KORU Medical Systems Inc
For the period ended Mar 31, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
KRMD$3.09+2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001161697-24-000441
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001161697-25-000169
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 56 previous paragraphs and 43 current paragraphs.
22 unchanged; 17 reworded; 4 added; 13 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Current uncertainties about increases in tariffs on imported products may have an adverse effect on our Company. In April 2025, the U.S. government announced a baseline tariff of 10% on products from all countries and an additional individualized reciprocal on the countries with which the United States has the largest trade deficits. We are evaluating the potential impacts of these tariffs, as well as our ability to mitigate their related impacts. We do not currently expect these announced tariffs to have a material affect on our revenues and cost of goods.
Current report
Total net revenues increased $1.4 million, or 17.5%, to $9.6 million for the three months ended March 31, 2025, as compared to $8.2 million in the prior year period. Domestic core revenues were $6.9 million, an increase of 16.4% over the prior year period, primarily due to higher pump and consumable volumes, driven by new patient starts and market share gains within new and existing accounts, supported by a strong underlying SCIg market. International core revenues were $2.4 million, an increase of 35.6% over the prior year period, primarily due to higher pump and consumable volumes, driven by geographical expansion and a tender win with an Ig pharma partner. International growth was impacted by approximately $0.4 million of distributor stocking to support expansion, compared to $0.3 million of distributor stocking in the prior year as a result of the BSI regulatory review process. Pharma services and clinical trials net revenues were $0.3 million, a decrease of 38.6% over the prior year period, primarily due to lower clinical trial revenue.
Current report
Research and development expenses decreased $0.4 million, or 24.5%, to $1.1 million during the three months ended March 31, 2025, as compared to $1.5 million in the prior year period, primarily due to timing of project spend related to our new product development.
Current report
Our net loss decreased $0.8 million in the three months ended March 31, 2025, as compared to the prior year period, primarily driven by an increase in gross profit of $0.9 million, driven by increased revenues, partially offset by operating expense increases of $0.2 million.
Removed paragraphs (13)
Previous report
Total net revenues increased $1.2 million, or 16.8%, to $8.2 million for the three months ended September 30, 2024, as compared to $7 million in the same period in 2023. Domestic core revenues increased by 11.7% to $6.4 million over the prior year period, primarily due to higher consumable and pump volumes driven by new patients starts and market share gains. International core revenues increased by 5.1% to $1.1 million over the prior year period, primarily due to higher consumable volumes driven largely by increased Ig supply, increased penetration within certain approved indications, and geographic expansion. Partially offsetting the growth were lower orders from a distribution partner that expedited $0.3 million orders in the second quarter of 2024 related to the BSI regulatory review which has since been successfully appealed. Novel therapies net revenues increased by 275.6% to $0.6 million over the prior year period, primarily driven by clinical trial orders and progress on NRE milestones completed for multiple collaboration agreements.
Previous report
Research and development expenses increased $0.2 million, or 18.6%, to $1.5 million during the three months ended September 30, 2024, as compared to $1.3 million in the same period in 2023, primarily due to executive severance related to the elimination of the CTO role.
Previous report
Our net loss increased $0.2 million in the three months ended September 30, 2024, as compared to the same period last year, primarily driven by an increase in operating expenses of $0.8 million, and a prior year tax benefit of $0.2 million offset by an increase in gross profit of $0.8 million.
Previous report
Net Revenues
Previous report
Total net revenues increased $3.5 million, or 16.3% to $24.8 million, for the nine months ended September 30, 2024, as compared to $21.3 million in the same period in 2023. Domestic core revenues increased by 9.9% to $18.6 million over the prior year period, primarily due to volume growth in consumables driven by new patients starts and share gains. International core revenues increased by 38.4% to $4.5 million over the prior year period, primarily due to higher consumable and pump volumes driven largely by increased Ig supply, increased penetration within certain approved indications, and geographic expansion. Novel therapies net revenues increased by 46.3% to $1.7 million over the prior year period, driven by Phase III clinical trial orders and milestone completion from our collaboration agreements in the current period.
