 2011

36,577,667

$
365,777

$
3,017,809

$
(761,126
)
$
(142,000
)

—

$
2,480,460

Issuance of common stock for exercised stock options at $.06 per share

2,025,000

20,250

101,250

—

—

—

121,500

Excess tax benefit related to share-based compensation

—

—

132,875

—

—

—

132,875

Adjustment of shares outstanding

(1,131,000
)

(11,310
)

11,310

—

—

—

—

Net income for the year ended February 29, 2012,

—

—

—

815,893

—

—

815,893

BALANCE, FEBRUARY 29, 2012

37,471,667

374,717

3,263,244

54,767

(142,000
)

—

3,550,728

Issuance of common stock for employee stock awards

1,465,000

14,650

249,050

—

—

(183,600
)

80,100

Net income for the year ended February 28, 2013

—

—

—

725,763

—

—

725,763

BALANCE, FEBRUARY 28, 2013

38,936,667

$
389,367

$
3,512,294

$
780,530

$
(142,000
)
$
(183,600
)
$
4,356,591

~~The accompanying notes are an integral part of these Financial Statements.~~2016

- 17 -

~~REPRO-MED~~REPRO MED SYSTEMS, INC.

~~STATEMENTS OF CASH FLOWS~~BALANCE SHEETS

For the Years Ended

February 28,

February 29,

2013

2012

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

$
725,763

$
815,893

Adjustments to reconcile net income to net cash from operating activities:

Amortization of deferred compensation cost

80,100

—

Depreciation and amortization

190,971

103,981

Deferred capital gain - building lease

(22,481
)

(22,480
)
Deferred taxes

82,637

167,004

Changes in operating assets and liabilities:

Increase in accounts receivable

(230,120
)

(170,821
)
Decrease (Increase) in inventory

17,327

(499,256
)
Decrease (Increase) in prepaid expense

8,251

(75,965
)
Increase in other assets

(32,213
)

—

(Decrease) Increase in accounts payable

(89,169
)

41,419

Increase in accrued payroll and related taxes

8,644

20,356

Increase in accrued expense

15,990

82,470

Increase in accrued income tax liability

29,090

98,000

NET CASH PROVIDED BY OPERATING ACTIVITIES

784,790

560,601

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property and equipment

(563,567
)

(236,235
)
Payments for patents

(2,850
)

—

Purchase of certificates of deposit

(1,781
)

(102,829
)
NET CASH USED IN INVESTING ACTIVITIES

(568,198
)

(339,064
)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuing common stock

—

121,500

Payments to note payable to related parties

(41,417
)

(39,010
)
Payments on note payable

(2,077
)

(1,929)

Excess tax benefits from share-based payment arrangements

—

132,875

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

(43,494
)

213,436

NET INCREASE IN CASH AND CASH EQUIVALENTS

173,098

434,973

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

1,757,223

1,322,250

CASH AND CASH EQUIVALENTS, END OF YEAR

$
1,930,321

$
1,757,223

Supplemental Information

Cash paid during the years for:

Interest

$
28,280

$
31,540

Taxes

$
213,793

$
89,644

NON-CASH FINANCING AND INVESTING ACTIVITIES

Issuance of common stock as incentives

$
263,700

$
—


	February 29,			February 28,
	2016			2015

ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	4,201,949		$	2,557,235
Certificates of deposit		261,118			259,789
Accounts receivable less allowance for doubtful accounts of $18,648 and $29,865 for February 29, 2016, and February 28, 2015, respectively		1,350,180			1,623,695
Inventory		1,040,277			1,226,636
Prepaid expenses		265,123			240,688
TOTAL CURRENT ASSETS		7,118,647			5,908,043
Property and equipment, net		996,822			1,161,432
Patents, net of accumulated amortization of $147,380 and $134,552 at February 29, 2016 and February 28, 2015, respectively		247,691			180,558
Other Assets		31,140			31,140
TOTAL ASSETS	$	8,394,300		$	7,281,173

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Deferred capital gain - current portion	$	22,481		$	22,481
Accounts payable		307,764			243,217
Accrued expenses		499,406			304,041
Accrued payroll and related taxes		148,766			121,917
Accrued tax liability		129,497			—
Total Current Liabilities		1,107,914			691,656
Deferred capital gain -less current portion		44,976			67,454
Deferred tax liability		123,111			248,607
Total Liabilities		1,276,001			1,007,717
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, 50,000,000 shares authorized, 40,487,532 and 40,347,292 shares issued; 37,966,501 and 38,006,667 shares outstanding at February 29, 2016, and February 28, 2015, respectively		404,875			403,473
Additional paid-in capital		3,968,342			3,855,188
Retained earnings		3,019,940			2,237,076
		7,393,157			6,495,737
Less: Treasury stock, 2,521,031 shares and 2,340,625 shares at February 29, 2016, and February 28, 2015, respectively, at cost		(246,858	)		(166,281	)
Less: Deferred compensation cost		(28,000	)		(56,000	)
TOTAL STOCKHOLDERS’ EQUITY		7,118,299			6,273,456
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,394,300		$	7,281,173

The accompanying notes are an integral part of these Financial Statements.

- 18 -

~~REPRO-MED~~REPRO MED SYSTEMS, INC.

STATEMENTS OF OPERATIONS


	For the years ended
	February 29,		February 28,
	2016		2015

NET SALES	$	12,247,338	$	11,244,660
Cost of goods sold		4,644,435		4,556,961
Gross Profit		7,602,903		6,687,699

OPERATING EXPENSES
Selling, general and administrative		5,942,671		4,788,279
Research and development		207,282		468,154
Depreciation and amortization		271,566		283,875
Total Operating Expenses		6,421,519		5,540,308

Net Operating Profit		1,181,384		1,147,391

Non-Operating Expense/(Income)
Interest expense		3,412		512
Loss on foreign currency exchange		26,204		77,966
Other expense and interest income, net		9,198		(5,623	)

INCOME BEFORE TAXES		1,142,570		1,074,536

Income tax expense		359,706		321,419

NET INCOME	$	782,864	$	753,117

NET INCOME PER SHARE
Basic	$	0.02	$	0.02
Diluted	$	0.02	$	0.02

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic		37,988,954		37,634,064
Diluted		37,988,954		37,634,064

The accompanying notes are an integral part of these financial statements.

