Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 29, 2016 | May. 13, 2016 | Aug. 31, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | REPRO MED SYSTEMS INC | ||
Entity Central Index Key | 704,440 | ||
Document Type | 10-K | ||
Trading Symbol | REPR | ||
Document Period End Date | Feb. 29, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-29 | ||
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 Public Float | $ 10,424,264 | ||
Entity Common Stock, Shares Outstanding | 37,966,501 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Feb. 29, 2016 | Feb. 28, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 4,201,949 | $ 2,557,235 |
Certificates of deposit | 261,118 | 259,789 |
Accounts receivable less allowance for doubtful accounts of $18,648 and $29,865 for February 29, 2016, and February 28, 2015, respectively | 1,350,180 | 1,623,695 |
Inventory | 1,040,277 | 1,226,636 |
Prepaid expenses | 265,123 | 240,688 |
TOTAL CURRENT ASSETS | 7,118,647 | 5,908,043 |
Property and equipment, net | 996,822 | 1,161,432 |
Patents, net of accumulated amortization of $147,380 and $134,552 at February 29, 2016 and February 28, 2015, respectively | 247,691 | 180,558 |
Other Assets | 31,140 | 31,140 |
TOTAL ASSETS | 8,394,300 | 7,281,173 |
CURRENT LIABILITIES | ||
Deferred capital gain - current portion | 22,481 | 22,481 |
Accounts payable | 307,764 | 243,217 |
Accrued expenses | 499,406 | 304,041 |
Accrued payroll and related taxes | 148,766 | $ 121,917 |
Accrued tax liability | 129,497 | |
Total Current Liabilities | 1,107,914 | $ 691,656 |
Deferred capital gain - less current portion | 44,976 | 67,454 |
Deferred tax liability | 123,111 | 248,607 |
Total Liabilities | 1,276,001 | 1,007,717 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, 50,000,000 shares authorized, 40,487,532 and 40,347,292 shares issued; 37,966,501 and 38,006,667 shares outstanding at February 29, 2016, and February 28, 2015, respectively | 404,875 | 403,473 |
Additional paid-in capital | 3,968,342 | 3,855,188 |
Retained earnings | 3,019,940 | 2,237,076 |
TOTAL STOCKHOLDERS' EQUITY BEFORE TREASURY STOCK AND DEFERRED COMPENSATION COST | 7,393,157 | 6,495,737 |
Less: Treasury stock, 2,521,031 shares and 2,340,625 shares at February 29, 2016, and February 28, 2015, respectively, at cost | (246,858) | (166,281) |
Less: Deferred compensation cost | (28,000) | (56,000) |
TOTAL STOCKHOLDERS' EQUITY | 7,118,299 | 6,273,456 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 8,394,300 | $ 7,281,173 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Feb. 29, 2016 | Feb. 28, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 18,648 | $ 29,865 |
Patents, accumulated amortization | $ 147,380 | $ 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 | 40,487,532 | 40,347,292 |
Common stock, shares outstanding | 37,966,501 | 38,006,667 |
Treasury stock, shares | 2,521,031 | 2,340,625 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Income Statement [Abstract] | ||
NET SALES | $ 12,247,338 | $ 11,244,660 |
Cost of goods sold | 4,644,435 | 4,556,961 |
Gross Profit | 7,602,903 | 6,687,699 |
OPERATING EXPENSES | ||
Selling, general and administrative | 5,942,671 | 4,788,279 |
Research and development | 207,282 | 468,154 |
Depreciation and amortization | 271,566 | 283,875 |
Total Operating Expenses | 6,421,519 | 5,540,308 |
Net Operating Profit | 1,181,384 | 1,147,391 |
Non-Operating Expense/(Income) | ||
Interest expense | 3,412 | 512 |
Loss on foreign currency exchange | 26,204 | 77,966 |
Other expense and interest income, net | 9,198 | (5,623) |
INCOME BEFORE TAXES | 1,142,570 | 1,074,536 |
Income tax expense | (359,706) | (321,419) |
NET INCOME | $ 782,864 | $ 753,117 |
NET INCOME PER SHARE | ||
Basic (in dollars per share) | $ 0.02 | $ 0.02 |
Diluted (in dollars per share) | $ 0.02 | $ 0.02 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
Basic (in shares) | 37,988,954 | 37,634,064 |
Diluted (in shares) | 37,988,954 | 37,634,064 |
STATEMENT OF STOCKHOLDERS' EQUI
STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Deferred Compensation Cost [Member] | Total |
Balance beginning at Feb. 28, 2014 | $ 389,367 | $ 3,512,294 | $ 1,483,959 | $ (142,000) | $ (51,750) | $ 5,191,870 |
Balance beginning (in shares) at Feb. 28, 2014 | 38,936,667 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock awards | $ 4,200 | 79,800 | $ (84,000) | |||
Issuance of common stock awards (in shares) | 420,000 | |||||
Issuance of common stock | $ 10,000 | 263,000 | $ 273,000 | |||
Issuance of common stock (in shares) | 1,000,000 | |||||
Cancellation of Unvested common Stock | $ (94) | 94 | ||||
Cancellation of Unvested common Stock (in shares) | (9,375) | |||||
Purchase of treasury common stock | $ (24,281) | $ (24,281) | ||||
Amortization of deferred compensation cost | $ 79,750 | 79,750 | ||||
Net income | $ 753,117 | 753,117 | ||||
Balance ending at Feb. 28, 2015 | $ 403,473 | 3,855,188 | $ 2,237,076 | $ (166,281) | $ (56,000) | 6,273,456 |
Balance ending (in shares) at Feb. 28, 2015 | 40,347,292 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock | $ 1,402 | 113,154 | ||||
Issuance of common stock (in shares) | 140,240 | |||||
Purchase of treasury common stock | $ (80,577) | (80,577) | ||||
Amortization of deferred compensation cost | $ 28,000 | 28,000 | ||||
Net income | $ 782,864 | 782,864 | ||||
Balance ending at Feb. 29, 2016 | $ 404,875 | $ 3,968,342 | $ 3,019,940 | $ (246,858) | $ (28,000) | $ 7,118,299 |
Balance ending (in shares) at Feb. 29, 2016 | 40,487,532 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income | $ 782,864 | $ 753,117 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of deferred compensation cost | 28,000 | $ 79,750 |
