KORU Medical Systems, Inc.: Form 10-Q for the period ended Jun 30, 2023

The Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as such is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon their evaluations, the Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) is accumulated and communicated to the Company’s management, including its Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in the Company’s internal control over financial reporting during the six months ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Our operations and financial results are subject to various risks and uncertainties, including those described in “PART 1, ITEM 1A. RISK FACTORS” in our Annual Report on Form 10-K for the year ended December 31, 2022, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 and described below, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock.

Our business is currently principally dependent on the growth of the SCIg market.

Revenues from our domestic core business represented 77% of our total revenues for the first six months of fiscal year 2023 and 76% of our total revenues for fiscal year 2022. Growth of our domestic core business is currently principally dependent on growth of the market for SCIg drugs in the US and Canada. There can be no assurance that the market for SCIg drugs in the US and Canada will continue to grow at or near historical rates. If the market for SCIg drugs in the US and Canada does not grow at or near historical rates, or even declines, our business and outlook may be materially and adversely affected, which would materially and adversely affect our financial condition.

As of June 30, 2023, we had approximately $5.1 million in net deferred income tax assets (DTAs). These DTAs can be used to offset taxable income in future periods and reduce our income taxes payable in those future periods. At this time, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize these DTAs. However, it is possible that some or all of these NOL carryforwards could ultimately be unused, especially if our strategic plan objectives are not met. Therefore, unless we are able to generate sufficient taxable income from our operations, a substantial valuation allowance to reduce our DTAs may be required, which would materially increase our expenses in the period the allowance is recognized and materially adversely affect our results of operations and statement of financial condition.

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PART II – ITEM 6. EXHIBITS.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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