- 19 -

REPRO MED SYSTEMS, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED FEBRUARY 29, 2016 AND FEBRUARY 28, 2015


						Additional							Deferred			Total
	Common Stock					Paid-in		Retained		Treasury			Compensation			Stockholders’
	Shares		Amount			Capital		Earnings		Stock			Cost			Equity

BALANCE, FEBRUARY 28, 2014	38,936,667		$	389,367		$	3,512,294	$	1,483,959	$	(142,000	)	$	(51,750	)	$	5,191,870
Issuance of common stock awards	420,000			4,200			79,800		—		—			(84,000	)		—
Issuance of common stock	1,000,000			10,000			263,000		—		—			—			273,000
Cancellation of Unvested common Stock	(9,375	)		(94	)		94		—		—			—			—
Purchase of treasury common stock	—			—			—		—		(24,281	)		—			(24,281)
Amortization of deferred compensation cost	—			—			—		—		—			79,750			79,750
Net income for the year ended February 28, 2015	—			—			—		753,117		—			—			753,117
BALANCE, FEBRUARY 28, 2015	40,347,292		$	403,473		$	3,855,188	$	2,237,076	$	(166,281	)	$	(56,000	)	$	6,273,456
Issuance of Common Stock	140,240			1,402			113,154		—		—			—			114,556
Purchase of treasury common stock	—			—			—		—		(80,577	)		—			(80,577	)
Amortization of deferred compensation cost	—			—			—		—		—			28,000			28,000
Net income for the year ended February 29, 2016	—			—			—		782,864		—			—			782,864
BALANCE, FEBRUARY 29, 2016	40,487,532		$	404,875		$	3,968,342	$	3,019,940	$	(246,858	)	$	(28,000	)	$	7,118,299

The accompanying notes are an integral part of these Financial Statements.

- 20 -

REPRO MED SYSTEMS, INC.

STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these Financial Statements.

- 21 -

REPRO MED SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS

FEBRUARY ~~28, 2013~~29, 2016 AND FEBRUARY ~~29, 2012~~28, 2015

~~NOTE 1~~

NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

~~REPRO-MED~~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~~Food and Drug Administration (the “FDA”) regulates these products. The Company ~~is in~~operates as one ~~line of business.~~segment.

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~~The Company ~~has~~holds cash ~~held~~ in excess of $250,000 at ~~a single depository,~~multiple depositories, which exceeds the FDIC insurance limits and is, therefore, uninsured.

~~At February 28, 2013, cash equivalents consisted of money market funds aggregated to $852,977.~~

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%~~0.35% to 0.55% and mature in ~~July 2013~~June 2016 and February ~~2014.~~2017.

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.~~the legal life of the patents.

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 ~~2009~~2012 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~~maintains various long-term incentive stock ~~issued for services~~benefit plans under which it grants stock options and restricted stock awards to certain directors and key employees. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. All options are charged against income at their fair value. The entire compensation expense of the award is recognized over the vesting period. Shares of stock granted are recorded at the fair value ~~method. The measurement~~of the shares at the grant date, ~~of shares issued for service is~~over the ~~date when the counterparty’s performance is complete.~~vesting period.

- 1922 -

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)6).


	Fiscal Year Ended				Fiscal Year Ended
	February 28, 2013		February 29, 2012		February 29, 2016		February 28, 2015

Net income	$	725,763	$	815,893	$	782,864	$	753,117

Weighted Average Outstanding Shares:
Outstanding shares		36,011,448		34,250,560		37,988,954		37,634,064
Option shares includable		24,914		851,886		—		—
		36,036,362		35,102,446		37,988,954		37,634,064

Net income per share
Basic	$	0.02	$	0.02	$	0.02	$	0.02
Diluted	$	0.02	$	0.02	$	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, 2013, the date on which the financial statements were issued. With the exception of those matters discussed in Note 11, 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 generally does not accept return of goods shipped unless it is a Company error. The only credits provided to customers are for defective merchandise.

~~EMERGING~~RECENTLY ISSUED ACCOUNTING ~~STANDARDS~~PRONOUNCEMENTS

~~Management does not believe that any of the standards adopted by~~In March 2016, the Financial Accounting Standards Board ~~but~~(“FASB”) issued ASU No. 2016-09 — Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU was issued as part of the FASB’s simplification initiative and under the ASU, the areas of simplification in the update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classifications of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. The amendment eliminates the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment. This should not result in a change in practice because the guidance that is being superseded was never effective. The amendment in this ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period.

- 23 -

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The main difference between the current requirement under GAAP and this ASU is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. This ASU requires that a lessee recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are ~~not yet~~largely similar to those applied in current lease accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. This is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. This ASU must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We are currently assessing the potential impact of this ASU and expect it will have a material ~~effect~~impact on our consolidated financial condition and results of operations upon adoption.

In November 2015, the FASB issued ASU No. 2015-17 — Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Prior this ASU, GAAP required an entity to separate deferred income tax asset and liabilities into current and noncurrent amounts on the ~~Company’s~~balance sheet. This ASU requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This ASU is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted. This ASU may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. The requirement that deferred tax liabilities and assets be offset and presented as a single amount was not affected by this amendment. The Company has adopted this ASU retrospectively.

In July 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-11—Simplifying the Measurement of Inventory. The ASU was issued as part of the FASB’s simplification initiative and under the ASU, inventory is measured at the lower of cost and net realizable value, which would eliminate the other two options that currently exist for the market: (1) replacement cost and (2) net realizable value less an approximately normal profit margin. This ASU is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted and should be applied prospectively. The Company does not expect the adoption of the ASU to have any impact on its financial ~~reporting.~~statements.

In May 2014, FASB issued ASU No. 2014-09—Revenue from Contracts with Customers. The ASU clarifies the principles for recognizing revenue and develops a common revenue standard for U.S. GAAP and International Financial Reporting Standards (“IFRS”) that removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, provides more useful information to users of the financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The amendments in this update are effective for the annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Full or modified retrospective adoption is required and early application is not permitted. On July 9, 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers (Topic 606); Deferral of the Effective Date, which (a) delays the effective date of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), by one year to annual periods beginning after December 15, 2017 and (b) allows early adoption of the ASU by all entities as of the original effective date for public entities. In March 2016, the FASB issued ASU No. 2016-08 Revenue from Contracts with Customers (Topic 606); Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and the effective date is the same as the requirements in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606); Identifying Performance Obligations and Licensing, which is intended to clarify identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas and the effective date is the same as the requirements in ASU 2014-09. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption.

