Edgar Filing: REPRO MED SYSTEMS INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-KSB

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

For the fiscal year ended FEBRUARY 28, 2007
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Commission File Number 0-12305
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REPRO-MED SYSTEMS, INC.
-----------------------
(Exact name of registrant as specified in its charter)

New York 13-3044880
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

24 Carpenter Road, Chester, NY 10918
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(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (845) 469-2042
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Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Name of each exchange on
Title of each class which registered
------------------- ----------------
Common stock, $.01 Par Value Over the Counter Bulletin Board

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

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

Based on the closing sales price of February 28, 2007, the aggregate
market value of the voting and nonvoting common equity held by non-affiliates of
the registrant was $1,551,664.

The number of issued outstanding of the registrant's common stock, $.01
par value was 31,033,286 at February 28, 2007, which includes 2,275,000 shares
of Treasury Stock.

Repro-Med Systems, Inc.

Table of Contents

Page
----
PART I
Item 1. Description of Business ............................... 4

Item 2. Description of Property ............................... 11

Item 3. Legal Proceedings ..................................... 11

Item 4. Submission of Matters to a Vote of Security Holders ... 12

PART II

Item 5. Market for the Registrant's Common Equity and Related
Shareholder Matters ................................... 12

Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations ................... 13

Item 7. Financial Statements .................................. 17

Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures .................. 30

Item 8A. Controls and Procedures ............................... 30

PART III

Item 9. Directors, Executive Officers, Promoters and Control
Persons: Compliance with Section 16(a) of the
Exchange Act .......................................... 30

Item 10. Executive Compensation ................................ 31

Item 11. Security Ownership of Certain Beneficial Owners
and Management ........................................ 31

Item 12. Certain Relationships and Related Transactions ........ 33

Item 13. Accountants Fees and Services ......................... 33

PART IV

Item 14. Exhibits and Reports on Form 8-K ...................... 34

Signatures ................................................................ 35

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ...EX 31

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ...EX 32

PART I

FORWARD-LOOKING STATEMENTS
--------------------------

This Annual Report contains certain "forward-looking" statements as that term is
defined in the federal securities laws. Generally these statements relate to
business plans or strategies, projected or anticipated benefits or other
consequences of managements plans or strategies, projected or anticipated
benefits from acquisitions to be made by us, or projections involving
anticipated revenues, earnings or other aspects of our operating results. The
events described in forward-looking statements contained in this Annual Report
may not occur. The words "may," "will," "expect," "believe," "anticipate,"
"project," "plan," "intend," "estimate," and "continue," and their opposites and
similar expressions are intended to identify forward-looking statements. We
caution you that these statements are not guarantees of future performance or
events and are subject to a number of uncertainties, risks and other influences,
many of which are beyond our control, that may influence the accuracy of the
statements and the projections upon which the statements are based. Factors that
may affect our results include, but are not limited to, the risks and
uncertainties discussed in Item 6 of this Annual Report under "Factors That May
Affect Future Results and Financial Condition".

Any one or more of these uncertainties, risks and other influences
could materially affect our results of operations and whether forward-looking
statements made by us ultimately prove to be accurate. Our actual results,
performance and achievements could differ materially from those expressed or
implied in these forward-looking statements. We undertake no obligation to
publicly update or revise any forward-looking statements, whether from new
information, future events or otherwise.

ITEM 1. DESCRIPTION OF BUSINESS

THE COMPANY

Business of Registrant

REPRO-MED Systems, Inc. ("REPRO-MED", or "RMS Medical Systems" or the
"Company"), was incorporated in the State of New York in March of 1980. The
Company designs, manufactures and markets proprietary medical devices primarily
for emergency medical applications and ambulatory infusion therapy. These
products are regulated by the FDA. The Company's development and marketing focus
are primarily concentrated on the RES-Q-VAC(R) and the FREEDOM60(R) products.
The Company is seeking outside funding to increase market penetration and to
allow it to develop additional products into this market.

Corporate History

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

PRODUCTS

FREEDOM60(R) SYRINGE INFUSION SYSTEM

The FREEDOM60(R) for Primary Immune Deficiency by injecting immune globulin
(IgG) under the skin as a subcutaneous administration has seen increased usage
over the past year. This method has provided patients with vastly improved
quality of life with much fewer unpleasant side effects over the traditional
intravenous route. The FREEDOM60(R) is an ideal system for this administration
since the patient is able to self-medicate at home, the pump is easily
configured for this application, and the FREEDOM60(R) is the lowest cost
infusion system available in a heavily cost constrained market. Also due to its
safe, limited and controlled pressure system, the Freedom60 adjusts
automatically to the patient's needs providing a reliable and comfortable
administration for these patients.

The FREEDOM60(R) provides a high-quality delivery to the patient at costs
similar to gravity and is targeted for the home health care industry, patient
emergency transportation, and for any time a low-cost infusion is required.

For the home care patient, FREEDOM60(R) is an easy-to-use lightweight mechanical
pump using a 60cc syringe, completely portable, cost effective and maintenance
free, with no batteries to replace and no cumbersome IV pole. For the infusion
professional, FREEDOM60(R) delivers precise infusion rates and uniform flow
profiles providing consistent transfer of medication. A Form 510(k) Premarket
Notification for initial design of the FREEDOM60(R) as a Class II device was
approved by the FDA in May 1994.

The Company also designed and manufactured the FREEDOM60(R)-FM, an enhanced
version of the FREEDOM60(R) which contains an electronic flow monitor system
that provides occlusion and end of infusion alarm. This product is directed at
nursing homes, hospitals and pediatric ambulatory applications where alarms are
generally required for nursing acceptance. Nurses also appreciate being able to
visualize the drug volume by reading the scale on the syringe.

We have expanded the use of the FREEDOM60(R) to cover most antibiotics including
the widely used and somewhat difficult to administer vancomycin. We have also
found a following for FREEDOM60(R) for use in treating thalissemia with the drug
desferal. In Europe we found success in using the FREEDOM60(R) for pain control,
specifically post-operative epidural pain administration. Our European market
also uses the FREEDOM60(R) for chemotherapy.

The FREEDOM60(R) for Primary Immune Deficiency by injecting immune globulin
(IgG) under the skin as a subcutaneous administration has seen increased usage
over the past year. This method has provided patients with vastly improved
quality of life with much fewer unpleasant side effects over the traditional
intravenous route. The FREEDOM60(R) is an ideal system for this administration
since the patient is able to self-medicate at home, the pump is easily
configured for this application, and the FREEDOM60(R) is the lowest cost
infusion system available in a heavily cost constrained market. Also due to its
safe, limited and controlled pressure system, the Freedom60 by adjusting
automatically to the patient's needs provides a reliable and comfortable
administration for these patients.

Repro-Med Systems' objective is to build a product franchise with FREEDOM60(R)
and the sale of patented disposable tubing sets. FREEDOM60(R) uses
rate-controlled tubing with standard slide clamp and luer-lock connector on the
patient end. Our patented syringe disc connector insures that only the Company's
FREEDOM60(R) tubing sets will function with the pump. Non-conforming tubing
sets, without the patented disc connector, are ejected from the pump to prevent
the danger of an overdose or runaway pump from injuring the patient.

THE MARKET FOR INFUSION PUMPS & DISPOSABLES

The ambulatory market has been rapidly changing due to reimbursement issues.
Insurance reimbursement has drastically reduced the market share of high-end
electronic type delivery systems as well as high-cost disposable non-electric
devices, providing an opportunity for the FREEDOM60(R). The Freedom60 was
reclassified by the Centers for Medicare and Medicaid on May 21, 2007 for use
under code E0779 which increases the reimbursement for the Freedom60 for all
billable syringe pump applications approved by Medicare.

We believe market pressures have moved patients to low-cost gravity system or IV
push where the drug is pushed into the vein directly from a syringe. This is a
low-cost option but has been associated with complications and considered by
many to be a high-risk procedure. Thus, the overall trend has been towards
syringe pumps due to the low-cost of disposables. FREEDOM60(R)-FM addresses the
largest market segments with the lowest cost alarm syringe pump system.

The chart below summarizes the market trends of various infusion devices.

METHOD OF ADMINISTRATION MARKET TREND
------------------------ ------------
Ambulatory Pump Flat/Declining
Gravity Infusion Increasing
Pole Mounted Pump Declining
Elastomeric Declining
Syringe Increasing
Implant Increasing

ECONOMIC BENEFITS OF FREEDOM60(R) DISPOSABLE SALES

We have sold approximately 5,370 pumps since March 2000. We sold approximately
1,301 pumps during the past fiscal year. Although it is impossible to determine
exactly how many pumps are in operation at any given time, we estimate that,
after allowing for lost pumps and those no longer in use by the purchaser, there
are approximately 2,200 FREEDOM60(R) pumps currently in operation. The
FREEDOM60(R) pump is designed for a minimum use of 4,000 cycles which at our
list price is amortized at a low $.09 per use. The tubing sets currently have an
average price of $4.25. We estimate that each pump uses an average of six sets
per month. This monthly rate amounts to annual usage of 72 sets producing
typical gross consumables revenues of $306.00 per pump. If the pump is operated
up to 4 times per day, the total uses per month would be 48, and thus the pump
life expectancy is anticipated to be over six and a half years.

