UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, ~~2017~~2018

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________.

Commission File Number:0-12305

REPRO MED SYSTEMS, INC.

(Exact name of registrant as specified in its charter)


New York	13-3044880
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

24 Carpenter Road, Chester, New York	10918
(Address of Principal Executive Offices)	(Zip Code)

(845) 469-2042

(Registrant’s telephone number, including area code)

~~February 28~~

~~(Former name, former address and former fiscal year, if changed since last report)~~

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 of 1934 during the preceding 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. [X] Yes [ ] No

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


	Large accelerated filer [ ]	Accelerated filer [ ]
	Non-accelerated filer [ ]	Smaller reporting company [X]
	(Do not check if a smaller reporting company)	Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

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

As of August ~~4, 2017, 37,834,871~~6, 2018, 38,195,214 shares of common stock, $0.01 par value per share, were outstanding, which excludes 2,737,231 shares of treasury stock.

REPRO MED SYSTEMS, INC.

TABLE OF CONTENTS


		PAGE

PART I– FINANCIAL INFORMATION

ITEM 1.	Financial Statements

	Balance Sheets as of June 30, ~~2017~~2018 (Unaudited) and ~~February 28,~~December 31, 2017	3

	Statements of Operations (Unaudited) for the ~~one month ended March 31, 2017 and 2016, and the~~ three and ~~four~~six months ended June 30, ~~2017~~2018 and ~~2016.~~2017	4

	Statements of Cash Flows (Unaudited) for the ~~four~~six months ended June 30, ~~2017,~~2018 and ~~2016~~2017	5

	Notes to Financial Statements	~~6-11~~6

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~12-17~~12

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	1716

ITEM 4.	Controls and Procedures	17

PART II– OTHER INFORMATION

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~17-18~~17

ITEM 6.	Exhibits	1817

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

REPRO MED SYSTEMS, INC.

BALANCE SHEETS


	June 30,						June 30,			December 31,
	2017			February 28,			2018			2017
	(Unaudited)			2017			(Unaudited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	2,982,508		$	3,313,265		$	3,421,186		$	3,974,536
Certificate of deposit (restricted cash)								1,504,818			—
Certificates of deposit		262,315			262,314			159,462			263,269
Accounts receivable less allowance for doubtful accounts of $13,046 at June 30, 2017 and $18,046 at February 28, 2017		1,899,622			1,502,030
Accounts receivable less allowance for doubtful accounts of $77,067 at June 30, 2018 and $77,067 at December 31, 2017								1,840,094			1,861,949
Inventory		1,267,214			1,353,703			1,718,294			1,658,681
Tax Receivable		—			172,457
Prepaid expenses		229,667			175,955			255,888			170,739
TOTAL CURRENT ASSETS		6,641,326			6,779,724			8,899,742			7,929,174
Property and equipment, net		901,464			932,092			795,484			836,283
Patents, net of accumulated amortization of $188,735and $180,137 at June 30, 2017 and February 28, 2017, respectively		429,974			426,943
Patents, net of accumulated amortization of $220,340and $203,768 at June 30, 2018 and December 31, 2017, respectively								531,685			483,821
Other assets		31,582			31,490			31,582			31,582
TOTAL ASSETS	$	8,004,346		$	8,170,249		$	10,258,493		$	9,280,860

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Deferred capital gain - current	$	22,481		$	22,481		$	15,003		$	22,481
Accounts payable		279,130			772,428			711,947			454,398
Accrued expenses		353,997			417,357			539,473			658,060
Accrued payroll and related taxes		212,083			177,018			187,307			334,903
Accrued tax liability		1,384			—			91,488			115,854
TOTAL CURRENT LIABILITIES		869,075			1,389,284			1,545,218			1,585,696
Deferred capital gain – long term		15,002			22,496			—			3,762
Deferred tax liability		95,133			82,422			20,733			21,675
TOTAL LIABILITIES	$	979,210		$	1,494,202			1,565,951			1,611,133

STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value; 75,000,000 shares authorized, 40,572,102 and 40,558,429 shares issued, 37,834,871 and 37,821,198 shares outstanding at June 30, 2017 and February 28, 2017, respectively		405,721			405,584
Common stock, $0.01 par value; 75,000,000 shares authorized, 40,907,991 and 40,731,529 shares issued, 38,170,760 and 37,994,298 shares outstanding at June 30, 2018 and December 31, 2017, respectively								409,080			407,315
Additional paid-in capital		4,117,845			4,129,726			4,358,618			4,216,718
Retained earnings		2,845,774			2,484,941			4,269,048			3,389,898
		7,369,340			7,020,251			9,036,746			8,013,931
Less: Treasury stock, 2,737,231 shares at June 30, 2017 and February 28, 2017		(344,204	)		(344,204	)
Less: Treasury stock, 2,737,231 shares at June 30, 2018 and December 31, 2017								(344,204	)		(344,204	)
TOTAL STOCKHOLDERS’ EQUITY		7,025,136			6,676,047			8,692,542			7,669,727
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,004,346		$	8,170,249		$	10,258,493		$	9,280,860

The accompanying notes are an integral part of these financial statements

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REPRO MED SYSTEMS, INC.

STATEMENTS OF OPERATIONS (UNAUDITED)


	For the One Month Ended						For the Three Months Ended						For the Four Months Ended						For the Three Months Ended						For the Six Months Ended
	March 31						June 30						June 30						June 30,						June 30,
	2017			2016			2017			2016			2017			2016			2018			2017			2018			2017

NET SALES	$	1,509,619		$	1,276,299		$	3,829,457		$	2,795,894		$	5,339,076		$	4,072,193		$	4,502,326		$	3,829,457		$	8,535,550		$	7,467,893
Cost of goods sold		536,823			446,618			1,532,158			1,008,749			2,068,981			1,455,367			1,762,742			1,532,158			3,330,142			3,068,639
Gross Profit		972,796			829,681			2,297,299			1,787,145			3,270,095			2,616,826			2,739,584			2,297,299			5,205,408			4,399,254

OPERATING EXPENSES
Selling, general and administrative		637,707			655,043			2,005,336			2,118,159			2,643,043			2,773,202			2,022,631			2,005,336			3,902,900			3,780,445
Research and development		7,872			14,535			24,840			57,403			32,712			71,938			23,963			24,840			33,811			70,746
Depreciation and amortization		25,576			23,536			76,781			73,041			102,357			96,577			75,978			76,781			150,556			151,662
Total Operating Expenses		671,155			693,114			2,106,957			2,248,603			2,778,112			2,941,717			2,122,572			2,106,957			4,087,267			4,002,853

Net Operating Profit/(Loss)		301,641			136,567			190,342			(461,458	)		491,983			(324,891	)
Net Operating Profit																				617,012			190,342			1,118,141			396,401

Non-Operating Income/(Expense)
Gain/(Loss) on currency exchange		19,988			36,673			34,671			(24,340	)		54,659			12,333
Non-Operating (Expense)/Income
(Loss)/Gain on currency exchange																				(19,838	)		34,670			(10,414	)		51,744
Interest and other income		322			321			421			752			743			1,073			5,501			421			6,116			2,066
TOTAL OTHER INCOME/(EXPENSE)		20,310			36,994			35,092			(23,588	)		55,402			13,406
TOTAL OTHER (EXPENSE)/INCOME																				(14,337	)		35,091			(4,298	)		53,810

PROFIT/(LOSS) BEFORE TAXES		321,951			173,561			225,434			(485,046	)		547,385			(311,485	)
PROFIT BEFORE TAXES																				602,675			225,433			1,113,843			450,211

Income Tax (Expense)Benefit		(109,590	)		(59,231	)		(76,962	)		164,834			(186,552	)		105,603
Income Tax Expense																				(126,952	)		(76,961	)		(234,693	)		(174,788	)