Stock based compensation expense | 114,556 | |
Depreciation and amortization | 271,566 | $ 283,875 |
Deferred capital gain - building lease | (22,478) | (22,482) |
Deferred taxes | (125,496) | 93,607 |
Loss on disposal of fixed assets | 14,104 | 281 |
Allowance for returns and doubtful accounts | (12,912) | 7,366 |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 286,427 | 113,752 |
Decrease (Increase) in inventory | 186,359 | (407,913) |
(Increase) Decrease in prepaid expense | $ (24,435) | 5,079 |
Increase in other assets | (87) | |
Increase (Decrease) in accounts payable | $ 64,547 | (3,405) |
Increase in accrued payroll and related taxes | 26,849 | 48,941 |
Increase in accrued expense | 195,365 | 40,576 |
Increase (Decrease) in accrued income tax liability | 129,497 | (166,358) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,914,813 | 826,099 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Payments for property and equipment | (121,782) | $ (591,413) |
Proceeds on disposal of fixed assets | 13,550 | |
Payments for patents | (79,961) | $ (152,369) |
Purchase of certificates of deposit | (1,329) | (1,199) |
NET CASH USED IN INVESTING ACTIVITIES | (189,522) | (744,981) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Purchase of treasury stock | $ (80,577) | (24,281) |
Proceeds from sale of securities, net of legal and other fees of $15,000 | 273,000 | |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | $ (80,577) | 248,719 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,644,714 | 329,837 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 2,557,235 | 2,227,398 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 4,201,949 | 2,557,235 |
Cash paid during the years for: | ||
Interest | 3,412 | 512 |
Taxes | 255,000 | 494,891 |
NON-CASH FINANCING AND INVESTING ACTIVITIES | ||
Issuance of common stock as compensation | $ 114,556 | $ 84,000 |
STATEMENTS OF CASH FLOWS (Paren
STATEMENTS OF CASH FLOWS (Parenthetical) | 12 Months Ended |
Feb. 28, 2015USD ($) | |
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 | 12 Months Ended |
Feb. 29, 2016 | |
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. CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. The Company holds cash in excess of $250,000 at multiple depositories, which exceeds the FDIC insurance limits and is, therefore, uninsured. CERTIFICATES OF DEPOSIT The certificates of deposit are recorded at cost plus accrued interest. The certificates of deposit earn interest at a rate of 0.35% to 0.55% and mature in June 2016 and February 2017. INVENTORY Inventories of raw materials are stated at the lower of standard cost, which approximates average cost, or market value including allocable overhead. Work-in-process and finished goods are stated at the lower of standard cost or market value and include direct labor and allocable overhead. PATENTS Costs incurred in obtaining patents have been capitalized and are being amortized over the legal life of the patents. INCOME TAXES Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. The Company believes that it has no uncertain tax positions requiring disclosure or adjustment. Generally, tax years starting with 2012 are subject to examination by income tax authorities. PROPERTY, EQUIPMENT, AND DEPRECIATION Property and equipment is stated at cost and is depreciated using the straight-line method over the estimated useful lives of the respective assets. STOCK-BASED COMPENSATION The Company 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. NET INCOME PER COMMON SHARE Basic earnings per share are computed on the weighted average of common shares outstanding during each year. Diluted earnings per share include only an increase in the weighted average shares by the common shares issuable upon exercise of employee and director stock options (Note 6). Fiscal Year Ended February 29, 2016 February 28, 2015 Net income $ 782,864 $ 753,117 Weighted Average Outstanding Shares: Outstanding shares 37,988,954 37,634,064 Option shares includable 37,988,954 37,634,064 Net income per share Basic $ 0.02 $ 0.02 Diluted $ 0.02 $ 0.02 USE OF ESTIMATES IN THE FINANCIAL STATEMENTS The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Important estimates include but are not limited to, asset lives, valuation allowances, inventory, and accruals. REVENUE RECOGNITION Sales of manufactured products are recorded when shipment occurs. The Companys revenue stream is derived from the sale of an assembled product. Other service revenues are recorded as the service is performed. Shipping and handling costs generally are billed to customers and are included in sales. The Company generally does not accept return of goods shipped unless it is a Company error. The only credits provided to customers are for defective merchandise. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In March 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-09 Compensation Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU was issued as part of the FASBs simplification initiative and under the ASU, the areas of simplification in the update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classifications of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. The amendment eliminates the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment. This should not result in a change in practice because the guidance that is being superseded was never effective. The amendment in this ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The main difference between the current requirement under GAAP and this ASU is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. This ASU requires that a lessee recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. This is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. This ASU must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We are currently assessing the potential impact of this ASU and expect it will have a material impact on our consolidated financial condition and results of operations upon adoption. In November 2015, the FASB issued ASU No. 2015-17 Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Prior this ASU, GAAP required an entity to separate deferred income tax asset and liabilities into current and noncurrent amounts on the balance sheet. This ASU requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This ASU is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted. This ASU may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. The requirement that deferred tax liabilities and assets be offset and presented as a single amount was not affected by this amendment. The Company has adopted this ASU retrospectively. In July 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-11Simplifying 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 does not expect the adoption of the ASU to have any impact 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. In March 2016, the FASB issued ASU No. 2016-08 Revenue from Contracts with Customers (Topic 606); Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and the effective date is the same as the requirements in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606); Identifying Performance Obligations and Licensing, which is intended to clarify identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas and the effective date is the same as the requirements in ASU 2014-09. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts reported in the balance sheet for cash, trade receivables, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. ACCOUNTING FOR LONG-LIVED ASSETS The Company reviews its long-lived assets for impairment at least annually or whenever the circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable. As of February 29, 2016, the Company does not believe that any of its assets are impaired. |
INVENTORY
INVENTORY | 12 Months Ended |
Feb. 29, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 2 INVENTORY Inventory consists of: February 29, 2016 February 28, 2015 Raw materials and Work-in-process $ 600,028 $ 829,242 Finished goods 478,312 471,883 1,078,340 1,301,125 Less: reserve for obsolete inventory 38,063 74,489 Inventory, net $ 1,040,277 $ 1,226,636 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Feb. 29, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 3 PROPERTY AND EQUIPMENT Property and equipment consists of the following at: February 29, 2016 February 28, 2015 Estimated Useful Lives Land $ 54,030 $ 54,030 Building 171,094 171,094 20 years Furniture, office equipment, and leasehold improvements 923,394 887,959 3-10 years Manufacturing equipment and tooling 961,486 963,843 3-12 years 2,110,004 2,076,926 Less: accumulated depreciation 1,113,182 915,494 Property and equipment, net $ 996,822 $ 1,161,432 Depreciation expense was $258,738 and $268,759 for the years ended February 29, 2016, and February 28, 2015, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Feb. 29, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 4 RELATED PARTY TRANSACTIONS On December 20, 2013, we executed an agreement effective March 1, 2014, with a Company director, Dr. Mark Baker, to provide clinical research and support services related to new and enhanced applications for the FREEDOM60® Syringe Infusion System. Authorized by the Board of Directors, the agreement provides for payment of 420,000 shares of common stock valued at $0.20 per share over a three-year period. Amortization amounted to $28,000 for the each of the fiscal years ended February 29, 2016 and February 28, 2015. In August, 2014, Dr. Baker was paid a previously approved bonus of $25,000 to assist him in covering taxes due on the grant of common stock. On October 21, 2015, Cyril Narishkin was appointed to the Board of Directors and Interim Chief Operating Officer of the Company. Also effective October 21, 2015, we entered into a consulting agreement with Mr. Narishkin, to support our expanded management team and accelerate our growth opportunities under his role of Interim Chief Operating Officer. The agreement provides for payment of $16,000 per month, of which half is to be paid in cash and half is to be paid in shares of common stock. Effective January 1, 2016, the agreement provides for the same payment of $16,000 per month, of which seventy-five percent is to be paid in cash and twenty-five percent is to be paid in shares of common stock. On April 26, 2016, Cyril Narishkin was appointed President of the Company. LEASED AIRCRAFT The Company leases an aircraft from a company controlled by the Chief Executive Officer. The lease payments were $21,500 for each of the years ended February 29, 2016, and February 28, 2015. 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 seventeen of a twenty-year lease. There have been no changes to lease terms since his directorship and none are expected through the life of the current lease. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Feb. 29, 2016 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 5 STOCKHOLDERS EQUITY On August 8, 2014, we executed an agreement with Horton Capital Partners Fund, an institutional investor based in Philadelphia, PA, to sell one million shares of our common stock and warrants to purchase an additional one million shares of common stock at an exercise price of $0.45 per share. The aggregate purchase price was $0.3 million. 