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.

- 24 -

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, 2013~~29, 2016, the Company does not believe that any of its assets are impaired.

~~- 20 -~~


~~NOTE 2~~	NOTE 2 INVENTORY

Inventory consists of:

February 28, 2013

February 29, 2012

Raw materials

$
625,934

$
788,092

Work in progress

45,820

55,067

Finished goods

478,375

324,297

$
1,150,129

$
1,167,456


	February 29, 2016		February 28, 2015

Raw materials and Work-in-process	$	600,028	$	829,242
Finished goods		478,312		471,883
		1,078,340		1,301,125

Less: reserve for obsolete inventory		38,063		74,489
Inventory, net	$	1,040,277	$	1,226,636

~~NOTE 3~~

NOTE 3 PROPERTY AND EQUIPMENT

Property and equipment consists of the following at:

February 28, 2013

February 29, 2012

Estimated Useful Lives

Land

$
54,030

$
—

Building

171,094

—

20 years

Furniture, office equipment, and leasehold improvements

844,747

636,159

3-10 years

Manufacturing equipment and tooling

1,408,113

1,278,258

3-12 years

2,477,984

1,914,417

Less: accumulated depreciation

1,601,998

1,415,477

Property and equipment, net

$
875,986

$
498,940

Depreciation expense was ~~$186,521~~$258,738 and ~~$98,655~~$268,759 for the years ended February ~~28, 2013~~29, 2016, and February ~~29, 2012,~~28, 2015, respectively.


~~NOTE 4~~	~~RELATED PARTY TRANSACTIONS~~

NOTE 4 RELATED PARTY TRANSACTIONS

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 $28,000 for the each of the fiscal years ended February 29, 2016 and February 28, 2015. 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.

On October 21, 2015, Cyril Narishkin was appointed to the Board of Directors and Interim Chief Operating Officer of the Company. Also effective October 21, 2015, we entered into a consulting agreement with Mr. Narishkin, to support our expanded management team and accelerate our growth opportunities under his role of Interim Chief Operating Officer. The agreement provides for payment of $16,000 per month, of which half is to be paid in cash and half is to be paid in shares of common stock. Effective January 1, 2016, the agreement provides for the same payment of $16,000 per month, of which seventy-five percent is to be paid in cash and twenty-five percent is to be paid in shares of common stock.

On April 26, 2016, Cyril Narishkin was appointed President of the Company.

- 25 -

LEASED AIRCRAFT

The Company leases an aircraft from a ~~Company~~company controlled by the ~~President.~~Chief Executive Officer. The lease payments ~~aggregated~~were $21,500 for ~~both~~each of the years ended February ~~28, 2013~~29, 2016, and February ~~29, 2012.~~28, 2015. 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~~director, is a principal in the entity that owns the building leased by ~~REPRO-MED SYSTEMS, INC.~~Company. The Company is in year ~~fourteen~~seventeen 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.


~~NOTE 5~~	~~LONG-TERM DEBT~~

~~Long-term debt consists of the following at February 28, 2013 and February 29, 2012:~~

February 28, 2013

February 29, 2012

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 will mature in February 2021.

437,832

479,249

Other

1,474

3,551

439,306

482,800

Less current portion

45,445

43,494

Long-term portion

$
393,861

$
439,306

~~- 21 -~~

~~Aggregate maturities as required on long-term debt at February 28, 2013 are:~~

2014

$
45,445

2015

46,683

2016

49,562

2017

52,619

2018

55,865

Thereafter

189,132

Total

$
439,306

NOTE 5 STOCKHOLDERS’ EQUITY

NOTE 6 STOCK-BASED COMPENSATION

~~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 ~~$80,100~~zero and $51,750 for the ~~year~~years ended February 28, ~~2013.~~2016, and February 28, 2015, respectively.


~~NOTE 7~~	~~STOCK OPTIONS~~

On ~~June 6, 2007,~~September 30, 2015, the Board of Directors approved the ~~issuance~~2015 Stock Option Plan authorizing the Company to grant awards to certain employees under the plan at fair market value, subject to shareholder approval at the Annual Meeting to be held on July 27, 2016. The total number of ~~4,360,000~~shares of common stock of the Company, par value $.01 per share (“Common Stock”), with respect to which awards may be granted pursuant to the Plan shall not exceed 2,000,000 shares. As of February 29, 2016, the Company awarded 1,060,000 options to certain executives and key employees under the plan.

The per share weighted average fair value of stock options ~~to key employees~~granted during the fiscal year ended February 29, 2016 and ~~directors of the Company. The options had an expiration date of 5 years from the date of grant~~February 28, 2015 was $0.19 and ~~an exercise price of $0.06 per share.~~

zero, respectively. The fair value of each ~~option grant was calculated to be $.0272~~award is estimated on the grant date ~~of grant~~ using the ~~Black-Schole Option~~Black-Scholes option pricing model with the following ~~assumption~~weighted average assumptions used for grants ~~during~~in the ~~applicable period.~~fiscal year ended February 29, 2016. Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of the U.S. Treasury issues with a term equal to the expected life of the option being valued:


~~Risk free rate~~	February 29, 2016		February 28, 2015
		~~2.4%~~
~~Volatility~~		~~96.16%~~
~~Expected life~~		~~1.5 years~~
Dividend yield		0%0.00%		—
Expected Volatility		59.00%		—
Weighted-average volatility		—		—
Expected dividends		—		—
Expected term (in years)		5 Years		—
Risk-free rate		2.17%		—

- 26 -

The following table summarizes the status of the Company’s stock ~~options.~~option plan:

Options

Shares

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Contractual
Term

Outstanding at March 1, 2012

125,000

$
0.06

0.3

Granted

—

—

—

Exercised

—

—

—

Forfeited or expired

(125,000
)
$
0.06

—

Outstanding at February 28, 2013

—

—

—

Exercisable at February 28, 2013

—

—

—


	February 29, 2016				February 28, 2015
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price

Outstanding at March 1		—	$	—		—	$	—
Granted		1,155,000	$	0.36-0.38		—	$	—
Exercised		—	$	—		—	$	—
Forfeited		95,000	$	0.36		—	$	—
Outstanding at February 29,		1,060,000	$	0.36-0.38		—	$	—
Options exercisable at February 29,		—	$	—		—	$	—
Weighted average fair value of options granted during the period		—	$	—		—	$	—
Stock-based compensation expense		—	$	50,413		—	$	—

~~In August 2011,~~Total stock-based compensation expense for stock option awards totaled $50,413 and zero for the ~~president~~fiscal year ended February 29, 2016 and ~~one director exercised stock options. Total~~February 28, 2015, respectively.

