NASDAQ: KRMD New Life, New Beginnings KORU | TM Investor Presentation November 2020 NASDAQ: KRMD FORWARD-LOOKING STATEMENTS / NON-GAAP MEASURES This presentation contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as : "expect," "plan," "goals," "believe," "intend," "see," "could," "should," and similar references to future periods. Examples of forward-l ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q3 2020 financial statements reveal significant asset growth, a net loss from increased expenses, and substantial cash inflow from equity issuance [Balance Sheets](index=3&type=section&id=Balance%20Sheets) As of Sep 30, 2020, total assets significantly increased to $45.4 million, driven by cash from an equity offering, with corresponding growth in equity Balance Sheet Summary (as of Sep 30, 2020 vs. Dec 31, 2019) | Metric | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $32,433,811 | $5,870,929 | | Total Current Assets | $42,648,042 | $11,881,323 | | Total Assets | $45,434,452 | $13,881,861 | | **Liabilities & Equity** | | | | Total Current Liabilities | $5,361,430 | $2,406,289 | | Total Liabilities | $5,493,073 | $2,645,781 | | Total Stockholders' Equity | $39,941,379 | $11,236,080 | [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations) Q3 2020 saw decreased net sales and net income, while nine-month sales increased but resulted in a net loss due to higher operating and litigation expenses Q3 2020 vs Q3 2019 Performance | Metric | Q3 2020 | Q3 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $6.1M | $6.6M | (8.1%) | | Gross Profit | $3.9M | $4.4M | (10.1%) | | SG&A Expenses | $3.1M | $2.4M | 26.0% | | Litigation Expenses | $675 | $0.9M | (99.9%) | | R&D Expenses | $0.4M | $0.2M | 129.3% | | Net Income | $0.2M | $0.7M | (61.8%) | Nine Months 2020 vs 2019 Performance | Metric | Nine Months 2020 | Nine Months 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $20.1M | $16.9M | 18.8% | | Gross Profit | $12.6M | $10.9M | 15.9% | | SG&A Expenses | $9.0M | $7.0M | 29.6% | | Litigation Expenses | $2.45M | $2.48M | (1.4%) | | R&D Expenses | $0.9M | $0.5M | 109.7% | | Net (Loss)/Income | ($0.4M) | $0.6M | (158.6%) | [Statements of Cash Flows](index=5&type=section&id=Statements%20of%20Cash%20Flows) Nine-month cash flow from operations turned positive, investing activities used $1.0 million, and financing provided $26.6 million from equity, significantly boosting cash reserves Cash Flow Summary (Nine Months Ended Sep 30) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $968,437 | ($502,014) | | Net Cash from Investing Activities | ($1,007,539) | $1,389,281 | | Net Cash from Financing Activities | $26,601,984 | $502,958 | | **Net Increase in Cash** | **$26,562,882** | **$1,390,225** | | **Cash at End of Period** | **$32,433,811** | **$5,129,028** | [Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Financial%20Statements) Notes detail accounting policies, including a $2.2 million non-cash litigation settlement, a $26.5 million equity offering, and a subsequent five-year manufacturing agreement - The company settled litigation with competitor EMED, resulting in a **non-cash expense of $2.2 million** in the second quarter of 2020. The settlement involved issuing restricted stock units and an option to purchase common stock[53](index=53&type=chunk) - In June 2020, the company completed an equity offering, selling over 3.5 million shares of common stock and raising **net proceeds of $26.5 million** after discounts and expenses[75](index=75&type=chunk) - Subsequent to the quarter end, on November 11, 2020, the company entered into a **five-year Manufacturing and Supply Agreement** with Command Medical Products, Inc. to manufacture and supply subassemblies, needle sets, and tubing products[76](index=76&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2020 sales decline and nine-month net loss due to litigation and expenses, offset by strengthened liquidity from a $26.5 million capital raise, with COVID-19 impact remaining uncertain - The company's operations have been modified due to COVID-19, with non-production staff working remotely. The pandemic's ultimate impact on product demand and financial results remains uncertain, with potential negative effects on new prescriptions for PIDD and CIDP[84](index=84&type=chunk) - The company's liquidity position is **strong, with $32.4 million in cash** as of September 30, 2020, bolstered by **net proceeds of $26.5 million** from a recent capital raise. Management believes this is sufficient to fund operations and strategic initiatives for the next 12 months[102](index=102&type=chunk)[109](index=109&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Q3 