NET INCOME/(LOSS)	$	212,361		$	114,330		$	148,472		$	(320,212	)	$	360,833		$	(205,882	)
NET INCOME																			$	475,723		$	148,472		$	879,150		$	275,423

NET INCOME/(LOSS) PER SHARE
NET INCOME PER SHARE

Basic	$	0.01		$	—		$	—		$	(0.01	)	$	0.01		$	(0.01	)	$	0.01		$	—		$	0.02		$	0.01
Diluted	$	0.01		$	—		$	—		$	(0.01	)	$	0.01		$	(0.01	)	$	0.01		$	—		$	0.02		$	0.01

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

Basic		37,821,198			37,966,501			37,825,209			37,964,985			37,824,189			37,965,370			38,100,040			37,825,209			38,058,500			37,799,981
Diluted		37,847,628			37,966,501			37,891,306			37,964,985			37,877,694			37,965,370			38,872,998			37,899,619			38,815,301			37,866,730

The accompanying notes are an integral part of these financial statements

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REPRO MED SYSTEMS, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)


	For the Four Months Ended						For the Six Months Ended
	June 30,						June 30,
	2017			2016			2018			2017

CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)	$	360,833		$	(205,882	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Net Income							$	879,150		$	275,423
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Amortization of deferred compensation cost		—			7,000			—			7,000
Stock based compensation expense		7,615			69,714			94,170			41,479
Depreciation and amortization		102,357			96,577			150,556			151,662
Deferred capital gain - building lease		(7,493	)		(7,493	)		(11,240	)		(11,240	)
Deferred taxes		12,711			(15,144	)		(941	)		12,937
Provision for returns and doubtful accounts		(5,000	)		(10,312	)		—			(5,603	)
Changes in operating assets and liabilities:
Increase in accounts receivable		(392,592	)		(376,551	)
Decrease in inventory		86,489			1,575
Decrease/(Increase) in prepaid expense and other assets		118,652			(108,855	)
(Decrease)/Increase in accounts payable		(493,297	)		186,109
Increase/(Decrease) in accrued payroll and related taxes		35,065			(21,489	)
Decrease/(Increase) in accounts receivable								21,855			(597,699	)
(Increase)/Decrease in inventory								(59,613	)		94,177
(Increase)/Decrease in prepaid expense and other assets								(85,149	)		33,174
Increase/(Decrease) in accounts payable								257,549			(492,919	)
(Decrease)/Increase in accrued payroll and related taxes								(147,597	)		71,113
Decrease in accrued expense		(63,360	)		(67,383	)		(118,587	)		(12,207	)
Increase/(Decrease) in accrued tax liability		1,384			(92,003	)
NET CASH USED IN OPERATING ACTIVITIES		(236,636	)		(544,137	)
(Decrease)/Increase in accrued tax liability								(24,366	)		161,851
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES								955,787			(270,852	)

CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property and equipment		(63,133	)		(74,549	)
Payments for capital expenditures								(93,185	)		(89,437	)
Purchase of certificate of deposit (restricted cash)								(1,500,000	)		—
Reinvested earnings on certificate of deposit (restricted cash)								(4,818	)		—
Payments for patents		(11,628	)		(29,085	)		(64,436	)		(53,346	)
Proceeds/(reinvested earnings) from certificates of deposit								103,807			(1,196	)
NET CASH USED IN INVESTING ACTIVITIES		(74,761	)		(103,634	)		(1,558,632	)		(143,979	)

CASH FLOWS FROM FINANCING ACTIVITIES
Stock issuances								51,250			—
Payment for cancelled shares		(19,360	)		—			(1,755	)		(19,360	)
Purchase of treasury stock		—			(1,105	)		—			(484	)
NET CASH USED IN FINANCING ACTIVITIES		(19,360	)		(1,105	)
NET CASH PROVIDED BY/(USED) IN FINANCING ACTIVITIES								49,495			(19,844	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(330,757	)		(648,876	)		(553,350	)		(434,675	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		3,313,265			4,201,948			3,974,536			3,417,183
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	2,982,508		$	3,553,072		$	3,421,186		$	2,982,508

Supplemental Information
Cash paid during the periods for:
Interest	$	—		$	—		$	—		$	—
Taxes	$	—		$	90,000		$	260,000		$	—

NON-CASH FINANCING AND INVESTING ACTIVITIES
Issuance of common stock as compensation	$	45,000		$	24,718		$	67,500		$	67,500

The accompanying notes are an integral part of these financial statements

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REPRO MED SYSTEMS, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

REPRO MED SYSTEMS, INC. (the “Company”, “RMS”, or “we”) designs, manufactures and markets proprietary medical devices primarily for the ambulatory infusion market and emergency medical applications as governed by the United States Food and Drug Administration (the “FDA”) quality and regulatory system and international standards for quality management systems. The Company operates as one segment.

FISCAL YEAR END

~~On March 22, 2017, the Board of Directors approved a change in the~~The Company’s fiscal year end ~~from February 28 to~~is December 31. ~~With this fiscal year end change, the Company will report one-time, transitional financial information for the month of March 2017 and the quarter April through June 2017 on Form 10-Q.~~

BASIS OF PRESENTATION

The accompanying unaudited financial statements as of June 30, ~~2017,~~2018, have been prepared in accordance with generally accepted accounting principles and with instructions to SEC regulation S-X for interim financial statements.

In the opinion of the Company’s management, the financial statements contain all adjustments consisting of normal recurring accruals necessary to present fairly the Company’s financial position as of June 30, ~~2017,~~2018, and the results of operations and cash flow for the ~~four months~~three and six month periods ended June 30, ~~2017,~~2018, and ~~2016.~~2017.

The results of operations for the ~~four~~three and six months ended June 30, ~~2017,~~2018, and ~~2016~~2017 are not necessarily indicative of the results to be expected for the full year. These interim financial statements should be read in conjunction with the financial statements and notes thereto of the Company and management’s discussion and analysis of financial condition and results of operations included in the Company’s Annual Report for the year ended ~~February 28,~~December 31, 2017, as filed with the Securities and Exchange Commission on Form 10-K.

USE OF ESTIMATES IN THE FINANCIAL STATEMENTS

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Important estimates include but are not limited to, asset lives, valuation allowances, inventory, and accruals.

~~RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS~~REVENUE RECOGNITION

~~In May 2017, the~~The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2017-09—Compensation-Stock Compensation (Topic 718),~~2014-09—Revenue from Contracts with Customers, which provides ~~clarity~~a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. We adopted this ASU effective January 1, 2018 on a full retrospective basis. Adoption of this standard did not result in significant changes to our accounting policies, business processes, systems or controls, or have a material impact on our financial position, results of operations and ~~reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms~~cash flows or conditions of a share-based payment award. The amendments in this update affect any entity that changes the terms or conditions of a share-based payment award. The amendments in this update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interimrelated disclosures. As such, prior period ~~for (1) public business entities for reporting periods for which~~ financial statements ~~have~~were not ~~yet been issued~~recast.

The Company’s revenues result from the sale of assembled products. We recognize revenues when shipment occurs and ~~(2) all other entities for reporting periods for~~at which ~~financial statements have not yet been made available for issuance. The amendments~~point the customer obtains control and ownership of the goods. Shipping costs generally are billed to customers and are included in ~~this update should be applied prospectively to an award modified on or after the adoption date.~~ sales.

The Company generally does not accept return of goods shipped unless it is ~~assessing~~a Company error. The only credits provided to customers are for defective merchandise. The Company warrants the ~~impact of~~syringe driver from defects in materials and workmanship under normal use and the ~~adoption of~~warranty does not include a performance obligation. The costs under the ~~ASU on its financial statements, disclosure requirements and methods of adoption.~~warranty are expensed as incurred.

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Provisions for distributor pricing and annual customer volume rebates are variable consideration and are recorded as a reduction of revenue in the same period the related sales are recorded or when it’s probable the annual growth target will be achieved. The rebates are provided to distributors for the difference in selling price to distributor and pricing specified to select customers.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2016, FASB issued ASU No. 2016-13—Financial Instruments – Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments, which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. This ASU affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption.

