KORU Medical Systems(US:KRMD)2022-05-04 20:29Financial Performance - Net sales for the three months ended March 31, 2022, were $6,244,330, an increase of 15% compared to $5,430,951 for the same period in 2021[13]. - Gross profit for the quarter was $3,622,305, representing a gross margin of approximately 58%[13]. - The net loss for the quarter was $2,537,514, compared to a net loss of $1,276,138 in the same quarter of 2021, reflecting a 98% increase in losses year-over-year[13]. - Basic and diluted net loss per share for Q1 2022 was $(0.06), compared to $(0.03) for Q1 2021, indicating a worsening loss per share[35]. - Net loss for the three months ended March 31, 2022, was $2.5 million, a 98.8% increase from a net loss of $1.3 million in the same period last year, representing 40.6% of net sales[92]. Expenses - Operating expenses increased to $6,748,820, up 24% from $5,445,143 in the prior year, primarily due to higher selling, general, and administrative expenses[13]. - Research and development expenses surged to $1,148,355, a significant increase from $336,841 in the prior year, indicating a focus on innovation[13]. - Selling, general and administrative expenses increased by 10.0% to $5.49 million, while research and development costs surged by 240.9% to $1.15 million[89]. - The company recognized stock-based compensation expense of $524,670 for the three months ended March 31, 2022, down from $1,086,681 in the same period of 2021, representing a decrease of approximately 51.7%[61]. Assets and Liabilities - Cash and cash equivalents at the end of the period were $22,577,247, down from $25,334,889 at the end of 2021, indicating a decrease of 11%[16]. - Total assets increased to $43,427,637 as of March 31, 2022, compared to $41,293,031 at the end of 2021, marking a growth of 5%[11]. - Total liabilities rose to $8,626,540, up from $4,791,976 at the end of 2021, reflecting an increase of 80%[11]. - Total property and equipment increased to $4,156,663 as of March 31, 2022, compared to $3,418,479 as of December 31, 2021, reflecting a growth of approximately 21.6%[53]. Sales Breakdown - Domestic sales accounted for 84.9% of total net sales in Q1 2022, increasing from 81.9% in Q1 2021, with domestic sales reaching $5,301,388[43]. - International sales decreased to $942,942 in Q1 2022 from $984,162 in Q1 2021, representing a decline of approximately 4.2%[43]. - Domestic core revenues increased by 13.2% to $4.99 million, while international core revenues decreased by 8.6% to $0.89 million[87]. Cash Flow and Financing - Net cash used in operating activities was $1.8 million for the three months ended March 31, 2022, primarily due to the net loss and deferred tax asset[99]. - Cash flows from financing activities resulted in a net outflow of $0.3 million for the three months ended March 31, 2022, primarily for financed insurance[102]. - The company anticipates potential future capital requirements may necessitate additional debt or equity financing post-December 31, 2023[97]. Future Outlook and Strategic Initiatives - The company is focused on expanding its market presence and enhancing its product offerings in the ambulatory infusion market[81]. - The company has entered into a lease for a new manufacturing facility and corporate headquarters, expected to be operational by June 2022[84]. - The company is implementing secondary sourcing for needle and tubing sets, expected to be completed by the second half of 2022[84]. - The company anticipates that the COVID-19 pandemic may continue to impact demand for its products and financial results due to fewer new prescriptions[82]. Stock Options and Compensation - As of March 31, 2022, there were 3,638,750 stock options outstanding under the 2015 Plan, with a weighted average exercise price of $3.49[61]. - The fair value of stock options granted during the three months ended March 31, 2022, was $2.45 per share, compared to $3.06 per share in the same period of 2021[59]. - The company has $5,861,444 of total unrecognized compensation cost related to non-vested share-based compensation arrangements, expected to be recognized over a weighted-average period of 46 months[64]. - The total fair value of shares vested as of March 31, 2022, was $2,815,943, compared to $1,230,434 as of March 31, 2021, showing an increase of approximately 128.5%[64]. Legal and Regulatory Matters - The company has not been involved in any material legal proceedings that could impact its financial condition[54]. - The company is assessing the impact of recently adopted accounting standards, including those related to income taxes and leases, which have not materially affected its financial statements[45][44].