2020 saw an 8.1% sales decline and reduced net income, while nine-month sales grew 18.8% but resulted in a net loss due to a 25.5% increase in operating expenses, including a litigation settlement Q3 2020 vs Q3 2019 Results Summary | Metric | Q3 2020 | Q3 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $6.1M | $6.6M | (8.1%) | | Gross Profit | $3.9M | $4.4M | (10.1%) | | SG&A Expenses | $3.1M | $2.4M | 26.0% | | Litigation Expenses | $675 | $0.9M | (99.9%) | | R&D Expenses | $0.4M | $0.2M | 129.3% | | Net Income | $0.2M | $0.7M | (61.8%) | Nine Months 2020 vs 2019 Results Summary | Metric | Nine Months 2020 | Nine Months 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $20.1M | $16.9M | 18.8% | | Gross Profit | $12.6M | $10.9M | 15.9% | | SG&A Expenses | $9.0M | $7.0M | 29.6% | | Litigation Expenses | $2.45M | $2.48M | (1.4%) | | R&D Expenses | $0.9M | $0.5M | 109.7% | | Net (Loss)/Income | ($0.4M) | $0.6M | (158.6%) | [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is strong with $32.4 million cash, boosted by a $26.5 million capital raise, with operating activities generating $1.0 million cash and financing providing $26.6 million - Net cash from operating activities was **$1.0 million** for the nine months ended Sep 30, 2020, compared to a use of **$0.5 million** in the prior year period. The improvement was largely due to non-cash charges for stock-based compensation and litigation settlement (**$2.5 million**)[103](index=103&type=chunk)[104](index=104&type=chunk) - Net cash from financing activities was **$26.6 million** for the nine months ended Sep 30, 2020, primarily from a **$26.5 million capital raise**, net of expenses[103](index=103&type=chunk)[107](index=107&type=chunk) [Non-GAAP Financial Measures](index=22&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA, defined as net income before specific adjustments, as a non-GAAP measure, which was $3.9 million for the nine months ended September 30, 2020 Reconciliation of GAAP Net Income/(Loss) to Non-GAAP Adjusted EBITDA | Metric | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | | GAAP Net (Loss)/Income | ($377,435) | $644,606 | | Income Tax Expense | $316,200 | $189,265 | | Depreciation and Amortization | $297,801 | $252,594 | | Litigation | $2,446,747 | $2,481,471 | | Stock Option Expense | $1,011,140 | $640,775 | | Other Adjustments | $192,840 | $516,221 | | **Non-GAAP Adjusted EBITDA** | **$3,936,885** | **$4,624,932** | - Management uses Adjusted EBITDA as a supplemental measure for internal planning, forecasting, and evaluating performance, and it is a significant criterion for determining annual cash incentive compensation[112](index=112&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is marked as not applicable - Not applicable[120](index=120&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal control over financial reporting - The Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures were **effective** as of September 30, 2020[121](index=121&type=chunk) - No changes in internal control over financial reporting occurred during the third quarter of 2020 that have materially affected, or are reasonably likely to materially affect, these controls[122](index=122&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=25&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not currently involved in material legal proceedings, with prior litigation against EMED Technologies Corporation having been dismissed - The company is not currently a party to any legal proceedings that are believed to be **material to its financial condition**[127](index=127&type=chunk) - The report refers to a prior filing for details on the **dismissed case with competitor EMED Technologies Corporation**[128](index=128&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=ITEM%201A.%20Risk%20Factors) The COVID-19 pandemic is a significant risk factor, posing uncertainties for business operations, financial results, supply chain, and product demand, with its long-term impact remaining highly uncertain - The **COVID-19 pandemic** is identified as a significant risk factor that could adversely affect the company's business and financial condition[130](index=130&type=chunk) - Key uncertainties include the impact on employees, supply chain disruptions, delays in clinical trials, and changes in customer purchasing patterns and new prescriptions[130](index=130&type=chunk) - The pandemic has led to significant disruption of global financial markets, which could reduce the company's ability to access capital and negatively affect liquidity[130](index=130&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued common stock to directors for compensation and restricted stock units/options to EMED as part of a litigation settlement, all as unregistered sales - The company issued an aggregate of **6,681 shares of common stock** to its non-employee directors for the three months ended September 30, 2020, as part of their compensation[132](index=132&type=chunk) - As part of the litigation settlement with EMED, the company issued **95,238 restricted stock units** (vested May 21, 2020), another **95,238 restricted stock units** (vesting Jan 1, 2021), and an option to purchase up to **400,000 shares**[134](index=134&type=chunk) [Item 6. Exhibits](index=26&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including a manufacturing agreement and Sarbanes-Oxley certifications - A key exhibit filed is the **Manufacturing and Supply Agreement** dated November 11, 2020, between the company and Command Medical Products[138](index=138&type=chunk) - Standard certifications from the CEO and CFO under Sections 302 and 906 of the Sarbanes-Oxley Act were also filed as exhibits[138](index=138&type=chunk)

NASDAQ: KRMD New Life, New Beginnings KORU | TM Q3 2020 Financial Results November 4, 2020 NASDAQ: KRMD FORWARD-LOOKING STATEMENTS / NON-GAAP MEASURES This presentation contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as : "expect," "plan," "goals," "believe," "intend," "see," "could," "should," and similar references to future periods. Examples of fo ...

Repro Med Systems, Inc. (NASDAQ:KRMD) Q3 2020 Earnings Conference Call November 4, 2020 9:00 AM ET Company Participants Devin Sullivan - Senior Vice President, The Equity Group, Inc. Donald Pettigrew - President and Chief Executive Officer Karen Fisher - Chief Financial Officer Conference Call Participants Alexander Nowak - Craig-Hallum Capital Group LLC Matthew O'Brien - Piper Sandler & Co. Kyle Rose - Canaccord Genuity Group Inc. Raghuram Selvaraju - H.C. Wainwright & Co. Alex Silverman - AWM Investment C ...

Repro Med Systems, Inc. (NASDAQ:KRMD) Q2 2020 Earnings Conference Call August 5, 2020 9:00 AM ET Company Participants Devin Sullivan - Senior Vice President, Equity Group Don Pettigrew - President and Chief Executive Officer Karen Fisher - Chief Financial Officer Conference Call Participants Alex Nowak - Craig-Hallum Capital Group Matthew O'Brien - Piper Sandler Kyle Rose - Canaccord Genuity Operator Greetings and welcome to the KORU Medical's Systems Second Quarter 2020 Financial Results Conference Call. [ ...

PART I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q2 2020 financial statements show total assets grew to **$47.7 million** due to cash, with a **$1.1 million net loss** from a litigation settlement [Balance Sheets](index=3&type=section&id=Balance%20Sheets) As of June 30, 2020, total assets increased to **$47.7 million** from **$13.9 million**, primarily due to a rise in cash and cash equivalents to **$38.1 million** Balance Sheet Comparison (in thousands) | Account | June 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $45,306 | $11,881 | | Cash and cash equivalents | $38,129 | $5,871 | | **Total Assets** | **$47,711** | **$13,882** | | **Total Current Liabilities** | $8,296 | $2,406 | | Line of credit payable | $3,500 | $0 | | **Total Liabilities** | **$8,463** | **$2,646** | | **Total Stockholders' Equity** | **$39,247** | **$11,236** | [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations) Q2 2020 net sales grew **44.1%** to **$7.7 million**, but a **$2.3 million** litigation expense led to a **$1.1 million net loss** Quarterly Performance (Three Months Ended June 30, in dollars) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net Sales | $7,708,904 | $5,348,812 | | Gross Profit | $4,909,880 | $3,475,664 | | Litigation Expense | $2,346,914 | $1,124,947 | | Net (Loss)/Income | $(1,076,038) | $78,183 | | Diluted EPS | $(0.03) | $0.00 | Semi-Annual Performance (Six Months Ended June 30, in dollars) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net Sales | $14,038,913 | $10,323,090 | | Gross Profit | $8,698,090 | $6,523,618 | | Net (Loss)/Income | $(626,610) | $(7,207) | | Diluted EPS | $(0.02) | $0.00 | [Statements of Cash Flows](index=5&type=section&id=Statements%20of%20Cash%20Flows) For the six months ended June 30, 2020, cash from operations was **$2.7 million**, with **$30.1 million** from financing, increasing total cash to **$38.1 million** Cash Flow Summary (Six Months Ended June 30, in dollars) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $2,707,549 | $(1,483,909) | | Net Cash from Investing Activities | $(513,273) | $1,532,487 | | Net Cash from Financing Activities | $30,064,144 | $19,811 | | **Net