In May 2014, the 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. We currently anticipate adopting the new standard using the modified retrospective method beginning January 1, 2018. 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. In May 2016, FASB issued ASU No. 2016-12—Revenue from Contracts with Customers (Topic 606); Narrow-Scope Improvements and Practical Expedients, which is intended to not change the core principle of the guidance in Topic 606, but rather affect only the narrow aspects of Topic 606 by reducing the potential for diversity in practice at initial application and by reducing the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. The effective date and transition requirements for the amendments in this update are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by update 2014-09). In December 2016, the FASB issued ASU No. 2016-20 Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which represents changes to make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. This update is the final, combined version of Proposed Accounting Standards Updates 2016-240 and 2016-320 (both entitled Technical Corrections and Improvements), which have been deleted. Based upon our initial evaluation, we do not expect the adoption of the standard and related amendments to have a material effect on our financial condition or results of operations.

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 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 on our financial statements, disclosure requirements and methods of adoption.

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The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent accounting pronouncements not specifically identified in our disclosures are either not applicable to the Company or are not expected to have a material effect on our financial condition or results of operations.

STOCK-BASED COMPENSATION

The Company maintains a long-term incentive stock benefit plan under which it grants stock options and ~~restricted~~ stock 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 restricted stock granted are recorded at the fair value of the shares at the grant date and are recognized over the vesting period.

RECLASSIFICATION

Certain reclassifications have been made to conform prior period data to the current presentation. These reclassifications had no effect on reported net income.

- 7 -

NOTE 2 RELATED PARTY TRANSACTIONS

On December 20, 2013, we executed an agreement effective March 1, 2014, with a Company director, Dr. Paul Mark Baker, to provide clinical research and support services related to new and enhanced applications for the ~~FREEDOM60® Syringe Infusion~~FREEDOM System. Authorized by the Board of Directors, the agreement ~~provides~~provided for payment of 420,000 shares of common stock valued at $0.20 per share over a three-year period. Amortization ~~amounted to~~was zero for the three months ended June 30, 2018 and 2017, respectively, and zero and $7,000 for the ~~four~~six months ended June 30, 2018 and 2017, ~~and 2016, respectively.~~

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 provided for payment of $16,000 per month for eight days per month, of which half was to be paid in cash and half was to be paid in shares of common stock. Effective January 1, 2016,respectively; the agreement ~~provided for the same payment of $16,000 per month, of which seventy-five percent was to be paid in cash and twenty-five percent was to be paid in shares of common stock.~~is fully amortized.

On June 24, 2016, Cyril Narishkin, the Company’s former Chief Operating Officer, executed a termination and general release agreement, which terminated his previous consulting agreement, and resigned as an officer and director for personal reasons. Mr. Narishkin was compensated for services as a consultant through January 31, 2017 at a monthly rate of $16,000 per month for up to eight days of service a month upon request of the Company. Mr. Narishkin’s compensation was zero ~~and $118,000~~ for the ~~four~~three months ended June 30, 2018 and 2017, respectively, and ~~2016,~~was zero and $16,000 for the six months ended June 30, 2018 and 2017, respectively.

In ~~accordance with~~January 2017, Brad Sealfon, the ~~agreement,~~son of Andrew Sealfon, a Company Director and former President and Chief Executive Officer, consulted for the Company ~~repurchased 96,542 shares~~in its production and quality departments and was compensated $5,184. In March 2017, Mr. Sealfon provided additional consulting as a principal of ~~common stock of~~Stokequest, LLC for the Company ~~owned by~~in its marketing department and was compensated $2,000. Mr. ~~Narishkin at an aggregate purchase price of $43,393.~~Sealfon has not performed any consulting for the Company during the six months ended June 30, 2018.

LEASED AIRCRAFT

The Company leases an aircraft from a company controlled by Andrew Sealfon, ~~the Company’s~~a Company Director and former President and Chief Executive Officer. The lease payments were ~~$5,668 and $7,167~~$3,876 for ~~the four~~both three months ended June 30, 2018 and 2017, and $7,752 and $9,251 for the six months ended June 30, ~~2016,~~2018 and 2017, respectively. The original lease agreement has expired and the Company is currently on a month-to-month basis for rental payments.

BUILDING LEASE

Mr. Mark Pastreich, a director, is a principal in the entity that owns the building leased by Company. The Company is in year ~~nineteen~~twenty 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. With a monthly lease amount of $11,042, the lease payments were ~~$44,168~~$33,126 for each of the ~~four~~three months ended June 30, 2018 and 2017 and $66,252 for each of the six months ended June 30, ~~2016.~~2018 and 2017. The Company also paid property taxes for the ~~four~~three months ended June 30, ~~2017~~2018 and ~~June 30, 2016~~2017 in the amount of ~~$16,236~~$12,720 and ~~$15,825,~~$12,418, respectively, and $25,432 and $24,585 for the six months ended June 30, 2018 and 2017, respectively.

~~We are currently seeking another location within~~ On November 14, 2017, the Company executed a ~~30 mile radius from our current facility~~lease extension, which calls for six month extensions beginning March 1, 2019 with ~~more square footage~~the option to ~~accommodate our expanding needs. In addition to the increased costs~~renew six times at monthly lease amount of occupying a larger space, we expect to incur additional costs in connection with construction and FDA compliance with respect to the new location. There can be no assurance that we will find a suitable location before our current lease expires on terms that are economically favorable to us or at all.$12,088.

~~- 8 -~~

NOTE 3 PROPERTY AND EQUIPMENT

Property and equipment consists of the following at:


	June 30, 2017		February 28, 2017		June 30, 2018			December 31, 2017

Land	$	54,030	$	54,030	$	54,030		$	54,030
Building		171,094		171,094		171,094			171,094
Vehicles						60,784			43,836
Furniture, office equipment, and leasehold improvements		1,048,818		1,022,942		1,020,801			1,008,665
Manufacturing equipment and tooling		1,031,207		1,003,166		1,129,827			1,075,471
		2,305,149		2,251,232		2,436,536			2,353,096
Less: accumulated depreciation		1,403,685		1,319,140		(1,641,052	)		(1,516,813	)
Property and equipment, net	$	901,464	$	932,092	$	795,484		$	836,283

Depreciation expense was $67,504and $70,154 for the three months ended June 30, 2018 and 2017, respectively, and $133,984 and$139,162 for the six months ended June 30, 2018 and 2017, respectively.

- 8 -

NOTE 4 LEGAL PROCEEDINGS

~~Lawyers representing~~The Company is involved in several lawsuits with its competitor, EMED Technologies Corp. (“EMED”) ~~sent RMS a letter dated, May 1, 2013, which~~, wherein EMED has alleged ~~that~~ the ~~RMS High-Flo Butterfly design infringed a patent~~Company’s needle sets infringe various patents controlled by EMED. ~~RMS disputed this claim~~Certain of these lawsuits also allege antitrust violations, unfair business practices and ~~we believed~~various other claims. Although no assurances can be given, the Company believes it likely that ~~our design did not infringe~~each of EMED’s patents at issue in these cases will be deemed invalid and that the Company will succeed on the merits with respect to all of the other elements of the cases.

The initial case involving EMED ~~patent itself~~ was ~~not valid. Under advice of counsel, on September 20, 2013,~~filed by the Company ~~commenced~~ in the United States District Court for the Eastern District of California on September 20, 2013, in response to a ~~declaratory judgment action against competitor,~~letter from EMED claiming infringement by RMS, and sought to establish the invalidity of ~~one of EMED’s patents and non-infringement of~~ the ~~Company’s needle sets.~~patent referenced in the letter – patent US 8,500,703 – or “’703.” EMED answered the complaint and asserted patent infringement of ’703 and unfair business practice counterclaims. The Company responded by ~~asserting its own~~adding unfair business practice claims against EMED. Both parties have requested injunctive relief and monetary ~~damages. Discovery~~damages in unspecified amounts.