Previous report
Gross Profit
Previous report
Gross profit increased $3.4 million, or 27.4% to $15.8 million, for the nine months ended September 30, 2024, as compared to $12.4 million in the same period in 2023. The increase in gross profit was driven by the increase in net revenues of $3.5 million as described above and improvements in manufacturing efficiency. Gross margin increased to 63.6% in the first nine months of 2024 as compared to 58.0% in the same prior year period. The increase in gross margin was primarily driven by increased manufacturing efficiencies versus the prior year. Additionally, we realized improved NRE margin compared with the prior year period driven by a more profitable mix of services performed.
Previous report
Operating Expenses
Previous report
Selling, general and administrative expenses increased $0.5 million, or 2.9% to $15.8 million, for the nine months ended September 30, 2024, as compared to $15.3 million in the same period in 2023, primarily due to increases in compensation and benefits expense.
Previous report
Research and development expenses decreased $0.3 million, or 7.0% to $4.1 million, for the nine months ended September 30, 2024, as compared to $4.5 million in the same period in 2023, primarily due to a $1.1 million decrease in consulting expense due to less outsourcing activities and timing of project spend, partially offset by a $0.4 million increase in severance expense due to the elimination of the CTO role, and a $0.4 million increase in compensation and benefits.
Previous report
Depreciation and amortization expense remained flat at $0.7 million for the nine months ended September 30, 2024, compared to $0.6 million in the same period in 2023, resulting from minimal purchases of new PP&E being commissioned during the period.
Previous report
Net Loss
Previous report
Our net loss decreased $1.8 million in the nine months ended September 30, 2024, as compared to the same period in 2023, mostly driven by an increase in gross profit of $3.4 million, partially offset by an increase in operating expense of $0.2 million and a prior year tax benefit of $1.4 million.
Reworded paragraphs (17)
Previous wording
Our actual results may vary materially from the forward-looking statements made in this report due to important factors such as uncertainties associated with global health crises, inflation, war and other geopolitical conflicts, customer ordering patterns, availability and costs of raw materials and labor and our ability to recover such costs, future operating results, growth of new patient starts and the Ig market, our compliance with Food and Drug Administration and foreign authority regulations and the outcome of regulatory audits, introduction of competitive products, acceptance of and demand for new and existing products, ability to penetrate new markets, success in enforcing and obtaining patents, reimbursement related risks, government regulation of the home health care industry, success of our research and development effort, expanding the market of FREEDOMTM System demand in the SCIg market, availability of sufficient capital if or when needed, dependence on key personnel, and the impact of recent accounting pronouncements, as well as those risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2023. When used in this report, the words “estimate,” “project,” “believe,” “may,” “will,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements, which include, without limitation, statements regarding need for additional financing. 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. The Company 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.
Current wording
Our actual results may vary materially from the forward-looking statements made in this report due to important factors such as uncertainties associated with inflation, tariffs, war and other geopolitical conflicts, customer ordering patterns, availability and costs of raw materials and labor and our ability to recover such costs, future operating results, growth of new patient starts and the Ig market, our compliance with Food and Drug Administration and foreign authority regulations and the outcome of regulatory audits, introduction of competitive products, acceptance of and demand for new and existing products, ability to penetrate new markets, success in enforcing and obtaining patents, reimbursement related risks, government regulation of the home health care industry, success of our research and development effort, expanding the market of FREEDOMTM System, demand in the SCIg market, availability of sufficient capital if or when needed, dependence on key personnel, and the impact of recent accounting pronouncements, as well as those risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2024. When used in this report, the words “estimate,” “project,” “believe,” “may,” “will,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements, which include, without limitation, statements regarding need for additional financing. 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. The Company 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.