Increase in Cash** | **$32,258,420** | **$68,389** | | **Cash at End of Period** | **$38,129,349** | **$3,807,192** | [Notes to Financial Statements](index=6&type=section&id=Notes%20to%20Financial%20Statements) Notes detail the May 2020 EMED litigation settlement via non-cash equity, a **$3.5 million** credit line expansion, and a June 2020 public offering raising **$26.5 million** - The company designs, manufactures, and markets proprietary portable medical devices for the ambulatory infusion market[14](index=14&type=chunk) - On May 26, 2020, the company settled all litigation with competitor EMED, involving an equity payment including restricted stock units and an option to purchase **400,000 shares**, providing KORU Medical with freedom to operate under EMED's patent portfolio[41](index=41&type=chunk)[53](index=53&type=chunk) - The company increased its revolving line of credit with KeyBank to **$3.5 million** in April 2020 and drew the full amount[67](index=67&type=chunk)[69](index=69&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes **44%** Q2 2020 net sales growth to at-home infusion demand, despite a **$1.1 million** net loss from a **$2.2 million** litigation expense, while liquidity was significantly strengthened by a **$26.5 million** equity offering and **$3.5 million** credit line draw [Overview](index=16&type=section&id=Overview) Key Q2 2020 events include settling EMED litigation for **$2.2 million** (non-cash), raising **$26.5 million** from an equity offering, drawing the full **$3.5 million** from a credit line, and achieving **44%** net sales growth to **$7.7 million** due to at-home infusion demand - Settled all litigation with EMED through a non-cash agreement, recognizing a **$2.2 million** expense[84](index=84&type=chunk) - Raised **$26.5 million** in net proceeds from an equity offering in June 2020[85](index=85&type=chunk) - Q2 2020 net sales reached **$7.7 million**, a **44%** increase from the prior year, driven by demand for at-home infusion therapy and response to COVID-19 uncertainties[86](index=86&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Q2 2020 net sales rose **44.1%** to **$7.7 million**, but gross margin declined to **63.7%** due to COVID-related overtime, and operating expenses surged **74.3%** primarily from a **$2.2 million** non-cash litigation settlement Net Sales (Three Months Ended June 30, in dollars) | Region | 2020 | 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Domestic | $6,745,810 | $4,569,226 | $2,176,584 | 47.6% | | International | $963,094 | $779,586 | $183,508 | 23.5% | | **Total** | **$7,708,904** | **$5,348,812** | **$2,360,092** | **44.1%** | - Gross margin for Q2 2020 was **63.7%**, down from **65.0%** in Q2 2019, mainly due to overtime costs related to COVID-19 absenteeism[91](index=91&type=chunk) - Litigation expenses for Q2 2020 increased by **$1.2 million** year-over-year, primarily due to a non-cash expense of **$2.2 million** from the EMED settlement[93](index=93&type=chunk) Net Sales (Six Months Ended June 30, in dollars) | Region | 2020 | 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Domestic | $12,086,676 | $8,452,791 | $3,633,885 | 43.0% | | International | $1,952,237 | $1,870,299 | $81,938 | 4.4% | | **Total** | **$14,038,913** | **$10,323,090** | **$3,715,823** | **36.0%** | [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2020, liquidity was strong with **$38.1 million** in cash, boosted by a **$26.5 million** stock offering and **$3.5 million** credit line draw, with cash from operations positive at **$2.7 million** for the first six months - Principal source of liquidity is cash on hand of **$38.1 million** as of June 30, 2020, which includes **$26.5 million** from a recent capital raise and a **$3.5 million** draw on its line of credit[103](index=103&type=chunk) - The litigation settlement with EMED was a non-cash transaction involving the issuance of equity, which resulted in a **$2.2 million** expense in Q2 2020[105](index=105&type=chunk) Cash Flow Summary (Six Months Ended June 30, in dollars) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | $2,707,549 | $(1,483,909) | | Net cash (used in)/provided by investing activities | $(513,273) | $1,532,487 | | Net cash provided by financing activities | $30,064,144 | $19,811 | [Non-GAAP Financial Measures](index=21&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA, a non-GAAP measure, to supplement GAAP results, reporting **$1.8 million** for Q2 2020 (up from **$1.5 million**) and **$3.0 million** for the six-month period (up from **$2.4 million**) Reconciliation of GAAP Net (Loss)/Income to Non-GAAP Adjusted EBITDA (in