On August 22, 2017, the Company filed a motion in this California case seeking a Preliminary Injunction prohibiting EMED from making false statements and claims regarding the products of both companies. The motion has now been fully briefed, and the parties are awaiting action by the Court.

Earlier, on September 11, 2015, the Company requested an ex parte reexamination of the ’703 patent by the US Patent and Trademark Office (USPTO). The ex parte reexamination resulted in a Final Office Action dated July 19, 2017 rejecting all EMED claims of the patent. On January 25, 2018 EMED filed an Appeal Brief with a Petition for Revival, and the ex parte reexamination is ongoing.

~~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. On June 23, 2016,~~The second court case was filed by EMED filed a motion seeking to have the Company held in contempt, claiming that certain language in the Company’s device labeling does not comply with the injunction. In response to a show cause order, the Company advised the Court that the language in the Company’s labeling that EMED challenged is language that the FDA directed the Company to use in its labeling. The Court discharged the show cause order, effectively rejecting EMED’s contempt argument.

On March 24, 2016, EMED filed a motion seeking a second preliminary injunction prohibiting RMS from selling three of its products in California. The Company opposed that motion on April 19, 2016. A decision on the motion is still pending.

~~On June 25, 2015, EMED filed a claim of 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.~~Texas on June 25, 2015, claiming patent infringement of another of its patents (US 8,961,476 – “’476”), by the Company’s needle sets, and seeking unspecified monetary damages. This ~~second~~’476 patent is related to the ~~one concerning the Company’s declaratory judgment action. Given the close relationship between the two patents,~~’703 patent.

On September 17, 2015 the Company requested ~~that~~an inter partes review (“IPR”) of ’476, and in response to the Texas suit be transferred to California. Also, based on a validity review of the patent in the U.S. Patent and Trademark Office (“USPTO”), discussed below, the Company requested the Texas suit be stayed. On May 12, 2016,Company’s request, the Court entered an order staying the second case until after the Patent Trial and Appeal Board (“PTAB”) atof the USPTO ~~issued~~made a ~~final written~~ decision regarding the validity of the patent. On January 12, 2017, the PTAB issued its ~~final written decision~~Final Written Decision in RMS’s favor invalidating all but one of the claims ~~asserted by~~in this patent. (The Company believes the remaining claim is not independently material to any of EMED’s litigation claims or RMS’s rights.) EMED ~~in the Texas litigation. On January 26, 2017, the Company and EMED requested that the Texas case remain stayed pending EMED’s appeal of~~appealed the PTAB’s ~~final~~ ruling to the United States Court of Appeals for the Federal Circuit, ~~(“CAFC”).~~which affirmed the PTAB’s Final Written Decision in the Company’s favor on April 3, 2018. On April 18, 2018, EMED filed a petition for en banc rehearing. The second court case in the Eastern District of Texas remains stayed pending EMED’s exhaustion of its rights of judicial review of the PTAB’s decision.

Following the PTAB’s Final Written Decision in the IPR of ’476, EMED filed a new patent application claiming priority back to the application that issued as ’703 at issue in the California case. Submitted for accelerated examination, this new application issued as US 9,808,576 – “’576” on November 7, 2017. On this same date, EMED filed a new case (third case) in the United States District Court for the Eastern District of Texas claiming patent infringement of ’576, also directed to the Company’s needle sets, and seeking unspecified damages and a preliminary injunction against the Company’s marketing of its needle sets. RMS has filed a Motion to Dismiss or Transfer Venue to the Southern District of New York, as RMS has no physical or direct presence in the Eastern District of Texas. RMS also filed an opposition to EMED’s preliminary injunction motion, to which EMED did not file a reply. The Eastern District of Texas has now ordered the case moved to the Southern District of New York, which has now occurred.

On ~~September 11, 2015, the Company requested an ex parte reexamination of the patent in the first filed case, and on September 17, 2015~~May 4, 2018 the Company requested an inter ~~partes~~parties review (“IPR”) of ’576 and EMED’s response is due in mid-August. Upon the ~~patent~~submission of that Response, the Company intends to Move for Stay of the ’576 Southern District of New York matter.

EMED has petitioned the Eastern District of Texas for right to move the ’476 matter to the Southern District of New York and for leave to amend the original complaint, but neither request is believed likely to succeed as both issues are years past statutory deadlines and at odds with prior statements made by EMED in this matter.

On April 23, 2018, EMED filed a new Civil Case in the ~~second filed case. On November 20, 2015, the USPTO instituted the ex parte reexamination request having found a substantial new question~~Eastern District of ~~patentability concerning EMED’s patent~~Texas asserting antitrust, defamation and unfair business practice claims, and seeking unspecified damages, similar to those previously presented in the first case, described above. The Company has filed ~~case. All EMED claims have been rejected~~a Motion to Dismiss and the parties are awaiting a decision by the USPTO Examiner in a Non-Final Office Action. EMED filed a response that is awaiting consideration by the Examiner. Thus, the ex parte reexamination is ongoing. 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. Oral argument for the IPR was held on November 22, 2016 and a final ruling issued on January 12, 2017. In its final ruling, the PTAB held the claim asserted by EMED against the Company in the second filed case was invalid. EMED appealed the PTAB’s final ruling, and EMED’s opening brief in the CAFC was filed on June 26, 2017. The Company is now responding.Court.

Although the Company believes it has meritorious claims and defenses in these actions and proceedings, their outcomes cannot be predicted with any certainty. ~~We believe that it is very likely both patents will be determined invalid, however, if~~If any of these actions against the Company are successful, they could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows.

- 9 -

NOTE 5 STOCKHOLDERS’ EQUITY

On ~~September 30, 2015,~~June 29, 2016, RMS’s Board of Directors authorized the Company to make open market purchases of up to 2,000,000 shares of the Company’s ~~Outstanding~~outstanding Common Stock. The purchases are made through a broker designated by the Company, with price, timing and volume restrictions based on average daily trading volume, consistent with the rules of the Securities and Exchange Commission for such repurchases. As of June 30, ~~2017,~~2018, the Company had repurchased 396,606 shares at an average price of ~~$0.45 under the program.~~$0.45. The management of the Company has decided to discontinue repurchasing its outstanding common stock under the program for an undetermined period of time to utilize cash for capital investments needed to expand the business.

NOTE 6 STOCK-BASED COMPENSATION

On ~~September 30, 2015,~~June 29, 2016, the Board of Directors ~~approved~~amended the 2015 Stock Option Plan ~~(“the Plan”)~~ authorizing the Company to grant ~~stock option~~ awards to certain ~~officers,~~ employees ~~and consultants~~ under the ~~Plan, subject to shareholder approval~~plan at fair market value, which was approved by shareholders at the Annual Meeting ~~of Shareholders~~ held on September 6, 2016. The total number of shares of ~~common stock of the Company, par value $0.01 per share (“~~Common ~~Stock”),~~Stock, with respect to which awards may be granted pursuant to the Plan, ~~was~~shall not to exceed ~~2,000,000 shares.~~

On June 29, 2016, the Board of Directors approved the amendment to the Plan authorizing the total number of shares of common stock authorized to be subject to awards granted under the Plan to be increased to 4,000,000 shares. ~~On September 6, 2016, at the Annual Shareholder Meeting, the Company’s shareholders approved the Plan as amended.~~

As of June 30, ~~2017,~~2018, there were outstanding ~~1,113,000~~931,000 options awarded to certain executives, key employees and advisory board members under the Plan.