The weighted-average grant-date fair value of options granted during fiscal years ended February 29, 2016 and February 28, 2015 was $201,890 and zero, respectively. The total intrinsic value of options exercised during fiscal years ended February 29, 2016 and February 28, 2015, was zero for both periods.

The following table presents information pertaining to options outstanding at February 29, 2016:


Range of Exercise Price	Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price

$0.36 - $0.38	1,060,000	5 years	$	0.37	—	$	—

As of February 29, 2016, there was $0.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 17 months. The total fair value of shares vested during the fiscal years ended ~~August 31, 2011~~February 29, 2016 and February 28, 2015, was ~~$400,000.~~zero for both periods.

NOTE 7 CONTINGENT LIABILITY

On March 25, 2016, the Company’s legal counsel, who had represented the Company in its patent litigation withdrew as legal counsel, after discussions regarding whether they were the most suited to be our representative in this action and verbally waived payment on any remaining open invoices which totaled $0.5 million. The Company ~~recorded an excess tax benefit~~does not believe it is liable for these fees nor does it believe that the law firm will take action to ~~APIC related to share-based compensation in the amount of $136,000 at August 31, 2011.~~

~~There are no outstanding options as of February 28, 2013.~~collect these fees. The unpaid legal fees have been reversed.

- 2227 -


~~NOTE 8~~	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 20twenty years. The leaseback is accounted for as an operating lease. The gain of ~~$449,617~~$0.5 million 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, 2013~~29, 2016, minimum future rental payments are:


Year	Minimum Rental Payments		Minimum Rental Payments

2014	$	132,504
2015		132,504
2016		132,504
2017		132,504		132,504
2018		132,504		132,504
2019		132,504		132,504
	$	795,024	$	397,512

Rent expense for both the years ended February ~~28, 2013~~29, 2016, and February ~~29, 2012 aggregated~~28, 2015 were $132,504.

NOTE 9FEDERAL AND STATE INCOME TAXES

~~FEDERAL AND STATE INCOME TAXES~~

The provision for income taxes consisted of at February ~~28, 2013~~29, 2016, and February ~~29, 2012:~~28, 2015:

2013

2012

State income tax:

Deferred

$
—

$
—

Current, net of refund in 2013

(11,173
)

2,000

Federal income tax:

Deferred

82,637

167,004

Current, including credit to additional paid-in capital in 2012

240,883

296,287

Total

$
312,347

$
465,291

~~The Company had operating loss carry forwards, all of which were fully utilized by February 29, 2012.~~


	2016			2015

State income tax:
Current, net of refund	$	1,867		$	1,000
Federal income tax:
Deferred		(125,496	)		102,087
Current		483,335			218,332
Total	$	359,706		$	321,419

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:


	2013			2012		2016			2015

Income before tax	$	1,038,110		$	1,281,184	$	1,142,570		$	1,074,536
Computed expected tax	$	352,957		$	435,603	$	388,474		$	365,342
State income and franchise tax/(refund)		(11,173	)		2,000		1,232			660
Other		(29,437	)		27,688		(30,000	)		(44,583	)

Provision for taxes	$	312,347		$	465,291	$	359,706		$	321,419

~~- 23 -~~

The components of deferred tax liabilities at February ~~28, 2013~~29, 2016, and February ~~29, 2012,~~28, 2015, respectively, are as follows:

2013

2012

Deferred compensation cost

(62,424
)

$
—

Depreciation and amortization

(141,576
)

(121,363
)
Deferred tax liabilities

$
(204,000
)

$
(121,363
)


~~NOTE 10~~	~~MAJOR CUSTOMERS~~


	2016			2015

Deferred compensation cost	$	7,559		$	(19,040	)
Depreciation and amortization		(173,700	)		(239,660	)
Allowance for bad debts and other		43,030			10,093
Deferred tax liabilities	$	(123,111	)	$	(248,607	)

~~For the year ended February~~- 28 2013, approximately, 27.4% and 12.2% of the Company’s revenue were derived from two major customers. At February 28, 2013, accounts receivable due from these customers were $366,890 and $82,368, respectively.-

NOTE 10 MAJOR CUSTOMERS

For the ~~year~~years ended February 29, ~~2012,~~2016, and February 28, 2015, approximately, ~~19.2%~~55.3% and ~~17.6%~~52.9%, respectively, of the Company’s ~~revenue~~gross product revenues were derived from ~~two~~one major ~~customers.~~customer. At February 29, ~~2012,~~2016, and February 28, 2015, accounts receivable due from ~~these customers~~this customer were ~~$160,470~~$0.5 million and ~~$98,185,~~$1.0 million, respectively.

The largest customer in both years is a domestic medical products and supplies distributor. Although a number of larger ~~FREEDOM60(R) users~~infusion customers 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.


~~NOTE 11~~	~~SUBSEQUENT EVENTS~~

The FDA cleared a 510(k) on May 6, 2013 for enhancements to the RMS Subcutaneous Safety Needle Sets which included formally recognizing our clinical studies to support the Safety Needle claim, additional lengths of 4mm and 14mm, use for greater than 24 hours, non-pyrogenic claims, the use of up to eight sites and the 24 gauge needle.NOTE 11 LEGAL PROCEEDINGS

In 2013, the Company commenced in the United States District Court for the Eastern District of California a declaratory judgment action against competitor, EMED Technologies Corp. (“EMED”) to establish the invalidity of one of EMED’s patents and non-infringement of the Company’s needle sets. EMED answered the complaint and asserted patent infringement and unfair business practice counterclaims. The ~~Director loan~~Company responded by asserting its own unfair business practice claims against EMED. On June 16, 2015, the Court issued what it termed a “narrow” preliminary injunction against the Company from making certain statements regarding some of EMED’s products. The Company is complying with that order. On March 24, 2016, EMED filed a ~~balance~~motion for a second preliminary injunction regarding sales of ~~$437,832~~RMS products in California. The Company is opposing that motion and briefing for this motion, as well as case discovery is ongoing.