dollars) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2020** | **2019** | **2020** | **2019** | | GAAP Net (Loss)/Income | $(1,076,038) | $78,183 | $(626,610) | $(7,207) | | Litigation Expenses | $2,346,914 | $1,124,947 | $2,446,072 | $1,617,462 | | Stock Option Expense | $363,851 | $194,765 | $664,817 | $316,640 | | **Non-GAAP Adjusted EBITDA** | **$1,759,964** | **$1,490,504** | **$3,038,998** | **$2,418,502** | - Adjustments to calculate Adjusted EBITDA include excluding expenses for litigation, stock options, discontinued products, and manufacturing initiatives, which management believes provides a better understanding of ongoing business performance[119](index=119&type=chunk)[120](index=120&type=chunk)[122](index=122&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has indicated that this section is not applicable for the reporting period - The company states that Quantitative and Qualitative Disclosures About Market Risk are not applicable[125](index=125&type=chunk) [Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2020[126](index=126&type=chunk) - No material changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2020[127](index=127&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) In May 2020, the company successfully resolved all litigation with EMED Technologies Corporation through an equity payment, gaining freedom to operate under EMED's patent portfolio and dismissing all claims - On May 26, 2020, the company announced a settlement of all litigation with its competitor, EMED Technologies Corporation, which had been ongoing since 2013[128](index=128&type=chunk) - The settlement agreement provides KORU Medical with freedom to operate under EMED's patent portfolio, dismissal of all litigation, and involved an equity payment by KORU Medical to EMED[128](index=128&type=chunk) [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The COVID-19 pandemic is highlighted as a material risk factor, potentially adversely affecting business operations, employee health, supply chain, and financial condition, including manufacturing disruptions and liquidity impacts - The COVID-19 pandemic is identified as a significant risk factor that could adversely affect business, operations, and financial condition[138](index=138&type=chunk) - Specific pandemic-related risks include disruptions to the supply chain, limitations on the ability to manufacture products, reduced sales force effectiveness due to travel restrictions, and potential negative impacts on liquidity from financial market disruption[138](index=138&type=chunk)[139](index=139&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter, the company issued unregistered securities, including **7,999** common shares to directors, **710,000** shares from executive option exercises, and **95,238** restricted stock units plus an option for **400,000** shares to EMED as part of a settlement - Issued an aggregate of **17,188** shares of common stock to non-employee directors during the six-month period ended June 30, 2020, as part of their compensation[140](index=140&type=chunk) - Issued **95,238** restricted stock units and an option to purchase up to **400,000** shares to EMED as part of the litigation settlement on May 20, 2020[142](index=142&type=chunk) [Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including SOX certifications from the Principal Executive and Financial Officers, and Interactive Data Files (XBRL) of the financial statements - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act[146](index=146&type=chunk) - Interactive Data Files (XBRL) are furnished as Exhibit 101[145](index=145&type=chunk)[146](index=146&type=chunk)

Financial Data and Key Metrics Changes - Net sales increased by 27% to $6.3 million in Q1 2020 from $5 million in Q1 2019, driven by higher utilization of products by PIDD patients and expansion of HIZENTRA into CIDP [25] - Gross profit rose by 24% to $3.8 million in Q1 2020 from $3.1 million in Q1 2019, primarily due to increased sales volume [26] - Net income for Q1 2020 was $449,000, a turnaround of over $500,000 from a net loss of $85,000 in Q1 2019 [28] - Adjusted EBITDA improved by 38% to $1.3 million in Q1 2020 from $900,000 in Q1 2019 [28] Business Line Data and Key Metrics Changes - The increase in net sales for Q1 2020 reflected growth across infusion product lines and increased clinical trial sales compared to Q1 2019 [25][26] - The decline in gross margin was attributed to a noncash $100,000 charge related to the discontinuation of the Rescue VAC product line [26][18] Market Data and Key Metrics Changes - The company experienced higher demand for its products due to reactive