This statement relates to shares of common stock, par value $0.01 per share (“Common Stock”), of Repro Med Systems, Inc., a New York corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 24 Carpenter Road, Chester, NY 10918.
Horton Capital Partners Fund, LP, a Delaware limited partnership (“HCPF”), Horton Capital Partners LLC, a Delaware limited liability company (“HCP”), Horton Capital Management, LLC, a Delaware limited liability company (“HCM”), and Joseph M. Manko, Jr. (“Mr. Manko”) filed Schedule 13D with the Securities and Exchange Commission (the “SEC”) on May 23, 2017, as amended by Amendment No. 1 filed on December 4, 2017 and Amendment No. 2 filed on December 21, 2017 (“Schedule 13D”), to report their beneficial ownership of the shares of Common Stock of the Issuer. This Amendment No. 3 (“Amendment No. 3”) is filed with the SEC to amend and supplement Schedule 13D.
(a) This statement is filed by HCPF, HCP, HCM, and Mr. Manko (Mr. Manko together with HCPF, HCP and HCM, the “Reporting Persons” and each a “Reporting Person”), with respect to shares of Common Stock of the Issuer.
(b) The address of the principal office of each Reporting Person is 1717 Arch Street, Suite 3920, Philadelphia, PA 19103. The managing member of HCP and HCM is Mr. Joseph M. Manko, Jr.
(c) The principal business of HCPF and HCP is purchasing, holding and selling securities for investment purposes. The principal business of HCM is serving as the investment manager of HCPF. HCP is the general partner of HCPF. The principal occupation of Mr. Manko is serving as the managing member of HCM and HCP.
(d) No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) No Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
(f) Mr. Manko is a citizen of the United States of America.
Mr. Manko serves on the Board of Directors of the Issuer. On December 29, 2017, 2,500 shares of Common Stock were issued to HCPF in consideration for Mr. Manko’s services as a director of the Issuer (“Director Shares”). The shares of Common Stock acquired by the Reporting Persons as set forth on Schedule A attached hereto (the “Purchased Shares” and together with the Director Shares, the “Shares”) were purchased with the working capital of HCPF or HCM, as applicable (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business), in open market purchases.
Item 4. Purpose of Transaction.
Except for the Director Shares, the Reporting Persons acquired the Shares based on the Reporting Persons’ belief that the Shares, when purchased, represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of shares of Common Stock at prices that would make the purchase or sale of such shares desirable, the Reporting Persons may endeavor to increase or decrease their position in the Issuer through, among other things, the purchase or sale of shares of Common Stock on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable.
On February 15, 2018, HCPF submitted to the Issuer a shareholder proposal, attached to this Amendment No. 3 as Exhibit 3 (the “February 15 Letter”), to be presented at the 2018 Annual Meeting of Stockholders and to be included in the Issuer’s proxy materials pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended. The February 15 Letter proposed amendments to the Issuer’s By-Laws to implement certain good corporate governance policies, as set forth in Exhibit 3 incorporated herein by reference.
On March 6, 2018, HCPF submitted a letter to the Issuer withdrawing the proposal set forth in the February 15 Letter (the “March 6 Letter”), contingent upon the Issuer nominating a specific slate of directors for election by stockholders at the 2018 Annual Meeting of Stockholders. The March 6 Letter is attached as Exhibit 4 to this Amendment No. 3 and is incorporated herein by reference.
No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of the form of Schedule 13D, except as set forth herein, or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the shares of Common Stock of the Issuer, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, engaging in additional communications with management and the Board of the Issuer, engaging in discussions with stockholders of the Issuer and others about the Issuer and the Reporting Persons’ investment, making proposals to the Issuer concerning changes to the capitalization, ownership structure, board structure (including board composition) or operations of the Issuer, purchasing additional shares of Common Stock, selling some or all of their shares of Common Stock, or changing their intention with respect to any and all matters referred to in Item 4.
Item 5. Interest in Securities of the Issuer.