On June 25, 2015, EMED filed a claim of ~~February 28, 2013 was fully paid on May 17, 2013 as we concluded~~patent infringement for the second of its patents, also directed to the Company’s needle sets, in the United States District Court for the Eastern District of Texas. This second patent is related to the one concerning the Company’s declaratory judgment action. Given the close relationship between the two patents, the Company has requested that the ~~cash~~Texas suit be transferred to California. The Court has not yet ruled on ~~hand was not earning~~ the ~~cost~~Company’s transfer request. Discovery in the Texas suit is ongoing.

On September 11, 2015, the Company requested an ex parte reexamination of the ~~interest.~~patent in the first filed case, and on September 17, 2015 the Company requested an inter partes review (IPR) of the patent in the second filed case. On November 20, 2015, the U.S. Patent and Trademark Office (USPTO) instituted the ex parte reexamination request having found a substantial new question of patentability concerning EMED’s patent in the first filed case. A decision to institute the IPR for EMED’s patent in the second filed case was ordered by the USPTO on February 19, 2016 having determined a reasonable likelihood all claims of the patent may be found to be unpatentable. Based on the grant of the IPR, the Company intends to request the Court stay proceedings of the second filed case until conclusion of the IPR.

Although the Company believes it has meritorious claims and defenses in these litigations and proceedings, their outcomes cannot be predicted with any certainty.

- 29 -

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On October 20, 2011 McGrail Merkel Quinn & Associates, P.C., was dismissed as REPRO-MED SYSTEMS, INC.’s (the “Company”) independent registered public accounting firm, as approved by the Board of Directors. McGrail Merkel Quinn & Associates, P.C.’s, report on the Company’s financial statements for the two fiscal years ended February 28, 2011 and 2010 did not contain an adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles.

During the fiscal years ended February 28, 2011 and 2010, as well as the interim period preceding the dismissal of McGrail Merkel Quinn & Associates, P.C., there were no disagreements or reportable events of the kind described in Item 304(a)(1)(v) of Regulation S-K of the Securities and Exchange Commission (the “Commission”) between the Company and McGrail Merkel Quinn & Associates, P.C., on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the satisfaction of McGrail Merkel Quinn & Associates, P.C., would have caused McGrail Merkel Quinn & Associates, P.C., to make a reference to the subject matter of the disagreement or reportable event in connection with the issuance of its audit reports.

On October 20, 2011, the Board of Directors of REPRO-MED SYSTEMS, INC. approved the engagement of Radin, Glass & Co., LLP as the Company’s independent registered public accounting firm for the year ending February 29, ~~2012. Radin Glass & Co., LLP’s engagement as the Company’s independent registered public accounting firm commenced on October 20, 2011.~~

~~During the years ended February 28, 2010~~2016 and February 28, ~~2011, and through October 20, 2011,~~2015, neither the Company nor anyone on its behalf has consulted with ~~Radin Glass~~McGrail Merkel Quinn & ~~Co., LLP~~Associates, P.C. with respect to either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that ~~Radin Glass~~McGrail Merkel Quinn & ~~Co., LLP~~Associates, P.C. concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K).

~~- 24 -~~

ITEM 9A9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer or CEO, and Chief Financial Officer or CFO, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of February ~~28, 2013.~~29, 2016. Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, and implemented in conjunction with management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles.

There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal control may vary over time.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of February ~~28, 2013.~~29, 2016. This assessment was based on criteria for effective internal control over financial reporting described in “Internal Control - Integrated Framework,” issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO). Based on this assessment, management determined that, as of February ~~28, 2013,~~29, 2016, the Company maintained effective internal control over financial reporting.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the Dodd-Frank Act that permits the Company to provide only management’s report in the annual report.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fiscal year ended February ~~28, 2013~~29, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

~~None~~None.

- 2530 -

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The following table sets forth-certain information with respect to the Executive Officers and Directors:


Name	Age	Position / Held Since

Andrew I. Sealfon	6770	President 1980 through April 2016
		Chairman 1989
		Director 1980
		~~CEO~~Chief Executive Officer 1986

~~Michael R. Boscher~~Karen Fisher	4850	Chief Financial Officer and Treasurer ~~2012,~~2015
		~~CFO 2012~~
Cyril Narishkin	51	Interim Chief Operating Officer 2015 Director 2015 President 2016

Paul Mark Baker	6265	Director 1991

~~Remo Spagnoli~~Mark Pastreich	8386	Director ~~1993~~2011

~~Mark Pastreich~~Brad A. Sealfon	8328	Director ~~2011~~2013

Arthur J. Radin	79	Director 2015

David Anderson	63	Director 2016

Mr. Andrew Sealfon is deemed a “parent” and “promoter” as those terms are defined under the Securities Act of 1933 as amended.

All directors hold offices until the next annual meeting of ~~shareholders~~stockholders or until their successors are elected. Executive ~~Officers~~officers hold office at the discretion of the Board of Directors.

Mr. Andrew Sealfon co-founded ~~REPRO-MED SYSTEMS, INC.,~~Repro Med Systems, Inc. in 1980. He is an electrical engineer and inventor and has been granted numerous ~~United States~~U.S. patents. Mr. Sealfon is a graduate of Lafayette College. On April 26, 2016, Mr. Sealfon was replaced as President by Mr. Cyril Narishkin. He remains as Chief Executive Officer and head of research and development.