purchasing associated with COVID-19, with minimal impact on production, inventory, supply chain, or distribution [11][12] - Plasma collection efforts are continuing despite COVID-19, with expectations of a ramp-up in collection activities as guidelines permit [15] Company Strategy and Development Direction - The company aims for a $50 million run rate by year-end 2022, improving operating efficiencies to achieve a gross margin of over 70% and generating over 20% organic revenue growth annually [20] - The focus remains on penetrating primary end markets, increasing clinical trial revenue, and solidifying contractual positions with key customers [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the economic uncertainty due to COVID-19 but expressed confidence in the strong underlying demand for products [50] - The company believes that COVID-19 has highlighted the benefits of home healthcare, which may lead to increased conversations surrounding at-home infusion therapies [16] Other Important Information - The company ended Q1 2020 with $7.4 million in cash, a $1.6 million increase from the previous quarter, primarily due to a drawdown on the line of credit [29] - The company has not experienced significant slowdowns in customer payments to date, maintaining good liquidity and financial flexibility [31] Q&A Session Summary Question: Is the shift from IV to subcutaneous therapy a temporary benefit due to COVID-19 or a longer-term trend? - Management confirmed that the movement from IV to subcutaneous therapy is real, active, and sustainable, with COVID-19 amplifying this trend [37] Question: How did the business perform in April and what are the expectations for Q2? - Management noted increased demand in April attributed to COVID-19 and anticipated a strong tailwind from the shift to subcutaneous therapy [40] Question: How is the launch of Xembify progressing compared to HIZENTRA? - Management indicated that the launch of Xembify has been relatively slow but is starting to gain momentum [42] Question: Should there be more announcements or data releases from pharma companies throughout 2020? - Management expects commercialization of a successful hematology trial within the next 12 months and will share updates as they become available [44] Question: What is driving the decline in gross margins and when should this pressure moderate? - Management attributed the decline to increased production pressures and investments in manufacturing efficiency, with a focus on cost reduction going forward [45]

PART I [PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported strong Q1 2020 financial performance with increased net sales, a shift from net loss to net income, and positive operating cash flow, supported by asset growth [Balance Sheets](index=3&type=section&id=Balance%20Sheets) Total assets increased to **$16.6 million** as of March 31, 2020, driven by higher cash and inventory, while liabilities rose due to a new line of credit Balance Sheet Summary (Unaudited) | Account | March 31, 2020 ($) | December 31, 2019 ($) | | :--- | :--- | :--- | | **Total Current Assets** | $14,479,830 | $11,881,323 | | Cash and cash equivalents | $7,427,679 | $5,870,929 | | **Total Assets** | **$16,603,099** | **$13,881,861** | | **Total Current Liabilities** | $4,267,683 | $2,406,289 | | Line of credit payable | $1,500,000 | $0 | | **Total Liabilities** | **$4,471,123** | **$2,645,781** | | **Total Stockholders' Equity** | **$12,131,976** | **$11,236,080** | [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations) Net sales increased by **27.3%** to **$6.3 million** in Q1 2020, leading to a net income of **$449,428**, a significant improvement from a prior-year net loss Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended Mar 31, 2020 ($) | Three Months Ended Mar 31, 2019 ($) | | :--- | :--- | :--- | | **Net Sales** | **$6,330,009** | **$4,974,278** | | Gross Profit | $3,788,210 | $3,047,954 | | Total Operating Expenses | $3,205,387 | $3,162,993 | | Net Operating Profit/(Loss) | $582,823 | ($115,039) | | **Net Income/(Loss)** | **$449,428** | **($85,390)** | | Diluted EPS | $0.01 | $0.00 | [Statements of Cash Flows](index=5&type=section&id=Statements%20of%20Cash%20Flows) Operating activities generated **$153,236** in cash for Q1 2020, a significant improvement, with overall cash and cash equivalents increasing to **$7.4 million** primarily due to financing activities Cash Flow Summary (Unaudited) | Activity | Three Months Ended Mar 31, 2020 ($) | Three Months Ended Mar 31, 2019 ($) | | :--- | :--- | :--- | | Net Cash Provided By/(Used In) Operating Activities | $153,236 | ($1,045,233) | | Net Cash Used In