The following chart indicates estimates of potential consumable sales based on
various factors and the installed base levels of FREEDOM60(R) pumps:

Pumps In the Market Annual Sales of Disposables
------------------- ---------------------------
5000 $1,530,000
10000 3,060,000
50000 15,300,000
100000 30,600,000

Most of our current sales are made directly to health care providers, although
we maintain distributors in both the domestic and foreign markets.

COMPETITION FOR THE FREEDOM60(R)

FREEDOM60(R) competes in the United States infusion pump market based on price,
service and product performance. Some of the competitors have significantly
greater resources for research and development, manufacturing and marketing, and
as a result may be better prepared to compete for market share even in areas in
which FREEDOM60(R) products may be superior. The industry is subject to
technological changes and there can be no assurance that we will be able to
maintain any existing technological lead long enough to establish our products
and to sustain profitability.

PORTABLE MEDICAL SUCTION

The RES-Q-VAC(R) Emergency Airway Suction System, is a lightweight, portable,
hand-operated suction device that removes fluids from a patient's airway by
attaching the RES-Q-VAC(R) pump to various proprietary sterile and non-sterile
single-use catheters sized for adult and pediatric suctioning. The one-hand
operation makes it extremely effective and the product is generally found in
emergency vehicles, hospitals and wherever portable aspiration is a necessity,
including backup support for powered suction systems. The disposable features of
the RES-Q-VAC(R) reduce the risk of contaminating the health professional from
HIV or SARS when suctioning a patient or during post treatment cleanup. All of
the parts that connect to the pump are disposable.

We recently introduced a new version of the RES-Q-VAC with the addition of a
portable LED white light which attaches to the canister assembly. The light is
fully malleable and can direct light during operations when lighting is poor or
at night. We have begun marketing the new system with a national master
distributor and will introduce the new product to the international community
during the second quarter.

A critical component and advantage of the RES-Q-VAC(R) is the Full Stop
Protection(R), (FSP(R)) a recently patented filtering system that both prevents
leakage and over-flow of the aspirated fluids, even at full capacity, and traps
all air and fluid borne pathogens and potentially infectious materials within
the sealable container. This protects users from potential exposure to disease
and contamination. The Full Stop Protection(R) meets the requirement of the
Occupational Safety and Health Administration as described below. The Company
has received a letter from OSHA confirming that the RES-Q-VAC(R) with the Full
Stop Protection(R) falls under the engineering controls of the Blood borne
Pathogen regulation and that the Products use would fulfill the regulatory
requirements.

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

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

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

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

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

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

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

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

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

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

RES-Q-VAC(R) is sold domestically and internationally by emergency medical
device distributors. These distributors generally sell to the end user and
advertise these products in relevant publications and in their catalogs.

COMPETITION FOR THE RES-Q-VAC(R)

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

GYNECOLOGICAL INSTRUMENTS

We purchased the Gyneco product line in 1986. Products included the Masterson
Endometrial Biopsy Kit for in-office biopsy sampling procedures and the Thermal
Cautery System used for tubal ligation procedures.

Masterson Endometrial Biopsy Kit is a self-contained unit that offers a quick
and easy procedure for in-office tissue sampling. The powerful vacuum pump is
easily operated with one hand. The pump is supplied with sterile disposable
curettes and specimen containers presented in a kit.

The Thermal Cautery System is designed to provide a safe, reliable and effective
method of female sterilization. The unit is small, compact and portable. A
rechargeable battery supplies power. The unit uses disposable components that
include the cautery hook assembly, cannula and trocar stylette.

CONTRACT MANUFACTURING

Historically, we have used OEM profits to partially fund internal product
development that has resulted in RES-Q-VAC(R) and FREEDOM60(R). OEM sales have
been as high as 70% of sales (1996). In 2007 and 2006, contract manufacturing
amounted to 9.90% and 5.6% of sales, respectively. The Company has transitioned
from these contracts to building and selling its own proprietary products due to
the much-improved margins associated with directly marketed devices.

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

2007 2006
% OF SALES % OF SALES
---------- ----------
Infusion Therapy 39.33% 24.8%
Medical Suction 44.99% 63.4%
Gynecological Instruments 5.06% 5.8%
Contract Manufacturing 9.90% 5.6%
Other .72% 0.4%

We are also in various stages of development of other additional proprietary
medical devices. Thus, we have products currently on the market, new products in
development to be marketed, and long range products to support and enhance
future growth. Research and Development efforts have been curtailed pending
additional funds becoming available through internal cash flow or outside
financing.

SALES AND DISTRIBUTION

Distribution channels for the products are those generally common to their
respective markets. Emergency medical products are sold through a wide network
of domestic and international distributors in 31 countries. Ambulatory infusion
systems are sold through both direct sales efforts concentrated on large
national accounts and a network of medical device distributors. Gynecological
instruments are sold from the corporate offices primarily through repeat
business.

Over the past year, we have begun upgrading our EMS RES-Q-VAC(R) distribution
channels by selecting key distributors to work with as master distribution
outlets. The domestic emergency medical market has softened somewhat due to a
decrease in Federal reimbursement to the states and cities for firefighters,
police and emergency services. We have concluded that we can have more effective
market penetration with major master distributors who are able to better support
our products.

We have consolidated our international RES-Q-VAC(R) distribution as well by
creating a United Kingdom presence to focus solely on overseas distribution. We
already have master distribution in Norway, Sweden, Denmark, Iceland, Finland,
Estonia, Latvia, and Lithuania. We believe that one main distributor will be
more predisposed to advertising, promotion, and building the product franchise
in each market. In return, we will be able work more closely with the
distributors and be able to hold them accountable for the sales in each region.

Additional new markets we have recently sold include schools and hospital-based
respiratory centers. We are also planning mailings into those markets. In the
school market, we have been informed that any school, with a swimming pool is
normally required to have suction equipment available. In addition, many schools
are installing automatic electronic defibrillators (AED's) for which suction is
mandatory in more than 50% of uses for this device. Our mailings to nursing
homes have also resulted in some interest by respiratory centers, and we believe
there may be additional sales opportunities in this market.

We continue to support both of our main product lines at both National and
International trade shows. In November, we exhibited at Medica in Dusseldorf,
Germany; the world's largest medical products trade show. In March 2007 we
exhibited at the EMS Today Conference & Exposition in Baltimore.

MANUFACTURING AND EMPLOYEES

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

In February 2007, we employed 17 employees, 10 were assigned to manufacturing
operations, 2 to sales and customer support, 2 to administrative functions, 1 to
quality assurance functions, 1 Vice President of Operations (responsible for
manufacturing, warehouse and procurement operations), and 1 Executive Officer.
The Company is dependent on the services of Andrew Sealfon who serves as
President, head of Research and Development and is also instrumental in
marketing and finance. The Company does not have insurance on the life of Andrew
Sealfon and may not be able to replace him if the need arose.

REGULATIONS GOVERNING THE MANUFACTURING OPERATIONS

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

Our last filing of Form 510(k) with the FDA was for the Restore (R), approved in
1998.

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

Periodically we are subject to inspections and audits by FDA inspectors. During
the year ended February 28, 2007, we were subject to a routine QSR review by the
FDA. The FDA inspection did not find any violations and no DD483 was issued. As
a result of FDA audits, the Company is always subject to further audits and
could be impacted by adverse findings.

PATENTS AND TRADEMARKS

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

On August 9, 2005, a patent was issued for a new mechanical variable flow rate
controller. Used with our FREEDOM60(R) Syringe Infusion System, this device
enables the user to select from a number of flow rates while using just one set
of tubing, allowing flow rates to be changed during the course of a single
infusion to better meet the needs of the patient. The device may be applied to
other infusion systems as well. We have not yet determined a production or
marketing strategy for this product.

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

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

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

We also hold patent #5,336,189 for a "Combination IV Pump & Disposable Syringe"
which confers a unique syringe to IV pump interface design. This patent is for
the FREEDOM60(R) Infusion System, an infusion therapy product. The cost of
filing and maintaining applications has deterred pursuing international patents.

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

Our product names are registered trademarks. There can be no assurance that
patents or trademarks will provide competitive advantages for the products
covered or that they will not be challenged or circumvented by competitors.