The per share weighted average fair value of stock options granted during the ~~four~~six months ended June 30, ~~2017~~2018 and June 30, ~~2016~~2017 was ~~$0.24 and zero,~~$0.75and $0.25, respectively. The fair value of each award is estimated on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the ~~four~~six months ended June 30, ~~2017~~2018 and June 30, ~~2016.~~2017. 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:


	June 30,				June 30,
	2017		2016		2018		2017

Dividend yield		0.00%		0.00%		0.00%		0.00%
Expected Volatility		59.00-72.2%		59.00%		65.2%		70.9-72.20%
Weighted-average volatility		—		—		—		—
Expected dividends		—		—		—		—
Expected term (in years)		4 - 5 Years		5 Years		5 Years		5 Years
Risk-free rate		2.17-2.48%		2.17%		2.80%		2.36-2.48%

~~- 10 -~~

The following table summarizes the status of the Plan:


	Four Months Ended June 30,								Six months Ended June 30,
	2017				2016				2018			2017
	Shares	Weighted Average Exercise Price			Shares		Weighted Average Exercise Price		Shares	Weighted Average Exercise Price		Shares		Weighted Average Exercise Price

Outstanding at March 1	1,345,000	$	0.39			1,060,000	$	0.37
Outstanding at January 1									1,038,000	$	0.41		905,000	$	0.37
Granted	18,000	$	—			—	$	—	18,000	$	1.33		518,000	$	0.41
Exercised	—	$	—			—	$	—	125,000	$	0.41		—	$	—
Forfeited	250,000	$	0.36			—	$	—	—	$	—		310,000	$	0.36
Outstanding at June 30	1,113,000	$	0.39			1,060,000	$	0.37	931,000	$	0.43		1,113,000	$	0.39
Options exercisable at June 30,	538,000	$	0.38			—	$	—
Weighted average fair value of options granted during the period	—	$	—			—	$	—
Options exercisable at June 30									656,885	$	0.39		538,000	$	0.38
Stock-based compensation expense	—	$	(37,385	)		—	$	50,055	—	$	26,670		—	$	(26,021	)

- 10 -

Total stock-based compensation expense, net of estimated forfeitures for stock option awards totaled ~~$(37,385)~~$26,670 and ~~$50,055~~($26,021) for the ~~four~~six months ended June 30, ~~2017~~2018 and June 30, ~~2016,~~2017, respectively. Cash received from option exercises for the six months ended June 30, 2018 and 2017 was $51,250 and zero, respectively.

The weighted-average grant-date fair value of options granted during the ~~four~~six months ended June 30, ~~2017~~2018 and June 30, ~~2016,~~2017, was ~~$4,356~~$0.75 and ~~zero,~~$0.25, respectively. The total intrinsic value of options exercised during the ~~four~~six months ended June 30, ~~2017~~2018 and June 30, ~~2016,~~2017, was $30,664 and zero, ~~for both periods.~~respectively.

The following table presents information pertaining to options outstanding at June 30, ~~2017:~~2018:


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

$0.36 - $0.41	1,113,000	5 years	$	0.39	538,000	$	0.38
$0.36 - $1.33								931,000	5 years	$	0.43	656,885	$	0.39

As of June 30, ~~2017,~~2018, there was ~~$113,821~~$64,507 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 1719 months. The total fair value of shares vested ~~during the four months ended~~as of June 30, 2018 and June 30, 2017, was $135,979 and $107,732, respectively.

NOTE 7 DEBT OBLIGATIONS

On February 8, 2018, the Company executed a Promissory Note with KeyBank National Association in the amount of $1.5 million as a variable rate revolving line of credit loan due on demand with an interest rate of Libor plus 2.25%, collateralized with a certificate of deposit in the amount of $1.5 million. The Company entered into this arrangement to establish a credit lending history and, in the event needed, to have additional cash on hand for future expansion. As of June 30, ~~2016, was $9,300 and zero, respectively.~~2018 the Company has no outstanding amounts against the line of credit.

- 11 -

PART I – ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Quarterly Report on Form 10-Q 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 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 uncertainties associated with future operating results, unpredictability related to Food and Drug Administration regulations, introduction of competitive products, ~~limited liquidity,~~acceptance of and demand for new and existing products, ability to penetrate new markets, success in enforcing and obtaining patents, reimbursement related risks, government regulation of the home health care industry, success of the research and development effort, expanding the market of FREEDOM60^®,demand in the SCIg market, availability of sufficient capital ~~to continue operations,~~if or when needed, dependence on key personnel and the outcome of ~~litigation and regulatory investigation.~~litigation. 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 if or when needed to develop and market new products, acceptance of and demand for new and existing products, ability to penetrate new markets, our success in enforcing and obtaining patents, obtaining required Government approvals, attracting and maintaining key personnel, succeeding in litigation claims and resolving the FDA Warning Letter 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. 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.

Throughout this report, “RMS,” the “Company,” “we,” “us” and “our” refer to Repro Med Systems, Inc.

OVERVIEW

On March 22, 2017, the Board of Directors approved a change in the Company’s fiscal year end from February 28 to December 31. With this fiscal year end change, the Company is reporting one-time, transitional financial informationNet sales increased 17.6% for the ~~month of March 2017 and the quarter April through June 2017.~~

During the four month period ended June 30, 2017, we delivered sales growth both domestically and internationally, ramped up production to keep pace with demand and found ways to lower costs. The FDA renewed our Certificate to Foreign Government which is used to communicate to foreign governments that the FDA certified that RMS meets good manufacturing practices and quality system regulations. We received registrations in new countries, launched our new flow controller in Europe and started several clinical trials with drug companies. Furthermore, we have launched a new marketing campaign, redesigned our packaging and entered the social media world to help extend our brand awareness. We plan to continue to focus on global sales growth, cost control and new product development. Additionally, we continue to look for a new facility with more square footage to accommodate our expanding needs.

~~Our net sales results for the four~~three months ended June 30, 2017 increased 31.1%, versus the same period last year. Part of the increase was the result of backorders of $0.4 million at February 28, 2017 which were filled during the four months ended June 30, 2017. Excluding these backorders, net sales grew 21.6% driven by organic growth both domestically and internationally, which included two large pump orders accelerated into this period and a large return of product related to a market withdrawal last year. Our selling, general and administrative costs were 4.7% lower for the four months ended June 30, 20172018, as compared with the same period last year. ~~We saw a significant reduction~~The increase in ~~legal fees~~net sales was driven by higher needle set sales, which we believe was bolstered by the FDA clearance for the RMS “Integrated Catch-Up Freedom Syringe Driver Infusion System” on August 31, 2017, which includes both subcutaneous medications, specifically immunoglobulins and intravenous medications, such as antibiotics as well as sales from the recently FDA approved first use of immunoglobulin for chronic inflammatory demyelinating polyneuropathy (“CIDP”) indication for the subcutaneous drug Hizentra®. Net sales during the period included approximately $0.3 million of revenue related to our litigation and FDA regulatory efforts. However, we cannot predict whether this trend will continue, nor can we predict the outcome of the litigation or regulatory process. We also had reductions inone-time sales and marketing driven by reduced recruiting and consulting fees that were incurred last year related to our website redesign, public relations, sales training and lead generation efforts and the timing of spend for current year marketing initiatives. Offsetting these savings were increased salary and related benefit costs in our regulatory department due to headcount to support ~~our regulatory compliance requirements.~~the clinical activities for pharmaceutical companies. Net income for the period increased three-fold to $0.5 million, or 10.6% of net sales, which compares with $0.1 million reported during the second quarter of 2017. Higher net sales combined with improved gross profits on relatively flat operating expenses and a favorable tax rate change contributed to the increase in profitability.