~~Mr. Boscher, master in business administration~~Ms. Fisher has more than 19 years of financial experience at a variety of industries, most recently serving as Assistant Controller, Senior Manager for Armored Autogroup, Inc., a worldwide consumer products company, from ~~Durham University, United Kingdom, joined the company in 2011 as director of operations. Effective~~ February 2012 ~~he is~~to January 2015. Before joining Armored Autogroup, Inc., she spent seven years at Gilman Ciocia, Inc., where she served in a variety of financial roles, including Chief Accounting Officer and Treasurer, and, ~~Chief Financial Officer.~~earlier, as Controller. Before Gilman Ciocia, Inc., she held multiple financial management roles at The New York Times Company and Thomson Financial. Ms. Fisher is a Certified Public Accountant and a graduate of Arizona State University with a BS in accounting.

Dr. Baker earned a medical degree from Cornell University Medical College. He is a practicing pediatrician and is attending at Department of Pediatrics Horton Memorial Hospital, Middletown, New York, and attending at New York Hospital-Cornell Medical Center in New York City. Dr. Baker assisted us in the development of the ~~RES-Q-VAC(R)~~RES-Q-VAC^® Suction System. In addition, Dr. Baker has published results of use of the ~~RES-Q-VAC(R)~~RES-Q-VAC in a letter to LANCET, a medical journal.

~~Mr. Spagnoli~~ Dr. Baker is ~~a principal founder~~currently consulting with the Company to provide clinical research and ~~past President~~support services related to new and ~~Chairman of CRS, Inc., Newburgh, NY, a manufacturer of proprietary inventory control~~enhanced applications for the FREEDOM60 and ~~point of sale software and distributor of computer equipment.~~FreedomEdge.

Mr. Pastreich is a businessman, and a longtime real estate investor and broker. He has served on numerous for-profit and not-for-profit boards. Among his other various real estate holdings, he is presently a partner in Casper Creek LLC, which owns the building leased by ~~REPRO-MED SYSTEMS, INC.~~the Company.

- 31 -

Mr. Radin was appointed to the Board of Directors in January, 2015. Mr. Radin, who started his career at Touche Ross & Co., has been a partner in public accounting firms for 45 years. He was with Radin, Glass & Co., the Company’s former independent auditors, from 1998 until January 2015 when he joined Janover LLC. He is a member of the New York State Society of Certified Public Accountants Editorial Board. Mr. Radin received a BA degree from Columbia College and a Masters in Business Administration from New York University.

Mr. Brad Sealfon joined the board in November, 2013. Mr. Sealfon is the son of Mr. Andrew Sealfon, the Company’s President and Chief Executive Officer. He was previously the Marketing Director at Company.

Mr. Narishkin was appointed to the Board of Directors and interim Chief Operating Officer on October 21, 2015. On April 26, 2016, Mr. Narishkin became President of the Company. Mr. Narishkin has held various executive positions in medical device, defense and automotive manufacturing firms. He started his career at Texas Instruments’ Materials and Controls Group. After turning around the performance of Texas Instruments, Mexico as Operations Manager, Mr. Narishkin left Texas Instruments to start his own consulting firm helping clients reduce costs, improve performance and quality. He then became an executive at Essex Industries holding various positions in their defense and medical business divisions improving profitability and sales. As President of Piper Metal Forming, Mr. Narishkin led the turn-around of this failing business resulting in its sale to a strategic buyer. Mr. Narishkin has served on several non-profit boards and has been an Adjunct Professor at St. Louis University and Washington University’s MBA programs. Mr. Narishkin holds a Bachelor of Science degree in Mechanical Engineering from Tufts University, Medford, MA and a Masters in Business Administration from Olin Business School, Washington University in St. Louis.

Mr. Anderson was appointed to the Board of Directors on February 26, 2016. Mr. Anderson has been in the medical (device) industry for over 23 years and has held the role of Chief Executive Officer for Sterilox Technologies, Inc., Gentis, Inc. and currently with ORTEQ Ltd/CellCoTec Ltd. He has also served on the board for ACell Inc., (Regenerative Medicine for Woundcare) and Aperion Biologics, (ACL Replacement Technology), as well as served on several advisory committees. Mr. Anderson received a B.S. in Chemical Engineering from Cornell University and attended University of Minnesota for Graduate Studies in Microbiology.

ITEM 11. EXECUTIVE COMPENSATION

Andrew I. Sealfon, ~~President,~~Chief Executive Officer, received ~~$304,166~~$450,000 in salary ~~$348,218 in~~and bonus ~~and a restricted stock grant valued at $180,000 for a total compensation of $832,384~~ during the fiscal year ended February 28, 2013. The bonus payments were awarded by the Board of Directors for exceptional performance in recent years and intended to cover taxes on stock options and grants. The restricted stock vests over a two-year period.29, 2016.

~~Mike R. Boscher, CFO,~~Karen Fisher, Chief Financial Officer and Treasurer, received ~~$178,288~~$200,291 in salary ~~bonus~~ and ~~restricted stock awards from Repro-Med~~bonus during the fiscal year ended February ~~28, 2013.~~29, 2016. Ms. Fisher received a stock option grant of 500,000 shares in Fiscal 2016 which vest over twelve months.

~~The officers~~Officers are reimbursed for travel and other expenses incurred on behalf of ~~REPRO-MED SYSTEMS, INC.~~the Company. We ~~do not have pension or profit sharing plans, but do~~ offer an optional 401(k) savings plan with a company matching component to all full-time employees with 90 days of service.


	Summary Compensation Table
Name & Position	Year	Salary/ Compensation

Andrew I. Sealfon, CEO (1)	2016	$	450,000
	2015	$	408,333

Cyril Narishkin, President and Interim COO (2)	2016	$	80,000
	2015	$	—

Karen Fisher, CFO and Treasurer (effective January 28, 2015) (3)	2016	$	200,291
	2015	$	30,417

- 2632 -

Summary Compensation

Name & Position

Year

Salary

Other *

Andrew I. Sealfon, President & CEO
2013

$
832,384

—

2012

$
443,194

—

2011

$
163,917

—

2010

$
155,007

—

2009

$
122,499

—

2008

$
109,347

—

Michael R. Boscher, Treasurer & CFO
2013

$
178,288

—

2012

$
103,175

—

* Other compensation for(1) Mr. Sealfon ~~includes car allowance (not itemized here).~~is provided with an automobile that has been paid for in full by the Company.