Investing Activities | ($180,138) | ($96,833) | | Net Cash Provided By/(Used In) Financing Activities | $1,583,652 | ($3,848) | | **Net Increase/(Decrease) in Cash** | **$1,556,750** | **($1,145,914)** | | **Cash and Cash Equivalents, End of Period** | **$7,427,679** | **$2,592,889** | [Notes to Financial Statements](index=6&type=section&id=Notes%20to%20Financial%20Statements) Notes to financial statements detail accounting policies, ongoing litigation, and significant post-quarter financing activities, including an expanded credit line and a favorable legal ruling - The company designs, manufactures, and markets proprietary portable medical devices for the ambulatory infusion market under FDA and international quality standards[14](index=14&type=chunk) - The company is involved in several ongoing lawsuits with its principal competitor, EMED Technologies Corporation, concerning patent infringement and other claims. The company believes it has meritorious defenses but notes that a negative outcome could have a material adverse effect[41](index=41&type=chunk)[51](index=51&type=chunk) - Subsequent to the quarter end, the company secured additional liquidity by extending its line of credit to **$3.5 million**, obtaining a **$1.48 million** PPP loan, and entering a **$2.5 million** equipment financing agreement[69](index=69&type=chunk)[71](index=71&type=chunk)[73](index=73&type=chunk) - On April 9, 2020, the U.S. Court of Appeals affirmed a summary judgment of non-infringement in favor of KORU Medical in a patent case brought by EMED[74](index=74&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the **27.3%** Q1 2020 revenue growth driven by market expansion, improved net income, and strategic liquidity actions taken in response to COVID-19 uncertainty [Overview and Recent Developments](index=16&type=section&id=Overview%20and%20Recent%20Developments) Q1 2020 net sales grew **27.3%** to **$6.3 million** driven by core market expansion, with the company proactively securing additional liquidity in response to COVID-19 - Q1 2020 net sales grew **27.3%** to **$6.3 million**, driven by higher sales volume in needle sets, tubing, and pumps, linked to growth in PIDD diagnosis and expansion into the neurology (CIDP) market[82](index=82&type=chunk) - In response to COVID-19 uncertainty, the company drew **$1.5 million** from its line of credit in March 2020[81](index=81&type=chunk) - Post-quarter, the company extended its line of credit to **$3.5 million** and secured a **$1.5 million** PPP loan under the CARES Act[86](index=86&type=chunk)[87](index=87&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Q1 2020 net sales increased **27.3%** to **$6.3 million**, driven by strong domestic growth, while a reduction in litigation expenses contributed to a net income of **$0.4 million** Net Sales Breakdown (Q1 2020 vs Q1 2019) | Region | Q1 2020 Sales ($) | Q1 2019 Sales ($) | Change (%) | | :--- | :--- | :--- | :--- | | Domestic | $5,340,866 | $3,883,565 | +37.5% | | International | $989,143 | $1,090,713 | -9.3% | | **Total** | **$6,330,009** | **$4,974,278** | **+27.3%** | - Gross margin declined from **61.3%** to **59.9%** YoY, primarily due to an obsolescence reserve for a discontinued product line and increased overtime, partially offset by price increases[89](index=89&type=chunk) - Litigation fees decreased by **$0.4 million** (**-79.9%**) YoY, while R&D expenses increased by **$0.2 million** (**+151.1%**) due to higher headcount for development initiatives[92](index=92&type=chunk)[93](index=93&type=chunk) - Net income for Q1 2020 was **$449,428**, compared to a net loss of **$85,390** in Q1 2019[95](index=95&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained **$7.4 million** in cash as of March 31, 2020, with management confident in sufficient liquidity for the next 12 months, supported by positive operating cash flow - The company's principal source of liquidity is **$7.4 million** cash on hand as of March 31, 2020, which includes a **$1.5 million** draw against its line of credit[96](index=96&type=chunk) - Management believes current cash and expected cash from operations are sufficient to fund operations, R&D, and capital expenditures for the next 12 months[98](index=98&type=chunk) Cash Flow Summary (Q1 2020 vs Q1 2019) | Cash Flow Activity | Three Months Ended Mar 31, 2020 ($) | Three Months Ended Mar 31, 2019 ($) | | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | $153,236 | ($1,045,233) | | Net cash used in by investing activities | ($180,138) | ($96,833) | | Net cash provided by/(used in) financing activities | $1,583,652 | ($3,848) | [Non-GAAP Financial