KORU Medical Systems (KRMD) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01If 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
2. 02Our business depends on an adequate supply of drugs to be administered by our products
3. 03The size of the markets for our products and any future products may be smaller than we estimate and may declineNew
4. 04We sell a majority of our products through only a few distributors on whom we depend, and our financial results depend on their purchasing patterns73% rewritten
5. 05Interruption of our manufacturing or our contract manufacturing operations could adversely affect our business
6. 06If we are unable to compete successfully in our highly competitive industry, our business and financial condition may be adversely affected
7. 07Competition 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
8. 08Technological developments by others may disrupt our business and negatively impact our revenues
9. 09If a cybersecurity incident was to occur, it could cause substantial disruption to our information systems and breaches of our security systems which could harm our business, customer relations and financial conditionNew
10. 10If we are unable to protect our patents or other proprietary rights, or if we infringe the patents or other proprietary rights of others, our competitiveness and business prospects may be materially damaged
11. 11We need to attract and retain key employees to be competitive
12. 12Recent immigration enforcement actions in the U.S. could impact our operations or the operations of our suppliers and vendors, and the ability to retain talented personnelNew

Risks Related to Our Industry

1. 13Failure to obtain 510(k) clearance or PMA approval from the FDA for our new products or enhancements to our existing products may affect our ability to grow our businessNew
2. 14Healthcare policy changes and industry cost-containment measures could result in downward pricing pressure for our products and limit our sales
3. 15Issues with product quality could have an adverse effect upon our business, subject us to regulatory actions, cause a loss of customer confidence in us or our products, among other negative consequences
4. 16Defects or quality issues associated with our products could adversely affect the results of our operations
5. 17The therapeutic efficacy of certain of our biopharma customers’ products that may utilize our device are either unproven in humans or has only been proven in limited circumstances, and we may not be able to successfully develop and sell our products in combination with our biopharma customers’ products
6. 18Our commercial success depends upon the attainment of significant market acceptance of drug product candidates to be included in our biopharma customers’ products that may utilize our device, if approved, among physicians, patients, healthcare payers or the medical community
7. 19If coverage and reimbursement from third-party payors for procedures utilizing our products are inadequate, adoption of our products will be adversely affected and our revenues and prospects for profitability will sufferNew
8. 20Most brand name injectable therapies will face future competition from generic or biosimilar therapies, which could significantly reduce their commercial viability81% rewritten

Risks Related to Legal and Regulatory Compliance

1. 21We are subject to costly and complex laws and governmental regulations and any adverse regulatory action may materially adversely affect our financial condition and business operations30% rewritten
2. 22We and the biopharmaceutical companies with whom we do novel therapies business (“our biopharma customers”) are subject to extensive regulation by governments around the world, and if these regulations are not complied with, existing and future operations may be curtailed, and we could be subject to liability67% rewritten
3. 23If our devices are commercialized as part of a drug-delivery combination product we, as the manufacturer of the device component of that combination product, we are subject to unannounced and preapproval inspections by the FDA of our manufacturing facility to determine our compliance with QSR and cGMP
4. 24Our compliance with EU MDR regulations by December 2028 will require significant investment and, if we are not in compliance by that time, we will not be able to sell our products in the EU
5. 25Our failure to comply with laws and regulations relating to reimbursement of healthcare products may subject us to penalties and adversely impact our reputation, business, results of operations, financial condition and cash flows

Risks Related to Economic Conditions

1. 26Our distribution network and other operations outside the U.S. subject us to certain risks
2. 27Rising inflation increases economic uncertainty and may require us to raise prices in order to maintain our operating margins
3. 28We are subject to foreign currency exchange risk
4. 29A government shutdown may have a material adverse impact on our business and results of operationsNew
5. 30A downturn in global economic conditions in government-sponsored healthcare systems could adversely affect our operations
6. 31Public health crises, such as the COVID-19 pandemic, have had, and could in the future have, a negative effect on our business
7. 32Brexit may impact our business in the United Kingdom

Risks Related to Our Financial Position

1. 33We may need additional funding in the future, and if we are unable to raise capital when needed, we may be forced to delay, reduce or eliminate our product development, commercial efforts, or sales effortsNew
2. 34Producing and marketing our developed products is costly. Although we believe we currently have adequate capital to fulfill our near-term funding needs, we may need to raise additional capital in the future in order to execute our business plan and help us fund the development and commercialization of new products
3. 35We are required to comply with certain financial and operating covenants under our credit facility. Failure to comply with these covenants would prevent us from drawing on our facility and, once drawn, could cause amounts borrowed to become immediately due and payable
4. 36Changes in tax or labor laws or exposure to additional income tax liabilities could increase our costs and reduce our margins42% rewritten
5. 37Changes in tariff and trade policies by the US administration, and uncertainties with respect to such policies, may have an adverse impact on our costs of goods and gross marginNew
6. 38Our operating results and financial condition may fluctuate
7. 39Future material impairments in the value of our long-lived assets could negatively affect our operating results

Risks Related to Ownership of Our Common Stock

1. 40There may be circumstances in which the interests of our significant stockholders could be in conflict with your interests as a stockholder
2. 41We do not currently intend to pay dividends on our common stock
3. 42Future sales and issuances of shares of our common stock or rights to purchase our common stock, including pursuant to our equity compensation plans, could result in additional dilution of the percentage ownership of our stockholders
4. 43There has been volatility in the price of shares of our common stock
5. 44If we do not maintain compliance with the listing standards of the Nasdaq Capital Market, Nasdaq may delist our common stock from trading on its exchange
6. 45We are a smaller reporting company and non-accelerated filer, and we cannot be certain if the reduced disclosure requirements applicable to us will make our common stock less attractive to investors
7. 46The price of our common stock may be adversely affected by the future issuance and sale of shares of our common stock or other equity securities
8. 47You may find it difficult to sell our common stock
9. 48Actions of activist stockholders could have an adverse effect on our business
10. 49Natural disasters, war and other events could adversely affect our suppliers and customers
11. 50We are dependent on information technology systems and subject to privacy and security laws, and our systems and infrastructure face certain risks, including from cyber security breaches and data leakage
12. 51We are subject to lawsuits
13. 52Our insurance coverage may be inadequate to cover all the liabilities we may incur