~~Table~~(2) Mr. Narishkin was paid for travel and other expenses in the amount of ~~aggregate options exercised during the fiscal year ended February, 2012~~$19,090. As of October 21, 2015 his compensation was paid half in cash and ~~option values~~half in common stock and as of January 1, 2016 his compensation was paid seventy-five percent in cash and twenty-five percent in common stock. Mr. Narishkin is compensated at ~~year-end February 2012:~~$16,000 per month.

Value of

Number of

Unexercised

Unexercised

In-the-money

Shares

Options at

Options at

Acquired

Year-end

Year-end

On

Value

Exercisable/

Exercisable/
Name of Individual

Exercise

Realized

Un-exercisable

Un-exercisable
A. I. Sealfon

  Exercisable

2,000,000

$ 400,000

0

$            0
  Un-exercisable

0

$            0

0

$            0

(3) Ms. Fisher has an employment agreement with the Company which was entered into on January 15, 2015. Ms. Fisher’s annual salary is $185,000, plus bonus.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of ~~May 29, 2013,~~April 30, 2016, the number of shares of Common Stock beneficially owned by each person owning more than 5% of the outstanding shares, by each officer and director, and by all officers and directors as a group:


Name of Principal Shareholders and Identity of Group	Number of Shares Owned		Percent of Class			Notes:
Name of Principal Stockholders and Identity of Group								Number of Shares Owned		Percent of Class			Notes:

Andrew I. Sealfon*		8,267,250		23	%		(1)		8,127,250		21	%	(1)
Dr. Paul Mark Baker		1,381,180		4	%		(2)		1,815,746		5	%	(2)
Remo Spagnoli		1,009,381		3	%		—
Mark Pastreich		376,500		1	%		—		391,066		1	%	—
Mike R. Boscher		75,000		—			—
Arthur J. Radin									115,166		—		—
Brad A. Sealfon									85,000		—		—
Cyril Narishkin									96,542		—		—

All Directors and Officers as a Group		11,109,311		31	%		—		10,630,770		27	%	—

Horton Capital Partners Fund, LP									4,702,247		12	%	(3)

Total of all Directors, Offices and 5% stockholders									15,333,017		39	%	—

*Andrew I. Sealfon is deemed a “parent” and a “promoter” of ~~REPRO-MED SYSTEMS, INC.~~Repro Med Systems, Inc., as those terms are defined under the Securities Act of 1933, as amended.

(1) Does not include ~~690,000~~approximately 115,000 shares of common stock owned by ~~members~~Mr. Andrew Sealfon’s wife, 85,000 shares of common stock held by Mr. Sealfon’s ~~family,~~son, Brad A. Sealfon, or 85,000 shares of common stock held by Mr. Sealfon’s daughter, Carolyn Sealfon, as to which Mr. Sealfon disclaims beneficial ownership.

(2) Includes beneficial shares owned by Andrea ~~Baker.~~Baker, Dr. Baker’s wife.

(3) As part of its investment in the Company in August, 2014, Horton Capital Partners Fund, LP, was issued warrants to purchase up to 1.0 million shares additional shares of common stock at an exercise price of $0.45 per share. The warrants expire in August, 2019.

Certain shares and/or options, which have been disclosed above, were issued to officers, directors, or 10% shareholders. The Company has reminded each of said directors to file an SEC Form 3, 4, or 5 as applicable, with respect to such stock issuances, or option ~~grants.~~grants and other stock transactions.

- 2733 -

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

To reduce corporate travel expenses, we maintain and operate a corporate aircraft. Since 1992, the aircraft has been leased from AMI Aviation, Inc. Mr. Andrew Sealfon is a majority shareholder in AMI Aviation. The lease expenses paid were $21,500 in each of ~~2013~~the Fiscal Years 2016 and ~~2012.~~2015. We believe the AMI lease is on terms competitive with those that could be obtained from unaffiliated third parties.

In February ~~2009,~~2011, the Company borrowed $672,663 from a Director of the company, at 6% interest per annum. In June 2009, 755,000 shares of stock were issued to the director at $0.11 per share to reduce the debt. The remaining debt matures in February 2021.

~~In February 2011, the company~~ added Mr. Mark Pastreich as a director. Mr. Pastreich is a principal in the company that owns the building leased by ~~REPRO-MED SYSTEMS, INC.~~the Company. The Company is in year ~~fourteen~~seventeen of a twenty-year lease. No changes have been made to the lease terms as a result of his directorship, and none are anticipated before the end of the lease.

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 $28,000 for the year ended February 29, 2016. 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.

On April 26, 2016, Cyril Narishkin was appointed President of the Company.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following is a summary of the fees billed to us by ~~Radin, Glass~~McGrail Merkel Quinn & ~~Co.~~Associates, P.C., ~~LLP,~~ an independent registered public accounting firm, for professional services rendered for the fiscal years ended February ~~28, 2013~~29, 2016 and February ~~29, 2012,~~28, 2015, respectively.

Fee Category

Fiscal 2013 Fees

Fiscal 2012 Fees
Audit Fees (1)

$40,000

$38,500
Tax Returns & Consulting Services

$18,000

$10,000


Fee Category	Fiscal 2016 Fees	Fiscal 2015 Fees

Audit Fees	$39,000	$39,000

~~(1)~~

Audit fees consist of aggregate fees billed for professional services rendered for the audit of our annual financial statements and review of the interim financial statements included in quarterly reports or services that are normally provided by the independent auditors in connection with statutory and regulatory filings or engagements for the fiscal years ended February 28, 2013 and February 29, 2012,

The Board of Directors is responsible for the appointment, compensation, and oversight of the work of the independent auditors and approves in advance any services to be performed by the independent auditors, whether audit-related or not. The Board of Directors reviews each proposed engagement to determine whether the provision of services is compatible with maintaining the independence of the independent auditors. All of the fees shown above were pre-approved by the Board of Directors.

- 2834 -

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


~~(a)~~ The Financial Statement Schedules are filed in Part II, Item 8 hereof.
	~~(1)~~	~~Financial Statements - The following financial statements are incorporated by reference in Part II, Item 8 hereof:~~

		~~Report of Independent Registered Public Accounting Firm~~ ~~Balance Sheets~~ ~~Statements of Operations~~ ~~Statements of Stockholders’ Equity~~ ~~Statements of Cash Flows~~ ~~Notes to Financial Statements~~

	~~(2)~~	~~Financial Statement Schedules - The Financial Statement Schedules are incorporated by reference in Part II, Item 8 hereof.~~

	~~(3)~~	~~Exhibits~~

		The following exhibits are filed herewith or incorporated by reference as part of this Annual Report.