Previous wording
Our revenues derive from three business sources: (i) domestic core (which consists of US and Canada), (ii) international core, and (iii) novel therapies. Our domestic core and international core revenues consist of sales of our products for the delivery of subcutaneous drugs that are FDA cleared for use with the FREEDOMTM System, with the primary delivery for immunoglobulin to treat Primary Immunodeficiency Diseases (“PIDD”) and Chronic Inflammatory Demyelinating Polyneuropathy (“CIDP”). Novel therapies revenues consist of product revenues from our infusion system (syringe drivers, tubing and needles) for feasibility/clinical trials (pre-clinical studies, Phase I, Phase II, Phase III) of biopharmaceutical companies in the drug development process as well as non-recurring engineering services revenues (“NRE”) received from biopharmaceutical companies to ready or customize the FREEDOMTM System for clinical and commercial use.
Current wording
Our revenues derive from three business sources: (i) domestic core (which consists of US and Canada), (ii) international core, and (iii) pharma services and clinical trials. Our domestic core and international core revenues consist of sales of our products for the delivery of subcutaneous drugs that are FDA cleared for use with the FREEDOMTM System, with the primary delivery for immunoglobulin to treat Primary Immunodeficiency Diseases (“PIDD”) and Chronic Inflammatory Demyelinating Polyneuropathy (“CIDP”). Pharma services and clinical trials revenues consist of product revenues from our infusion system (syringe drivers, tubing and needles) for feasibility/clinical trials (pre-clinical studies, Phase I, Phase II, Phase III) of biopharmaceutical companies in the drug development process as well as non-recurring engineering services revenues (“NRE”) received from biopharmaceutical companies to ready or customize the FREEDOMTM System for clinical and commercial use.
Previous wording
The Company ended the third quarter of 2024 with $8.2 million in net revenues, a 16.8% increase compared to $7.0 million in the same period last year. Revenues were driven by growth in our core domestic and international business of 11.7% and 5.1%, respectively, and 275.6% in our novel therapies business.
Current wording
The Company ended the first quarter of 2025 with $9.6 million in net revenues, a 17.5% increase compared to $8.2 million in the same period last year. Revenues were driven by growth in our core domestic and international business of 16.4% and 35.6%, respectively, partially offset with a decrease of 38.6% in our pharma services and clinical trials business.
Previous wording
Gross profit for the third quarter of 2024 was $5.2 million, a 19.4% increase compared to $4.3 million in the same period last year, primarily driven by additional revenue from volume growth in each of our core and novel therapies businesses. Gross margin was 63.4% for the three months ended September 30, 2024, an increase from 62.0% in the prior year period. We define gross margin as gross profit stated as a percentage of net revenues.
Current wording
Gross profit for the first quarter of 2025 was $6.0 million, an 18.5% increase compared to $5.1 million in the same period last year, primarily driven by additional revenue from volume growth in our core domestic and international businesses. Gross margin was 62.8% for the three months ended March 31, 2025, an increase from 62.3% in the prior year period. We define gross margin as gross profit stated as a percentage of net revenues.
Previous wording
Operating expenses for the third quarter of 2024 were $6.9 million, compared to $6.1 million for the same period last year, driven by an increase of $0.5 million in selling, general, and administrative expenses and an increase of $0.2 million in research and development expenses.
Current wording
Operating expenses for the first quarter of 2025 were $7.3 million, compared to $7.1 million for the same period last year, driven by an increase of $0.6 million in selling, general, and administrative expenses offset by a decrease of $0.4 million in research and development expenses.
Previous wording
Gross profit increased $0.8 million, or 19.4%, to $5.2 million in the three months ended September 30, 2024, as compared to $4.3 million in the same period in 2023. Gross margin increased to 63.4% in the three months ended September 30, 2024, as compared to 62.0% in the prior year period. The increase in gross margin was primarily driven by a favorable sales mix of clinical trial orders, an improved NRE mix of more profitable services, and increased average selling prices when compared to the prior year period.
Current wording
Gross profit increased $0.9 million, or 18.5%, to $6.0 million in the three months ended March 31, 2025, as compared to $5.1 million in the prior year period. Gross margin increased to 62.8% in the three months ended March 31, 2025, as compared to 62.3% in the prior year period. The increase in gross margin was primarily driven by favorable changes in product revenue mix.