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 February 29, 2016, the Company had repurchased 180,406 shares at an average price of $0.45 under the program. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Feb. 29, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 6 STOCK-BASED COMPENSATION In July 2012, 1,465,000 shares were authorized to issue to employees as share compensation valued at $0.18 per share, the market value on the date of the board authorization. The value of these shares will be amortized into operations over the one to two year restriction on the shares. Amortization amounted to zero and $51,750 for the years ended February 28, 2016, and February 28, 2015, respectively. On September 30, 2015, the Board of Directors approved the 2015 Stock Option Plan authorizing the Company to grant awards to certain employees under the plan at fair market value, subject to shareholder approval at the Annual Meeting to be held on July 27, 2016. The total number of shares of common stock of the Company, par value $.01 per share (Common Stock), with respect to which awards may be granted pursuant to the Plan shall not exceed 2,000,000 shares. As of February 29, 2016, the Company awarded 1,060,000 options to certain executives and key employees under the plan. On October 21, 2015, the Board of Directors of the Company approved director compensation of $25,000 each annually, to be paid quarterly half in cash and half in common stock, effective September 1, 2015. Directors include Dr. Mark Baker, Mr. Mark Pastreich, Mr. Arthur Radin and Mr. Cyril Narishkin. For purposes of director compensation, Mr. Narishkin will receive $25,000 annually in addition to his payments under his consulting agreement. As of February 29, 2016, each director was paid $12,500 of which half was paid in cash and half in common stock of which each director received 14,566 in common shares. Beginning March 1, 2016, all Directors, excluding Mr. Andrew Sealfon, the Companys Chief Executive Officer, will receive director compensation. The per share weighted average fair value of stock options granted during the fiscal year ended February 29, 2016 and February 28, 2015 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 fiscal year ended February 29, 2016. Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of the U.S. Treasury issues with a term equal to the expected life of the option being valued: February 29, 2016 February 28, 2015 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: February 29, 2016 February 28, 2015 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at March 1 $ $ Granted 1,155,000 $ 0.36-0.38 $ Exercised $ $ Forfeited 95,000 $ 0.36 $ Outstanding at February 29, 1,060,000 $ 0.36-0.38 $ Options exercisable at February 29, $ $ Weighted average fair value of options granted during the period $ $ Stock-based compensation expense $ 50,413 $ Total stock-based compensation expense for stock option awards totaled $50,413 and zero for the fiscal year ended February 29, 2016 and February 28, 2015, respectively. The weighted-average grant-date fair value of options granted during fiscal years ended February 29, 2016 and February 28, 2015 was $201,890 and zero, respectively. The total intrinsic value of options exercised during fiscal years ended February 29, 2016 and February 28, 2015, was zero for both periods. The following table presents information pertaining to options outstanding at February 29, 2016: Range of Exercise Price Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.36 - $0.38 1,060,000 5 years $ 0.37 $ As of February 29, 2016, there was $0.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 17 months. The total fair value of shares vested during the fiscal years ended February 29, 2016 and February 28, 2015, was zero for both periods. |
CONTINGENT LIABILITY
CONTINGENT LIABILITY | 12 Months Ended |
Feb. 29, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENT LIABILITY | NOTE 7 CONTINGENT LIABILITY On March 25, 2016, the Companys legal counsel, who had represented the Company in its patent litigation withdrew as legal counsel, after discussions regarding whether they were the most suited to be our representative in this action and verbally waived payment on any remaining open invoices which totaled $0.5 million. The Company does not believe it is liable for these fees nor does it believe that the law firm will take action to collect these fees. The unpaid legal fees have been reversed. |
SALE-LEASEBACK TRANSACTION - OP
SALE-LEASEBACK TRANSACTION - OPERATING LEASE | 12 Months Ended |
Feb. 29, 2016 | |
Leases [Abstract] | |
SALE-LEASEBACK TRANSACTION - OPERATING LEASE | NOTE 8 SALE-LEASEBACK TRANSACTION - OPERATING LEASE On February 25, 1999, the Company entered into a sale-leaseback arrangement whereby the Company sold its land and building at 24 Carpenter Road in Chester, New York and leased it back for a period of twenty years. The leaseback is accounted for as an operating lease. The gain of $0.5 million realized in this transaction has been deferred and is amortized to income in proportion to rental expense over the term of the related lease. At February 29, 2016, minimum future rental payments are: Year Minimum Rental Payments 2017 132,504 2018 132,504 2019 132,504 $ 397,512 Rent expense for both the years ended February 29, 2016, and February 28, 2015 were $132,504. |
FEDERAL AND STATE INCOME TAXES
FEDERAL AND STATE INCOME TAXES | 12 Months Ended |
Feb. 29, 2016 | |
Income Tax Disclosure [Abstract] | |
FEDERAL AND STATE INCOME TAXES | NOTE 9 FEDERAL AND STATE INCOME TAXES The provision for income taxes consisted of at February 29, 2016, and February 28, 2015: 2016 2015 State income tax: Current, net of refund $ 1,867 $ 1,000 Federal income tax: Deferred (125,496 ) 102,087 Current 483,335 218,332 Total $ 359,706 $ 321,419 The reconciliation of income taxes shown in the financial statements and amounts computed by applying the Federal expected tax rate of 34% is as follows: 2016 2015 Income before tax $ 1,142,570 $ 1,074,536 Computed expected tax $ 388,474 $ 365,342 State income and franchise tax/(refund) 1,232 660 Other (30,000 ) (44,583 ) Provision for taxes $ 359,706 $ 321,419 The components of deferred tax liabilities at February 29, 2016, and February 28, 2015, respectively, are as follows: 2016 2015 Deferred compensation cost $ 7,559 $ (19,040 ) Depreciation and amortization (173,700 ) (239,660 ) Allowance for bad debts and other 43,030 10,093 Deferred tax liabilities $ (123,111 ) $ (248,607 ) |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 12 Months Ended |
Feb. 29, 2016 | |
Risks and Uncertainties [Abstract] | |
MAJOR CUSTOMERS | NOTE 10 MAJOR CUSTOMERS For the years ended February 29, 2016, and February 28, 2015, approximately, 55.3% and 52.9%, respectively, of the Companys gross product revenues were derived from one major customer. At February 29, 2016, and February 28, 2015, accounts receivable due from this customer were $0.5 million and $1.0 million, respectively. The largest customer in both years is a domestic medical products and supplies distributor. Although a number of larger infusion customers have elected to consolidate their purchases through one or more distributors in recent years, we continue to maintain a strong direct relationship with them. We do not believe that their continued purchases of FREEDOM60 pumps, tubing, needle sets and related supplies is contingent upon the distributor. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended |
Feb. 29, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | NOTE 11 LEGAL PROCEEDINGS In 2013, the Company commenced in the United States District Court for the Eastern District of California a declaratory judgment action against competitor, EMED Technologies Corp. (EMED) to establish the invalidity of one of 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. On March 24, 2016, EMED filed a motion for a second preliminary injunction regarding sales of RMS products in California. The Company is opposing that motion and briefing for this motion, as well as case discovery is ongoing. On June 25, 2015, EMED filed a claim of patent infringement for the second of its patents, also directed to the Companys needle sets, in the United States District Court for 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 (IPR) of the patent in the second filed case. On November 20, 2015, the U.S. Patent and Trademark Office (USPTO) instituted the ex parte reexamination request having found a substantial new question of patentability concerning EMEDs patent in the first filed case. A decision to institute the IPR for EMEDs patent in the second filed case was ordered by the USPTO on February 19, 2016 having determined a reasonable likelihood all claims of the patent may be found to be unpatentable. Based on the grant of the IPR, the Company intends to request the Court stay proceedings of the second filed case until conclusion of the IPR. Although the Company believes it has meritorious claims and defenses in these litigations and proceedings, their outcomes cannot be predicted with any certainty. |
NATURE OF OPERATIONS AND SUMM19
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 29, 2016 | |
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. |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. The Company holds cash in excess of $250,000 at multiple depositories, which exceeds the FDIC insurance limits and is, therefore, uninsured. |
CERTIFICATES OF DEPOSIT | CERTIFICATES OF DEPOSIT The certificates of deposit are recorded at cost plus accrued interest. The certificates of deposit earn interest at a rate of 0.35% to 0.55% and mature in June 2016 and February 2017. |
INVENTORY | INVENTORY Inventories of raw materials are stated at the lower of standard cost, which approximates average cost, or market value including allocable overhead. Work-in-process and finished goods are stated at the lower of standard cost or market value and include direct labor and allocable overhead. |
PATENTS | PATENTS Costs incurred in obtaining patents have been capitalized and are being amortized over the legal life of the patents. |
INCOME TAXES | INCOME TAXES Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. The Company believes that it has no uncertain tax positions requiring disclosure or adjustment. Generally, tax years starting with 2012 are subject to examination by income tax authorities. |
PROPERTY, EQUIPMENT, AND DEPRECIATION | PROPERTY, EQUIPMENT, AND DEPRECIATION Property and equipment is stated at cost and is depreciated using the straight-line method over the estimated useful lives of the respective assets. |
STOCK-BASED COMPENSATION | 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. |