In the third quarter of the 2005 fiscal year, it was brought to management's
attention that one of the Company's German distributors had commenced selling a
copy, manufactured in China, of our basic RES-Q-VAC(R), using the RES-Q-VAC(R)
name. We are pleased to announce that the distributor eventually agreed to
discontinue use of the RES-Q-VAC(R) name, destroy its existing inventory of the
copied pumps and to refrain from selling the copied pumps in the future.

To strengthen our position in the future, we applied for, and were granted,
trademark status for the RES-Q-VAC(R) name in Germany. An application to
register the name throughout the entire European Union has been filed and is
undergoing review.

We have filed a provisional patent application for our new LED RES-Q-VAC system
on April 23, 2007. We are also filing a provisional patent for a newly designed
needle set to be used with the Freedom60.

ITEM 2. DESCRIPTION OF PROPERTY

We currently rent a masonry and steel frame building erected on 3.27 acres of
land located at 24 Carpenter Road, Chester, New York 10918. This facility is our
only location and is used as our headquarters and manufacturing operations.
Currently we have a 20-year lease and are responsible for all repairs,
maintenance and upkeep of the space occupied. The terms of the lease call for
monthly lease payments of $10,000 per month for the first 10 years of the lease
term and increasing to $11,042 thereafter, we also contribute payments of 65% of
the building's annual property taxes, amounting to $52,467 for the year ended
February 28, 2007

ITEM 3. LEGAL PROCEEDINGS

We are, from time to time, subject to claims and suits arising in the ordinary
course of business, including claims for damages for personal injuries, breach
of management contracts and employment related claims.

One of our sales employees who reigned in 2006 has undertaken a lawsuit which he
claims is for commissions earned. Based on the actual sales performance during
that time period, we believe this lawsuit is without merit. We have agreed to
mediation at attempt to settle this matter.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fiscal year
ended February 28, 2007.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS

We are authorized to issue 50,000,000 shares of Common Stock, $.01 par value. As
of February 28, 2007, 31,033,286 shares were issued and outstanding and there
were approximately 1,076 holders of record.

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

High Bid Low Bid
-------- -------
Year Ended February 28, 2007
----------------------------

1st Quarter ................ $0.25 $0.09
2nd Quarter ................ $0.19 $0.06
3rd Quarter ................ $0.09 $0.04
4th Quarter ................ $0.07 $0.05

Year Ended February 28, 2006
----------------------------

1st Quarter ................ $0.23 $0.09
2nd Quarter ................ $0.15 $0.07
3rd Quarter ................ $0.25 $0.08
4th Quarter ................ $0.18 $0.09

On February 2, 1993 we issued 10,000 shares of 8% Cumulative Convertible
Preferred Stock in a private placement for $100,000. We are obligated to pay
semi-annual dividend payments of $4,000 until conversion by shareholders or
redemption by us. The 10,000 shares of Cumulative Convertible Preferred Stock
are convertible to 238,095 shares of Repro-Med common stock at $0.40 per share.
The 10,000 shares of Cumulative Convertible Preferred Stock are convertible
based on the following formula: multiply the number of shares of Preferred Stock
to be converted by $10.00, divide the result by the conversion price of $0.20
per share (or by the conversion price as last adjusted and in effect at the date
any shares are surrendered for conversion). The Conversion Price shall increase
by $.02 for each year that the Preferred Stock is outstanding. The current
conversion price is $0.48

We have not declared or paid any cash dividends on our Common Stock and do not
anticipate that any dividends will be paid in the foreseeable future. During the
fiscal year ended February 28, 2007, dividends on the Convertible Preferred
Stock were accrued in the amount of $8,000 on the balance sheet.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

This Annual Report on Form 10-KSB contains certain "forward-looking" statements
(as such term is defined in the Private Securities Litigation Reform Act of
1995) and information relating to us that are based on the beliefs of the
management, as well as assumptions made by and information currently available.
Our actual results may vary materially from the forward-looking statements made
in this report due to important factors such as, recent operating losses,
uncertainties associated with future operating results, unpredictability related
to Food and Drug Administration regulations, introduction of competitive
products, limited liquidity, reimbursement related risks, government regulation
of the home health care industry, success of the research and development
effort, market acceptance of FREEDOM60(R), availability of sufficient capital to
continue operations and dependence on key personnel. When used in this report,
the words "estimate," "project," "believe," "anticipate," "intend," "expect" and
similar expressions are intended to identify forward-looking statements. Such
statements reflect current views with respect to future events based on
currently available information and are subject to risks and uncertainties that
could cause actual results to differ materially from those contemplated in such
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. These
statements involve risks and uncertainties with respect to the ability to raise
capital to develop and market new products, acceptance in the market place of
new and existing products, ability to penetrate new markets, our success in
enforcing and obtaining patents, obtaining required Government approvals and
attracting and maintaining key personnel that could cause the actual results to
differ materially. Repro-Med does not undertake any obligation to release
publicly any revision to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

RESULTS OF OPERATIONS
---------------------

2007 VS. 2006

We continue to focus our sales and marketing efforts on our two core product
lines, the RES-Q-VAC(R) Medical Suction system and FREEDOM60(R) Syringe Infusion
System. This included mail marketing, telemarketing, trade shows, and increased
on site sales calls.

Our Freedom60 increased 56.6% to $772,252 from $429,349 due to increased sales
for use with immune globulin and antibiotics, and a price increase, which was
put into effect during the year. The Freedom60 is gaining more traction in the
market as word of our performance and costs are communicated throughout the
industry. These increases are expected to continue into FY2008.

RES-Q-VAC(R) sales decreased domestically by 31.2% from $550,274 to $378,421 due
almost entirely to a one-time large order for the relief effort relating to
Hurricane Katrina in the previous year which did not repeat. The loss without
the Katrina order would have been 2% showing that we were able to offset the
continuing decline in the EMS market with sales of the RES-Q-VAC in new markets.
The international market declined by 29% from $561,794 to $398,805 due to
foreign competition. Overall RES-Q-VAC(R) sales declined 30.1% from $1,112,068
to $777,226.

Our new RES-Q-VAC(R) markets included hospitals, nursing homes, dental sales,
sales to school and prisons.

Sales of our non-core product lines declined by 14.5% due to our increased
efforts going to the FREEDOM60(R) and RES-Q-VAC(R) product lines. Sales from OEM
manufacturing (production for other manufacturers) increased by 72% and
accounted for 9.90% of the company's revenue in 2007. We do not actively seek
OEM business but will accept these contracts when appropriate.

Our total sales were essentially flat overall declining by 1.8% for the year
ended February 28, 2007 to $1,727,518 from $1,759,566 in 2006 as we virtually
made up the entire on-time Katrina order of $161,250 which did not repeat this
year as mentioned above.

Our net operating loss decreased to $22,137 this year as compared to $88,252 for
the year ended February 28, 2006.

The Net Loss for the year ended February 28, 2007, was $254,721, which includes
$174,710 in stock-based compensation, as compared to the previous year's loss of
$217,815 (which included stock-based compensation of $88,550.) Gross profit
margin for the year ended February 28, 2007 was 62%, as compared with 58%
experienced in the prior year ending February 28, 2006. Selling, General &
Administrative Expenses (SG&A) increased slightly by $8,784 year over year from
$984,631 to $993,415. Research and development expenses were essentially flat
increasing by $216 from $41,817 to $42,033 in 2007.

Interest expense decreased by $11,183 to $61,336 in 2007 from $77,519 in 2006 as
the result of our paying off high interest on demand bank notes and capital
leases.

We continue to make an extensive effort to market our Freedom60 Syringe Infusion
System for the delivery of immune globulin (IgG) using the subcutaneous route of
administration. We have directly supported a clinical trial conducted by the
manufacturer of an approved subcutaneous medication by supplying 42 of the trial
centers with Freedom60 pumps and support. We have participated in several
educational primers for nurses and web based training sessions. We have one
customer in this market who represents 14% of our revenues and have trials
underway with several other providers.

We have surmised and have recently confirmed anecdotally that the Freedom60
system because of its constant safe pressure design is the ideal technology to
infuse this medication regardless of cost. IgG is quite viscous, and the
Freedom60 appears to adjust automatically to patient tissue saturation,
preventing complications at the administration sites which include pain,
swelling, redness and possible tissue damage. Competitive electronic devices,
which are also used for this indication, can deliver higher and quite possibly
harmful pressures, and will reach occlusion pressures, which will frequently
cause the electronic pumps to shut down prior to completing the drug delivery.