Measures](index=20&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes Adjusted EBITDA as a non-GAAP measure, which increased to **$1.3 million** in Q1 2020, reflecting adjustments for various non-operating expenses Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA | Reconciliation Item | Three Months Ended Mar 31, 2020 ($) | Three Months Ended Mar 31, 2019 ($) | | :--- | :--- | :--- | | GAAP Net Income/(Loss) | $449,428 | ($85,390) | | Tax Expense/(Benefit) | $141,928 | ($22,099) | | Depreciation/Amortization | $87,224 | $83,651 | | Litigation Expenses | $99,158 | $492,515 | | Stock Compensation Expense | $300,966 | $121,875 | | Other Adjustments | $190,331 | $337,446 | | **Non-GAAP Adjusted EBITDA** | **$1,279,035** | **$927,998** | - Management uses Adjusted EBITDA as a supplemental measure for internal planning, forecasting, and evaluating performance for incentive compensation[110](index=110&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has indicated that disclosures regarding quantitative and qualitative market risk are not applicable - The company has indicated that Quantitative and Qualitative Disclosures About Market Risk are not applicable[117](index=117&type=chunk) [Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal control over financial reporting - Management concluded that as of the end of the reporting period, the Company's disclosure controls and procedures were effective[118](index=118&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2020, that have materially affected, or are reasonably likely to materially affect, these controls[119](index=119&type=chunk) PART II [PART II – OTHER INFORMATION](index=22&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in complex, ongoing legal proceedings with its main competitor, EMED, concerning patent infringement and other claims, with uncertain outcomes despite some favorable rulings - The company is involved in several lawsuits with its principal competitor, EMED Technologies Corporation, concerning patent infringement, antitrust violations, and other business tort claims[120](index=120&type=chunk) - The company is vigorously defending against all claims and believes it has meritorious defenses, but the outcomes cannot be predicted with certainty and could have a material adverse effect on the business[131](index=131&type=chunk) - A recent development includes a unanimous decision on April 9, 2020, by the Court of Appeals for the Federal Circuit (CAFC) affirming a district court's judgment of non-infringement in favor of KORU Medical[128](index=128&type=chunk) [Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) A material new risk factor is the uncertainty related to the COVID-19 pandemic, which could severely impact future operations and financial condition through various disruptions - A material new risk factor is the uncertainty related to the COVID-19 pandemic[132](index=132&type=chunk)[133](index=133&type=chunk) - Potential impacts from COVID-19 include disruptions to employees, suppliers, business operations, and the availability of drugs administered by the company's products, which could severely impact financial results[133](index=133&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2020, the company issued common stock to non-employee directors and facilitated the exercise of options by its COO, all under registration exemptions - The company issued **9,189 shares** of common stock to non-employee directors as compensation during the three-month period ended March 31, 2020[134](index=134&type=chunk) - On January 7, 2020, the company's COO, Manuel Marques, exercised options for **175,000 shares** of common stock for an aggregate exercise price of **$85,500**[135](index=135&type=chunk) [Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including required certifications by executive officers and Interactive Data Files for financial statements - Exhibits filed include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[138](index=138&type=chunk) - Exhibit 101 contains the Interactive Data Files (XBRL) for the financial statements and notes[137](index=137&type=chunk)[138](index=138&type=chunk)

Q1 2020 Financial Results May 5, 2020 Nasdaq: KRMD DISCLAIMER / NON-GAAP MEASURES This presentation contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "expect", "plan," "goal," "seek," "vision, "confident," "future," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make rega ...

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, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-12305 REPRO MED SYSTEMS, INC. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Organization) (IRS Employer Identification No.) ...