NET INCOME PER COMMON SHARE | NET INCOME PER COMMON SHARE Basic earnings per share are computed on the weighted average of common shares outstanding during each year. Diluted earnings per share include only an increase in the weighted average shares by the common shares issuable upon exercise of employee and director stock options (Note 6). Fiscal Year Ended February 29, 2016 February 28, 2015 Net income $ 782,864 $ 753,117 Weighted Average Outstanding Shares: Outstanding shares 37,988,954 37,634,064 Option shares includable 37,988,954 37,634,064 Net income per share Basic $ 0.02 $ 0.02 Diluted $ 0.02 $ 0.02 |
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 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. |
REVENUE RECOGNITION | REVENUE RECOGNITION Sales of manufactured products are recorded when shipment occurs. The Companys revenue stream is derived from the sale of an assembled product. Other service revenues are recorded as the service is performed. Shipping and handling costs generally are billed to customers and are included in sales. The Company generally does not accept return of goods shipped unless it is a Company error. The only credits provided to customers are for defective merchandise. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In March 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-09 Compensation Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU was issued as part of the FASBs simplification initiative and under the ASU, the areas of simplification in the update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classifications of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. The amendment eliminates the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment. This should not result in a change in practice because the guidance that is being superseded was never effective. The amendment in this ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The main difference between the current requirement under GAAP and this ASU is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. This ASU requires that a lessee recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. This is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. This ASU must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We are currently assessing the potential impact of this ASU and expect it will have a material impact on our consolidated financial condition and results of operations upon adoption. In November 2015, the FASB issued ASU No. 2015-17 Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Prior this ASU, GAAP required an entity to separate deferred income tax asset and liabilities into current and noncurrent amounts on the balance sheet. This ASU requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This ASU is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted. This ASU may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. The requirement that deferred tax liabilities and assets be offset and presented as a single amount was not affected by this amendment. The Company has adopted this ASU retrospectively. In July 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-11Simplifying 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 does not expect the adoption of the ASU to have any impact 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. In March 2016, the FASB issued ASU No. 2016-08 Revenue from Contracts with Customers (Topic 606); Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and the effective date is the same as the requirements in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606); Identifying Performance Obligations and Licensing, which is intended to clarify identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas and the effective date is the same as the requirements in ASU 2014-09. The Company is assessing the impact of the adoption of the ASU on its financial statements, disclosure requirements and methods of adoption. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts reported in the balance sheet for cash, trade receivables, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. |
ACCOUNTING FOR LONG-LIVED ASSETS | ACCOUNTING FOR LONG-LIVED ASSETS The Company reviews its long-lived assets for impairment at least annually or whenever the circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable. As of February 29, 2016, the Company does not believe that any of its assets are impaired. |
NATURE OF OPERATIONS AND SUMM20
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Accounting Policies [Abstract] | |
Schedule of net income per common share | Fiscal Year Ended February 29, 2016 February 28, 2015 Net income $ 782,864 $ 753,117 Weighted Average Outstanding Shares: Outstanding shares 37,988,954 37,634,064 Option shares includable 37,988,954 37,634,064 Net income per share Basic $ 0.02 $ 0.02 Diluted $ 0.02 $ 0.02 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory consists of: February 29, 2016 February 28, 2015 Raw materials and Work-in-process $ 600,028 $ 829,242 Finished goods 478,312 471,883 1,078,340 1,301,125 Less: reserve for obsolete inventory 38,063 74,489 Inventory, net $ 1,040,277 $ 1,226,636 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consists of the following at: February 29, 2016 February 28, 2015 Estimated Useful Lives Land $ 54,030 $ 54,030 Building 171,094 171,094 20 years Furniture, office equipment, and leasehold improvements 923,394 887,959 3-10 years Manufacturing equipment and tooling 961,486 963,843 3-12 years 2,110,004 2,076,926 Less: accumulated depreciation 1,113,182 915,494 Property and equipment, net $ 996,822 $ 1,161,432 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
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: February 29, 2016 February 28, 2015 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: February 29, 2016 February 28, 2015 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at March 1 $ $ Granted 1,155,000 $ 0.36-0.38 $ Exercised $ $ Forfeited 95,000 $ 0.36 $ Outstanding at February 29, 1,060,000 $ 0.36-0.38 $ Options exercisable at February 29, $ $ Weighted average fair value of options granted during the period $ $ Stock-based compensation expense $ 50,413 $ |
Schedule of information pertaining to options outstanding | The following table presents information pertaining to options outstanding at February 29, 2016: Range of Exercise Price Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.36 - $0.38 1,060,000 5 years $ 0.37 $ |
SALE-LEASEBACK TRANSACTION - 24
SALE-LEASEBACK TRANSACTION - OPERATING LEASE (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Leases [Abstract] | |
Schedule of minimum future rental payments | At February 29, 2016, minimum future rental payments are: Year Minimum Rental Payments 2017 132,504 2018 132,504 2019 132,504 $ 397,512 |
FEDERAL AND STATE INCOME TAXES
FEDERAL AND STATE INCOME TAXES (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The provision for income taxes consisted of at February 29, 2016, and February 28, 2015: 2016 2015 State income tax: Current, net of refund $ 1,867 $ 1,000 Federal income tax: Deferred (125,496 ) 102,087 Current 483,335 218,332 Total $ 359,706 $ 321,419 |
Schedule of reconciliation of income taxes | The reconciliation of income taxes shown in the financial statements and amounts computed by applying the Federal expected tax rate of 34% is as follows: 2016 2015 Income before tax $ 1,142,570 $ 1,074,536 Computed expected tax $ 388,474 $ 365,342 State income and franchise tax/(refund) 1,232 660 Other (30,000 ) (44,583 ) Provision for taxes $ 359,706 $ 321,419 |
Schedule of component of deferred tax liabilities | The components of deferred tax liabilities at February 29, 2016, and February 28, 2015, respectively, are as follows: 2016 2015 Deferred compensation cost $ 7,559 $ (19,040 ) Depreciation and amortization (173,700 ) (239,660 ) Allowance for bad debts and other 43,030 10,093 Deferred tax liabilities $ (123,111 ) $ (248,607 ) |
NATURE OF OPERATIONS AND SUMM26
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended |
Feb. 29, 2016USD ($)Number | |
Number of segments | Number | 1 |
FDIC cash uninsured amount | $ | $ 250,000 |
Certificates Of Deposit [Member] | |
Description of maturity date | Mature in June 2016 and February 2017. |
Certificates Of Deposit [Member] | Minimum [Member] | |
Interest rate | 0.35% |
Certificates Of Deposit [Member] | Maximum [Member] | |
Interest rate | 0.55% |
NATURE OF OPERATIONS AND SUMM27
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Nature Of Operations And Summary Of Significant Accounting Policies Details | ||
Net income | $ 782,864 | $ 753,117 |
Weighted Average Outstanding Shares: | ||
Outstanding shares | 37,988,954 | 37,634,064 |
Option shares includable | ||
Total | 37,988,954 | 37,634,064 |
Net income per share | ||
Basic (in dollars per share) | $ 0.02 | $ 0.02 |
Diluted (in dollars per share) | $ 0.02 | $ 0.02 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Feb. 29, 2016 | Feb. 28, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials and Work-in-process | $ 600,028 | $ 829,242 |
Finished goods | 478,312 | 471,883 |
Inventory, gross | 1,078,340 | 1,301,125 |
Less: reserve for obsolete inventory | 38,063 | 74,489 |
Inventory, net | $ 1,040,277 | $ 1,226,636 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Property and equipment, gross | $ 2,110,004 | $ 2,076,926 |
Less: accumulated depreciation | 1,113,182 | 915,494 |
Property and equipment, net | 996,822 | 1,161,432 |
Land [Member] | ||
Property and equipment, gross | 54,030 | 54,030 |
Building [Member] | ||
Property and equipment, gross | $ 171,094 | 171,094 |
Useful life | 20 years | |
Furniture, Office Equipment, And Leasehold Improvements [Member] | ||
Property and equipment, gross | $ 923,394 | 887,959 |
Furniture, Office Equipment, And Leasehold Improvements [Member] | Minimum [Member] | ||
Useful life | 3 years | |
Furniture, Office Equipment, And Leasehold Improvements [Member] | Maximum [Member] | ||
Useful life | 10 years | |
Manufacturing Equipment And Tooling [Member] | ||
Property and equipment, gross | $ 961,486 | $ 963,843 |
Manufacturing Equipment And Tooling [Member] | Minimum [Member] | ||
Useful life | 3 years | |
Manufacturing Equipment And Tooling [Member] | Maximum [Member] | ||
Useful life | 12 years |
PROPERTY AND EQUIPMENT (Detai30
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 258,738 | $ 268,759 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jan. 01, 2016 | Oct. 21, 2015 | Dec. 20, 2013 | Aug. 31, 2014 | Feb. 29, 2016 | Feb. 28, 2015 | Jul. 31, 2012 |
Share price (in dollars per share) | $ 0.18 | ||||||
Mr. Andrew I. Sealfon [Member] | Lease Agreement [Member] | Aircraft [Member] | |||||||
Lease payments | $ 21,500 | $ 21,500 | |||||
Clinical Research & Support Services Consulting Agreement [Member] | Dr. Paul Mark Baker [Member] | |||||||
Amortization of deferred compensation cost | $ 28,000 | $ 28,000 | |||||
Bonus paid to director | $ 25,000 | ||||||
Clinical Research & Support Services Consulting Agreement [Member] | FREEDOM60 Syringe Infusion System [Member] | Dr. Paul Mark Baker [Member] | |||||||
Number of shares issued upon agreement | 420,000 | ||||||
Share price (in dollars per share) | $ 0.20 | ||||||
Agreement term | 3 years | ||||||
Consulting Agreement [Member] | Mr. Cyril Narishkin [Member] | |||||||
Monthly payment for agreement | $ 16,000 | $ 16,000 | |||||
Description of payment terms | Seventy-five percent is to be paid in cash and twenty-five percent is to be paid in shares of common stock. | Half is to be paid in cash and half is to be paid in shares of common stock. |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Aug. 08, 2014 | Feb. 28, 2015 | Feb. 29, 2016 | Sep. 30, 2015 |
Value of shares issued upon new issue | $ 273,000 | |||
Share Repurchase Program [Member] | ||||
Maximum number of shares repurchased | 180,406 | 1,000,000 | ||
Average share price (in dollars per share) | $ 0.45 | |||
Horton Capital Partners Fund [Member] | ||||
Number of shares issued upon new issue | 1,000,000 | |||
Value of shares issued upon new issue | $ 300,000 | |||
Horton Capital Partners Fund [Member] | Warrant [Member] | ||||
Number of shares issued upon new issue | 1,000,000 | |||
Warrant exercise price (in dollars per share) | $ 0.45 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | Oct. 21, 2015 | Jul. 31, 2012 | Feb. 29, 2016 | Feb. 28, 2015 | Sep. 30, 2015 |
Number of shares authorized to employees | 1,465,000 | ||||
Share price (in dollars per share) | $ 0.18 | ||||
Common shares par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Accrued expenses | $ 499,406 | $ 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 per director | $ 25,000 | ||||
Independent Directors ( Dr. Mark Baker, Mr. Mark Pastreich, Mr. Arthur Radin and Mr. Cyril Narishkin) [Member] | Consulting Agreement [Member] | |||||
Accrued expenses | $ 12,500 | ||||
2015 Stock Option Plan [Member] | |||||
Number of shares authorized | 2,000,000 | ||||
Number of common shares awarded | 1,155,000 | ||||
Common shares par value (in dollars per share) | $ 0.01 | ||||
Weighted average grant date fair value of stock options | $ 0.19 | ||||
Allocated stock-based compensation expense | $ 50,413 | ||||
Weighted-average grant-date fair value options granted | 201,890 | $ 0 | |||
Total intrinsic value of options exercised | 0 | 0 | |||
Total unrecognized compensation cost | $ 200,000 | 0 | |||
Weighted-average period (in years) | 17 months | ||||
Total fair value of shares vested | $ 0 | 0 | |||
Amortization amount | $ 0 | $ 51,750 | |||
Minimum [Member] | |||||
Terms of amortization | 1 year | ||||
Maximum [Member] | |||||
Terms of amortization | 2 years |
STOCK-BASED COMPENSATION (Det34
STOCK-BASED COMPENSATION (Details) - 2015 Stock Option Plan [Member] - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Dividend yield | 0.00% | |
Expected Volatility | 59.00% | |
Weighted-average volatility | ||
Expected dividends | ||
Expected term (in years) | 5 years | |
Risk-free rate | 2.17% |
STOCK-BASED COMPENSATION (Det35
STOCK-BASED COMPENSATION (Details 1) - 2015 Stock Option Plan [Member] - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at beginning | ||
Granted | 1,155,000 | |
Exercised | ||
Forfeited | 95,000 | |
Outstanding at ending | 1,060,000 | |
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 | $ 0.36 | |
Outstanding at ending | ||
Options exercisable at ending | ||
Weighted average fair value of options granted during the period | $ 0.19 | |
Stock-based compensation expense | $ 50,413 | |
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 (Det36
STOCK-BASED COMPENSATION (Details 2) - 2015 Stock Option Plan [Member] - $0.36 - $0.38 [Member] | 12 Months Ended |
Feb. 29, 2016$ / sharesshares | |
Number Outstanding | shares | 1,060,000 |
Weighted Average Remaining Contractual Term | 5 years |
Weighted Average Exercise Price | $ / shares | $ 0.37 |
Number Exercisable | shares | |
Weighted Average Exercise Price | $ / shares |
CONTINGENT LIABILITY (Details N
CONTINGENT LIABILITY (Details Narrative) | Mar. 25, 2016USD ($) |
Subsequent Event [Member] | Patent Litigation [Member] | |
Reversal of unpaid legal fees | $ 500,000 |
SALE-LEASEBACK TRANSACTION - 38
SALE-LEASEBACK TRANSACTION - OPERATING LEASE (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Rent expense | $ 132,504 | $ 132,504 |
Sale-Leaseback Arrangement [Member] | Land and Building [Member] | ||
Lease terms | Twenty years. | |
Gain realized | $ 500,000 |
SALE-LEASEBACK TRANSACTION - 39
SALE-LEASEBACK TRANSACTION - OPERATING LEASE (Details) | Feb. 29, 2016USD ($) |
Leases [Abstract] | |
2,017 | $ 132,504 |
2,018 | 132,504 |
2,019 | 132,504 |
Total | $ 397,512 |
FEDERAL AND STATE INCOME TAXE40
FEDERAL AND STATE INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
State income tax: | ||
Current, net of refund | $ 1,867 | $ 1,000 |
Federal income tax: | ||
Deferred | (125,496) | 102,087 |
Current | 483,335 | 218,332 |
Total | $ 359,706 | $ 321,419 |
FEDERAL AND STATE INCOME TAXE41
FEDERAL AND STATE INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income before tax | $ 1,142,570 | $ 1,074,536 |
Computed expected tax | 388,474 | 365,342 |
State income and franchise tax/(refund) | 1,232 | 660 |
Other | (30,000) | (44,583) |
Provision for taxes | $ 359,706 | $ 321,419 |
Federal expected tax rate | 34.00% | 34.00% |
FEDERAL AND STATE INCOME TAXE42
FEDERAL AND STATE INCOME TAXES (Details 2) - USD ($) | Feb. 29, 2016 | Feb. 28, 2015 |
Income Tax Disclosure [Abstract] | ||
Deferred compensation cost | $ 7,559 | $ (19,040) |
Depreciation and amortization | (173,700) | (239,660) |
Allowance for bad debts and other | 43,030 | 10,093 |
Deferred tax liabilities | $ (123,111) | $ (248,607) |
MAJOR CUSTOMERS (Details Narrat
MAJOR CUSTOMERS (Details Narrative) - One Customer [Member] - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Sales Revenue [Member] | ||
Percentage of product revenues | 55.30% | 52.90% |
Accounts Receivable [Member] | ||
Accounts receivable | $ 500,000 | $ 1,000,000 |