Previous wording
Selling, general and administrative expenses increased $0.5 million, or 10.9%, to $5.1 million during the three months ended September 30, 2024, as compared to $4.6 million in the same period in 2023. The increase in selling, general and administrative expenses was primarily driven by compensation related to new hires and bonus accruals.
Current wording
Selling, general and administrative expenses increased $0.6 million, or 11.2%, to $6.0 million during the three months ended March 31, 2025, as compared to $5.4 million in the prior year period. The increase in selling, general and administrative expenses was primarily driven by increases in compensation-related expenses related to product development, higher stock compensation expenses, and legal fees, partially offset by lower severance, recruiting, and consulting expenses.
Previous wording
Depreciation and amortization expense remained flat at $0.2 million during the three months ended September 30, 2024, as compared to $0.2 million during the same period in 2023, primarily driven by timing of projects and related capital spending.
Current wording
Depreciation and amortization expense remained flat at $0.2 million during the three months ended March 31, 2024, as compared to $0.2 million in the prior year period, primarily driven by timing of projects and related capital spending.
Previous wording
Our principal source of liquidity is our cash on hand of $8.8 million as of September 30, 2024. Our principal source of operating cash inflows is from sales of our products and NRE. Our principal cash outflows relate to the purchase and production of inventory, funding of research and development, and selling, general and administrative expenses. To develop new products, support future growth, achieve operating efficiencies, and maintain product quality, we are continuing to invest in research and development and manufacturing equipment.
Current wording
Our principal source of liquidity is our cash on hand of $8.7 million as of March 31, 2025. Our principal source of operating cash inflows is from sales of our products and NRE. Our principal cash outflows relate to the purchase and production of inventory, funding of research and development, and selling, general and administrative expenses. To develop new products, support future growth, achieve operating efficiencies, and maintain product quality, we are continuing to invest in research and development and manufacturing equipment.
Previous wording
Our inventory position was $3.9 million at September 30, 2024, which reflects an increase of $0.4 million from December 31, 2023.
Current wording
Our inventory position was $3.3 million at March 31, 2025, which reflects an increase of $0.5 million from December 31, 2024.
Previous wording
We expect that our cash on hand and cash flows from operations will be sufficient to meet our requirements at least through the next twelve months. Continued execution on our longer-term strategic plan may require the Company to draw on our credit facility, take on additional debt, raise capital through issuance of equity, or a combination of both. Our future capital requirements may vary from those currently planned and will depend on many factors, including our rate of sales growth, the timing and extent of spending on various strategic initiatives including research and development, our international expansion, the timing of new product introductions, market acceptance of our solutions, and overall economic conditions including inflation and the potential impact of global supply imbalances on the global financial markets. To the extent that current and anticipated future sources of liquidity are or are expected to be insufficient to fund our future business activities and requirements, we may be required to draw on our new credit facility or seek additional equity or debt financing sooner. There can be no assurance the Company will be able to obtain the financing or raise the capital required to fund its operations or planned expansion.
Current wording
We expect that our cash on hand and cash flows from operations will be sufficient to meet our requirements at least through the next twelve months. Continued execution on our longer-term strategic plan may require the Company to draw on our credit facility, take on additional debt, raise capital through issuance of equity, or utilize a combination of the above. Our future capital requirements may vary from those currently planned and will depend on many factors, including our rate of sales growth, the timing and extent of spending on various strategic initiatives including research and development, our international expansion, the timing of new product introductions, market acceptance of our solutions, and overall economic conditions including inflation and the potential impact of global supply imbalances on the global financial markets. To the extent that current and anticipated future sources of liquidity are or are expected to be insufficient to fund our future business activities and requirements, we may be required to draw on our new credit facility or seek additional equity or debt financing sooner. There can be no assurance the Company will be able to obtain the financing or raise the capital required to fund its operations or planned expansion.
