Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May. 31, 2015 | Jul. 10, 2015 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 31, 2015 | |
Entity Registrant Name | REPRO MED SYSTEMS INC | |
Entity Central Index Key | 704,440 | |
Current Fiscal Year End Date | --02-28 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 38,006,667 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | May. 31, 2015 | Feb. 28, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 2,470,636 | $ 2,557,235 |
Certificates of deposit | 259,789 | 259,789 |
Accounts receivable less allowance for doubtful accounts of $31,581 and $29,865 for May 31, 2015 and February 28, 2015, respectively | 1,474,510 | 1,623,695 |
Inventory | 1,412,636 | 1,226,636 |
Prepaid expenses | 409,013 | 240,688 |
TOTAL CURRENT ASSETS | 6,026,584 | 5,908,043 |
Property and equipment, net | 1,156,289 | 1,161,432 |
Patents, net of accumulated amortization of $137,390 and $134,552 at May 31, 2015 and February 28, 2015, respectively | 214,076 | 180,558 |
Other assets | 31,140 | 31,140 |
TOTAL ASSETS | 7,428,089 | 7,281,173 |
CURRENT LIABILITIES | ||
Deferred capital gain - current portion | 22,481 | 22,481 |
Accounts payable | 397,492 | 243,217 |
Accrued expenses | 238,435 | 304,041 |
Accrued payroll and related taxes | 245,802 | 121,917 |
TOTAL CURRENT LIABILITIES | 904,210 | 691,656 |
Deferred capital gain - less current portion | 61,836 | 67,454 |
Deferred tax liability | 246,227 | 248,607 |
TOTAL LIABILITIES | 1,212,273 | 1,007,717 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, 50,000,000 shares authorized, 40,347,292 shares issued; 38,006,667 shares outstanding | 403,473 | 403,473 |
Additional paid-in capital | 3,855,188 | 3,855,188 |
Retained earnings | 2,172,436 | 2,237,076 |
Total Stockholders' Equity before Treasury Stock | 6,431,097 | 6,495,737 |
Less: Treasury stock, 2,340,625 shares at cost | (166,281) | (166,281) |
Less: Deferred compensation cost | (49,000) | (56,000) |
TOTAL STOCKHOLDERS' EQUITY | 6,215,816 | 6,273,456 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 7,428,089 | $ 7,281,173 |
BALANCE SHEETS (PARENTHETICAL)
BALANCE SHEETS (PARENTHETICAL) - USD ($) | May. 31, 2015 | Feb. 28, 2015 |
BALANCE SHEETS [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 31,581 | $ 29,865 |
Patents, accumulated amortization | $ 137,390 | $ 134,552 |
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 40,347,292 | 40,347,292 |
Common stock, shares outstanding | 38,006,667 | 38,006,667 |
Treasury stock, shares | 2,340,625 | 2,340,625 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) None in scaling factor is -9223372036854775296 | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
STATEMENTS OF OPERATIONS [Abstract] | ||
NET SALES | $ 2,630,545 | $ 2,637,021 |
Cost of goods solds | 1,112,686 | 1,110,771 |
Gross Profit | 1,517,859 | 1,526,250 |
OPERATING EXPENSES | ||
Selling, general and administrative | 1,478,339 | 1,094,065 |
Research and development | 53,665 | 131,396 |
Depreciation and amortization | 64,719 | 59,690 |
Total Operating Expenses | 1,596,723 | 1,285,151 |
Net Operating (Loss)/ Profit | (78,864) | 241,099 |
Non-Operating Income/(Expense) | ||
Gain (Loss) currency exchange | (15,070) | $ 1,844 |
Gain (Loss) on disposal of fixed assets | (4,606) | |
Interest and other income | 1,103 | $ 1,209 |
TOTAL OTHER INCOME (EXPENSES) | (18,573) | 3,053 |
(LOSS)/INCOME BEFORE TAXES | (97,437) | 244,152 |
Income Tax Benefit/(Expense) | 32,797 | (86,096) |
NET (LOSS)/INCOME | $ (64,640) | $ 158,056 |
NET (LOSS)/INCOME PER SHARE | ||
Basic | ||
Diluted | ||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||
Basic | 38,006,667 | 37,081,667 |
Diluted | 38,006,667 | 37,081,667 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (Loss)/Income | $ (64,640) | $ 158,056 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Amortization of deferred compensation cost | 7,000 | 32,875 |
Depreciation and amortization | 64,719 | 59,690 |
Deferred capital gain - building lease | (5,618) | $ (5,620) |
Loss on disposal of fixed assets | 4,606 | |
Allowance for returns and doubtful accounts | 951 | $ 1,109 |
Deferred taxes | (2,380) | |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 148,234 | $ 89,334 |
Increase in inventory | (186,000) | (205,862) |
(Increase) Decrease in prepaid expense | (168,325) | (141,198) |
Increase in accounts payable | 154,275 | 273,690 |
Increase in accrued payroll and related taxes | 123,885 | (11,432) |
Increase (Decrease) in accrued expense | $ (65,606) | 55,451 |