Exhibit No.		Description

3(i)		Articles of Incorporation ~~by reference from~~dated March 7, 1980; as amended September 18, 1980; October 12, 1982; November 11, 1986 and November 17, 1987 (previously filed with the ~~Regulation and Offering Statement of REPRO-MED SYSTEMS, INC., dated~~Form 10-Q for the quarter ended November ~~12, 1982 (previously filed~~30, 2013, and incorporated by reference).

3(ii)		By-Laws, by reference from the Annual Report on Form10-K of ~~REPRO-MED~~REPRO MED SYSTEMS, INC., for the fiscal year ended February 1987 (previously filed and incorporated by reference).

4.1		Securities Purchase Agreement with Horton Capital Partners Fund, L.P. dated August 8, 2014 (previously filed and incorporated by reference).

10.1		Executive Employment Agreement for Karen Fisher, Chief Financial Officer dated January 15, 2015 (previously filed and incorporated by reference).

14.1		Acknowledgement of Receipt and Understanding of Code of Ethics for Officers, Directors, and Employees of ~~REPRO-MED~~REPRO MED SYSTEMS, INC., and Federal Securities Law Prohibitions as to use of Insider Information (previously filed and incorporated by reference).

14.2		Code of Ethics for Officers, Directors, and Employees of ~~REPRO-MED~~REPRO MED SYSTEMS, INC. (previously filed and incorporated by reference).

14.3		Federal Securities Law Considerations for Management of ~~REPRO-MED~~REPRO MED SYSTEMS, INC. (previously filed and incorporated by reference).

31.1		Certification of the Principal Executive Officer of registrant required under Section ~~302of~~302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2		Certification of the ~~Treasurer and Chief~~Principal Financial Officer of registrant required under Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1		Certification of the Principal Executive Officer of registrant required under Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.2		Certification of the ~~Treasurer and Chief~~Principal Financial Officer of registrant required under Section 906 of the Sarbanes-Oxley Act of 202, filed herewith.

101		Interactive Data File (Annual Report on Form 10-K, for the fiscal year ended February ~~28, 2013)~~29, 2016), furnished in XBRL (eXtensible Business Reporting Language).

- 2935 -

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on May ~~29, 2013.~~13, 2016.

~~REPRO-MED~~REPRO MED SYSTEMS, INC.

/s/ Andrew I. Sealfon

Andrew I. Sealfon, ~~President~~Chief Executive Officer

/s/ ~~Michael R. Boscher~~Karen Fisher

~~Michael R. Boscher,~~Karen Fisher, Chief Financial Officer and Treasurer ~~& CFO~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on May ~~29, 2013.~~13, 2016.

/s/ Andrew I. Sealfon

Andrew I. Sealfon, ~~President,~~ Chairman of the Board, Director, and ~~Principal~~Chief Executive Officer

/s/ Cyril Narishkin

Cyril Narishkin, President, Interim Chief Operating Officer, and Director

/s/ Dr. Paul Mark Baker

Dr. Paul Mark Baker, Director

/s/ ~~Remo Spagnoli~~

~~Remo Spagnoli, Director~~

~~/s/~~ Mark Pastreich

Mark Pastreich, Director

/s/ Arthur J. Radin

Arthur J. Radin, Director

/s/ Brad A. Sealfon

Brad A. Sealfon, Director

/s/ David Anderson

David Anderson, Director

- 3036 -


	FY 2013			FY 2012
	Percentage of Sales			Percentage of Sales

Infusion Therapy		90.0	%		86.4	%
Medical Suction		9.8	%		12.3	%
Other		0.2	%		1.3	%


	High		Low

2013 QUARTER ENDED
February 28, 2013	$	0.26	$	0.19
November 30, 2012	$	0.26	$	0.17
August 31, 2012	$	0.26	$	0.17
May 31, 2012	$	0.25	$	0.19

2012 QUARTER ENDED
February 29, 2012	$	0.30	$	0.22
November 30, 2011	$	0.36	$	0.20
August 31, 2011	$	0.42	$	0.28
May 31, 2011	$	0.36	$	0.15


	February 28, 2013		February 29, 2012		Estimated Useful Lives

Land	$	54,030	$	—
Building		171,094		—		20 years
Furniture, office equipment, and leasehold improvements		844,747		636,159		3-10 years
Manufacturing equipment and tooling		1,408,113		1,278,258		3-12 years
		2,477,984		1,914,417

Less: accumulated depreciation		1,601,998		1,415,477
Property and equipment, net	$	875,986	$	498,940


	February 28, 2013		February 29, 2012

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 will mature in February 2021.		437,832		479,249
Other		1,474		3,551
		439,306		482,800
Less current portion		45,445		43,494
Long-term portion	$	393,861	$	439,306


Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term
Outstanding at March 1, 2012		125,000		$	0.06		0.3
Granted		—			—		—
Exercised		—			—		—
Forfeited or expired		(125,000	)	$	0.06		—

Outstanding at February 28, 2013		—			—		—
Exercisable at February 28, 2013		—			—		—


	Summary Compensation
Name & Position	Year	Salary		Other *
Andrew I. Sealfon, President & CEO	2013	$	832,384		—
	2012	$	443,194		—
	2011	$	163,917		—
	2010	$	155,007		—
	2009	$	122,499		—
	2008	$	109,347		—

Michael R. Boscher, Treasurer & CFO	2013	$	178,288		—
	2012	$	103,175		—


				Value of
			Number of	Unexercised
			Unexercised	In-the-money
	Shares		Options at	Options at
	Acquired		Year-end	Year-end
	On	Value	Exercisable/	Exercisable/
Name of Individual	Exercise	Realized	Un-exercisable	Un-exercisable
A. I. Sealfon
Exercisable	2,000,000	$ 400,000	0	$ 0
Un-exercisable	0	$ 0	0	$ 0


Fee Category	Fiscal 2013 Fees	Fiscal 2012 Fees
Audit Fees (1)	$40,000	$38,500
Tax Returns & Consulting Services	$18,000	$10,000