Reimbursement is one of the main driving forces in medicine. We recently
challenged the current Freedom60 reimbursement for Medicare by requested a
coding verification for the Freedom60 with the Centers for Medicare and Medicaid
services (CMS). On May 21, 2007 CMS issued a formal notice that the Freedom60
was reclassified to E0779, which at the current time appears to increase the
reimbursement for the Freedom60 some twenty fold. On the Medicare web site
maintained by Palmetto GBA is stated the following for Subcutaneous Immune
Globulin:

"The DME pump and related supplies are also covered. Typically this involves a
non-electric syringe pump (K0779). Code K0552 is used for the syringe and code
A4221 is billed for the infusion sets and all other needed supplies. Only 1 unit
of service of A4221 may be billed per week."(http://www.palmettogba.com/palmetto
/providers_A.nsf/(Docs)/85256D57005BA23B85257170006A1FA7?OpenDocument)

We appear to be the only Medicare approved device for this indication.

For the RES-Q-VAC(R), we have introduced a new offering which consists of a
patent pending, portable LED white light source which is attached to the top of
the canister system and provides illumination for the medical professional
during night time or low light conditions. We have selected a master distributor
domestically (Moore Medical) and have begun a marketing program with them.

We continue our sales effort into the hospital and nursing homes working with a
national distributor and by direct sales to penetrate this market. Due to power
outages, hurricanes such as recently hit New Orleans and other disasters; there
is interest for the RES-Q-VAC for these markets. In the hospital, the RES-Q-VAC
is used on crash carts, emergency room, patients in isolation, for tracheotomy
patients and to meet new hospital regulations such as EMTALA. Hospitals also are
cognizant of infectious disease control and we continue to make them aware of
our Full Stop Protection(R) filter, which protects the users from any
contamination from overflow and traps all pathogens inside the suction
container. This feature is also a requirement of the Occupational Safety and
Health Administration under OSHA 29CFR 1910.1030 - Occupational Exposure to
Blood borne Pathogens. The RES-Q-VAC(R) is the only hand-held non-electric
suction system with sterile catheters for infants, large catheters for adults,
and meets the intent of the OSHA requirements with the Full Stop Protection(R).
The Company has received a letter from OSHA confirming that the Full Stop
Protection(R) falls under the engineering controls of the Blood borne Pathogen
regulation and therefore would be required by any employer of medical personnel
to protect their employees from potentially infectious materials. The Centers
for disease control have issued Guidelines for medical personnel for the
treatment of patients with SARS, which include the recommendation to employ
suction devices containing HEPA type filtration on the output to prevent the
spread of this disease. We believe RES-Q-VAC(R) is the only hand-held portable
suction system, which meets this requirement.

We recently conducted a focus group for RES-Q-VAC in the pediatric home
tracheostomy market to introduce the RES-Q-VAC to this new home market. The
results of the focus group non-electric suction is strongly need in the home
care setting and parents of children with trachs and suction needs will consider
a portable non-electric device for safety and ease of travel. From this focus
group we have generated a clinical trial conducted in the home with children
with trachs which, will continue for the next few months

We continue to seek funds to increase marketing and sales of both key products
and to design a new improved RES-Q-VAC(R) suction device to expand the market
substantially, although there is no assurance that such funding can be obtained,
or obtained at terms acceptable to us, or that if funded, the markets would
develop as expected. We are also beginning to promote the RES-Q-VAC(R) in the
home care market, for which the RES-Q-VAC(R) is ideally suited due to its low
cost, portability and convenience. We have begun marketing a dental version
called DENTAL-EVAC(R) and have added one distributor. We have signed an
agreement with a company to market RES-Q-VAC(R) and certain other of our
products in the veterinary markets.

LIQUIDITY AND CAPITAL RESOURCES

Non-cash expenses for depreciation and amortization along with stock-based
compensation offset a net loss of $254,721. For the year ended February 28, 2007
Net Cash from Operations was ($85,591) as compared with ($138,748) for the prior
year. This change of $129,654 was due primarily to an increase in our accounts
payable of $ 144,126. As a result, at the end of fiscal year 2007, the net
working capital decrease to ($156,212).

As of February 28, 2006, $198,553 had been advanced on the line of credit with M
& T bank which was guaranteed by the President and one of the directors on
October 11, 2006, one of the directors advanced the company $325,000 in order to
satisfy this line and add additional liquidity to the company. This note is
included in the long-term debt of the company. Together with simple interest of
6% annum are due on April 30, 2008. In addition Warrants were issued to acquire
150,000 shares of restricted common stock exercisable at $.10 per share

In raising capital beginning in February 2004, the Company issued promissory
notes in the total amount of $432,000. These five-year promissory notes pay 2%
over prime plus four shares of common stock per year for every year the loan is
in place. The loans are due on March 30, 2009.

Accounts Receivable, net of reserves, increased at February 28, 2007 to $206,076
as compared to $145,579 for the previous year. Domestic sales are made primarily
on net 30-day payment terms. A variety of terms continue to be employed for
export sales including cash prepayments and net 45 days to allow for increased
delays due to transportation and communications. As of February 28, 2007, 65% of
Accounts Receivable were current or less than 30 days past due, 25% were at
30-60 days and 10% were over 60 days.

Prepaid expenses and other receivables decreased $17,872 from $28,182 to
$10,310.

Expenditures for capital equipment and intellectual property protection in 2006
increased by $15,192 as compared to $9,251 2006. $11,915 contributed to molds
and costs associated to filing and issuance of patents and trademarks.

We are contingently liable to rework approximately 13,000 units of a product for
an OEM customer order, which was completed in prior years. The total additional
material and labor cost to complete this rework approximates $70,000, which has
not been recorded in the financial statements. These units are deliverable over
the next three years.

An agreement with a marketing management company was terminated on November 11,
2006 for various reasons including the failure of this company to meet the
minimum sales agreed goals. The management fees and rights to earn warrants'
were based on this performance, which was not met, and therefore these fees are
not earned and not owed. A note issued totaling $50,000 was therefore canceled.

We continue to seek funds to enhance our marketing efforts substantially and for
other corporate purposes, although there is no assurance that such funding can
be obtained, or obtained at terms acceptable to us. Substantial resources have
been directed into the marketing efforts during the past year which produced an
increase in new RES-Q-VAC(R) customers and new FREEDOM60(R) users. We are aware
of the delay between marketing and the resulting sales in our medical markets.
Furthermore, new customers tend to purchase smaller initial quantities, and
since a major portion of our income stream is derived from the use of disposable
supplies, it may take several months for the full impact of new customers to be
reflected in our sales performance.

We believe we are continuing to enhance a new customer base for our products.
With the current capital we have, and if sales continue to meet the Company's
targets, which we expect but cannot assure, we believe that we will have
sufficient resources to meet our obligations for the next twelve months.
However, if these sales do not continue to develop to our expectations, and if
new funding does not become available, then our viability could be in question
(see going concern qualification NOTE 1 - Notes to Financial Statements). We
remain cautiously optimistic that, at a minimum, these new sales will meet our
expectations and needs for the coming year.

SUBSEQUENT EVENTS

In order to receive more favorable Medicare reimbursement for our Freedom60
Syringe Infusion System, we had submitted a formal request for a HCPCS coding
verification with the Statistical Analysis Durable Medical Equipment Regional
Carrier (SADMERC). On May 21, 2007 we received a notification from CMS (Centers
for Medicare & Medicaid Services) that the Freedom 60(R) had been re-reviewed
for Medicare billing. It was the determination that the Medicare HCPCS code(s)
to bill the four Durable Medical Regional Carries (DMERCs) should be: E0779
Ambulatory infusion pump, mechanical, reusable, for infusion 8 hours or greater.
The new coding provides for a substantial increase in reimbursement for
providers using an infusion pump for authorized users under Part B of Medicare.
Current approved uses under Medicare include among others, subcutaneous immune
globulin, antivirals, antifungals, and chemotherapeutics.

ITEM 7. FINANCIAL STATEMENTS

Index to Financial Statements
-----------------------------

Report of Independent Registered Public Accounting Firm ................... 18

Balance Sheets ............................................................ 19

Statements of Operations .................................................. 20

Statement of Stockholders' (Deficit) ...................................... 21

Statements of Cash Flows .................................................. 22

Notes to Financial Statements ............................................. 23

MEYLER & COMPANY, LLC
CERTIFIED PUBLIC ACCOUNTANTS
ONE ARIN PARK
1715 HIGHWAY 35
MIDDLETOWN, NJ 07748

Report of Independent Registered Public Accounting Firm

To the Board of Directors of
Repro-Med Systems, Inc.
Chester, NY

We have audited the accompanying balance sheets of Repro-Med Systems, Inc. as of
February 28, 2007 and 2006 and the related statements of operations,
stockholders deficit and cash flows for each of the two years in the period then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Repro-Med Systems, Inc. as of
February 28, 2007 and 2006 and the results of its operations and its cash flows
for each of the two years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
Financial Statements, the Company has an accumulated deficit of $3,427,011 and
there are existing uncertain conditions the Company faces relative to its
ability to obtain capital and operate successfully. These conditions raise
substantial doubt about its ability to continue as a going concern. Management's
plans regarding these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
these uncertainties.

/s/ Meyler & Company, LLC

May 29, 2007
Middletown, NJ

REPRO-MED SYSTEMS, INC.
BALANCE SHEETS

FEBRUARY 28,
2007 2006
----------- -----------

ASSETS
CURRENT ASSETS:
Cash .......................................................... $ 99,421 $ 26,753
"project," "plan," "intend," "estimate," and "continue," and
$21,950 and $27,632 for 2007 and 2006 respectively ........... 214,446 147,579
Inventory ..................................................... 489,738 347,392
Prepaid Expenses .............................................. 10,310 28,182
----------- -----------
TOTAL CURRENT ASSETS ........................................ 813,915 549,906

PROPERTY & EQUIPMENT, less accumulated depreciation of
$1,066,329 and $1,005,830 for 2007 and 2006 respectively ....... 220,515 268,096

OTHER ASSETS:
Patents, net of accumulated amortization of $78,675 and $81,633
for 2007 and 2006, respectively .............................. 40,588 35,214
Goodwill, net of accumulated amortization of $5,528 and $5,168
for 2007 and 2006, respectively .............................. 8,609 8,969
Security Deposit .............................................. 54,802 54,802
----------- -----------
TOTAL OTHER ASSETS .......................................... 103,999 98,985
----------- -----------
TOTAL ASSETS .................................................... $ 1,138,429 $ 916,987
=========== ===========

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

CURRENT LIABILITIES
Note payable to bank - demand ................................. $ - $ 198,553
Notes payable to related parties .............................. 71,274 6,834
Accounts Payable .............................................. 443,440 307,245
Accrued Expenses .............................................. 46,179 46,172
Accrued Interest .............................................. 44,565 42,663
Current Portion of capital lease obligations .................. 617 9,437
Accrued Preferred stock dividends ............................. 44,000 36,000
Accrued payroll and related taxes ............................. 9,408 17,030
----------- -----------
TOTAL CURRENT LIABILITIES ....................................... 659,483 663,934

OTHER LIABILITIES
Capital lease obligations, less current ....................... - 616
Deferred capital gain ......................................... 269,776 292,256
Long-term debt - notes payable ................................ 855,000 530,000
----------- -----------
TOTAL OTHER LIABILITIES ..................................... 1,124,776 822,872
----------- -----------
TOTAL LIABILITIES ............................................... 1,784,259 1,486,806

STOCKHOLDERS' DEFICIT
Preferred Stock, 8% cumulative, liquidation value $100,000,
$0.01 par value, 2,000,000 shares authorized, 10,000 shares
issued and outstanding 2007 and 2006, respectively ........... 100 100
Common Stock, $0.01 par value, 50,000,000 shares authorized,
31,033,286 and 29,012,286 issued and outstanding at 2007
and 2006, respectively ....................................... 310,333 290,123
Additional paid-in Capital .................................... 2,612,748 2,446,248
Accumulated deficit ........................................... (3,427,011) (3,164,290)
----------- -----------
(503,830) (427,919)
Less: Treasury Stock, 2,275,000 shares at cost at February 28,
2007 and 2006, respectively ................................... (142,000) (142,000)
----------- -----------
Total Stockholders' Deficit ................................... (645,830) (569,819)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT ..................... $ 1,138,429 $ 916,371
=========== ===========

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

REPRO-MED SYSTEMS, INC.
STATEMENT OF OPERATIONS

FOR THE YEARS ENDED
FEBRUARY 28,
2007 2006
------------ ------------

NET SALES ........................................ $ 1,734,579 $ 1,745,806

COST AND EXPENSE
Cost of goods Sold ........................... 663,507 728,522
Selling, general and administrative .......... 993,415 984,631
Research and development ..................... 42,033 41,817
Depreciation and amortization ................ 57,760 79,089
------------ ------------
TOTAL COSTS AND EXPENSES ....................... 1,756,715 1,834,059

NET OPERATING LOSS ............................. (22,136) (88,253)

OTHER INCOME/(EXPENSES)
Stock based compensation to obtain loan
financing ................................... (174,710) (88,550)
Interest Expense ............................. (61,336) (77,519)
Interest and Other Income .................... 3,461 36,507
------------ ------------
TOTAL OTHER INCOME/(EXPENSE) ..................... (232,585) (129,562)

------------ ------------
NET LOSS ......................................... $ (254,721) $ (217,815)
============ ============

NET LOSS PER COMMON SHARE (BASIC AND DILUTIVE) ... $ (0.01) $ (0.01)
============ ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ....... 29,872,541 26,467,786
============ ============

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

REPRO-MED SYSTEMS, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
For the Years Ended February 28, 2007 and 2007

Preferred Stock Common Stock
--------------- --------------------- Paid-in Accumulated Treasury
Shares Amount Shares Amount Capital Deficit Stock Total
------ ------ ---------- -------- ---------- ----------- --------- ---------

Balance, February 28, 2005 10,000 $100 26,027,000 $260,270 $2,302,551 $(2,938,475) $(142,000) $(517,554)

Issuance of common stock
@ $0.07 per share ....... - - 1,214,286 12,143 72,857 - - 85,000

Issuance of common stock
in connection with
obtaining loan financing
@$0.05 per share ........ - - 1,567,000 15,670 62,680 - - 78,350

Issuance of common stock
to consultants @ $0.05
per share ............... - - 204,000 2,040 8,160 - - 10,200

Preferred stock dividends - - - - - (8,000) - (8,000)

Net loss for the year
ended February 28, 2006 . - - - - - (217,815) - (217,815)
------ ---- ---------- -------- ---------- ----------- --------- ---------
Balance, February 28, 2006 10,000 $100 29,012,286 $290,123 $2,446,248 $(3,164,290) $(142,000) $(569,819)

Preferred stock dividends - - - - - (8,000) - (8,000)

Issuance of common stock
in connection with
obtaining loan financing
@$0.06 to $0.11per share - - 1,617,000 16,171 139,700 - - 155,870

Issuance of common stock
to consultants @ $0.09
to $1.11 per share ...... - - 204,000 2,040 16,800 - - 18,840

Issuance of common stock
to consultants @ $0.05
per share ............... - - 200,000 2,000 10,000 - - 12,000

Net loss for the year
ended February 28, 2007 . - - - - - (254,721) - (254,721)
------ ---- ---------- -------- ---------- ----------- --------- ---------
Balance, February 28, 2007 10,000 $100 31,033,286 $310,333 $2,612,748 $(3,427,011) $(142,000) $(645,830)
====== ==== ========== ======== ========== =========== ========= =========

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

REPRO-MED SYSTEMS, INC
STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED
FEBRUARY 28,
---------------------
2007 2006
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ............................................. $(254,721) $(217,815)
Adjustments to reconcile net loss to net cash used
in operating activities:
Stock based Compensation to obtain loan financing 174,710 88,550
Amortization of prepaid consulting ............... 2,666 -
Depreciation and amortization .................... 57,760 79,089
Deferred capital gain - building lease ........... (22,481) (22,481)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable ....... (66,867) (22,501)
(Increase) decrease in inventory ................. (142,346) 24,177
(Increase) decrease in prepaid expense ........... 27,206 8,349
Increase (decrease) in accounts payable .......... 136,195 (64,221)
Increase (decrease) in preferred stock dividend .. 8,000 8,000
Increase (decrease) in accrued payroll and
related taxes ................................... (7,622) (16,673)
Increase (decrease) in accrued expense ........... 7 (14,416)
Increase (decrease) in accrued interest .......... 1,902 11,194
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES .................. (85,591) (138,748)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment ................... (12,777) (2,602)
Additional patent costs .............................. (2,415) (6,649)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES .................. (15,192) (9,251)

CASH FLOWS FROM FINANCING ACTIVITIES
Notes payable ........................................ 325,000 80,000
Notes payable to bank on Demand ...................... (198,553) -
Proceeds from sale of common stock ................... - 85,000
Preferred stock dividends ............................ (8,000) (8,000)
Proceeds from note payable to related party .......... 64,440 (166)
Payments on capitalized lease obligations ............ (9,436) (19,412)
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES .............. 173,451 137,422

NET INCREASE,(DECREASE) IN CASH AND CASH EQUIVALENTS ... 72,668 (10,577)
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR ............ 26,753 37,330
--------- ---------
CASH AND CASH EQUIVALENTS-END OF YEAR .................. $ 99,421 $ 26,753
========= =========

Supplemental Information
Cash paid during the year for:
Interest ............................................. $ 68,868 $ 77,518
Non-Cash activities
Issuance of 200,000 shares of common stock for
onsulting contact ................................... $ 12,000 -

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

REPRO-MED SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
February 28, 2007 and 2006

NOTE 1 DESCRIPTION OF BUSINESS, GOING CONCERN UNCERTAINTY AND MANAGEMENT'S
PLANS

The Company and Nature of Business
----------------------------------

Repro-Med Systems, Inc. (the "Company") was incorporated on March 24,
1980 under the laws of the State of New York. The Company was organized
to engage in research, development, laboratory and clinical testing,
production and marketing of medical devices used in the treatment of
the human condition.

Going Concern Uncertainty and Management's Plans
------------------------------------------------

As shown in the accompanying financial statements, the Company incurred
net losses of $254,721 and $217,815 during the years ended February 28,
2007 and 2006 respectively, and has an accumulated deficit of
$3,427,011. The Company is seeking to raise additional working capital
through debt or equity channels and is working with outside
distributors to increase its market share in the European and U.S.
markets for its products. However, even if the Company does raise
capital through debt or equity channels or increases its sales through
new strategies, there can be no assurance that the net proceeds of the
capital raised or the revenue generated from the new marketing
strategies will be sufficient to enable it to develop business to a
level where it will generate profits and cash flows from operations.

These matters raise substantial doubt about the Company's ability to
continue as a going concern. However, the accompanying financial
statements have been prepared on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities
in the normal course of business. These financial statements do not
include any adjustments relating to the recovery of the recorded assets
or the classification of the liabilities that might be necessary should
the Company be unable to continue as a going concern.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

Inventory
---------

Inventories consist primarily of purchased parts and assembled units
and are stated at the lower of cost FIFO (first-in, first-out) or
market value.

Patents
-------

Costs incurred in obtaining patents have been capitalized and are being
amortized over seventeen years. Costs of goodwill have been capitalized
and are being amortized over thirty-five years.

REPRO-MED SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
Continued

Income Taxes
------------

The Company accounts for income taxes under the liability method, which
requires the determination of deferred tax assets and liabilities based
on the differences between the financial and tax bases of assets and
liabilities using enacted tax rates expected to be in effect for the
year in which differences are expected to reverse. Deferred tax assets
are adjusted by a valuation allowance since, based on available
evidence, it is more likely than not that some portion or all of the
deferred tax assets will not be realized.

At February 28, 2007, the Company has net operating loss carry forwards
of approximately $3,000,000, which expire through 2026. Since the
Company has generated significant operating losses, a deferred tax
asset of approximately $600,000 has been offset by a valuation
allowance of $600,000.

Property and 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. Routine maintenance, repairs and replacement costs are expensed
as incurred and improvements that extend the useful life of the assets
are capitalized. When property and equipment are sold or otherwise
disposed of, the cost and related accumulated depreciation are
eliminated from the accounts and any resulting gain or loss is
recognized in operations.

Net Loss Per Common Share
-------------------------

The Company computes per share amounts in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share".
SFAS No. 128 requires the presentation of primary and fully diluted
earnings per share ("EPS") and requires presentation of basic and
diluted EPS. Basic EPS is computed by dividing the income (loss)
available to Common Stockholders by the weighted-average number of
common shares outstanding for the period. Diluted EPS is based on the
weighted-average number of shares of Common Stock and Common stock
equivalents outstanding during the periods. Common stock equivalents
have been excluded from the weighted average shares outstanding
calculation, as inclusion would be anti-dilutive. The diluted earnings
per share calculation includes the addition of $8,000 from preferred
stock dividends, resulting in no difference between basic and diluted
earnings per share.

Use of Estimates in the Financial Statements
--------------------------------------------

The preparation of financial statements in conformity with U.S.
generally accepted accounting principles ("GAAP") requires management
to make estimates and assumptions that affect the amounts reported in
the consolidated 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.

REPRO-MED SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
Continued

Allowance for Doubtful Accounts
-------------------------------

In determining the allowance for doubtful accounts the Company analyzes
the aging of accounts receivable, historical bad debts, customer
creditworthiness and current economic trends.

Revenue Recognition
-------------------

In accordance with Securities and Exchange Commission's (SEC's), Staff
Accounting Bulletin No. 104, sales of manufactured products are
principally recorded when shipment occurs and title passes to a
customer, persuasive evidence of an arrangement exists with the
customer, the sales price is fixed and determinable and the
collectibility of the sales price is reasonably assured. The Company's
revenue stream is derived from the sale of an assembled product. Other
service revenues are recorded as the service is performed. Shipping and
handling costs are generally billed to customers and are included in
sales.

Stock-Based Compensation
------------------------

The Company accounts for employee stock based compensation and stock
issued for services using the fair value method. In accordance with
SFAS No. 123R, the measurement date of shares issued for services is
the date when the counterparty's performance is complete.

The Company accounts for stock issued for services using the fair value
method. In accordance with the Emerging Issues Task Force ("EIFT")
96-18, the measurement date of shares issued for service is the date
when the counterparty's performance is complete.

Recent Accounting Pronouncements
--------------------------------

In June 2006, the Financial Accounting Standards Board ("FASB") issued
FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes
-- an interpretation of FASB Statement No. 109 ("FIN 48"), which
clarifies the accounting and disclosure for uncertainty in tax
positions. FIN 48 seeks to reduce the diversity in practice associated
with certain aspects of the recognition and measurement related to
accounting for income tax uncertainties. We have not yet finally
determined the impact that this interpretation will have on our results
of operations or financial position.

In September 2006, the FASB issued SFAS No. 157 Fair Value Measurements
("SFAS 157"). SFAS No. 157 provides guidance for using fair value to
measure assets and liabilities and is intended to respond to investors'
requests for expanded information about the extent to which companies'
measure assets and liabilities at fair value, the information used to
measure fair value and the effect of fair value measurements on income.
SFAS 157 applies whenever other standards require (or permit) assets or
liabilities to be measured at fair value but does not expand the use of
fair value in any new circumstances. SFAS 157 also requires expanded
disclosure of the effect on income for items measured using
unobservable data, establishes a fair value hierarchy that prioritizes
the information used to develop those assumptions and requires separate
disclosure by level within the fair value hierarchy. The provisions of
SFAS 157 are effective on January 1, 2008. We have not yet determined
the impact of SFAS 157 on our consolidated financial statements.

REPRO-MED SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
Continued

In February 2007, the FASB issued SFAS No. 159 The Fair Value option
for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159
allows entities to measure at fair value many financial instruments and
certain other assets and liabilities that are not otherwise required to
be measured at fair value. SFAS 159 is effective for fiscal years
beginning after November 15, 2007. We have not determined what impact,
if any, that adoption will have on our results of operations, cash
flows or financial position.

NOTE 3 INVENTORY

Inventory is valued at the lower of average cost or market and consists
of the following at:

February 28
-----------
2007 2006
---- ----

Raw Material ................. $344,348 $254,475
Work in progress ............. 47,042 28,795
Finished Goods ............... 98,348 64,122
-------- --------
$489,738 $347,392
======== ========

NOTE 4 PROPERTY AND EQUIPMENT

Property and equipment consists of the following at:

February 28
----------- Estimated
2007 2006 Useful Lives
---- ---- ------------

Furniture and office equipment .... $ 346,482 $ 343,064 5 years
Manufacturing equipment and tooling 940,362 930,862 7 - 12 years
---------- ----------
1,286,844 1,273,926
Less: accumulated amortization and
depreciation ..................... 1,066,329 1,005,830
---------- ----------
Property and Equipment, Net ....... $ 220,515 $ 268,096
========== ==========

NOTE 5 RELATED PARTY TRANSACTIONS

Notes Payable to Related Parties
--------------------------------

The President of the Company has advanced the Company $100,000 under a
demand loan which bears interest at the rate of 8% (see Note 8 -
Long-term debt). This note has been approved by the Board of Directors.
The President has agreed to extend the maturity date to March 30, 2009.
Additionally, included in current liabilities are notes payable to
related parties of $71,27., Included in this amount is $69,274 to the
President of the Company and $2,000 to the former Controller. The
$69,274 to the President represents short term advances that are
secured by certain customer accounts receivable. The $2,000 to the
former controller is currently past due and bears interest at the rate
of 2% over prime. See also Note 8 for additional loans payable to the
President.

REPRO-MED SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
Continued

Leased Aircraft
---------------

The Company leases an aircraft from a Company controlled by the
President. The lease payments aggregated $21,500 and $22,500 for the
years ended February 28, 2007 and 2006, respectively. The original
lease agreement has expired and the Company is currently on a
month-to-month basis for rental payments.

NOTE 6 NOTE PAYABLE TO BANK - DEMAND

The Company had a demand note with a local financial institution in the
amount of $198,553 at February 28, 2006. The note bore interest at the
rate of 8.5% and is secured by the Company's assets as well as personal
guarantees of the President and a Company Director. In October, 2006
the loan was repaid.

NOTE 7 CAPITAL LEASE OBLIGATIONS

The Company has obtained various pieces of equipment under capital
leases expiring through April 2007. The assets and liabilities under
these capital leases are recorded at the lower of the present values of
the minimum lease payments or the fair values of the assets. The assets
are included in property and equipment and are being depreciated over
their estimated useful lives.

As of February 28, 2007, minimum future lease payments under these
capital leases is $617.

February 28,
------------
2007 2006
---- ----

Total minimum lease payments ........... $ 650 $13,816
Less: amounts representing interest .... 35 3,763
------- -------
Net minimum lease payments ....... 617 10,053
Less: current portion .................. 617 9,437
------- -------

Long-term portion ...................... $ 0 $ 616
======= =======

NOTE 8 LONG-TERM DEBT

Long-term debt consists of the following at:

February 28,
------------
2007 2006
---- ----
In April 2004, the Company borrowed $25,000
from three individuals, including $10,000 from
the President, at 2% over the prime-lending
rate. These loans mature June 30, 2008. As an
additional incentive to make the loans, the
Company agreed to grant one share of its common
stock for each dollar of indebtedness
outstanding at each calendar quarter. As of
February 28, 2007, 75,000 shares of common
stock are to be issued to these note holders... $ 25,000 $ 25,000

REPRO-MED SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
Continued

During the period February 2004 to May 2005,
the Company borrowed $405,000 from several
individuals. These loans mature between March
30, 2009 and 2010 and bear interest at a rate
of 2% over the prime-lending rate. As incentive
to make the loans, the Company agreed to grant
4 shares of its common stock immediately to
each of the note holders and, commencing on the
yearly anniversary date, four shares of common
stock for each dollar of unpaid principal. As
of February 28, 2007, 812,000 shares of common
stock are to be issued to these note holders... 405,000 405,000

The President of the Company has loaned the
Company, $100,000 at 8% interest. The loan is
unsecured and matures March 30, 2009........... 100,000 100,000

In October, 2006, the Company borrowed $325,000
from a Director of the company, at 6% interest
per annum. This loan matures April 30, 2008. In
addition to the interest the holder is issued
Warrants' to acquire 150,000 shares of
restricted common stock at $.10 per share. The
Warrants vest immediately...................... 325,000 -
-------- --------
$855,000 $530,000
======== ========

In connection with the October 2006 borrowing of $325,000, the company
issued 150,000 warrants to acquire its common stock at $0.10 per share.
As a result of the company performing a black-scholes computation on
the value of the warrants, it concluded that the resultant value of
approximately $4,500 was not significant and accordingly, did not
reduce the value of the warrants from the note proceeds.

NOTE 9 STOCKHOLDERS' EQUITY

On February 2, 1993, the Company sold 10,000 shares of $0.01 par value
Convertible Cumulative Preferred Stock at a price of $10.00 per share.
Dividends are payable semi-annually at an annual rate of $8,000 or 8%
of $100,000. Effective February 28, 2005 the Convertible Cumulative
Preferred Stock can be converted to 238,095 shares of common stock at a
conversion price of $0.42 per share. Dividends for the years ending
February 28, 2007 and 2006 have been accrued but not paid.

On October 31, 1996, the Company purchased, in a private offering,
275,000 shares of common stock at a price of $0.08 per share, a total
of $22,000. On September 10, 1996, the Company purchased, in a private
offering, 2,000,000 shares of common shares at a price of $0.06 per
share, a total of $120,000. These treasury shares may be sold at a
future time or utilized for corporate use.

In connection with note agreements executed in April 2003, the Company
is obligated to issue one share per quarter for each dollar of
indebtedness, which exists at the calendar quarter. At February 28,
2007, the Company is obligated to issue 210,000 shares of its common
stock to these note holders at prices ranging from $0.06 to $0.11 per
share. These shares have not been issued to date, but have been
reflected as issued in the accompanying financial statements.

REPRO-MED SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
Continued

In connection with note agreements executed between February 2004 and
May 2005, the Company is obligated to issue 4 shares for every dollar
of principal borrowed. As at February 28, 2007 the Company is obligated
to issue 1,492,000 shares to these note holders at a price ranging from
$0.06 to $0.11 per share. These shares have not been issued to date,
but have been reflected as issued for the accompanying financial
statements.

In September and October 2005, the Company sold 1,214,286 shares of its
common stock for cash at $0.07 per share, a total of $85,000.

In July 2006 the company entered into a consulting agreement to assist
the company in various general corporate matters for a term of three
years. In connection with the agreement the company issued 200,000
shares of it common stock at $0.06 per share.

The company has several verbal agreements with consultants to assist in
general corporate matters. The consultants are paid 204,000 shares per
year. For the year ended February 28, 2007, the company had not yet
issued the shares. However the company has recorded the shares as
though they were issued in the accompanying financial statements at a
price ranging between $0.09 and $0.11 per share.

All of the qualified and non-qualified options existing under the
company's qualified and non-qualified options plans have expired at
February 28, 2007.

NOTE 10 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
20 years. The leaseback is accounted for as an operating lease. The
gain of $449,617 realized in this transaction has been deferred and
will be amortized to income in proportion to rental expense over the
term of the related lease.

At February 28, 2006 minimum future rental payments are:

Year Minimum Rental Payments
---- -----------------------
2008 $ 120,000
2009 120,000
thereafter $1,205,000
----------
$1,565,000
==========

Rent expense for the year ended February 28, 2007 aggregated $120,000.

NOTE 11 COMMITMENTS AND CONTINGENCIES

The Company is contingently liable to rework approximately 13,000 units
of its product for a customer order, which was completed in prior
years. The total additional material and labor cost to complete this
rework approximates $70,000. This amount has not been provided in the
accompanying financial statements.

NOTE 12 LITIGATION

The company has been served a complaint by a former commissioned
salesman for alleged eared commissions. The aggregate amount of the
complaint is approximately $30,000. The company contends that complaint
is frivolous and with out merit.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

ITEM 8A. CONTROLS AND PROCEDURES

Our Chief Executive Officer and Chief Financial Officer conducted an evaluation
of the effectiveness of our disclosure controls and procedures. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective as of February 28,
2007 in alerting him in a timely manner to material information required to be
included in our Securities and Exchange Commission reports. In addition, no
change in our internal control over financial reporting occurred during the
fourth quarter of the fiscal year ended February 28, 2007 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS:
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

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

Name Age Position/Held Since
---- --- -------------------
Andrew I. Sealfon 61 President 1980,
Treasurer 1983,
Chairman 1989,
Director 1980,
CEO 1986

Paul Mark Baker 56 Director 1991

Nathan Blumberg 71 Director 2000

Remo Spagnoli 77 Director 1993

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

All directors hold office until the next annual meeting of shareholders or until
there successors are elected. Executive Officers hold office at the discretion
of the Board of Directors.

Mr. Sealfon co-founded Repro-Med Systems, Inc. in 1980. He is an electrical
engineer and inventor and has been granted numerous United States patents. Mr.
Sealfon is a graduate of Lafayette College.

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

Dr. Blumberg was a practicing urologist in the New York area, and has founded
and sold an IV business to 3M. He teaches medicine at Stony Brook University on
Long Island, and now consults for various medical companies. He makes available
a wealth of medical and business acumen to the Company.

Mr. Spagnoli is a principal founder and past President and Chairman of CRS,
Inc., Newburgh, NY, a manufacturer of proprietary inventory control and point of
sale software and distributor of computer equipment. Mr. Spagnoli presently
consults for CRS, Inc.

ITEM 10. EXECUTIVE COMPENSATION

Andrew I. Sealfon, President, received $116,757 in salary from Repro-Med during
the fiscal year ended February 28, 2007. Mr. Sealfon had been granted incentive
stock options, which expired February 28, 2006, in Repro-Med under its 1995
Stock Option Plan.

The officers are reimbursed for travel and other expenses incurred on behalf of
Repro-Med Systems, Inc. We do not have pension or profit sharing plans.

Summary Compensation
--------------------

Name & Position Year Salary Other *
--------------- ---- ------ -------
Andrew I. Sealfon, 2007 $116,757 -
President 2006 $112,266 -
2005 $119,750 -

* Other compensation includes car allowance (not itemized here).

Table of aggregated options exercised in the fiscal year and option values at
year-end February 2005:

Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired Year-end Year-end
Name of On Value Exercisable / Exercisable/
Individual Exercise Realized Unexercisable Unexercisable
---------- -------- -------- ------------- -------------
A. I. Sealfon
-------------
Exercisable 0 0 0 $0
Unexercisable 0 0 0 $0

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of February 2007, the number of shares of
Common Stock beneficially owned by each person owning more than 5% of the
outstanding shares, by each officer and director, and by all officers and
directors as a group:

Name of Principal Shareholders Number of Percent
and Identity of Group Shares Owned Of Class Notes:
------------------------------ ------------ -------- ------
Andrew I. Sealfon* 5,367,250 20% 1,2,6

Dr. Paul Mark Baker 1,034,000 4% 6

Dr. Nathan Blumberg 260,000 1% 5,6

Remo Spagnoli 1,234,045 6% 3,4,6

*Andrew I. Sealfon is deemed a "parent" and a "promoter" of Repro-Med Systems,
Inc. as those terms are defined under the Securities Act of 1933, as amended.

(1) Does not include 690,000 shares of common stock owned by members of Mr.
Sealfon's family, as to which Mr. Sealfon disclaims beneficial ownership.

(2) Includes 477,000 shares of Common Stock owned by six members of Mr.
Spagnoli's family.

(3) Mr. Spagnoli directly owns 10,000 shares of Repro-Med Convertible 8%
Preferred Stock. For fiscal 2005, $8,000 in preferred stock dividends has been
accrued on the balance sheet. The preferred stock can be redeemed for 238,095
shares of Repro-Med common stock at $0.42 per share. Consequently, 238,095
shares are deemed beneficially owned by Mr. Spagnoli and included above.

(4) Dr. Blumberg was issued 50,000 shares through an agreement between Princeton
Research and Repro-Med Systems, Inc., which called for a total issue of 250,000
shares of stock in exchange for services rendered.

(5) On March 1, 1995, the Board of Directors approved two incentive stock option
programs for the benefit of key employees, directors, and officers of Repro-Med
Systems, Inc. The two plans, termed the 1995 Stock Option Plan and the 1995
Stock Option Plan For Non-Employee Directors (the "Option Plans"), provide
options to purchase 5,000,000 and 500,000 shares, respectively, of Repro-Med
common stock. We have filed a Registration Statement with the Securities and
Exchange Commission for the Option Plans. The Option Plans expire March 1, 2005.
Options granted under the 1995 Stock Option Plan to full time employees and are
intended as "incentive stock options" within the meaning of Section 422A of the
Internal Revenue Code. On March 1, 1995, the Board of Directors granted options
for 3,800,000 shares. On August 28, 1998 the option price was reduced from $.15
to $.06 per share. The option price of $.06 per share was not less than the fair
market value of the common stock on the date the price was reduced. The option
price of $.066 cents per share was not less than 110% of the fair market value
of the common stock on the date the price was reduced. Options for 100,000
shares are awarded to each Director upon signing on as a Director. Options for
30,000 shares were issued to Dr. Blumberg, Dr. Baker and Mr. Spagnoli for their
efforts during the fiscal year ended February 28, 2001.

(7) Treasury stock totaling 2,275,000 shares acquired by Repro-Med Systems, Inc.
at a cost of $142,000 was excluded from all percentage calculations.

Price No. Shares & Earliest
Name Main Position Per Share Date of Exercise
---- ------------- --------- ----------------
Sealfon, A. President $0.066 1,500,000, 3/1/95*
Baker, M. Clinical Consultant $0.060 300,000, 3/1/95*
$0.250 30,000, 3/9/01*

1995 Stock Option Plan for Non-Employee Directors:
--------------------------------------------------
Spagnoli, R. Director $0.060 20,000, 3/1/96*
20,000, 3/1/97*
20,000, 3/1/98*
20,000, 3/1/99*
20,000, 3/1/00*
$0.250 30,000, 5/9/01*

Blumberg N. Director $0.230 20,000, 8/1/01
20,000, 8/1/02
20,000, 8/1/03
20,000, 8/1/04
20,000, 8/1/05
$0.250 30,000, 5/9/01*

* These options expired February 28, 2005.

The above calculations give effect to purchase of shares exercisable under the
terms of the Option Plans on these issued options by each officer and director,
and by all officers and directors as a group.

All new directors were granted an option for 100,000 shares at an exercise price
of $.25 per share during the fiscal year 2002, which are vested at 20,000
options per year for five years. The Company has reminded each of said directors
to file an SEC Form 3 or SEC Form 4, as applicable, with respect to such option
grant. The Company's officers and directors who participated in the debt private
placement have not yet filed their SEC Forms 4 to reflect the shares that they
will receive.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

To reduce corporate travel expenses, we maintain and operate a corporate
aircraft. Since 1992, the aircraft has been leased from AMI Aviation, Inc. Mr.
Sealfon is a majority shareholder in AMI Aviation. The lease expenses paid were
$21,500 and $22,500 in each of 2007 and 2006. We believe the AMI lease is on
terms competitive with those that could be obtained from unaffiliated third
parties.

During fiscal year 2004, the Company borrowed $5,000 from AMI Aviation. This
loan is payable September 30, 2005, and bears an interest rate of 2% over prime.

During fiscal year 2004, the Company borrowed $6,000 from the President, Andrew
Sealfon, under a demand loan with an annual interest rate of 8%. The note has
been approved by the Board of Directors. The maturity of this loan has been
extended by Mr. Sealfon to March 30, 2009.

During fiscal year 2004, the Company borrowed $10,000 from Mr. Sealfon under
terms similar to the private note program. Interest is payable at 2% over the
prime rate plus one share of common stock per quarter for each dollar of
indebtedness. As of the date of this report, these shares have not been issued
to Mr. Sealfon. The loan matures June 30, 2008.

The President of the Company has loaned the Company, $100,000 at 8% interest.
The loan is unsecured and matures March 30, 2009.

In October 2006 the Company borrowed $325,000 from a Director of the company, at
6% interest per annum. This loan matures April 30, 2008. In addition to the
interest the holder is issued Warrants' to acquire 150,000 shares of restricted
common stock at $.10 per share. The Warrants vest immediately.

ITEM 13. ACCOUNTANTS FEES AND SERVICES

The following is a summary of the fees billed to us by Meyler & Company, LLC,
our independent auditors, for professional services rendered for the fiscal
years ended February 28, 2007 and February 28, 2006:

FEE CATEGORY FISCAL 2007 FEES FISCAL 2006 FEES
------------ ---------------- ----------------
Audit Fees (1) $23,500 $23,500

(1) Audit fees, consist of aggregate fees billed for professional services
rendered for the audit of our annual financial statements and review of
the interim financial statements included in quarterly reports or
services that are normally provided by the independent auditors in
connection with statutory and regulatory filings or engagements for the
fiscal years ended February 28, 2007 and February 28, 2006,
respectively. All Other Fees consist of aggregate fees billed for
products and services provided by Meyler & Company, LLC other than
those disclosed above. These fees related to the preparation of the
10Qs.

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

PART IV

ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

(3) Articles of Incorporation and By-Laws
3(a) - Articles of Incorporation (1)
3(b) - By-Laws (2)

(10) Material Contracts:
10(c) Voting Agreement for Repro-Med Systems, Inc.
Common Stock between Andrew I. Sealfon and Dr. Adrian Zorgniotti (3)
10(e) 1995 Stock Option Plan (4)
10(f) 1995 Stock Option Plan for Non-Employee Directors (4)

(21) Subsidiary of Registrant:
NONE

(31) Rule 13a-14(a)/15d-14(a) Certifications:
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002

(32) Section 1350 Certifications:
32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002

(b) REPORTS ON FORM 8-K:

Form 8-K/A, Item 9, Regulation FD Disclosure, incorporated by reference for May
12, 2004.
_________

(1) Incorporated by reference from the Registration and Offering Statement of
Repro-Med Systems, Inc., dated November 12, 1982.
(2) Incorporated by reference from the Form 10-KSB Report of Repro-Med
Systems, Inc., dated February 28, 1987.
(3) Incorporated by reference from Form 10-KSB Report of Repro-Med Systems,
Inc., dated February 29, 1993.
(4) Incorporated by reference from Form 10-KSB Report of Repro-Med Systems,
Inc., dated February 28, 1995.

SIGNATURES

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

REPRO-MED SYSTEMS, INC.

/s/ Andrew I. Sealfon
-----------------------------
Andrew I. Sealfon, President
Dated: June 4, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

/s/ Andrew I. Sealfon June 4, 2007
-----------------------------
Andrew I. Sealfon, President, Treasurer, Chairman of the Board,
Director, and Chief Executive Officer, Chief Financial Officer

/s/ Dr. Nathan Blumberg June 4, 2007
-----------------------------
Dr. Nathan Blumberg, Director

/s/ Dr. Paul Mark Baker June 4, 2007
-----------------------------
Dr. Paul Mark Baker, Director

/s/ Remo Spagnoli June 4, 2007
-----------------------------
Remo Spagnoli, Director