Form 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
☒ ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
OR
☐ 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)
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
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes ☐No☒
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒
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.
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.) Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, smaller reporting company, or an 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 ☒ Smaller reporting company ☒
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 has filed a report on and
attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b)
of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate
by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously
issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during
the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Act). Yes ☐No☒
Based on the closing sales price of June 30, 2025, the aggregate market
value of the voting and nonvoting common equity held by non-affiliates of the registrant was $119,084,035.
As of March 12, 2026, 46,370,432 shares of common stock, $0.01 par value per share,
were outstanding, which excludes 3,438,526 shares of Treasury Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s proxy statement for the 2026 Annual
Meeting of Shareholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein.
Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended
December 31, 2025.
INDEX TO FORM 10-K
Page
PART I
Item 1. Business 4
Item 1A. Risk Factors 11
Item 1B. Unresolved Staff Comments 26
Item 1C. Cybersecurity 26
Item 2. Properties 27
Item 3. Legal Proceedings 27
Item 4. Mine Safety Disclosures 27
PART II
Item 6. RESERVED 28
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 32
Item 8. Financial Statements and Supplementary Data 32
Item 9A. Controls and Procedures 50
Item 9B. Other Information 50
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 50
PART III
Item 10. Directors, Executive Officers, and Corporate Governance 51
Item 11. Executive Compensation 51
Item 14. Principal Accountant Fees and Services 51
PART IV
Item 15. Exhibits and Financial Statement Schedules 52
Signatures 54
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PART I
Throughout this report, the “Company,” “KORU Medical,”
“KORU,” “we,” “us” or “our” refer to KORU Medical Systems, Inc.
FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K contains “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements can be identified by words such as: “mission,” “believe,” “plan,”
“goal,” “intend,” “seek,” “expect,” “will,” and similar references to future
periods. Examples of forward-looking statements include, among others, statements we make under “Our Strategy” in Business
under Item 1 of this Form 10-K and “Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial
Condition and Results of Operations under Item 7 of this Form 10-K, and statements regarding, completion of a next-generation pump and
consumable system, compliance with EU MDR, needs for additional capital, capital investments, plans for expansion of our share position
and products, and increase in patient SCIg prescriptions. Forward-looking statements are neither historical facts nor assurances of future
performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business,
future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking
statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to
predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those
indicated in the forward-looking statements. Therefore, readers should not rely on any of these forward-looking statements.
Important factors that could cause our actual results and financial condition
to differ materially from those indicated in the forward-looking statements include, among others, those discussed in this Annual Report
on Form 10-K, and in particular, the risks discussed under the caption “Risk Factors” in Item 1A, and those discussed in other
documents we file with the Securities and Exchange Commission (“SEC”).
Any forward-looking statement made by us in this Annual Report on Form
10-K is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no
obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a
result of new information, future developments or otherwise.
RISK FACTOR SUMMARY
Our business faces many risks and uncertainties. These risks and uncertainties
could lead to events or circumstances that have a material adverse effect on our business, financial condition, results of operations
and prospects. You should carefully review and consider the full discussion of our risk factors described under Item 1A, Risk Factors
of this Annual Report together with other information in this Annual Report and our other filings with the SEC, before making an investment
decision regarding our common stock.
Risks Related to Our Business
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• We need to attract and retain key employees to be competitive.
Risks Related to Our Industry
Risks Related to Legal and Regulatory Compliance
Risks Related to Economic Conditions
• We are subject to foreign currency exchange risk.
• Brexit may impact our business in the United Kingdom.
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Risks Related to Our Financial Position
• Our operating results and financial condition may fluctuate.
Risks Related to Ownership of Our Common Stock
• We do not currently intend to pay dividends on our common stock.
• There has been volatility in the price of shares of our common stock.
• You may find it difficult to sell our common stock.
• Actions of activist stockholders could have an adverse effect on our business.
General Risk Factors
• We are subject to lawsuits.
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ITEM 1. BUSINESS
OUR BUSINESS
KORU Medical develops, manufactures and commercializes innovative and patient-centric
large volume subcutaneous infusion solutions primarily for the subcutaneous drug delivery market as governed by the United States Food
and Drug Administration (the “FDA”) quality and regulatory system and international standards for quality system management.
Our focus is primarily concentrated on our mechanical infusion products, the FREEDOM Infusion Systems (which we refer to as the “FREEDOM
System” when used with one or more accessories), which include the FREEDOM60® Syringe Driver, the FreedomEdge® Syringe Driver,
HIgH-Flo Subcutaneous Safety Needle SetsTM and Precision Flow Rate TubingTM.
Our revenues are derived from three business sources: (i) domestic core
(which consists of US and Canada), (ii) international core, and (iii) pharma services and clinical trials. Our core domestic and
international revenues consist of sales of our syringe drivers, tubing and needles (“Product Revenue”) for the delivery of
subcutaneous drugs that are FDA cleared for use with the FREEDOM 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 Revenue 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 (“NRE”)
revenues (including product innovation, testing and registration services) received from biopharmaceutical companies to ready or customize
the FREEDOM System for clinical and commercial use across multiple drug categories.
