Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 30, 2015 | Jan. 08, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | REPRO MED SYSTEMS INC | |
Entity Central Index Key | 704,440 | |
Document Type | 10-Q | |
Trading Symbol | REPR | |
Document Period End Date | Nov. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-28 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 38,006,667 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
BALANCE SHEETS (UNAUDITED)
BALANCE SHEETS (UNAUDITED) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 3,339,531 | $ 2,557,235 |
Certificates of deposit | 259,789 | 259,789 |
Accounts receivable less allowance for doubtful accounts of $31,455 and $29,865 for November 30, 2015 and February 28, 2015, respectively | 1,757,961 | 1,623,695 |
Inventory | 1,258,802 | 1,226,636 |
Prepaid expenses | 290,383 | 240,688 |
TOTAL CURRENT ASSETS | 6,906,466 | 5,908,043 |
Property and equipment, net | 1,045,765 | 1,161,432 |
Patents, net of accumulated amortization of $143,762 and $134,552 at November 30, 2015 and February 28, 2015, respectively | 210,264 | 180,558 |
Other assets | 31,140 | 31,140 |
TOTAL ASSETS | 8,193,635 | 7,281,173 |
CURRENT LIABILITIES | ||
Deferred capital gain - current portion | 22,481 | 22,481 |
Accounts payable | 522,338 | 243,217 |
Accrued expenses | 434,117 | 304,041 |
Accrued tax liability | 43,424 | |
Accrued payroll and related taxes | 118,193 | 121,917 |
TOTAL CURRENT LIABILITIES | 1,140,553 | 691,656 |
Deferred capital gain - less current portion | 50,596 | 67,454 |
Deferred tax liability | 231,544 | 248,607 |
TOTAL LIABILITIES | 1,422,693 | 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 | 3,893,548 | 3,855,188 |
Retained earnings | 2,675,202 | 2,237,076 |
TOTAL STOCKHOLDERS' EQUITY BEFORE TREASURY STOCK AND DEFERRED COMPENSATION COST | 6,972,223 | 6,495,737 |
Less: Treasury stock, 2,340,625 shares at cost | (166,281) | (166,281) |
Less: Deferred compensation cost | (35,000) | (56,000) |
TOTAL STOCKHOLDERS' EQUITY | 6,770,942 | 6,273,456 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 8,193,635 | $ 7,281,173 |
BALANCE SHEETS (UNAUDITED) (Par
BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 31,455 | $ 29,865 |
Patents, accumulated amortization | $ 143,762 | $ 134,552 |
Common stock, par value (in dollars 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 |
STATEMENTS OF OPERATIONS (UNAUD
STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Income Statement [Abstract] | ||||
NET SALES | $ 3,144,954 | $ 2,655,155 | $ 8,941,676 | $ 7,797,030 |
Cost of goods sold | 1,035,675 | 1,075,158 | 3,307,808 | 3,054,246 |
Gross Profit | 2,109,279 | 1,579,997 | 5,633,868 | 4,742,784 |
OPERATING EXPENSES | ||||
Selling, general and administrative | 1,698,226 | 1,257,134 | 4,567,709 | 3,439,258 |
Research and development | 51,564 | 116,885 | 143,940 | 406,705 |
Depreciation and amortization | 69,274 | 71,544 | 204,087 | 202,224 |
Total Operating Expenses | 1,819,064 | 1,445,563 | 4,915,736 | 4,048,187 |
Net Operating Profit | 290,215 | 134,434 | 718,132 | 694,597 |
Non-Operating Income/(Expense) | ||||
Loss on currency exchange | (36,663) | $ (23,483) | (42,420) | $ (33,198) |
Loss on disposal of fixed assets | $ (253) | $ (13,577) | ||
Interest expense | $ (512) | |||
Interest and other income | $ 929 | $ 1,143 | $ 3,058 | 4,058 |
TOTAL OTHER INCOME (EXPENSES) | (35,987) | (22,340) | (52,939) | (29,652) |
INCOME BEFORE TAXES | 254,228 | 112,094 | 665,193 | 664,945 |
Income Tax Expense | (86,676) | (19,402) | (227,067) | (211,203) |
NET INCOME | $ 167,552 | $ 92,692 | $ 438,126 | $ 453,742 |
NET INCOME PER SHARE | ||||
Basic (in dollars per share) | $ 0.01 | $ 0.01 | ||
Diluted (in dollars per share) | $ 0.01 | $ 0.01 | ||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||
Basic (in shares) | 38,006,667 | 38,081,667 | 38,006,667 | 37,499,849 |
Diluted (in shares) | 38,006,667 | 38,081,667 | 38,006,667 | 37,499,849 |
STATEMENTS OF CASH FLOWS (UNAUD
STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income | $ 438,126 | $ 453,742 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of deferred compensation cost | 21,000 | $ 72,750 |
Stock based compensation expense | 38,360 | |
Depreciation and amortization | 204,087 | $ 202,224 |
Deferred capital gain - building lease | (16,860) | $ (16,860) |
Loss on disposal of fixed assets | 13,577 | |
Provision for returns and doubtful accounts | (70) | |
Deferred taxes | (17,063) | $ (24,701) |
Changes in operating assets and liabilities: | ||