~~- 12 -~~

RESULTS OF OPERATIONS

~~Four Months Ended~~Three months ended June 30, ~~2017~~2018 compared to June 30, ~~2016~~2017

Net Sales

The following table summarizes our net sales for the ~~four~~three months ended June 30, ~~2017~~2018 and ~~2016:~~2017:


	Four Months Ended June 30,				Change from Prior Year			% of Sales		Three Months Ended June 30,				Change from Prior Year			% of Sales
	2017		2016		$		%	2016	2015	2018		2017		$		%	2018	2017
Sales
Domestic	$	4,254,605	$	3,287,740	$	966,865	29.4%	79.7%	80.7%	$	3,582,392	$	2,988,833	$	593,559	19.9%	79.6%	78.0%
International		1,084,471		784,453		300,018	38.2%	20.3%	19.3%		919,934		840,624		79,310	9.4%	20.4%	22.0%
Total	$	5,339,076	$	4,072,193	$	1,266,883	31.1%			$	4,502,326	$	3,829,457	$	672,869	17.6%

Total net sales increased ~~$1.3~~$0.7 million or ~~31.1%~~17.6% for the ~~four months ended~~three monthsended June 30, ~~2017~~2018 compared with the same period last year. ~~Part of the increase came from fulfilling backorders of $0.4 million at February 28, 2017. Excluding these backorders, net sales increased 21.6%.~~ This growth was driven mostly by ~~both~~increased volume in domestic ~~and international~~needle sales. We believe our 510(k) clearance described above contributed to the increase, as well as sales resulting from increased organic growth in all product categories. The launch of a new drug generated increased needle sales as customers built inventory, two large pump orders were accelerated forward into this period and last year included a large return of product related to ~~a market withdrawal. We continue to concentrate~~our pharmaceutical partners for clinical trials, which added $0.3 million for the majority of our efforts in our infusion product lines, specifically towards new applications in both domestic and international markets. We continue to pursue registrations in new countries, although revenue realization could take up to eighteen months from the initial registration efforts. We also continue to expand our sales efforts into the antibiotic market.three months.

- 12 -

Gross Profit

Our gross profit for the ~~four~~three months ended June 30, ~~2017~~2018 and ~~2016~~2017 is as follows:


	Four Months Ended June 30,				Change from Prior Year			Three Months Ended June 30,				Change from Prior Year
	2017		2016		$		%	2018		2017		$		%
Gross Profit	$	3,270,095	$	2,616,826	$	653,269	25.0%	$	2,739,584	$	2,297,299	$	442,285	19.3%
Stated as a Percentage of Net Sales		61.2%		64.3%					60.8%		60.0%

Gross profit increased ~~$0.7~~$0.4 million or ~~25.0%~~19.3% in the ~~four~~three months ended June 30, ~~2017,~~2018, compared to the same period in ~~2016. This~~2017.This increase in the quarter was mostly driven by the increase in net revenues of $1.3 million. Partially offsetting this increase was higher production costs related to scrap during quality inspections as we work to implement a nondestructive testing protocol. Additionally, we had higher sterilization costs due to more frequent cycles required to meet demand and backlog and increased shipping costs due to the backlog. We also had higher production salary and related benefits costs from overtime and the addition of a second shift to meet increased demand.sales.

Selling, general and administrative and Research and development

Our selling, general and administrative expenses and research and development costs for the ~~four~~three months ended June 30, ~~2017~~2018 and ~~2016~~2017 are as follows:


	Four Months Ended June 30,				Change from Prior Year					Three Months Ended June 30,				Change from Prior Year
	2017		2016		$			%		2018		2017		$			%
Selling, general and administrative	$	2,643,043	$	2,773,202		(130,159	)	(4.7%	)	$	2,022,631		2,005,336	$	17,295		0.9%
Research and development		32,712		71,938		(39,226	)	(54.5%	)		23,963		24,840		(877	)	(3.5%	)
	$	2,675,755	$	2,845,140		(169,385	)	(-6.0%	)	$	2,046,594		2,030,176	$	16,418		0.8%
Stated as a Percentage of Net Sales		50.1%		69.9%							45.5%		53.0%

~~- 13 -~~

Selling, general and administrative ~~expenses decreased $0.1 million, or 4.7%, during~~expensesduring the ~~four~~three months ended June 30, ~~2017 compared to~~2018 were nearly even with the same period last year. ~~The decrease was~~This resulted from higher regulatory salary and benefits to meet our compliance activities, the ~~result~~addition of a ~~significant reduction~~clinical and medical affairs associate and consulting for FDA submissions and international registrations in aggregate $0.2 million. Additionally we incurred higher consulting and recruiting fees for investor relations and the chief executive officer search of $0.1 million. Mostly offsetting these increases were lower legal fees ~~related to our litigation and regulatory efforts. However, we cannot predict whether this trend will continue, nor can we predict the outcome~~ of the litigation. We are making every effort to manage the spend on professional fees while making sure we do whatever is necessary to achieve a positive outcome regarding out litigation and FDA matters. We also had reductions in sales and marketing driven by reduced recruiting fees, lower consulting fees related to our website redesign last year, timing of spend this year on marketing initiatives$0.1 million and lower salary and related ~~costs~~benefits expense of $0.2 million due to ~~attrition. Partially offsetting these savings were increased costs~~the termination of the chief operating officer last year and decreased headcount in ~~our regulatory department due to headcount to support our regulatory compliance requirements.~~sales and marketing.

Research and development ~~expense decreased by 54.5%, primarily due to attrition for~~expenses are nearly even with the ~~period.~~same period last year. We ~~are committed to our research and development activities and are actively searching to replace the open position. We continue to actively pursue~~hired a 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 usefulengineer 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.~~April 2018.

Depreciation and amortization

Depreciation and amortization expense ~~increased~~decreased by ~~6.0% up~~1.0 % to ~~$102,357~~$75,978 in the ~~four~~three months ended June 30, 2018 compared with $76,781 in the three months ended June 30, 2017, ~~compared with $96,577 in the four months ended June 30, 2016~~ as a result of decreased depreciation as more assets become fully depreciated offset by a continued investment in ~~new computer~~production equipment, ~~for both administrative support~~ and ~~for production requirements,~~increased amortization expense of new patent applications and maintenance of existing patents.

Net ~~Income/(Loss)~~Income


	Four Months Ended June 30,					Change from Prior Year		Three Months Ended June 30,				Change from Prior Year
	2017		2016			$		2018		2017		$
Net Income/(Loss)	$	360,833	$	(205,882	)	$	566,715
Net Income								$	475,723		148,472		327,251
Stated as a Percentage of Net Sales		6.8%		(5.1%	)				10.6%		3.9%

Our net income for the ~~four~~three months ended June 30, 2018 was $0.5 million compared to $0.1 million for the three months ended June 30, 2017, driven by higher net sales, level operating expenses and the impact of the new lower income tax rate. Partially offsetting this was a negative foreign exchange effect of $54,508 versus last year.

- 13 -

Six months ended June 30, 2018 compared to June 30, 2017

Net Sales

The following table summarizes our net sales for the six months ended June 30, 2018 and 2017:


	Six months Ended June 30,				Change from Prior Year			% of Sales
	2018		2017		$		%	2018	2017
Sales
Domestic	$	6,957,600	$	5,984,280	$	973,320	16.3%	81.5%	80.1%
International		1,577,950		1,483,613		94,337	6.4%	18.5%	19.9%
Total	$	8,535,550	$	7,467,893	$	1,067,657	14.3%

Total net sales increased $1.1 million or 14.3% for the six months ended June 30, 2018 driven largely by needle set sales. We believe our 510(k) clearance described above contributed to the increase, as well as sales to our pharmaceutical partners for clinical trials which added $0.4 million for the six months.

Gross Profit

Our gross profit for the six months ended June 30, 2018 and 2017 is as follows:


	Six months Ended June 30,				Change from Prior Year
	2018		2017		$		%
Gross Profit	$	5,205,408	$	4,399,254	$	806,154	18.3%
Stated as a Percentage of Net Sales		61.0%		58.9%

Gross profit increased $0.8 million or 18.3% in the six months ended June 30, 2018, compared to the same period last year. This increase was driven by the increase in net sales of $1.1 million. Additionally, production operating efficiencies contributed to improved gross margin.