Decrease in accrued tax liability | (40,403) | |
NET CASH PROVIDED BY OPERATING ACTIVITIES | $ 11,101 | 265,690 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Payments for property and equipment | (61,344) | (91,427) |
Payments for patents | (36,356) | (62,913) |
NET CASH USED IN INVESTING ACTIVITIES | $ (97,700) | $ (154,340) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | ||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | $ (86,599) | $ 111,350 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 2,557,235 | 2,227,398 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 2,470,636 | $ 2,338,748 |
Supplemental Information | ||
Cash paid during the years for: Interest | ||
Cash paid during the years for: Taxes | $ 126,500 | |
NON-CASH FINANCING AND INVESTING ACTIVITIES | ||
Issuance of common stock as compensation | $ 84,000 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
May. 31, 2015 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS REPRO MED SYSTEMS, INC. (the Company) designs, manufactures and markets proprietary medical devices primarily for the ambulatory infusion market and emergency medical applications. The Food and Drug Administration (the FDA) regulates these products. The Company operates as one segment. BASIS OF PRESENTATION The accompanying unaudited financial statements as of May 31, 2015, 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 May 31, 2015, and the results of operations and cash flow for the three-month periods ended May 31, 2015, and 2014. The results of operations for the three months ended May 31, 2015, and 2014 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, 2015, as filed with the Securities and Exchange Commission on Form 10-K. SUBSEQUENT EVENTS EVALUATION The Company has evaluated subsequent events through July 10, 2015, the date on which the financial statements were issued. There were no material subsequent events that required recognition or additional disclosure in the financial statements. 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 In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09Revenue 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 April 29, 2015, the FASB issued a proposed ASU, Revenue from Contracts with Customers (Topic 606); Deferral of the Effective Date, which includes proposals related to: (a) delaying the effective date of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), by one year and (b) allowing early adoption of the ASU by all entities as of the original effective date for public entities. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption. RECLASSIFICATION Certain reclassifications have been made to conform prior period data to the current presentation. These reclassifications had no effect on reported net income. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
May. 31, 2015 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 2 RELATED PARTY TRANSACTIONS CONSULTING SERVICES 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 0.20 three Amortization amounted to $ 7,000 25,000 LEASED AIRCRAFT The Company leases an aircraft from a company controlled by the president. The lease payments aggregated were $ 5,375 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
May. 31, 2015 | |
PROPERTY AND EQUIPMENT [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 3 PROPERTY AND EQUIPMENT Property and equipment consists of the following at: May 31, 2015 February 28, 2015 Land $ 54,030 $ 54,030 Building 171,094 171,094 Furniture, office equipment, and leasehold improvements 913,397 887,959 Manufacturing equipment and tooling 992,858 963,843 2,131,379 2,076,926 Less: accumulated depreciation 975,090 915,494 Property and equipment, net $ 1,156,289 $ 1,161,432 |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 3 Months Ended |
May. 31, 2015 | |
LEGAL PROCEEDINGS [Abstract] | |
LEGAL PROCEEDINGS | NOTE 4 LEGAL PROCEEDINGS We commenced a declaratory judgment action in 2013 to establish the invalidity and non-infringement patent infringement claims by a competitor. The defendant answered the complaint and asserted various counterclaims that we believe are without merit. We subsequently added claims against the defendant to show that the defendant had engaged in various unfair business practices. On June 16, 2015 the Court issued what it termed a narrow preliminary injunction against the Company from making certain statements regarding certain competitor products. The Company is complying with the preliminary injunction. The parties will proceed with discovery in the case. On June 25, 2015 the competitor filed a claim of patent infringement in the Eastern District of Texas with respect to the Company's needle sets. This patent is similar to the patent that is the subject of the Company's declaratory judgment action and we believe this claim is likewise without merit. The Company has not yet answered the complaint in the case in Texas. |
NATURE OF OPERATIONS AND SUMM10
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy) | 3 Months Ended |
May. 31, 2015 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS REPRO MED SYSTEMS, INC. (the Company) designs, manufactures and markets proprietary medical devices primarily for the ambulatory infusion market and emergency medical applications. The Food and Drug Administration (the FDA) regulates these products. The Company operates as one segment. |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited financial statements as of May 31, 2015, 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 May 31, 2015, and the results of operations and cash flow for the three-month periods ended May 31, 2015, and 2014. The results of operations for the three months ended May 31, 2015, and 2014 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, 2015, as filed with the Securities and Exchange Commission on Form 10-K. |
SUBSEQUENT EVENTS EVALUATION | SUBSEQUENT EVENTS EVALUATION The Company has evaluated subsequent events through July 10, 2015, the date on which the financial statements were issued. There were no material subsequent events that required recognition or additional disclosure in the financial statements. |
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS | USE OF ESTIMATES IN THE FINANCIAL STATEMENTS The preparation of financial statements in conformity with U.S. generally accepted accounting principles (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 | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09Revenue 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 April 29, 2015, the FASB issued a proposed ASU, Revenue from Contracts with Customers (Topic 606); Deferral of the Effective Date, which includes proposals related to: (a) delaying the effective date of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), by one year and (b) allowing early adoption of the ASU by all entities as of the original effective date for public entities. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption. |
RECLASSIFICATION | RECLASSIFICATION Certain reclassifications have been made to conform prior period data to the current presentation. These reclassifications had no effect on reported net income. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
May. 31, 2015 | |
PROPERTY AND EQUIPMENT [Abstract] | |
Schedule of Property and Equipment | May 31, 2015 February 28, 2015 Land $ 54,030 $ 54,030 Building 171,094 171,094 Furniture, office equipment, and leasehold improvements 913,397 887,959 Manufacturing equipment and tooling 992,858 963,843 2,131,379 2,076,926 Less: accumulated depreciation 975,090 915,494 Property and equipment, net $ 1,156,289 $ 1,161,432 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Aug. 31, 2014 | Mar. 31, 2014 | May. 31, 2015 | May. 31, 2014 | |
Related Party Transaction [Line Items] | ||||
Amortization of deferred compensation cost | $ 7,000 | $ 32,875 | ||
Chief Executive Officer [Member] | Leased Aircraft [Member] | ||||
Related Party Transaction [Line Items] | ||||
Aircraft aggregate lease payments | 5,375 | 5,375 | ||
Director [Member] | Consulting Services [Member] | ||||
Related Party Transaction [Line Items] | ||||
Issuance of common stock for employee stock awards, shares | 420,000 | |||
Price per share | $ 0.20 | |||
Agreement period | 3 years | |||
Amortization of deferred compensation cost | $ 7,000 | $ 7,000 | ||
Payments for taxes due on the grant of common stock | $ 25,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | May. 31, 2015 | Feb. 28, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 2,131,379 | $ 2,076,926 |
Less: accumulated depreciation | 975,090 | 915,494 |
Property and equipment, net | 1,156,289 | 1,161,432 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 54,030 | 54,030 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 171,094 | 171,094 |
Furniture, Office Equipment, and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 913,397 | 887,959 |
Manufacturing Equipment and Tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 992,858 | $ 963,843 |