(Increase) decrease in accounts receivable | (134,196) | 35,905 |
Increase in inventory | (32,165) | (752,373) |
(Increase) decrease in prepaid expense | (49,695) | 975 |
Increase in accounts payable | 279,122 | 431,920 |
Decrease in accrued payroll and related taxes | (3,724) | (7,758) |
Increase in accrued expense | 130,076 | 162,721 |
Increase (Decrease) in accrued tax liability | 43,424 | (166,358) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 913,999 | 392,187 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Payments for property and equipment | (106,337) | $ (552,060) |
Proceeds on disposal of fixed assets | $ 13,550 | |
Purchase of certificates of deposit | $ (880) | |
Payments for patents | $ (38,916) | (91,726) |
NET CASH USED IN INVESTING ACTIVITIES | $ (131,703) | (644,666) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from sale of securities, net of legal and other fees of $15,000 | 273,000 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 273,000 | |
NET INCREASE IN CASH AND CASH EQUIVALENTS | $ 782,296 | 20,521 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 2,557,235 | 2,227,398 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 3,339,531 | 2,247,919 |
Cash paid during the years for: | ||
Interest | 512 | |
Taxes | $ 100,000 | 404,891 |
NON-CASH FINANCING AND INVESTING ACTIVITIES | ||
Issuance of common stock as compensation | $ 84,000 |
STATEMENTS OF CASH FLOWS (UNAU6
STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) | 9 Months Ended |
Nov. 30, 2014USD ($) | |
Statement of Cash Flows [Abstract] | |
Legal and other fees, sale of securities | $ 15,000 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Nov. 30, 2015 | |
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 November 30, 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 Companys management, the financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the Companys financial position as of November 30, 2015, and the results of operations and cash flow for the three month and nine month periods ended November 30, 2015, and 2014. The results of operations for the three and nine months ended November 30, 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 managements discussion and analysis of financial condition and results of operations included in the Companys Annual Report for the year ended February 28, 2015, 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 In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-11Simplifying the Measurement of Inventory. The ASU was issued as part of the FASBs simplification initiative and under the ASU, inventory is measured at the lower of cost and net realizable value, which would eliminate the other two options that currently exist for the market: (1) replacement cost and (2) net realizable value less an approximately normal profit margin. This ASU is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted and should be applied prospectively. The Company is assessing the impact of the adoption of the ASU on its financial statements. In May 2014, FASB issued 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 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. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption. STOCK-BASED COMPENSATION The Company maintains various long-term incentive stock benefit plans under which it grants stock options and restricted stock awards to certain directors and key employees. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. All options are charged against income at their fair value. The entire compensation expense of the award is recognized over the vesting period. Shares of stock granted are recorded at the fair value of the shares at the grant date, 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Nov. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 2 RELATED PARTY TRANSACTIONS On December 20, 2013, we executed an agreement effective March 1, 2014, with a Company director, Dr. Mark Baker, to provide clinical research and support services related to new and enhanced applications for the FREEDOM60® Syringe Infusion System. Authorized by the Board of Directors, the agreement provides for payment of 420,000 shares of common stock valued at $0.20 per share over a three-year period. Amortization amounted to $7,000 and $21,000 for the three and nine months ended November 30, 2015 and 2014, respectively. In August, 2014, Dr. Baker was paid a previously approved bonus of $25,000 to assist him in covering taxes due on the grant of common stock. On October 21, 2015, Cyril Narishkin was appointed to the Board of Directors and Interim Chief Operating Officer of the Company. Also effective October 21, 2015, we entered into a consulting agreement with Mr. Narishkin, to support our expanded management team and accelerate our growth opportunities under his role of Interim Chief Operating Officer. The agreement provides for payment of $16,000 per month, of which half is to be paid in cash and half is to be paid in shares of common stock. On October 21, 2015, the Board of Directors of the Company also approved independent director compensation of $25,000 each annually, to be paid quarterly half in cash and half in common stock, effective September 1, 2015. Independent directors include Dr. Mark Baker, Mr. Mark Pastreich, Mr. Arthur Radin and Mr. Cyril Narishkin. For purposes of director compensation, Mr. Narishkin will receive $25,000 annually in addition to his payments under his consulting agreement. As of November 30, 2015, $12,500 was included in accrued expenses. 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 sixteen 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. LEASED AIRCRAFT The Company leases an aircraft from a company controlled by the president. The lease payments aggregated were $5,375 and $16,125 for the three and nine months ended November 30, 2015, and 2014, respectively. The original lease agreement has expired and the Company is currently on a month-to-month basis for rental payments. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Nov. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 3 PROPERTY AND EQUIPMENT Property and equipment consists of the following at: November 30, 2015 February 28, 2015 Land $ 54,030 $ 54,030 Building 171,094 171,094 Furniture, office equipment, and leasehold improvements 932,049 887,959 Manufacturing equipment and tooling 966,223 963,843 2,123,396 2,076,926 Less: accumulated depreciation 1,077,631 915,494 Property and equipment, net $ 1,045,765 $ 1,161,432 |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 9 Months Ended |
Nov. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | NOTE 4 LEGAL PROCEEDINGS In 2013, the Company commenced in the Eastern District of California a declaratory judgment action against competitor, EMED Technologies Crop. (EMED) to establish the invalidity of one of EMEDs patents and non-infringement of the Companys needle sets. EMED answered the complaint and asserted patent infringement and unfair business practice counterclaims. The Company responded by asserting its own unfair business practice claims against EMED. On June 16, 2015, the Court issued what it termed a narrow preliminary injunction against the Company from making certain statements regarding some of EMEDs products. The Company is complying with that order. Discovery is ongoing. On June 25, 2015, EMED filed a claim of patent infringement for the second of its patents, also directed to the Companys needle sets, in the Eastern District of Texas. This second patent is related to the one concerning the Companys declaratory judgment action. Given the close relationship between the two patents, the Company has requested that the Texas suit be transferred to California. The Court has not yet ruled on the Companys transfer request. Discovery in the Texas suit is ongoing. On September 11, 2015, the Company requested an ex parte reexamination of the patent in the first filed case, and on September 17, 2015 the Company requested an inter partes review of the patent in the second filed case. On November 20, 2015, the U.S. Patent and Trademark Office instituted the ex parte reexamination request having found a substantial new question of patentability concerning EMEDs patent in the first filed case. A decision whether to institute the inter partes review is expected within three (3) months. Although the Company believes it has meritorious claims and defenses in these litigations and proceedings, their outcomes cannot be predicted with any certainty. |
STOCK
STOCK | 9 Months Ended |
Nov. 30, 2015 | |
Equity [Abstract] | |
STOCK | NOTE 5 STOCK On September 30, 2015, RMSs Board of Directors authorized a stock repurchase program pursuant to which the Company will make open market purchases of up to 1,000,000 shares of the Companys Outstanding Common Stock. The purchases will be made through a broker to be designated by the Company with price, timing and volume restrictions based on average daily trading volume, consistent with the safe harbor rules of the Securities and Exchange Commission for such repurchases. As of November 30, 2015, the Company had not made any purchases under the program, and as of January 8, 2016, the Company had repurchased 33,454 shares at an average price of $0.47 under the program. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Nov. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 6 STOCK-BASED COMPENSATION On September 30, 2015, the Board of Directors approved the 2015 Stock Option Plan authorizing the Company to grant awards to certain employees under the plan at fair market value, subject to shareholder approval. The total number of shares of common stock of the Company, par value $.01 per share (Common Stock), with respect to which awards may be granted pursuant to the Plan shall not exceed 2,000,000 shares. As of November 30, 2015, the Company awarded 1.2 million options to certain executives and key employees under the plan. On October 21, 2015, Cyril Narishkin was appointed to the Board of Directors and Interim Chief Operating Officer of the Company. Also effective October 21, 2015, we entered into a consulting agreement with Mr. Narishkin, to support our expanded management team and accelerate our growth opportunities under his role of Interim Chief Operating Officer. The agreement provides for payment of $16,000 per month, of which half is to be paid in cash and half is to be paid in shares of common stock. On October 21, 2015, the Board of Directors of the Company also approved independent director compensation of $25,000 each annually, to be paid quarterly half in cash and half in common stock, effective September 1, 2015. For purposes of director compensation, Mr. Narishkin will receive $25,000 annually in addition to his payments under his consulting agreement. As of November 30, 2015, $12,500 was included in accrued expenses. The per share weighted average fair value of stock options granted during the three months ended November 30, 2015 and November 30, 2014 was $0.19 and zero, 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 three months ended November 30, 2015. 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: Three Months Ended November 30, 2015 2014 Dividend yield 0.00% Expected Volatility 59.00% Weighted-average volatility Expected dividends Expected term (in years) 5 Years Risk-free rate 2.17% The following table summarizes the status of the Companys stock option plan: Three Months Ended November 30, 2015 2014 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at September 1 $ $ Granted 1,155,000 $ 0.36 - 0.38 $ Exercised $ $ Forfeited $ $ Outstanding at November 30, 1,155,000 $ 0.36 - 0.38 $ Options exercisable at November 30, $ $ Weighted average fair value of options granted during the period $ $ Stock-based compensation expense $ 10,717 $ Total stock-based compensation expense for stock option awards totaled $10,717 and zero for the three months ended November 30, 2015 and November 30, 2014, respectively. The weighted-average grant-date fair value of options granted during the three months ended November 30, 2015 and November 30, 2014 was $219,000 and zero, respectively. The total intrinsic value of options exercised during the three months ended November 30, 2015 and November 30, 2014, was zero for both periods. The following table presents information pertaining to options outstanding at November 30, 2015: Range of Exercise Price Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.36 - $0.38 1,155,000 5 years $ 0.37 $ As of November 30, 2015, there was $0.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 19 months. The total fair value of shares vested during the three months ended November 30, 2015 and November 30, 2014, was zero for both periods. |
NATURE OF OPERATIONS AND SUMM13
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Nov. 30, 2015 | |
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 November 30, 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 Companys management, the financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the Companys financial position as of November 30, 2015, and the results of operations and cash flow for the three month and nine month periods ended November 30, 2015, and 2014. The results of operations for the three and nine months ended November 30, 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 managements discussion and analysis of financial condition and results of operations included in the Companys Annual Report for the year ended February 28, 2015, as filed with the Securities and Exchange Commission on Form 10-K. |
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS | USE OF ESTIMATES IN THE FINANCIAL STATEMENTS The preparation of financial statements in conformity with U.S. generally accepted accounting principles (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 July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-11Simplifying the Measurement of Inventory. The ASU was issued as part of the FASBs simplification initiative and under the ASU, inventory is measured at the lower of cost and net realizable value, which would eliminate the other two options that currently exist for the market: (1) replacement cost and (2) net realizable value less an approximately normal profit margin. This ASU is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted and should be applied prospectively. The Company is assessing the impact of the adoption of the ASU on its financial statements. In May 2014, FASB issued 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 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. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption. |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company maintains various long-term incentive stock benefit plans under which it grants stock options and restricted stock awards to certain directors and key employees. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. All options are charged against income at their fair value. The entire compensation expense of the award is recognized over the vesting period. Shares of stock granted are recorded at the fair value of the shares at the grant date, over the vesting period. |
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) | 9 Months Ended |
Nov. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consists of the following at: November 30, 2015 February 28, 2015 Land $ 54,030 $ 54,030 Building 171,094 171,094 Furniture, office equipment, and leasehold improvements 932,049 887,959 Manufacturing equipment and tooling 966,223 963,843 2,123,396 2,076,926 Less: accumulated depreciation 1,077,631 915,494 Property and equipment, net $ 1,045,765 $ 1,161,432 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value of the stock options granted Black-Scholes option valuation model | 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: Three Months Ended November 30, 2015 2014 Dividend yield 0.00% Expected Volatility 59.00% Weighted-average volatility Expected dividends Expected term (in years) 5 Years Risk-free rate 2.17% |
Schedule of stock option plan | The following table summarizes the status of the Companys stock option plan: Three Months Ended November 30, 2015 2014 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at September 1 $ $ Granted 1,155,000 $ 0.36 - 0.38 $ Exercised $ $ Forfeited $ $ Outstanding at November 30, 1,155,000 $ 0.36 - 0.38 $ Options exercisable at November 30, $ $ Weighted average fair value of options granted during the period $ $ Stock-based compensation expense $ 10,717 $ |
Schedule of information pertaining to options outstanding | The following table presents information pertaining to options outstanding at November 30, 2015: Range of Exercise Price Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.36 - $0.38 1,155,000 5 years $ 0.37 $ |
NATURE OF OPERATIONS AND SUMM16
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 9 Months Ended |
Nov. 30, 2015Number | |
Accounting Policies [Abstract] | |
Number of segments | 1 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Oct. 21, 2015 | Dec. 20, 2013 | Aug. 31, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | Feb. 28, 2015 |
Amortization of deferred compensation cost | $ 7,000 | $ 7,000 | $ 21,000 | $ 72,750 | ||||
Accrued expenses | 434,117 | 434,117 | $ 304,041 | |||||
Independent Directors ( Dr. Mark Baker, Mr. Mark Pastreich, Mr. Arthur Radin and Mr. Cyril Narishkin) [Member] | ||||||||
Description of payment terms | Paid quarterly half in cash and half in common stock. | |||||||
Annually compensation paid | $ 25,000 | |||||||
Consulting Agreement [Member] | Mr. Cyril Narishkin [Member] | ||||||||
Monthly payment for agreement | $ 16,000 | |||||||
Description of payment terms | Half is to be paid in cash and half is to be paid in shares of common stock. | |||||||
Annually additional payment for agreement | $ 25,000 | |||||||
Accrued expenses | 12,500 | 12,500 | ||||||
Dr. Paul Mark Baker [Member] | Clinical Research & Support Services Consulting Agreement (FREEDOM60 Syringe Infusion System) [Member] | ||||||||
Share price (in dollars per share) | $ 0.20 | |||||||
Dr. Paul Mark Baker [Member] | Clinical Research & Support Services Consulting Agreement (FREEDOM60 Syringe Infusion System) [Member] | ||||||||
Number of shares issued upon agreement | 420,000 | |||||||
Agreement term | 3 years | |||||||
Bonus paid to officer | $ 25,000 | |||||||
Mr.Andrew Sealfon [Member] | Aircraft [Member] | ||||||||
Lease payments | $ 5,375 | $ 5,375 | $ 16,125 | $ 16,125 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Property and equipment, gross | $ 2,123,396 | $ 2,076,926 |
Less: accumulated depreciation | 1,077,631 | 915,494 |
Property and equipment, net | 1,045,765 | 1,161,432 |
Land [Member] | ||
Property and equipment, gross | 54,030 | 54,030 |
Building [Member] | ||
Property and equipment, gross | 171,094 | 171,094 |
Furniture, Office Equipment, And Leasehold Improvements [Member] | ||
Property and equipment, gross | 932,049 | 887,959 |
Manufacturing Equipment And Tooling [Member] | ||
Property and equipment, gross | $ 966,223 | $ 963,843 |
STOCK (Details Narrative)
STOCK (Details Narrative) - Stock Repurchase Program [Member] - $ / shares | Jan. 08, 2016 | Sep. 30, 2015 |
Number of shares repurchased in open market | 1,000,000 | |
Subsequent Event [Member] | ||
Number of shares repurchased | 33,454 | |
Share repurchased price (in dollars per share) | $ 0.47 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | Oct. 21, 2015 | Nov. 30, 2015 | Nov. 30, 2014 | Sep. 30, 2015 | Feb. 28, 2015 |
Common shares par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Accrued expenses | $ 434,117 | $ 304,041 | |||
Independent Directors ( Dr. Mark Baker, Mr. Mark Pastreich, Mr. Arthur Radin and Mr. Cyril Narishkin) [Member] | |||||
Description of payment terms | Paid quarterly half in cash and half in common stock. | ||||
Annually compensation paid | $ 25,000 | ||||
Consulting Agreement [Member] | Mr. Cyril Narishkin [Member] | |||||
Monthly payment for agreement | $ 16,000 | ||||
Description of payment terms | Half is to be paid in cash and half is to be paid in shares of common stock. | ||||
Annually additional payment for agreement | $ 25,000 | ||||
Accrued expenses | $ 12,500 | ||||
2015 Stock Option Plan [Member] | |||||
Number of shares authorized | 2,000,000 | ||||
Number of common shares granted | 1,155,000 | ||||
Common shares par value (in dollars per share) | $ 0.01 | ||||
Weighted average grant date fair value of stock options | $ 0.19 | $ 0 | |||
Allocated stock-based compensation expense | $ 10,717 | $ 0 | |||
Weighted-average grant-date fair value of granted | 219,000 | 0 | |||
Total intrinsic value of options exercised | 0 | 0 | |||
Total unrecognized compensation cost | $ 200,000 | ||||
Weighted-average period | 19 months | ||||
Total fair value of shares vested | $ 0 | $ 0 |
STOCK-BASED COMPENSATION (Det21
STOCK-BASED COMPENSATION (Details) - 2015 Stock Option Plan [Member] - USD ($) | 3 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Dividend yield | 0.00% | |
Expected Volatility | 59.00% | |
Weighted-average volatility | ||
Expected dividends | ||
Expected term (in years) | 5 years | |
Risk-free rate | 2.17% |
STOCK-BASED COMPENSATION (Det22
STOCK-BASED COMPENSATION (Details 1) - 2015 Stock Option Plan [Member] - USD ($) | 3 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at beginning | ||
Granted | 1,155,000 | |
Exercised | ||
Forfeited | ||
Outstanding at ending | 1,155,000 | |
Options exercisable at ending | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding at beginning | ||
Granted | ||
Exercised | ||
Forfeited | ||
Outstanding at ending | ||
Options exercisable at ending | ||
Weighted average fair value of options granted during the period | $ 0.19 | $ 0 |
Stock-based compensation expense | $ 10,717 | $ 0 |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Granted | $ 0.38 | |
Outstanding at ending | 0.38 | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Granted | 0.36 | |
Outstanding at ending | $ 0.36 |
STOCK-BASED COMPENSATION (Det23
STOCK-BASED COMPENSATION (Details 2) - 2015 Stock Option Plan [Member] - $0.36 - $0.38 [Member] | 9 Months Ended |
Nov. 30, 2015$ / sharesshares | |
Number Outstanding | shares | 1,155,000 |
Weighted Average Remaining Contractual Term | 5 years |
Weighted Average Exercise Price | $ / shares | $ 0.37 |
Number Exercisable | shares | |
Weighted Average Exercise Price | $ / shares |