The Company originally incorporated in March 1980.
OUR MISSION
Our mission is to improve the quality of life of patients around the world
by delivering innovative, effective, and easy-to-use drug delivery systems that can be used at home or alternate site settings, for patient
self-administration of drug therapy.
OUR STRATEGY
Our goal is to strengthen our position as a leading provider of large-volume
subcutaneous infusion systems (≥10ml) for self-administration in the home and for administration by healthcare professionals in infusion
centers. We aim to achieve this by expanding our leadership and market penetration in the domestic and international subcutaneous immunoglobulin
(SCIg) market while extending our expertise into emerging subcutaneous drug therapies. Both SCIg and novel drug therapies will leverage
our FREEDOM System and upcoming innovations within the platform, supporting healthcare providers in delivering optimized, efficient,
and patient-friendly infusion solutions.
To reinforce our leadership in SCIg, we have identified key market trends
driving its continued growth, including:
As we continue to advance subcutaneous infusion therapy, we are focused
on delivering solutions that not only improve patient outcomes but also enhance the overall infusion experience for both patients and
caregivers. Our commitment to innovation extends beyond product development—we work closely with healthcare providers and specialty
pharmacies to drive therapy optimization through advanced infusion solutions and evidence-based insights. By reducing the complexity of
infusions, improving workflow efficiencies, and supporting economic sustainability for providers, we help ensure that SCIg therapy remains
a viable and preferred option for a growing number of patients.
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Through ongoing clinical and product innovation, strategic partnerships,
and commercial excellence, we will continue to expand our presence in the SCIg market. By improving treatment protocols, expanding geographic
reach, and executing commercially, we aim to enhance our global market position and increase the number of patients benefiting from SCIg
therapy over IVIg.
In our goal to expand into novel therapies outside of SCIg, we estimate
that at least 170 large-volume drugs, greater than 2ml, are in clinical development utilizing subcutaneous infusion, with approximately
20% greater than 10ml. The pipeline is driven by the need to deliver high therapeutic doses, difficulty in formulating large molecules
into small volumes, nursing shortage, pharmaceutical companies shifting development programs toward at-home and infusion clinic subcutaneous
therapy, and patient preference. Biopharmaceutical manufacturers seek device partners during the drug development process. We intend to
partner with them during clinical development—generating non-recurring services revenues to prepare and customize our products for
use during the clinical trial process and to obtain regulatory clearance for use with their drug. Post launch, we intend to commercialize
our products for use with these drugs, working with our pharmaceutical partners, our distributors and our specialty pharmacy partners
who distribute and train patients on the use of these products both in the home and in infusion centers.
We believe our track record of achieving regulatory clearances and successful
patient use, combined with our channel access, position KORU to both maximize our growth in the core SCIg market and expand into new therapeutic
areas.
OUR PRODUCTS
KORU’s infusion devices work together as a system to deliver life-saving
therapies to patients with chronic illnesses, such as PIDD and CIDP. The FREEDOM System comprises the FREEDOM60 Syringe Driver (standard
60/50ml syringe compatible) and FreedomEdge Syringe Driver (standard 30ml and 20ml syringe and prefilled syringe compatible), HIgH-Flo
Subcutaneous Safety Needle Sets and Precision Flow Rate Tubing. The systems are portable, easy to operate, maintenance free and
do not require batteries or electricity. The FREEDOM System operates at a lower pressure than an electrical, volumetric pump and maintains
a balance between what a patient’s subcutaneous tissues can tolerate and what the system delivers.
Our FREEDOM System is FDA 510(k) cleared and certified outside the United
States for delivery of several on-label subcutaneous indications including Cutaquig ®, Cuvitru®, Hizentra®, Xembify, Empaveli®
(branded Aspaveli® outside the United States), and Gammagard Liquid®. Additionally, our FREEDOM System has specific FDA clearance
for selected intravenously administered antibiotics.
Infusion systems such as the FREEDOM System are most prevalent in the home
care and alternate infusion clinic markets. The SCIg products administered by the FREEDOM System are indicated for a variety of conditions,
including Primary Immunodeficiency Disease (PIDD ) and Chronic Inflammatory Demyelinating Polyneuropathy (CIDP) in the United States and
PIDD, CIDP and Secondary Immunodeficiency Disorder (“SIDD”) outside of the United States. Empaveli® is indicated for Paroxysmal
Nocturnal Hemoglobinuria (“PNH”). The use of the FREEDOM System for SCIg drug delivery continues to increase, and it remains
the market leading delivery system in the U.S. for these treatments. In recent years Hizentra® and HyQvia® has received an expanded
indication for treatment of CIDP in the United States. Multiple SCIg drugs have received indications for SID outside of the United States.