Selling, general and administrative and Research and development

Our selling, general and administrative expenses and research and development costs for the six months ended June 30, 2018 and 2017 are as follows:


	Six months Ended September 30,				Change from Prior Year
	2018		2017		$			%
Selling, general and administrative	$	3,902,900	$	3,780,445	$	122,455		3.2%
Research and development		33,811		70,746		(36,935	)	(52.2)%
	$	3,936,711	$	3,851,191	$	85,520		2.2%
Stated as a Percentage of Net Sales		46.1%		51.6%

Selling, general and administrative expenses increased $0.1 million, or 3.2%, during the six months ended June 30, 2018 compared to the same period last year. This resulted from higher regulatory salary and benefits to meet our compliance activities, the addition of a clinical and medical affairs associate and consulting fees for FDA submissions and international registrations in aggregate $0.3 million. Additionally we incurred higher consulting and recruiting fees for investor relations and the chief executive officer search of $0.2 million. Mostly offsetting these increases were lower salary and related benefits expense of $0.4 million due to the termination of the chief operating officer last year and decreased headcount in sales and marketing.

Research and development expense decreased by 52.2%, primarily due to attrition for the period compared with last year. We have since hired an engineer.

Depreciation and amortization

Depreciation and amortization expense decreased by 0.7% to $150,556 in the six months ended June 30, 2018 compared with $151,662 in the six months ended June 30, 2017as a result of decreased depreciation as more assets become fully depreciated offset by a continued investment in production equipment, and increased amortization expense of new patent applications and maintenance of existing patents.

- 14 -

Net Income


	Six months Ended June 30,				Change from Prior Year
	2018		2017		$
Net Income	$	879,150	$	275,423	$	603,727
Stated as a Percentage of Net Sales		10.3%		3.7%

Our net income for the six months ended June 30, 2018 was $0.9 million compared to a net ~~loss~~income of ~~$0.2~~$0.3 million for the ~~four~~six months ended June 30, ~~2016.~~2017. This $0.6 million ~~increase~~change was mostly a result of the increase in net sales, ~~and reduced~~a 2.2% increase in selling, general and administrative and research and development expenses as described ~~above. Additionally, the Company recognized~~above as well as a ~~$54,659~~lower income tax rate. Partially offsetting this was a negative foreign exchange ~~gain for the period.~~effect of $62,158 versus last year.

LIQUIDITY AND CAPITAL RESOURCES

Our principal source of liquidity is our cash of ~~$3.0~~$3.4 million as of June 30, ~~2017, and cash flows from operations.~~2018. Our principal source of operating 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.

We believe that as of June 30, ~~2017,~~2018, 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 FREEDOM System continues to find a solid following in the SCIg market, and this market is expected to continue to increase both domestically and internationally. ~~In addition, we expect many~~

On February 8, 2018, the Company executed a Promissory Note with KeyBank National Association in the amount of $1.5 million as a variable rate revolving line of credit loan due on demand with an interest rate of Libor plus 2.25%, collateralized with a certificate of deposit in the ~~SCIg providers,~~amount of $1.5 million. The Company entered into this arrangement to establish a credit lending history and, ~~others, will see benefit~~ in ~~using~~ the ~~FREEDOM System~~event needed, to have additional cash on hand for ~~additional uses such as antibiotics, chemotherapeutics, and pain medications.~~future expansion. As of June 30, 2018, the Company has no outstanding amounts against the line of credit.

We continue to be in litigation with a competitor, EMED Technologies ~~Corp.~~Corporation (“EMED”) and have incurred a significant amount of legal fees in connection with that process. Although the Company believes it has meritorious claims and defenses in the actions and proceedings, their outcomes cannot be predicted with any certainty. If any of these actions against the Company are successful, they could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows.

~~- 14 -~~

On September 30, 2015, RMS’s Board of Directors authorized the Company to make open market purchases of up to 2,000,000 shares of the Company’s Outstanding Common Stock. The purchases are made through a broker designated by the Company, with price, timing and volume restrictions based on average daily trading volume, consistent with the rules of the Securities and Exchange Commission for such repurchases. As of June 30, 2017, the Company had repurchased 396,606 shares at an average price of $0.45 under the program. The management of the Company decided to discontinue repurchasing its outstanding common stock under the program for an undetermined period of time to utilize cash for capital investments needed to expand the business.

Cash Flows

The following table summarizes our cash flows:

Four Months Ended
June 30, 2017

Four Months Ended
June 30, 2016

Net cash used in operating activities

$
(236,636
)
$
(544,137
)
Net cash used in investing activities

$
(74,761
)
$
(103,634
)
Net cash used in financing activities

$
(19,360
)
$
(1,105
)


	Six months Ended June 30, 2018			Six months Ended June 30, 2017
Net cash provided by/(used in) operating activities	$	955,787		$	(270,852	)
Net cash used in investing activities	$	(1,558,632	)	$	(143,979	)
Net cash provided by/(used in) financing activities	$	49,495		$	(19,844	)

Operating Activities

Net cash provided by operating activities of $1.0 million for the six months ended June 30, 2018 was primarily the result of net income of $0.9 million, non-cash charges of $0.2 million for depreciation and amortization of long lived tangible and intangible assets and stock based compensation of $0.1 million, as well as an increase in accounts payable of $0.3 million due to higher supplier payables. Partially offsetting these were payments for insurance renewals, severance, bonus and commission payments.

Net cash used in operating activities of ~~$0.2~~$0.3 million for the ~~four~~six months ended June 30, 2017 was primarily attributable to ~~our~~an increase in accounts receivable of ~~$0.4 millionand~~$0.6 million and a decrease in accounts payable of $0.5 million mostly due to the payment of legal fees ~~accrued for at February 28, 2017. Partially offsetting these items were~~in the period. Offsetting this was net income of ~~$0.4~~$0.3 million, non-cash charges of ~~$0.1~~$0.2 million for depreciation and amortization of long lived tangible, ~~and~~ intangible assets and stock based compensation of $41,479, a decrease in ~~income tax receivable of $0.2 million.~~

Net cash used in operating activities of $0.6 million for the four months ended June 30, 2016 was primarily attributable to the operating loss of $0.2 million, an increase in accounts receivable of $0.4 million, an increase in prepaid expenseinventory of $0.1 million ~~mostly due to an income tax receivable of $0.1 million due to the loss in the period, all partially offset by non-cash charges of $0.1 million for depreciation~~ and ~~amortization of long lived tangible and intangible assets, stock based compensation expense of $69,714 and an~~ increase in ~~accounts payable of $0.2 million mostly due to raw material purchases and legal fees.~~tax liability resulting from increased profits.

- 15 -

Investing Activities

Our net cash used for investing activities of $1.6 million for the six months ended June 30, 2018 was mostly the result of the purchase of a certificate of deposit. Net cash used in investing activities of $0.1 million for the ~~four~~six months ended June 30, 2017 ~~and June 30, 2016~~ was primarily attributable to our ~~continued~~ investment in capital assets, mostly related to production and computer equipment, and for new patent applications and maintenance of existing patents.

Financing Activities

~~Our net~~Net cash provided by financing activities was $49,495 for the six months ended June 30, 2018 mostly resulting from the exercise of options. Net cash used in financing activities was ~~$19,360 and $1,105~~$19,844 for the ~~four~~six months ended June 30, 2017 ~~and June 30, 2016, respectively, both~~mostly resulting from the ~~result~~cancellation of ~~the repurchase of shares of the Company’s common stock.~~

~~FDA~~

RMS had an inspection by the FDA in June 2015, which included, among other items, a review of customer complaints, quality controls, quality assurance and documentation. The FDA inspection was then expanded as a consequence of an extensive “trade complaint” filed on behalf of a competitor which resulted in the issuance of an FDA FORM 483. Eight months later, on February 29, 2016 we received a Warning Letter. The Company responded and replied numerous times to the Warning Letter from March 18, 2016 on, and underwent a follow up inspection on November 29, 2016. On December 16, 2016, the FDA issued another FDA FORM 483, to which the Company provided a written response on January 9, 2017 and provided a supplemental response on March 17, 2017 and April 24, 2017. On April 25, 2017, RMS met with the FDA Center for Devices and Radiological Health (“CDRH”) Compliance team and the New York District Office to discuss the final resolution of Warning Letter closure. On May 23, 2017, the Compliance Office of CDRH issued a letter to RMS to acknowledge that RMS had successfully addressed all quality and regulatory issues cited in the Warning Letter. Prior to closing the Warning Letter, the FDA also needs to complete its review of our premarket submission (a pending 510(k)), which was accepted for review on May 17, 2017. On June 30, 2017, RMS received a written response regarding our pending 510(k) submission, and RMS is working with the Office for Device Evaluation of CDRH to address those questions in order receive the 510(k) clearance as expeditiously as possible.

~~- 15 -~~

On April 19, 2017, the FDA renewed our Certificate to Foreign Government which is used to communicate to foreign governments that the FDA certified that RMS meets good manufacturing practices and quality system regulations.

Although the Company is attempting to meet all of the FDA requirements, we cannot be certain that our actions will be deemed satisfactory by the FDA and this could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows.shares.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In ~~May 2017,~~June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09—Compensation-Stock Compensation (Topic 718), which provides clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this update affect any entity that changes the terms or conditions of a share-based payment award. The amendments in this update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption.

~~In June 2016, FASB issued ASU~~ No. 2016-13—Financial Instruments – Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments, which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. This ASU affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption.

~~- 16 -~~

this update are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by update 2014-09). In December 2016, the FASB issued ASU No. 2016-20 Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which represents changes to make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. This update is the final, combined version of Proposed Accounting Standards Updates 2016-240 and 2016-320 (both entitled Technical Corrections and Improvements), which have been deleted. Based upon our initial evaluation, we do not expect the adoption of the standard and related amendments to have a material effect on our financial condition or results of operations.

PART I – ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

- 16 -

PART I – ITEM 4. CONTROLS AND PROCEDURES.

The Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures as such is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon their evaluations, the Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) is accumulated and communicated to the Company’s management, including its Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in the Company’s internal control over financial reporting during the quarter ended June 30, ~~2017,~~2018, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

PART II – ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On October 21, 2015, the Board of Directors of the Company approved non-employee director compensation of $25,000 each annually, to be paid quarterly half in cash and half in common stock, beginning September 1, 2015. The number of shares to be issued each quarter is calculated based upon the closing price of the common stock on the last day of each fiscal quarter as reported by the OTCQX. The Company issued ~~an aggregate of 44,118~~14,424 and 29,424 shares of common stock to its non-employee directors during the ~~four~~three and six month period ended June 30, ~~2017.~~2018, respectively.

~~As of June 30, 2017, the~~The Company issued ~~an aggregate of 13,555~~11,538 and 23,538 shares of common stock to Dr. Fred Ma, its Chief Medical Officer, under the terms of his employment ~~agreement.~~agreement, during the three and six month periods ended June 30, 2018, respectively.

~~- 17 -~~

On June 29, 2016, RMS’s Board of Directors authorized the Company to make open market purchases of up to 2,000,000 shares of the Company’s outstanding Common Stock. The ~~following table provides information regarding repurchases~~purchases are made through a broker designated by the Company, with price, timing and volume restrictions based on average daily trading volume, consistent with the rules of ~~its~~the Securities and Exchange Commission for such repurchases. As of June, 2018, the Company had repurchased 396,606 shares at an average price of $0.45. There were no repurchases of common stock by the Company during the ~~three month period~~quarter ended June 30, ~~2017:~~

~~Issuer Purchases~~2018. The management of the Company has decided to discontinue repurchasing its outstanding Common Stock for an undetermined period of time to utilize cash for capital investments needed to expand the business. There is no expiration date to the repurchase plan.

Total Number

Maximum

of Shares

Number of

Total

Purchased as

Shares that May

Number of

Average

Part of Publicly

Yet Be

Shares

Price Paid

Announced

Purchased

Period (1)

Purchased (2)

Per Share

Plan (3)

Under the Plan (3)

March 1, 2017 – March 31, 2017

—

—

—

1,603,394

April 1, 2017 – April 30, 2017

—

—

—

1,603,394

May 1, 2017 – May 31, 2017

44,000

$
0.44

—

1,603,394

June 1, 2017 – June 30, 2017

—

—

—

1,603,394

Total

44,000

$
0.44

—

~~__________~~


~~(1)~~	~~Monthly information is presented by reference to the Company’s fiscal months for the four months ended June 30, 2017.~~

~~(2)~~	~~In May 2017, the Company repurchased 44,000 shares of the Company’s common stock owned by two terminated employees at an aggregate purchase price of $19,360.~~

~~(3)~~	On September 30, 2015, RMS’s Board of Directors authorized the Company to make open market purchases of up to 2,000,000 shares of the Company’s Outstanding Common Stock. The purchases are made through a broker designated by the Company, with price, timing and volume restrictions based on average daily trading volume, consistent with the rules of the Securities and Exchange Commission for such repurchases. As of June 30, 2017, the Company had repurchased 396,606 shares at an average price of $0.45 under the program. The management of the Company decided to discontinue repurchasing its outstanding common stock under the program for an undetermined period of time to utilize cash for capital investments needed to expand the business. There is no expiration date to the program.

On ~~September 30, 2015,~~June 29, 2016, the Board of Directors ~~approved~~amended the 2015 Stock Option Plan authorizing the Company to grant awards to certain employees under the plan at fair market value, which was approved by shareholders at the Annual Meeting held on September 6, 2016. The total number of shares of Common Stock, with respect to which awards may be granted pursuant to the Plan, shall not exceed 4,000,000 shares. As of June 30, ~~2017,~~2018, there were outstanding ~~1.1 million~~931,000 options awarded to certain executives, key employees and advisory board members under the Plan.

All of the securities issued by the Company as described in this Item were issued in reliance on the exemption from registration under Section 4(2) under the Securities Act of 1933, as amended.

PART II – ITEM 6. EXHIBITS.


31.1	Certification of Principal Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act 2002

31.2	Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act 2002

32.1	Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act 2002

32.2	Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act 2002

101*	Interactive Data Files of Financial Statements and Notes.

* In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.

- 1817 -

SIGNATURES

Pursuant to the requirements 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.


	REPRO MED SYSTEMS, INC.

August ~~4, 2017~~6, 2018	/s/ ~~Andrew I. Sealfon~~Daniel S. Goldberger
	~~Andrew I. Sealfon, President,~~Daniel S. Goldberger, Chairman of the Board, ~~Director,~~Interim President and Chief Executive Officer

August ~~4, 2017~~6, 2018	/s/ Karen Fisher
	Karen Fisher, Chief Financial Officer and Treasurer

- 1918 -


	Four Months Ended June 30, 2017			Four Months Ended June 30, 2016
Net cash used in operating activities	$	(236,636	)	$	(544,137	)
Net cash used in investing activities	$	(74,761	)	$	(103,634	)
Net cash used in financing activities	$	(19,360	)	$	(1,105	)


				Total Number	Maximum
				of Shares	Number of
	Total			Purchased as	Shares that May
	Number of	Average		Part of Publicly	Yet Be
	Shares	Price Paid		Announced	Purchased
Period (1)	Purchased (2)	Per Share		Plan (3)	Under the Plan (3)
March 1, 2017 – March 31, 2017	—		—	—	1,603,394
April 1, 2017 – April 30, 2017	—		—	—	1,603,394
May 1, 2017 – May 31, 2017	44,000	$	0.44	—	1,603,394
June 1, 2017 – June 30, 2017	—		—	—	1,603,394
Total	44,000	$	0.44	—