Previous wording
Net cash used in operating activities was $1.3 million for the nine months ended September 30, 2024, as compared to $6.0 million in the same period in 2023. This net cash usage of $1.3 million was primarily due to the net loss of $4.5 million, an increase in accounts receivable of $1.2 million, and increases in inventory of $0.4 million, partially offset by increases in accounts payable and payroll bonus accruals of $1.9 million, and decreases in pre-paid expenses of $0.3 million. Additional offsets to the net loss were non-cash items including stock-based compensation expense of $1.9 million, and depreciation and amortization expense of $0.7 million.
Current wording
Net cash used in operating activities was $0.2 million for the three months ended March 31, 2025, as compared to $0.3 million in the prior year period. This net cash usage of $0.2 million was primarily due to the net loss of $1.2 million, an increase in accounts receivable of $0.2 million, and increases in inventory of $0.5 million, partially offset by increases in accounts payable of $0.4 million, expense and payroll related accruals of $0.3 million, and other liabilities of $0.1 million. Additional offsets to the net loss were non-cash items including stock-based compensation expense of $0.7 million, and depreciation and amortization expense of $0.2 million.
Previous wording
Net cash used in operating activities was $6.0 million for the nine months ended September 30, 2023. This net cash usage was primarily due to the net loss of $6.3 million, plus cash flows used to reduce accrued expenses of $1.4 million, primarily from the payment of 2023 bonuses, and a decrease in accounts payable of $1.4 million, offset by cash flows generated from a decrease in inventory of $1.7 million, and an increase in accounts receivable of $0.3 million. Further contributing to this change were non-cash items including an increase in deferred tax assets of $1.5 million offset by stock-based compensation expense of $2.4 million, depreciation and amortization expense of $0.6 million and a loss on disposal of fixed assets of $0.1 million.
Current wording
Net cash used in operating activities was $0.3 million for the three months ended March 31, 2024. This net cash usage was primarily due to the net loss of $1.9 million, an increase in accounts receivable of $0.3 million, a reduction of accrued expenses of $0.2 million driven by payment of 2023 bonuses, offset by an increase in accounts payable of $0.8 million, a decrease in inventory of $0.3 million, and non-cash items including stock-based compensation expense of $0.7 million, and depreciation and amortization expense of $0.2 million.
Previous wording
Net cash used in investing activities of $1.4 million for the nine months ending September 30, 2024, was for capital expenditures for manufacturing equipment related to our new consumables production lines.
Current wording
Net cash used in investing activities of $0.4 million for the three months ending March 31, 2025, was for capital expenditures for manufacturing equipment related to our new consumables production lines.
Previous wording
Net cash used in investing activities of $0.6 million for the nine months ending September 30, 2023, was for capital expenditures for research and development and office equipment.
Current wording
Net cash used in investing activities of $0.1 million for the three months ending March 31, 2024, was for capital expenditures for research and development and office equipment.
Previous wording
Net cash used in financing activities of $0.03 million for the nine months ended September 30, 2024 was due to payments on our note payable for insurance premium financing, partially offset by new borrowings for a subsequent insurance premium financing agreement.
Current wording
Net cash used in financing activities of $0.2 million for the three months ended March 31, 2025 was due primarily to payments on our note payable for insurance premium financing.
Previous wording
Net cash used in financing activities of $0.04 million for the nine months ended September 30, 2023, was due to payments on our note payable for insurance premium financing as well as for payments on our finance leases.
Current wording
Net cash used in financing activities of $0.2 million for the three months ended March 31, 2024, was due to payments on our note payable for insurance premium financing.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Nine months ended September 30, 2024, compared to September 30, 2023
Previous report — wording carried elsewhere
The following table summarizes our net revenues for the nine months ended September 30, 2024, and 2023:
Previous report — wording carried elsewhere
Our gross profit for the nine months ended September 30, 2024 and 2023 is as follows:
Previous report — wording carried elsewhere
Our selling, general and administrative, research and development and depreciation and amortization expenses for the nine months ended September 30, 2024 and 2023 are as follows: