Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended March 31, 2025

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________.

Commission File Number: 0-12305

KORU MEDICAL SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	13-3044880
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 Corporate Drive, Mahwah, New Jersey	07430
(Address of principal executive offices)	(Zip Code)

(845) 469-2042

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	KRMD	The Nasdaq Stock Market

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 of 1934 during the preceding 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. [X] Yes [_] No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X] Yes [_] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer [_]	Accelerated filer [_]
	Non-accelerated filer [X]	Smaller reporting company [X]
		Emerging growth company [_]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [_] Yes [X] No

As of May 7, 2025, 46,140,996 shares of common stock, $0.01 par value per share, were outstanding, which excludes 3,438,526 shares of treasury stock.

KORU MEDICAL SYSTEMS, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

TABLE OF CONTENTS

		PAGE

PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements (Unaudited)	3

	Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024	3

	Statements of Operations (Unaudited) for the three months ended March 31, 2025 and 2024	4

	Statements of Cash Flows (Unaudited) for the three months ended March 31, 2025 and 2024	5

	Statements of Stockholders' Equity (Unaudited) for the three months ended March 31, 2025 and 2024	6

	Notes to Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	17

ITEM 4.	Controls and Procedures	17

PART II. OTHER INFORMATION

ITEM 1A.	Risk Factors	18

ITEM 6.	Exhibits	18

	Signatures	19

- 2 -


	March 31,			December 31,
	2025			2024
	(UNAUDITED)

ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	8,735,834		$	9,580,947
Accounts receivable less allowance for credit losses of $0 as of March 31, 2025 and December 31, 2024		5,949,411			5,720,750
Inventory		3,278,646			2,803,669
Other receivables		321,167			277,193
Prepaid expenses		713,970			749,851
TOTAL CURRENT ASSETS		18,999,028			19,132,410
Property and equipment, net		4,533,949			4,290,515
Intangible assets, net of accumulated amortization of $475,891 and $458,538 as of March 31, 2025 and December 31, 2024, respectively		716,326			730,279
Operating lease right-of-use assets		2,867,894			2,966,341
Other assets		98,970			98,970
TOTAL ASSETS	$	27,216,167		$	27,218,515

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	2,013,578		$	1,649,969
Accrued expenses		3,977,987			3,924,184
Note payable		137,180			271,152
Other liabilities		110,097			29,269
Accrued payroll and related taxes		1,038,717			811,401
Financing lease liability – current		117,105			115,587
Operating lease liability – current		404,613			400,258
TOTAL CURRENT LIABILITIES		7,799,277			7,201,820
Financing lease liability, net of current portion		174,259			202,613
Operating lease liability, net of current portion		2,897,600			3,000,403
TOTAL LIABILITIES		10,871,136			10,404,836

STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, 75,000,000 shares authorized, 49,561,498 and 49,377,617 shares issued 46,140,996 and 45,957,115 shares outstanding as of March 31, 2025, and December 31, 2024, respectively		495,615			493,776
Additional paid-in capital		50,277,053			49,581,303
Treasury stock, 3,438,526 and 3,438,526 shares as of March 31, 2025 and December 31, 2024, respectively, at cost		(3,882,494	)		(3,882,494	)
Accumulated deficit		(30,545,143	)		(29,378,906	)
TOTAL STOCKHOLDERS’ EQUITY		16,345,031			16,813,679
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	27,216,167		$	27,218,515


	Three Months Ended
	March 31,
	2025			2024

NET REVENUES	$	9,635,075		$	8,197,798
Cost of goods sold		3,588,740			3,094,500
Gross Profit		6,046,335			5,103,298

OPERATING EXPENSES
Selling, general and administrative		5,959,374			5,357,620
Research and development		1,114,609			1,475,674
Depreciation and amortization		217,357			231,370
Total Operating Expenses		7,291,340			7,064,664

Net Operating Loss		(1,245,005	)		(1,961,366	)

Non-Operating Income/(Expense)
Gain/(Loss) on currency exchange		5,588			(11,479	)
Loss on disposal of fixed assets, net		—			(300	)
Interest income, net		73,180			37,187
TOTAL OTHER INCOME		78,768			25,408

LOSS BEFORE INCOME TAXES		(1,166,237	)		(1,935,958	)

Income Tax Benefit		—			—

NET LOSS	$	(1,166,237	)	$	(1,935,958	)

NET LOSS PER SHARE

Basic & Diluted	$	(0.03	)	$	(0.04	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

Basic & Diluted		45,981,826			45,712,224


	For the Three Months Ended
	March 31,
	2025			2024

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(1,166,237	)	$	(1,935,958	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense and warrant expense		697,590			699,718
Depreciation and amortization		217,357			231,370
Loss on disposal of fixed assets		—			300
Non-cash lease adjustments		—			(5,497	)
Changes in operating assets and liabilities:
Accounts receivable		(228,661	)		(607,125	)
Inventory		(474,977	)		333,989
Prepaid expenses and other assets		(8,094)			387,880
Other liabilities		80,828			(54,867	)
Accounts payable		363,608			798,992
Accrued payroll and related taxes		227,316			56,500
Accrued expenses		53,803			(252,022	)
NET CASH USED IN OPERATING ACTIVITIES		(237,467	)		(346,720	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(443,438	)		(133,083	)
Purchases of intangible assets		(3,400	)		(0	)
NET CASH USED IN INVESTING ACTIVITIES		(446,838	)		(133,083	)

CASH FLOWS FROM FINANCING ACTIVITIES
Payments on insurance finance indebtedness		(133,973	)		(155,313	)
Payments on finance lease liability		(26,835	)		(26,807	)
NET CASH USED IN FINANCING ACTIVITIES		(160,808	)		(182,120	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(845,113	)		(661,923	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		9,580,947			11,482,240
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	8,735,834		$	10,820,317

Supplemental Information
Cash paid during the periods for:
Interest	$	5,385		$	12,296
Income taxes	$	—		$	—


				Additional								Total
	Common Stock			Paid-in		Accumulated			Treasury			Stockholders’
	Shares	Amount		Capital		Deficit			Stock			Equity

BALANCE, DECEMBER 31, 2024	49,377,617	$	493,776	$	49,581,303	$	(29,378,906	)	$	(3,882,494	)	$	16,813,679
Issuance of stock-based compensation	183,881		1,839		95,661		—			—			97,500
Compensation expense related to stock options	—		—		359,197		—			—			359,197
Compensation related to restricted stock	—		—		227,860		—			—			227,860
Issuance of warrants	—		—		13,032		—			—			13,032
Net loss	—		—		—		(1,166,237	)		—			(1,166,237	)
BALANCE, MARCH 31, 2025	49,561,498	$	495,615	$	50,277,053	$	(30,545,143	)	$	(3,882,494	)	$	16,345,031

	Three Months Ended March 31,
	2025		2024
Revenues
Domestic	$	7,205,633	$	6,384,083
International		2,429,442		1,813,715
Total	$	9,635,075	$	8,197,798

	March 31, 2025			December 31, 2024

Furniture and office equipment	$	1,443,144		$	1,433,622
Leasehold improvements		1,953,653			1,953,653
Manufacturing equipment and tooling		4,806,537			4,376,147
Total property and equipment		8,203,334			7,763,422
Less: accumulated depreciation and amortization		(3,669,385	)		(3,472,907	)
Property and equipment, net	$	4,533,949		$	4,290,515

	Shares	Weighted Average Exercise Price

Outstanding at January 1	2,687,024	$	3.07
Granted	—		—
Exercised	—		—
Forfeited	—		—
Outstanding at March 31	2,687,024	$	3.07
Options exercisable at March 31	1,719,254	$	3.42

Range of Exercise Price	Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price

$2.08-$3.98	2,687,024	7.2 years	$	3.07	1,719,254	$	3.42

	Shares	Weighted Average Grant-Date Fair Value

Unvested at January 1	133,334	$	1.48
Granted	—		—
Vested	—		—
Forfeited/canceled	—		—
Unvested at December 31	133,334	$	1.48

	March 31, 2025	December 31, 2024
Weighted Average Remaining Lease Term
Operating leases	4.8 Years	5.1 Years
Finance leases	2.5 Years	2.7 Years

Weighted Average Discount Rate
Operating leases	6.47%	6.52%
Finance leases	6.40%	6.34%

Three Months Ending March 31,	Operating Leases			Finance Leases
Remainder of 2025	$	400,484		$	98,578
2026		533,979			131,437
2027		533,979			74,194
2028		520,985			6,180
2029		501,595			—
Thereafter		1,332,008			—
Total undiscounted lease payments		3,823,030			310,389
Less: imputed interest		(520,817	)		(19,025	)
Total lease liabilities	$	3,302,213		$	291,364

	Three Months Ended March 31,				Change from Prior Year					% of Net Revenues
	2025		2024		$			%		2025	2024
Net Revenues
Domestic Core	$	6,927,964	$	5,953,865	$	974,099		16.4%		71.9%	72.6%
International Core		2,428,662		1,790,483		638,179		35.6%		25.2%	21.8%
Total Core		9,356,626		7,744,348		1,612,278		20.8%		97.1%	94.5%
Pharma Services and Clinical Trials		278,449		453,450		(175,001	)	(38.6%	)	2.9%	5.5%
Total	$	9,635,075	$	8,197,798	$	1,437,277		17.5%		100%	100%

Exhibit No.	Description

31.1	Certification of Principal Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act 2002

31.2	Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act 2002

32.1	Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act 2002

32.2	Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act 2002

101.INS	Inline XBRL Instance Document - the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	Inline XBRL Taxonomy Definition Linkbase Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	KORU MEDICAL SYSTEMS, INC.

May 7, 2025	/s/ Linda Tharby
	Linda Tharby, President and Chief Executive Officer (Principal Executive Officer)

May 7, 2025	/s/ Thomas Adams
	Thomas Adams, Chief Financial Officer and Treasurer (Principal Financial Officer)

	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024
Net cash used in operating activities	$	(237,467	)	$	(346,720	)
Net cash used in investing activities	$	(446,838	)	$	(133,083	)
Net cash used in financing activities	$	(160,808	)	$	(182,120	)

SEC Form 10-Q filed by KORU Medical Systems Inc.