It is expected that patient access to SCIg will expand as new drugs are developed, existing drugs are approved and/or marketed in new
countries, and existing drugs receive new indications.
The FREEDOM System is also approved in the US for the administration by healthcare professionals of RYSTIGGO, a novel
biologic, for the treatment of generalized myasthenia (gMG).
HIgH-Flo Subcutaneous Safety Needle Sets are an important element of the
FREEDOM System. The needle sets are available in 26- and 24-gauge sizes and feature unique design elements specific to subcutaneous self-administration.
Precision Flow Rate Tubing is designed for repeatable flow rates without
allowing unrestricted flow. The tubing regulates the flow rate and infusion time for various applications when used with the FREEDOM
System. Each tubing set provides a different level of flow restriction and consistently delivers medication with low residual volume
to minimize drug waste.
SALES AND DISTRIBUTION
The FREEDOM System is sold through both direct sales and medical device
distributors to pharmaceutical companies, specialty pharmacy customers and home infusion providers. Our products are sold principally
through a small number of distributors so our specialty pharmacy customers receive the benefit of remote inventory management and one-stop
shopping. We sell the majority of our products through three distributors in the U.S. and six distributors outside the U.S. As
of December 31, 2025, these nine distributors comprised approximately 77% of our net revenues with one of our U.S. distributors contributing
approximately 29%.
Specialty pharmacies, home infusion providers, and distributors are our
primary sales contacts, although we provide education and training materials to clinicians, patients, and patient advocates both in the
field and online.
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MANUFACTURING AND RAW MATERIALS
We currently manufacture 100% of our pump product volume and a portion
of our consumables volume at our Mahwah, NJ facility. The remaining amount of our consumable supply is sourced from Command Medical Products,
Inc. (“Command”), a contract manufacturing organization with operations in Nicaragua.
Our ability to meet customer demand depends, in part, on our ability to
obtain timely and adequate delivery of components for our products. All of the components that go into the manufacturing of our products
and accessories are sourced from third-party suppliers on a single source basis. The Company uses single-source suppliers in part due
to governmental approval and validation requirements. A change in supplier, or the use of multiple suppliers of the same materials, often
would necessitate additional approvals and validations, which the Company seeks to avoid unless and until the need arises. The Company
does not have any contracts with suppliers that impose material binding obligations on the Company or provide the Company with any material
rights or benefits, other than the Company’s agreement with Command. Command currently stores our finished goods in their warehouse
located in Miami, Florida once the products are released and shipped from Nicaragua.
RESEARCH AND DEVELOPMENT
We recognize the importance of innovation to our long-term success and
are committed to research and new product development activities. Our product development team along with outside engineering resources
are continuously engaged in improving existing product performance and innovating on new product opportunities to enhance our product
portfolio. We spent $4.4 million and $5.3 million on research and development for the years ended December 31, 2025 and 2024, respectively.
We intend to make ongoing investments in research and development for our infusion pumps, consumable systems, and accessories, as
well as for future innovation.
REGULATORY
Our medical devices and technologies, as well as our business activities,
are subject to a complex set of regulations and rigorous enforcement, principally by the FDA, and numerous other federal, state, and non-U.S.
governmental authorities. To varying degrees, each of these agencies requires us to comply with laws and regulations governing the
development, testing, manufacturing, labeling, marketing and distribution of our products.
The FDA regulates, among other things, the research, development, testing,
manufacturing, approval, labeling, storage, recordkeeping, advertising, promotion, marketing, distribution, post approval monitoring and
reporting, import and export of medical devices in the U.S. to assure the safety and effectiveness of medical products for their intended
use. Thus, both before and after a product is commercially released, we have ongoing responsibilities under the FDA. For instance,
all medical devices marketed in the U.S. must be manufactured in accordance with the FDA’s quality system regulations (“QSRs”).
Accordingly, our facility and procedures and those of our applicable suppliers are also subject to periodic inspections by the FDA
to determine compliance with applicable laws and regulations. The Federal Trade Commission also regulates the advertising of our
products. Further, we are subject to laws directed at preventing fraud and abuse, which subject our sales and marketing, training
and other practices to government scrutiny.
Our business is also affected by patient privacy laws and government payor
cost containment initiatives, as well as environmental health and safety laws and regulations.
U.S. Device Classification and Clearance
Except where an exemption applies, each new or significantly modified medical
device we seek to commercially distribute in the U.S. will require either a premarket notification to the FDA requesting permission for
commercial distribution under Section 510(k) of the Federal Food, Drug and Cosmetic Act (“FFDCA”), also known as a 510(k)
clearance, approval of a pre-market approval application, or as part of a drug-device combination product through a Biologics License
Application (“BLA”) or New Drug Application (“NDA”). For example, the use of our FREEDOM System with therapies
not covered by the existing FDA clearance will require additional 510(k) clearance, BLA, NDA or PMA approval.
Under the 510(k) process, applicants must demonstrate to the FDA that a
device is as safe and effective as, or substantially equivalent to, a legally marketed device, known as the “predicate” device.
Applicants must submit performance data to establish substantial equivalence. In some instances, data from human clinical
trials must also be submitted in support of a 510(k), and this data must be collected in a manner that conforms to the applicable Investigational
Device Exemption (“IDE”) regulations. The FDA must issue a substantial equivalence determination before commercial distribution
can occur. Changes to cleared devices that will not significantly affect the safety or effectiveness of the device can generally
be made without additional 510(k) submissions. Changes that will significantly affect the safety or effectiveness of the device
will require a new 510(k) prior to marketing of the modified device. We cannot predict with any certainty how future reforms to
Federal regulations may impact our business. See “ITEM 1A. RISK FACTORS.”
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Under the PMA application process, the applicant must demonstrate that
the device is safe and effective for its intended use. This approval process applies to most Class III devices, and generally requires
clinical data to support the safety and effectiveness of the device, obtained in conformance with IDE regulations. The FDA will
approve a PMA application if it finds that there is a reasonable assurance that the device is safe and effective for its intended purpose,
and that the proposed manufacturing is in compliance with the QSRs. For novel technologies, the FDA will seek input from an advisory
panel of medical experts regarding the safety and effectiveness of, and their benefit-risk analysis for the device. The PMA process
is generally more detailed, lengthier and more expensive than the 510(k) process, though both processes can be expensive and lengthy,
and requires payment of significant user fees, unless an exemption is available.
We are also required to comply with the regulations of every other country
where we commercialize products before we can launch or maintain new products on the market. Many countries that previously did
not have medical device regulations, or had minimal regulations, are now introducing them.
International sales of medical devices manufactured in the U.S. that are
not approved by the FDA for use in the U.S., or that are banned or deviate from lawful performance standards, are subject to FDA export
requirements. Additionally, exported devices are subject to the regulatory requirements of each country to which the device is exported.
Some countries do not have medical device regulations, but in many foreign countries, medical devices are regulated. Frequently,
regulatory approval may first be obtained in a foreign country prior to application in the U.S. due to differing regulatory requirements;
however, other countries require approval in the country of origin first. Most countries outside of the U.S. require that product
approvals be recertified on a regular basis, generally every three to five years. The recertification process requires that we evaluate
any device changes and any new regulations or standards relevant to the device and, where needed, conduct appropriate testing to document
continued compliance. Where recertification applications are required, they must be approved in order to continue selling our products
in those countries.
Post-Approval Regulation
Even after a device is cleared or approved by FDA for marketing, numerous
regulatory requirements continue to apply. The FDA and other worldwide regulatory agencies and competent authorities actively monitor
compliance to local laws and regulations through review and inspection of design and manufacturing practices, record-keeping, reporting
of adverse events, labeling and promotional practices. The FDA can ban certain medical devices, detain or seize adulterated or misbranded
medical devices, order repair, replacement or refund of these devices and require notification of health professionals and others with
regard to medical devices that present unreasonable risks of substantial harm to the public health. The FDA may also enjoin and
restrain a company for certain violations of the FFDCA and the Safe Medical Devices Act pertaining to medical devices or initiate action
for criminal prosecution of such violations. In addition, FDA and other governmental agencies such as the Department of Justice
can take action against a company that promotes “off-label” uses. Regulatory agencies and authorities in the countries
where we do business can halt production in or distribution within their respective country or otherwise take action in accordance with
local laws and regulations. Any adverse regulatory action, depending on its magnitude, may restrict a company from effectively marketing
and selling its products, may limit a company’s ability to obtain future premarket clearances or approvals, and could result in
a substantial modification to a company’s business practices and operations.
Manufacturing Regulation
We must also comply with FDA and foreign agency regulations governing medical
device manufacturing practices. The FDA and foreign agencies require manufacturers to register their establishments, and they monitor
compliance with device manufacturing requirements through inspections of manufacturing facilities. If an investigator observes conditions
that might be violative, the manufacturer must correct those conditions or explain them satisfactorily or face potential regulatory action
that might include physical removal of the product from the marketplace. We are an FDA-registered medical device manufacturer and
must demonstrate that we comply with the FDA’s QSR and Current Good Manufacturing Practices (“cGMPs”).
We believe that our products and procedures are in compliance with all
applicable FDA and international regulations. There is no assurance, however, that other products we are developing or products
that we may develop in the future will be cleared by the FDA and classified as Class II products, or that additional regulations restricting
the sale of our present or proposed products will not be promulgated by the FDA or other foreign agencies. In addition, changes
in FDA, or other federal or state health, environmental or safety regulations or their applications could adversely affect our business.
Other Healthcare Laws
We are subject to additional healthcare regulation and enforcement by the
federal government and by authorities in the states and foreign jurisdictions in which we conduct our business. These laws include:
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Violations of any of the laws described above include civil and criminal
penalties, damages, fines, the curtailment or restructuring of an entity’s operations, the debarment, suspension or exclusion from
federal and state healthcare programs and/or imprisonment.
Coverage and Reimbursement
Our profitability and operations are subject to changes in legislative,
regulatory and reimbursement policies and decisions as well as changes in private payer reimbursement coverage and payment decisions and
policies. Our products are purchased by specialty pharmacies and ambulatory service providers or hospitals that typically bill various
third-party payors, such as governmental programs (e.g., Medicare, Medicaid, and comparable non-U.S. programs), private insurance plans
and managed care plans, for the healthcare services and products provided to their patients. The ability of our customers to obtain
appropriate coverage and reimbursement for our products and the drugs they administer is critical because it affects which products customers
purchase and the price they are willing to pay. Third-party payors are increasingly reducing coverage and reimbursement for certain
healthcare services and products and challenging prices charged for healthcare services and products.
Environmental Health and Safety Laws
We are required to comply with federal, state, and local environmental
laws; however, there is no significant effect of compliance on capital expenditures, earnings, or competitive position. We do not
use significant amounts of hazardous materials in the assembly of our products.
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COMPETITION AND THE MARKET
Competition for the FREEDOM System includes electronic (volumetric) pumps,
elastomeric (infuser) pumps, and fully mechanical pumps as well as other types of pumps. Safety, ease of use, familiarity, cost
effectiveness, accuracy, and sustainability are the principal driving influencers of pump selection. Electronic pumps deliver drugs
at a programmed flow rate. They are more costly and require electricity or batteries, extensive training and maintenance and must
be programmed by a qualified pharmacist or clinician. Elastomeric pumps are one-time-use balloon type devices used for infusion of drugs
in intravenous and surgical wound site applications. Pharmacies are required to fill them with drugs and deliver them to the patient.
They are easy to use from the patient point of view but can be more costly and time consuming to fill, are temperature sensitive
and have larger residual volumes than other delivery systems.
Competition for infusion devices for new drugs includes a variety of technologies
and companies. No single technological approach—autoinjectors, electronic (volumetric pumps), mechanical pumps, needle-free injectors,
on-body wearable devices, pen injectors, and pre-filled syringes—will meet the needs of all or even a majority of drugs. For drugs
requiring infusion volumes over 3 ml, the segment most similar to the SCIg drugs currently delivered by the FREEDOM System, the most relevant
approaches include mechanical pumps, on-body wearable devices, and simple electronic pumps. Challenges to their successful commercialization
include high costs per infusion, increased environmental impact, complexity for users, and complex mechanisms with multiple failure modes.
HUMAN CAPITAL RESOURCES
As of December 31, 2025, we had 73 full time employees, including 4 international
employees. As of December 31, 2025, approximately 48% of the Company’s workforce was female and approximately 41% of the Company’s
employees in managerial roles were female. Approximately 38% were minorities (non-White) in the Company workforce as of December
31, 2025. None of our employees are represented by a collective bargaining agreement.
To help drive consistent execution of our business strategy, including
our customer focused philosophy, and support their development, we provide training opportunities to our employees that align with their
responsibilities over their career with us. We maintain a dedicated internet-based learning platform with a broad portfolio of written,
audio-visual and interactive enterprise-wide and discipline-specific policy and training materials. This platform includes a library
of self-directed courses and virtual, instructor-led programs for employees at all levels of our organization. Managers and supervisors
are provided training to help their employees progress in their professional development.
We believe our employees are key to achieving our business objectives.
Our key human capital measures include employee safety, turnover, absenteeism and production. We frequently benchmark our
compensation practices and benefits programs against those of comparable industries and in the geographic areas where our facilities are
located. We believe that our compensation and employee benefits are competitive and allow us to attract and retain skilled and unskilled
labor throughout our organization. Our notable health, welfare and retirement benefits include:
• Company subsidized health insurance
• 401(k) Plan with Company matching contributions
• Paid time off
• Life and disability insurance
We strive to maintain an inclusive environment free from discrimination
of any kind, including sexual or other discriminatory harassment. Our employees have multiple avenues available through which inappropriate
behavior can be reported, including a confidential hotline. All reports of inappropriate behavior are promptly investigated with
appropriate action taken to stop such behavior.
PATENTS AND INTELLECTUAL PROPERTY
We have patents and other intellectual property that we believe protect
the FREEDOM System, and we continue to file patent applications in connection with our research and development activities. As of December
31, 2025, we own 15 U.S. Patents and 26 foreign patents. In addition, we have 8 pending U.S. patent applications and 18 foreign patent
applications. The fundamental patents protecting our drug delivery systems extend until 2039 and beyond.
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to our
executive officers as of March 12, 2026:
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Name Age Position / Held Since
Linda Tharby 57 Chief Executive Officer and President (since April 2021)
Christopher Pazdan 43 Chief Operating Officer (since July 2024)
Adam Kalbermatten 42 Chief Commercial Officer (since July 2025)
Eric Schiller 52 Chief Technology Officer (since December 2025)
Executive officers hold office at the discretion of the Board of Directors.
Ms. Tharby was appointed as President and CEO in April 2021. Ms. Tharby
has over 25 years of executive leadership experience building and leading strong performing global organizations that develop and commercialize
products and service innovations, while delivering solutions to patients in the home setting. Prior to joining KORU, Ms. Tharby spent
24 years working in various roles of increased responsibility at Becton Dickinson (“BD”). Ms. Tharby was a member of the Executive
Leadership team of BD that transformed the company from an $8 billion medical supplies company to an $18 billion global medical technology
company. Ms. Tharby’s last role at BD was as Chief Customer Experience Officer from July 2018 through December 2020. Prior to that
she served as BD’s Chief Human Resources Officer, from October 2016 through July 2018. From 1998 to 2016, she held numerous senior
global business leadership roles at BD, including Executive Vice President and President of Life Sciences, Group President of Pre-Analytical
Systems and Biosciences, Worldwide President of Diabetes Care, and Vice President/General Manager of Pharmaceutical Systems. Ms. Tharby
has an Honors Bachelor of Business Administration from Wilfrid Laurier University in Waterloo, Ontario, Canada.
Mr. Adams joined KORU Medical in November 2021 as Vice President of Financial
Planning and Analysis, was appointed Interim-Chief Financial Officer in July 2022 and Chief Financial Officer in August 2023. Mr. Adams
has an extensive background in financial planning, corporate finance, commercial and supply chain finance, and mergers and acquisitions
(M&A). Prior to joining KORU Medical, Mr. Adams spent 10 years at Integra Life Sciences in various leadership positions in Finance
and Accounting Controllership with his most recent position as Senior Director of Finance. In this role, Mr. Adams was the head of finance
for Integra’s Tissue Technology Business where he served a leading role in supporting a $500 million business unit to high growth
and profitability. Previous roles included Group Controller/Head of FP&A Global Supply and prior to Integra Life Sciences, Mr. Adams
served as Director of Finance at Pfizer Inc serving in many domestic and international roles. Mr. Adams earned his Bachelor of Science
in Business Administration-Accounting & Finance from the Ohio State University.
Mr. Pazdan joined KORU Medical in September 2021 as Vice President of Quality
Assurance and Regulatory Affairs before being promoted to Senior Vice President of Operations in 2022, and subsequently to Chief Operating
Officer in July 2024. As Chief Operating Officer, Mr. Pazdan oversees Manufacturing, Sourcing, Supply Chain, Quality, Regulatory
and Project Management. Prior to joining KORU, Mr. Pazdan spent 17 years in various functions within the Medical Device industry, most
recently serving as Vice President of Quality Assurance at Hillrom. In this role, Mr. Pazdan was head of quality for multiple business
segments comprising $2 billion in annual revenue. Mr. Pazdan earned his Bachelor of Science in Engineering from the University of Illinois
Urbana-Champaign.
Mr. Kalbermatten joined Koru Medical Systems as Chief Commercial Officer
in July 2025, bringing more than 20 years of commercial leadership experience across the medical device and pharmaceutical industries.
Adam has a proven track record of accelerating growth, scaling businesses, and building high-performing teams, all while delivering innovative,
customer-centric solutions. Prior to Koru, Adam served as Vice President and General Manager of the Advanced Drug Delivery Systems
business at Becton Dickinson (“BD”) until 2025. He previously served as Chief Executive Officer of ZebraSci, a drug-device
combination product development firm, between 2019-2022, where he led a successful turnaround and growth strategy, resulting in the company’s
acquisition by BD. Earlier in his career, Adam held global leadership and engineering roles at both Terumo Corporation and BD between
2005 and 2019. Adam holds a Bachelor of Engineering in Mechanical Engineering and a Master of Engineering in Engineering Management
from Stevens Institute of Technology and an MBA from Columbia Business School.
Mr. Schiller joined Koru Medical Systems as Chief Technology Officer in
December 2025, bringing more than 25 years of experience in medical devices and drug-device combination products. He has deep expertise
across product development, engineering, supply chain, and lifecycle management. Prior to joining Koru, Eric held senior leadership roles
at Sanofi between 2021 and 2025, most recently serving as Global Head of Device Development Portfolio, where he oversaw more than 80 pipeline
assets across Specialty Care, General Medicine, and Vaccines, with approximately 40 planned launches by 2030. Earlier in his career, Eric
held leadership positions at Bristol Myers Squibb, Celgene, Becton Dickinson, and Saint-Gobain, where he led global commercialization
efforts and advanced innovative drug-delivery technologies. Eric holds an MBA from Seton Hall University and a Bachelor of Science in
Mechanical Engineering from the New Jersey Institute of Technology and is a named inventor on multiple U.S. patents.
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ITEM 1A. RISK FACTORS
RISK FACTORS
An investment in our common stock involves significant risks. Before
making an investment in our common stock, you should carefully consider all of the information contained in this Annual Report on Form
10-K and our other filings with the SEC including the material risks and uncertainties that we have identified below. The risks
and uncertainties identified below are not the only risks and uncertainties we face. If any of the material risks or uncertainties
that we face were to occur, the trading price of our common stock could decline and you could lose part or all of your investment. Please
note that additional risks not currently known to us or that we currently deem immaterial also may adversely affect our business, operations,
results of operations, financial condition and prospects.
Risks Related to Our Business
If we are unable to successfully introduce new products or fail to
keep pace with advances in technology, our business, financial condition and results of operations could be adversely affected.
We need to successfully introduce new products to achieve our strategic
business objectives. A significant element of our strategy is to increase revenue growth by investing in innovation and new product
development, which will require substantial resources. Our successful product development will depend on many factors, including
our ability to attract strong talent to lead our research and development efforts, properly anticipate and satisfy customer needs, adapt
to new technologies, obtain regulatory concurrence on a timely basis, demonstrate satisfactory clinical results, manufacture products
in an economical and timely manner, obtain appropriate intellectual property protection for our products, gain and maintain market acceptance
of our products, and differentiate our products from those of our competitors. In addition, patents attained by others can preclude
or delay our commercialization of a product. There can be no assurance that any products now in development or that we may seek to develop
in the future will achieve technological
feasibility, obtain regulatory concurrence or gain market acceptance. If
we cannot successfully introduce new products or adapt to changing technologies, our products may become obsolete, and our revenue and
profitability could suffer.
Our business depends on an adequate supply of drugs to be administered
by our products.
Demand for our products depends on the availability of drugs to be administered
through our delivery system. Currently, most of our products require immunoglobulin therapies that rely on blood plasma collection
for drugs such as Hizentra® and Cuvitru®. Any disruption in the supply of these drugs for any reason, including contamination,
could significantly adversely affect our business. The change of any drug indication by the FDA or comparable foreign governmental
agencies could also result in decreased demand for our products. In addition, pharmaceutical companies and other competitors have
or are developing alternative therapies for disease states that are deliverable with devices we do not offer or without a medical device.
If there is not an adequate supply of drugs requiring administration by medical devices such as those provided by us or alternative
therapies are developed, our sales may suffer and/or our products may become obsolete.
The size of the markets for our products and any future products
may be smaller than we estimate and may decline.
Our estimates of the total addressable market for our products are based
on a number of internal and third-party estimates and assumptions, including, without limitation, the assumed prices at which we can
sell our products in those markets. While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions
and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing
the predictive accuracy of these underlying factors.
As a result, our estimates of the annual total addressable market for
our products may prove to be incorrect. If the actual number of patients with indications who would benefit from our products, the price
at which we can sell our products or the annual total addressable market for our products is smaller than we have estimated, it may impair
our prospective market and revenue opportunity.
We sell a majority of our products through only a few distributors
on whom we depend, and our financial results depend on their purchasing patterns.
Most of our customers prefer to purchase our products through distributors,
rather than directly from us, because of “one-stop shopping” convenience and their ability to ship directly to patients. We
sell most of our products through a small number of distributors, three in the U.S. and six outside the U.S. As of December 31,
2025, these nine distributors comprised approximately 77% of our net revenues with one U.S. distributor contributing 29%. Purchasing
patterns by these distributors cannot always be predicted and fluctuate from quarter to quarter and year to year based on, among other
things, their expectations of customer demand. Any decline in business with the distributors outside the U.S. could have an adverse
impact on our business. If we were unable to sell through the distributors outside the U.S., we would have to find other distributors
or broaden our customer base and expand direct
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relationships with customers. Other distributors may not be available
or may not agree to arrangements that are commercially reasonable. In the U.S. we could transition to direct customer purchase;
however, customers may not want to purchase directly from us and may decide to purchase competitors’ products through their distributors.
Moreover, a transition from distributors to direct customer purchase would be time consuming and costly.
Most of our components and raw materials, including all of our consumables
subassemblies, are sourced from single suppliers. If we are unable to obtain sufficient components or raw materials on a timely basis
or for a cost-effective price, or if we experience other supply difficulties, our business and results of operations may be adversely
affected.
Our ability to meet customer demand depends, in part, on our ability to
obtain timely and adequate delivery of raw materials and components for our products. A majority of the materials and components
that go into the manufacturing of our products, including all of our consumables subassemblies, are single-sourced from third-party suppliers.
The price and supply of materials and components for our products may be
impacted or disrupted for reasons beyond our control. A significant price increase from a single-source supplier could have a material
impact on our financial results. While we work with suppliers to ensure continuity of supply, no assurance can be given that these efforts
will be successful. Although we do carry strategic inventory and maintain insurance to help mitigate the potential risk related
to any supply disruption, there can be no assurance that such measures will be sufficient or effective. The termination, reduction
or interruption in supply of raw materials and components and an inability to quickly develop acceptable alternative sources for such
supply, could adversely impact our ability to manufacture and sell our products in a timely or cost-effective manner.
We do not have long-term agreements in place with any of our suppliers,
with the exception of an agreement with Command that expires December 31, 2026, subject to renewal. Due to regulatory requirements relating
to the qualification of suppliers, we are not likely to be able to establish additional or replacement sources on a timely basis or without
excessive cost. We are in the process of establishing alternative sources of supply for our raw materials and components, but there
can be no assurance we will be able to do so.
Additionally, volatility in our cost of energy, raw materials, components,
subassemblies, transportation/freight, and manufacturing and distribution could adversely affect our results of operations. Climate
change (including laws or regulations passed in response to it) could increase our costs, in particular our costs of supply, energy and
transportation/freight. Material or sustained increases in the price of oil and natural gas could have an adverse impact on the
cost of many of the plastic materials we use to make and package our products, as well as our transportation/freight costs. These
outcomes may in turn result in customers transitioning to available competitive products, loss of market share, negative publicity, reputational
damage, loss of customer confidence or other negative consequences (including a decline in stock price).
Interruption of our manufacturing or our contract manufacturing operations
could adversely affect our business.
Command currently provides subassemblies for all of our consumables (needle
and tubing sets), and manufactures, assembles and packages approximately 85% of our consumables. In the event of any interruption in Command’s
operations or supply of goods, the Company may have to seek alternative sources of subassemblies, which may be not be readily available
on commercially reasonable terms or at all, and increase its capacity for manufacturing finished goods in Mahwah, NJ, which could be time-consuming
and costly.
The FDA and other U. S. and non-U.S. government agencies regulate our manufacturing
and contract manufacturing operations for all of our products. Variations in our or Command’s manufacturing process may result in
production failures which could lead to launch delays, product shortage, unanticipated costs, lost revenues and damage to our reputation.
A failure to identify and address manufacturing problems prior to the release of products to our customers may also result in a
quality or safety issue that could result in a recall or other inability to sell our products.
Our products are currently manufactured in Nicaragua and Mahwah, NJ, and
stored in warehouse space at our corporate headquarters in Mahwah, NJ. Loss or damage to our manufacturing or contract manufacturing
and storage site due to weather, vandalism, terrorism, a natural disaster, issues in our manufacturing process, equipment failure or other
factors, could adversely affect our ability to manufacture sufficient quantities of products or otherwise deliver products to meet customer
demand or contractual requirements which may result in a loss of revenue and other adverse business consequences, including damage to
our relationship with customers. Additionally, because Command manufactures and supplies the Company’s subassemblies and finished
goods for needle sets and tubing products in Nicaragua, there could be a delay in providing the products timely due to their climate and
international boundaries. Command currently stores our finished goods in their warehouse located in Miami Florida once the products are
released from Nicaragua.
We take precautions to safeguard our facility, including acquiring insurance,
adopting health and safety protocols and utilizing off-site storage of computer data. Our insurance may not cover our losses in
any particular case. In addition, regardless of the level of insurance coverage, damage to our facility may harm our business, financial
condition and operating results.
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If we are unable to compete successfully in our highly competitive
industry, our business and financial condition may be adversely affected.
We operate in a single market – infusion – and are dependent
upon our success in that market. We face competition in our market from a wide range of international and domestic companies, including
those that deliver electronic volumetric pumps, elastomeric infuser pumps, other mechanical devices, novel drug delivery devices and methodologies,
and devices and formulation technologies that allow drugs to be delivered in volumes smaller than the FREEDOM System is designed to deliver.
These include large medical device companies with multiple product lines, some of which may have greater financial and marketing resources
than we do. We also face competition from companies that are even more specialized than ours with respect to particular markets
or product lines. Some of those companies have greater financial and sales and marketing resources than we do or offer products
at a lower price point than ours. In addition, former employees may develop products that are competitive with ours or capitalize
on customer relationships developed while employed with us, subject to their continuing obligations under confidentiality agreements and
other restrictive covenants that may survive their employment. We face competition on the basis of product features, clinical or
economic outcomes, product quality, availability, price, services, technological innovation and other factors. In addition, we face
changing customer preferences and requirements, changes in the ways healthcare services are delivered, including the transition of high-acuity
care to lower-acuity, and non-acute care settings.
Competition may increase further as additional companies begin to enter
our market or modify their existing products to compete directly with ours. If we are forced to reduce our prices due to increased
competition, our business could suffer.
The medical technology industry has also experienced a significant amount
of consolidation, resulting in larger companies with greater access to markets. Pharmaceutical manufacturers, healthcare systems,
other healthcare companies and even retail pharmacies are also consolidating, resulting in greater purchasing power for these companies.