UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB/A
AMENDMENT NO. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES ACT OF
1934
For the quarterly period ended MAY 31, 2007
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Commission File Number 0-12305
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REPRO-MED SYSTEMS, INC.
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(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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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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 31, 2007
----- ---------------------------
Common stock, $.01 par value 32,754,286 shares
EXPLANATORY NOTE
The Company files this Amendment No. 1 to Form 10-QSB for the quarter ended May
31, 2007 to provide the disclosures required by Item 307 and Item 308(c) of
Regulation S-B. This disclosure is provided under ITEM 7. CONTROLS AND
PROCEDURES.
REPRO-MED SYSTEMS, INC.
TABLE OF CONTENTS
PART I PAGE
----
ITEM 1. Financial Statements
Balance Sheet (Unaudited) - May 31, 2007 and
February 28, 2007 (Audited) ....................................... 3
Statements of Operations (Unaudited) - for the three-months
Ending May 31, 2007 and May 31, 2006 .............................. 4
Statements of Cash Flow (Unaudited) - for the three months
Ending May 31, 2007 and May 31, 2006 .............................. 5
Notes to Unaudited Financial Statements ........................... 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ..................... 7
PART II
ITEM 1. Legal Proceedings ................................................. 12
ITEM 2. Changes in Securities ............................................. 12
ITEM 3. Defaults Upon Senior Securities ................................... 12
ITEM 4. Submission of Matters to a Vote of Security Holders ............... 12
ITEM 5. Other Information ................................................. 12
ITEM 6. Exhibits and Reports on Form 8-K .................................. 12
ITEM 7. Controls and Procedures ........................................... 13
2
REPRO-MED SYSTEMS, INC.
BALANCE SHEETS
ASSETS
MAY 31, FEBRUARY 28,
2007 2007
(UNAUDITED) (AUDITED)
----------- -----------
CURRENT ASSETS:
Cash .............................................................. $ 83,456 $ 99,421
Accounts Receivable less allowance for doubtful accounts of $21,981
and $21,950 for May 31, 2007 and February 28 2007 respectively ... 181,516 214,446
Inventory ......................................................... 461,916 489,738
Prepaid Expenses .................................................. 25,618 10,310
----------- -----------
TOTAL CURRENT ASSETS .............................................. 752,506 813,915
PROPERTY & EQUIPMENT, less accumulated depreciation of $1,081,051
and $1,066,329 for May 31, 2007 and February 28, 2007, respectively 207,649 220,515
OTHER ASSETS:
Patents, net of accumulated amortization of $79,923 and $78,675 for
May 31, 2007 and February 28, 2007 respectively .................. 42,099 40,588
Goodwill, net of accumulated amortization of $5,618 and $5,528 for
May 31, 2007 and February 28, 2007, respectively ................. 8,519 8,609
Security Deposit .................................................. 28,157 54,802
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TOTAL OTHER ASSETS ................................................ 78,775 103,999
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TOTAL ASSETS ........................................................ $ 1,038,930 $ 1,138,429
=========== ===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Notes payable to related parties .................................. $ 67,023 $ 71,274
Accounts Payable .................................................. 443,235 443,440
Accrued Expenses .................................................. 55,915 46,179
Accrued Interest .................................................. 46,727 44,565
Current Portion of capital lease obligations ...................... - 617
Accrued Preferred stock dividends ................................. 44,000 44,000
Accrued payroll and related taxes ................................. 18,385 9,408
----------- -----------
TOTAL CURRENT LIABILITIES ......................................... 675,285 659,483
OTHER LIABILITIES
Capital lease obligations, less current ........................... - -
Deferred capital gain ............................................. 264,156 269,776
Long-term debt - notes payable .................................... 855,000 855,000
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TOTAL OTHER LIABILITIES ........................................... 1,119,156 1,124,776
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TOTAL LIABILITIES ................................................... $ 1,794,441 $ 1,784,259
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,
32,754,286 and 31,033,286 issued and outstanding at May 31, 2007
and February 28, 2007, respectively .............................. 327,543 310,333
Additional paid-in Capital ........................................ 2,664,378 2,612,748
Accumulated deficit ............................................... (3,605,532) (3,427,011)
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(613,511) (503,830)
Less: Treasury Stock, 2,275,000 shares at cost at May 31, 2007 and
February 28, 2007 respectively ................................... (142,000) (142,000)
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TOTAL STOCKHOLDERS' DEFICIT ....................................... (755,511) (645,830)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT ......................... $ 1,038,930 $ 1,138,429
=========== ===========
See Accompanying Notes to Financial Statements
3
REPRO-MED SYSTEMS, INC.
STATEMENT OF OPERATIONS
UNAUDITED
FOR THE THREE MONTHS ENDING
MAY 31,
2007 2006
------------ ------------
NET SALES ........................................ $ 397,417 $ 347,725
COST AND EXPENSE
Cost of goods Sold ........................... 199,606 150,310
Selling, general and administrative .......... 261,504 285,939
Research and development ..................... 13,753 10,065
Depreciation and amortization ................ 16,061 19,213
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TOTAL COSTS AND EXPENSES ....................... 490,924 465,527
NET OPERATING LOSS ............................. (93,507) (117,802)
OTHER INCOME/(EXPENSES)
Stock based compensation to obtain loan
financing ................................... (68,840) (70,050)
Interest Expense ............................. (16,685) (19,462)
Interest and Other Income .................... 512 -
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TOTAL OTHER INCOME/(EXPENSE) ..................... (85,013) (89,512)
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NET LOSS ......................................... $ (178,520) $ (207,314)
============ ============
NET LOSS PER COMMON SHARE (BASIC AND DILUTIVE) ... $ (0.01) $ (0.01)
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ....... 32,193,090 29,012,286
============ ============
See Accompanying Notes to Financial Statements
4
REPRO-MED SYSTEMS, INC
STATEMENT OF CASH FLOWS
UNAUDITED
FOR THE
THREE MONTHS ENDING
MAY 31,
2007 2006
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CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ............................................. $(178,520) $(207,314)
Adjustments to reconcile net loss to net cash used
in operating activities:
Stock based Compensation to obtain loan financing 68,840 70,050
Depreciation and amortization .................... 16,061 19,213
Deferred capital gain - building lease ........... (5,620) (5,620)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable ....... 32,930 42,833
(Increase) decrease in inventory ................. 27,822 (24,595)
(Increase) decrease in prepaid expense ........... (15,308) (3,476)
Increase (decrease) in accounts payable .......... (205) 33,683
Increase (decrease) in accrued payroll and
related taxes ................................... 8,977 -
Increase (decrease) in accrued expense ........... 9,736 7,704
Increase (decrease) in accrued interest .......... 2,162 -
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NET CASH USED IN OPERATING ACTIVITIES .................. (33,127) (67,522)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment ................. (1,856) -
Additional patent costs ............................ (2,760) -
Security Deposits .................................. 26,646 -
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NET CASH USED IN INVESTING ACTIVITIES .................. 22,030 -
CASH FLOWS FROM FINANCING ACTIVITIES
Notes payable ...................................... - 47,701
Proceeds from note payable to related party ........ (4,251) -
Payments on capitalized lease obligations .......... (617) (3,136)
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NET CASH USED IN FINANCING ACTIVITIES .................. (4,868) 44,565
NET DECREASE IN CASH AND CASH EQUIVALENTS .............. (15,965) (22,957)
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR ............ 99,421 26,753
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CASH AND CASH EQUIVALENTS-END OF YEAR .................. $ 83,456 $ 3,796
========= =========
Cash paid during the year for:
Interest ............................................. 16,685 19,462
See Accompanying Notes to Financial Statements
5
REPRO-MED SYSTEMS, INC.
NOTES TO THE FINANCIAL STATEMENTS
UN-AUDITED
BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
statements and with instructions to Form 10-QSB. Accordingly, they do not
include all of the information and disclosures required for annual financial
statements. These financial statements should be read in conjunction with the
financial statements and related footnotes for the year ended February 28, 2007
included in the Form 10-KSB for the year then ended.
In the opinion of the Company's management, all adjustments (consisting of
normal recurring accruals) necessary to present fairly the Company's financial
position as of May 31, 2007 and the results of operations and cash flows for the
three-month period ended May 31, 2007 and 2006 have been included.
The results of operations for the three-month period ended May 31, 2007, are not
necessarily indicative of the results to be expected for the full year. For
further information, refer to the financial statements and footnotes thereto
included in the Company's Form 10-KSB as filed with the Securities and Exchange
Commission for the year ended February 28, 2007.
STOCKHOLDERS' EQUITY/NOTES PAYABLE
In connection with the Company's convertible notes, the Company is obligated to
issue four shares of its common stock each year for each dollar of principal
borrowed. As of May 31, 2007 the Company is obligated to issue an additional
1,721,000 shares for previously executed note agreements. Such shares have been
considered as issued for purposes of financial reporting.
GOING CONCERNS
As shown in the accompanying financial statements, the Company incurred a net
loss of $178,520 during the three-months ended May 31, 2007 and has an
accumulated deficit of $3,605,532. Additionally, for the three-months ending May
31, 2007, the Company had working capital of $77,221. 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.
6
RELATED PARTY LOANS
The President of the Company has advanced the Company $100,000 under a demand
loan which bears interest at the rate of 8%. 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 $67,023. Included in this amount is $65,023 to the
President of the Company and $2,000 to the former Controller. The $65,023 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.
PART I ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
This Quarterly Report on Form 10-QSB 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.
THREE MONTHS ENDED MAY 31 2007 VS. 2006
---------------------------------------
Total sales increased by 14.3% ($49,692) from $347,725 to $397,417 for the
three-month period ending May 31, 2007.
Net Income/(Loss) from operations shows a Loss of $93,507 for the three-months
ending May 31, 2007 as compared to a loss of $117,802 for the same quarter in
2006 and represents a total improvement of $24,295 quarters over quarter.
7
Sales of the FREEDOM60(R) Syringe Infusion System and related accessories
increased 59.5% domestically in the first quarter ending May 31, 2007 as
compared to the same period in 2006. This increase is due to the increased sales
for use with immune globulin and antibiotics along with worked of our
performance and costs being communicated throughout the industry. However, sales
of RES-Q-VAC(R) and related accessories declined 5% and 15.4%, respectively in
the domestic and international markets in the first quarter ending May 31, 2007
with an overall decline of 10.3% from 159,168 to 142,787. This decline is
primarily caused by foreign competition continuing to penetrate market place.
Net Loss for the Quarter was $178,520, which includes $68,840 in stock, based
compensation, as compared to the previous quarter loss of $207,314, which
included stock, based compensation of $70,050. Gross Profit decreased to 50%
from 57% last year for the same period. This increase is attributed in part to
two clinical trials of the pump which occurred this quarter and in which we have
incurred salary and material expenses that are not offset by sales revenue in
the first quarter but has been recognized in the second quarter. Do to increase
demand more sterilization cycles were required to meet customer delivery dates
which increased production costs. Tubing sets increased 50.6% over last year to
32,950 sets from 21,881 set as the same time May 31, 2006. Lastly we also
believe that this margin is skued due to expediting customer sales that would
have been included in the first quarter and actually shipping them at the end of
the year. Selling, General and Administrative Expense (SG&A) decreased $24,435
from 285,939 to 261,504 quarter over quarter 2007 vs. 2006. Research and
Development increased slightly $3,688.
Interest expense decreased $2,777 to $16,685 from $19,462 as a result of the
company paying off high interest on demand bank notes and capital leases.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Non-cash expenses for depreciation and amortization along with stock-based
compensation offset a net loss of $178,520. For the Quarter ending May 31,2007
Net Cash from Operations was ($93,507) as compared with ($117,802) for the prior
year. This increase is due primarily to managements cost controls related to
Selling and General and Administrative Expense.
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 concerns). We remain cautiously optimistic that, at a minimum, these
new sales will meet our expectations and needs for the coming year.
8
FREEDOM60(R)
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The FREEDOM60(R) Syringe Infusion Pump is designed for ambulatory medication
infusions. Ambulatory infusion pumps are most prevalent in the home care market.
Other potential applications for the FREEDOM60(R) are pain control, the infusion
of specialized drugs such as IgG, and chemotherapy. The home infusion therapy
market is comprised of approximately 4,500 sites of service, including local and
national organizations, hospital-affiliated organizations, and national home
infusion organizations, and produces approximately $4.5 Billion in revenue
annually (Ref: www.nhianet.org). With insurance reimbursement in a severe
decline, there is a tremendous need for a low-cost, effective alternative to
electronic and expensive disposable IV administration devices for the home care
and nursing home market.
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) Pre-market
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) use 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.
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.
9
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.
In order to receive more favorable Medicare reimbursement for our FREEDOM60(R)
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.
RES-Q-VAC(R)
------------
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.
10
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 there from. 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, rapid, aggressive, and repeated suctioning best treats
exposure to chemical weapons of mass destruction such as Sarin. 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.
11
TRADE SHOWS
-----------
We continue to support our products at several trade shows. In June 2007, we
attended the National Home Infusion Association Show in Orlando, Fl to exhibit
our FREEDOM60(R). We are also scheduled to attend the IDF Show in St. Louis MO
in July 2007.
PART II - OTHER INFORMATION
---------------------------
ITEM 1. 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 resigned in 2006 has undertaken a lawsuit, which
he claims, is for commissions earned. We have agreed to mediation have settle
this matter.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
--------------------------------------------------
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
----------------------------------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
No matters were submitted to a vote of security holders of the Company during
the quarter ended May 31, 2007.
ITEM 5. OTHER INFORMATION
--------------------------
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------
(a) Exhibits
31.1 Certification of Chief Executive Officer and Principal Financial
Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer and Principal Financial
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
None
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ITEM 7. CONTROLS AND PROCEDURES
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Internal 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 we
have disclosure controls and procedures as of May 31, 2007. In addition, no
change in our internal control over financial reporting occurred during the
first quarter of the fiscal year ended February 28, 2008 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
SIGNATURES
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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 January 22, 2008
---------------------
Andrew I. Sealfon, President, Treasurer,
Chairman of the Board, Director, and
Chief Executive Officer
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