The percentages used herein are calculated based upon 38,021,298 shares of Common Stock issued and outstanding as of March 5, 2018, pursuant to the Annual Report on Form 10-KT filed by the Issuer with the SEC on March 5, 2018.
As of the close of business on March 15, 2018:
1. HCPF
(a) Amount beneficially owned: 6,206,907*
(b) Percent of class: 16.32%*
(i) Sole power to vote or direct the vote: 0
(ii) Shared power to vote or direct the vote: 6,206,907*
(iii) Sole power to dispose or direct the disposition: 0
(iv) Shared power to dispose or direct the disposition: 6,206,907*
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2. HCP
(a) Amount beneficially owned: 6,206,907*
(b) Percent of class: 16.32%*
(i) Sole power to vote or direct the vote: 0
(ii) Shared power to vote or direct the vote: 6,206,907*
(iii) Sole power to dispose or direct the disposition: 0
(iv) Shared power to dispose or direct the disposition: 6,206,907 *
3. HCM
(a) Amount beneficially owned: 7,314,727*
(b) Percent of class: 19.24%*
(i) Sole power to vote or direct the vote: 0
(ii) Shared power to vote or direct the vote: 7,314,727*
(iii) Sole power to dispose or direct the disposition: 0
(iv) Shared power to dispose or direct the disposition: 7,314,727*
4. Mr. Manko
(a) Amount beneficially owned: 7,314,727*
(b) Percent of class: 19.24%*
(i) Sole power to vote or direct the vote: 0
(ii) Shared power to vote or direct the vote: 7,314,727*
(iii) Sole power to dispose or direct the disposition: 0
(iv) Shared power to dispose or direct the disposition: 7,314,727*
* HCPF owns directly 6,206,907 shares of Common Stock. Pursuant to investment management agreements, HCM maintains investment and voting power with respect to the securities held by HCPF. However, despite the delegation of investment and voting power to HCM, HCP may be deemed to be the beneficial owner of such securities under Rule 13d-3 of the Act because HCP has the right to acquire investment and voting power through termination of investment management agreements with HCM. HCM also acts as an investment adviser to certain managed accounts. Under investment management agreements with managed account clients, HCM has investment and voting power with respect to 1,107,820 shares of Common Stock held in the client managed accounts. HCP is the general partner of HCPF. Mr. Manko is the managing member of both HCM and HCP. By reason of the provisions of Rule 13d-3 of the Act, each of HCM and Mr. Manko may be deemed to beneficially own 7,314,727 shares of Common Stock, and HCP may be deemed to beneficially own 6,206,907 shares of Common Stock held by HCPF. However 1,000,000 shares of Common Stock issuable upon the exercise of the Warrant, dated August 8, 2014, issued to HCPF pursuant to the Securities Purchase Agreement (the “SPA”) with the Issuer, dated August 8, 2014, are excluded from the Reporting Persons’ beneficial ownership due to a conversion cap that precludes HCPF from exercising the Warrant to the extent that HCPF would, after such exercise, beneficially own (as determined in accordance with Section 13(d) of the Act) in excess of 9.99% of the shares of Common Stock then outstanding, unless HCPF elects to waive this provision with the agreement of the Issuer. On September 8, 2017, HCPF waived this provision, but the Issuer did not agree to have the Warrant exercised. Each of the Reporting Persons disclaims beneficial ownership of any of the securities covered by this Amendment No. 3.
(c) Schedule A attached to this Amendment No. 3 and incorporated herein by reference lists all transaction in the Purchased Shares effected by the Reporting Persons during the past sixty days.
(d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Shares.
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(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
HCPF entered into the SPA and was issued the Warrant described in Item 4 above. Mr. Manko is a member of the Issuer’s Board of Directors.
The Reporting Persons have entered into a Joint Filing Agreement, pursuant to which they have agreed to file this Amendment No. 3 jointly in accordance with the provisions of Rule 13d-1(k) of the Act.
The responses to Items 3, 4, and 5 of this Amendment No. 3 are incorporated herein by reference.
Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
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Exhibit 1
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Joint Filing Agreement, dated May 22, 2017
, incorporated by reference to Exhibit 1 to Schedule 13D filed with the SEC on May 23, 2017.
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Exhibit 2
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Securities Purchase Agreement dated, August 8, 2014, between the Issuer and HCPF and the Warrant, dated August 8, 2014
, incorporated by reference to Exhibit 4.1 of the Issuer’s Annual Report on Form 10-K filed by the Issuer on May 8, 2015.
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Exhibit 3
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February 15 Letter
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Exhibit 4
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March 6 Letter
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Exhibit 5
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Schedule A
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct.
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Dated: March 15, 2018
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HORTON CAPITAL PARTNERS FUND, LP
By: Horton Capital Partners, LLC, its General Partner
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By:
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/s/ Joseph M. Manko, Jr.
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Name:
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Joseph M. Manko, Jr.
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Title:
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Managing Member
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HORTON CAPITAL PARTNERS, LLC
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By:
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/s/ Joseph M. Manko, Jr.
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Name:
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Joseph M. Manko, Jr.
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Title:
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Managing Member
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HORTON CAPITAL MANAGEMENT, LLC.
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By:
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/s/ Joseph M. Manko, Jr.
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Name:
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Joseph M. Manko, Jr.
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Title:
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Managing Member
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/s/ Joseph M. Manko, Jr.
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JOSEPH M. MANKO, JR.
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Exhibit 3
HORTON CAPITAL PARTNERS FUND, LP
1717 ARCH STREET, 39TH FLOOR
PHILADELPHIA PA 19103
February 15, 2018
BY ELECTRONIC MAIL AND OVERNIGHT MAIL
Repro Med Systems, Inc.
24 Carpenter Road
Chester, NY 10918
Attn: Corporate Secretary
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Re:
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Submission of a Business Proposal at the 2018 Annual Meeting of Stockholders of Repro Med Systems, Inc.
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Dear Karen:
This letter serves as the submission of a business proposal by Horton Capital Partners Fund, LP, a Delaware limited partnership (“Horton”) at the 2018 annual meeting of stockholders of Repro Med Systems, Inc. a New York corporation (“REPR” or the “Company”).
The proposal is being submitted under SEC Rule 14a-8. Horton is located at the address shown above and has beneficially owned more than $2,000 worth of REPR common stock for longer than a year. Enclosed under separate cover is a copy of Horton’s most recent 13D filing, confirming that ownership. Horton intends to continue ownership of at least $2,000 worth of REPR common stock through the date of the 2018 annual meeting, which a representative is prepared to attend.
Through this proposal, Horton hereby submits a business proposal for approval by stockholders at the Annual Meeting to require the Company to take steps to implement good corporate governance policies by amending the Company’s By-Laws to incorporate the following provisions:
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(i)
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Adopt a majority voting standard in uncontested director elections;
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(ii)
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Reduce the size of the Board of Directors to five (5) members;
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(iii)
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Adopt a requirement that the Board of Directors be comprised of a majority of independent directors, with the definition of independence set forth in accordance with the rules of the Nasdaq Stock Market (Nasdaq);
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(iv)
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Establish term limits of twelve (12) years and age limits of 85 years old for re-election of members of the Board of Directors;
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(v)
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Adopt an anti-nepotism policy prohibiting the appointment of related directors and/or hiring of related employees without approval by the majority of independent directors;
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(vi)
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Separate the Chairman of the Board of Directors and Chief Executive Officer positions; and
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(vii)
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Allow shareholders proxy access for the nomination of candidates for the Board of Directors.
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Horton reserves the right to challenge any action that may be taken by the Company, including any amendment to the Company’s By-laws, that would have the effect of enjoining Horton from submitting its business proposal at the Annual Meeting or that would contravene with or have the effect of invalidating any of this proposal.
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Very truly yours,
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HORTON CAPITAL PARTNERS FUND, LP
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By:
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Horton Capital Partners, LLC, its General Partner
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By:
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/s/ Joseph Manko, Jr.
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Name: Joseph Manko, Jr.
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Title: Managing Member of Horton
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Capital Partners, LLC
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Exhibit 4
HORTON CAPITAL PARTNERS FUND, LP
1717 ARCH STREET, 39TH FLOOR
PHILADELPHIA PA 19103
March 6, 2018
BY ELECTRONIC MAIL AND OVERNIGHT MAIL
Repro Med Systems, Inc.
24 Carpenter Road
Chester, NY 10918
Attn: Corporate Secretary
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Re:
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Business Proposal at the 2018 Annual Meeting of Stockholders of Repro Med Systems, Inc.
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Dear Karen:
On February 15, 2018, Horton Capital Partners, LP (“Horton”) delivered a letter (the “Proposal Letter”) to Repro Med Systems, Inc., a New York corporation (“REPR” or the “Company), submitting a business proposal for approval by stockholders at the 2018 Annual Meeting to require the Company to take steps to implement good corporate governance policies by amending the Company’s By-Laws.
Assuming:
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(1)
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the Company nominates exactly seven (7) directors to be elected to the Board at the Annual Meeting consisting of the following nominees: David Anderson, Paul Mark Baker, Daniel S. Goldberger, Joseph Manko, Jr., Mark Pastreich, Arthur Radin and Andrew Sealfon (all together, the “Slate”); and
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(2)
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the Company files a proxy statement with the Board of Directors nominating the Slate and recommending the shareholders vote for the Slate; and
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(3)
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the Slate is contained in the proxy statement that is voted on at the 2018 Annual Meeting
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Then, Horton withdraws its Proposal Letter effective immediately prior to filing of the proxy statement with the Slate.
Furthermore, in the event the proxy statement is:
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(1)
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not filed with the Slate; or
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(2)
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amended to change any of the nominees; or
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(3)
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not the slate voted on at the 2018 Annual Meeting
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Then, the withdrawal notice is not effective and does not withdraw the Proposal Letter.
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Very truly yours,
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HORTON CAPITAL PARTNERS FUND, LP
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By:
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Horton Capital Partners, LLC, its General Partner
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By:
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/s/ Joseph Manko, Jr.
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Name: Joseph Manko, Jr.
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Title: Managing Member of Horton
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Capital Partners, LLC
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Exhibit 5
SCHEDULE A
This Schedule A sets forth information with respect to all transactions in the shares of Common Stock of the Issuer effected by the Reporting Persons during the past sixty days.
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Shares
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Reporting
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Trade Date
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Purchased
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Price (1)
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Person
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2/20/2018
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5,000
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$ 1.25
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HCPF
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2/21/2018
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78,300
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$ 1.30
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HCPF
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2/22/2018
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26,000
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$ 1.33
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HCPF
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2/23/2018
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23,000
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$ 1.32
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HCPF
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2/26/2018
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10,000
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$ 1.35
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HCM
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2/27/2018
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5,000
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$ 1.34
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HCPF
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2/27/2018
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20,000
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$ 1.34
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HCM
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2/28/2018
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5,000
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$ 1.38
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HCPF
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2/28/2018
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10,000
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$ 1.38
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HCM
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3/1/2018
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20,000
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$ 1.35
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HCM
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3/14/2018
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37,700
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$ 1.28
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HCM
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3/15/2018
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10,120
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$ 1.30
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HCM
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(1)
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The prices reported above are weighted average prices. The shares of Common Stock were purchased in multiple transactions at prices ranging from: (i) $1.25-$1.33 on February 21, 2018, (ii) $1.26-$1.35 on February 22, 2018, (iii) $1.32-$1.35 on February 23, 2018, (iv) $1.34-$1.35 on February 26, 2018, (v) $1.33-$1.35 on February 27, 2018, (vi) $1.37-$1.38 on February 28, 2018, (vii) $1.24-1.30 on March 14, 2018 and (viii) $1.29-$1.30 on March 15, 2018. The Reporting Persons undertake to provide to the Issuer, any holder of the Issuer’s common stock, or the staff of the SEC, upon request, full information regarding the number of shares purchased at each separate price within the ranges set forth in this footnote (1).
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