Thank you, Brock. Good morning everyone and thank you for joining us today.

The speakers for today's call are Don Pettigrew, President and Chief Executive Officer; and Karen Fisher, our Chief Financial Officer. During this call, we will discuss our business outlook and make forward-looking statements.

These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to several risks and uncertainties, including those mentioned in the associated slide presentation and our most recent filings with the SEC, along with the associated press releases.

We assume no obligation to update any forward-looking statements. The associated slide presentation will be posted to the Investor Relations' section of our website www.korumedical.com.

I encourage listeners to have our press release in front of you, which includes our financial results, as well as commentary on the quarter. During this call management, we'll discuss certain non-GAAP financial measures in our press release and slide presentation, accompanying this webcast and our filings with the SEC, each of which is posted on our website.

You will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures. Our strategic plan, goals incorporate the trends we've seen today and what we believe today to be appropriate assumptions.

Our results are inherently unpredictable and maybe materially affected by many factors, including the introduction of competitive products, availability of insurance reimbursement, success of our research and development efforts, acceptance of and demand for, new and existing products, expanded market acceptance of the Freedom system, the cost, duration, and ultimate outcomes of litigation, general economic and business conditions in the United States and abroad, and other factors described in our filings with the SEC. Therefore, our actual results could differ materially from the goals, set forth in the strategic plan.

For the benefit of those of you listening to the replay, this call was held and recorded on Wednesday, February 26, 2020 at approximately 9:00 A.M. Eastern Time.

Since then, the company may have made additional comments related to the topics discussed. Please reference the company's most recent press releases and filings with the SEC.

With that said, I'd now like to turn the call over to Don Pettigrew, President and CEO of the KORU Medical Systems. Don, please go ahead.

Thank you, Devin. Hope everybody's doing well today.

Thanks for joining us as always. I'll ask that you please note the slides addressing forward-looking statements and the non GAAP measure we will refer to you on today's call.

So, I'd like to begin on slide three. As you'll see, we begin with a brief overview of what was a eventful to say the least and exciting year for KORU Medical.

In summary, we generated record financial results, ended the year in a strong financial position, refreshed our management team and Board, listed on the NASDAQ capital market, implemented an enterprise-wide rebranding initiative, and developed and our preparing to launch a new product. We also increased our shareholder engagement activities and receive two consecutive favorable judgments with respect to our ongoing litigation, which we believe we will defend on appeal.

As you will also see on the slide, we had a very memorable day ringing the bell -- the closing bell of the NASDAQ on February 12th in New York City. We're very happy to be joined by members of our management team and Board members as well as associates, friends, and family.

Let me transition to slide four. We reported a record full year 2019 with the highest-ever annual net sales, gross profit, and gross margin.

We generated nearly $600,000 in net income, down from $900,000 last year, due primarily to litigation costs. Our adjusted EBITDA 2019 increased by nearly $2 million to record $5.6 million as compared to $3.6 million in 2018.

I want to thank everyone at KORU Medical for their initiative, hard work, insights, and execution. As I've stated in the past, we have spent the last two years putting together a team that rivals any in our industry.

Together, we reported a record 2019, and more significantly, have created a solid foundation for what we believe will be continued growth in 2020 and beyond. Karen will walk you through our results in greater detail shortly.

Slide five brings us to our primary disease state end markets, PIDD and CIDP, currently the two largest markets for subcutaneous IG therapy, and we continue to believe that the use of SUBQ-IG will expand. In the aggregate, PIDD and CIDP comprise a total of -- a total U.S.

addressable market for our Freedom Pumps and consumable needle sets and tubing of approximately $300 million. Our results for the year reflect our success in penetrating these end markets and validate our efforts to establish the Freedom system as a preferred means of drug delivery for patients undergoing treatment of these conditions.

Of the 270,000 people estimated to have PIDD, we estimate that just 24,000 are receiving SUBQ-IG therapy with the Freedom system. That represents a 9% market penetration for condition that we believe is increasingly being diagnosed.

The worldwide patient population for PIDD is estimated at two to three times that of the estimated U.S. PIDD population, bringing the addressable PIDD market to roughly 1 million patients.

Because these conditions are chronic, we have a very sticky revenue model. We estimate that each patient using the Freedom system generates average recurring revenue to KORU Medical of about $750 annually.

You'll know the names of five SUBQ-IG drugs approved for the U.S. market.

This compares to a total of 10 IVIG drugs with U.S. clearance to treat PIDD.

We continue to believe some of these IV therapies will migrate to a SUBQ formulation given the inherent therapeutic cost and patient comfort advantages of SUBQ-IG drugs as compared to IVIG therapy. We are aware of Specialty Pharmacy initiatives that are underway to move patients from IV to SUBQ with the increasing supply of SUBQ-IG.

Xembify by Grifols is the newest entrant having launched in December 2019 for the treatment of PIDD. We have been in close communication with Grifols and have supplied product to support its launch.

Hizentra by CSL Behring represents the majority of our revenues and we believe our Freedom system is currently the patient's preferred method of delivery for that drug. According to CSL, Hizentra is the number one product in the subcutaneous space.

CSL also announced it is enrolled in a Phase III trial for Hizentra in dermatomyositis, where we believe our system could be utilized. Hizentra continues to experience very strong growth in new prescriptions and as they reported earlier this month, even stronger growth in overall sales for the six months ended December 31st, 2019.

In 2018, Hizentra was approved to treat CIDP in the U.S. with an estimated patient population of 25,000.

Hizentra addresses a number of unmet needs and treating CIDP most of which again, align with our overall thesis of the benefits of subcutaneous therapy as compared to IVIG therapy. We believe that this reflects a growing trend of reformulating traditional IV therapies to SUBQ to extend patients' lives, generate incremental revenue, and improve the overall patient quality of life.

In a study conducted by CSL, five times as many patients said they felt fewer side effects with Hizentra as compared to IVIG therapy. Eight times as many patients said that Hizentra offers more freedom than IVIG and Hizentra patients also noted that the drug provides steady state IG levels In December, Hizentra also received orphan drug exclusivity from the FDA for the treatment of adult patients with CIDP.

This designation provides CSL a seven-year period of U.S. marketing exclusivity for Hizentra in the maintenance treatment of CIDP with subcutaneous therapy.

As a reminder, dosing for CIDP is typically two to three times more frequent than that for PIDD. So, recurring annual -- the recurring annual revenue figure of $750 per PIDD patient per year will likely be higher for CIDP patients using the Freedom system.

Transitioning to slide six, the projected demand for IG drugs shown on the chart on the left is driving growth in plasma collections across the United States. This additional IG supply could accelerate SUBQ-IG adoption.

On the right, you'll note that plasma collections increased each year since 2010 to nearly 49 million collections in 2018. The U.S.

is the leading source of plasma worldwide and the number of U.S. plasma collection centers has more than doubled since 2005.

In fact, plasma now represents approximately 2% of the total U.S. exports.

We believe that ongoing investment in securing plasma and bolstering and supply bodes well for the continuing growth of KORU Medical and our industry as a whole. By way of example, Grifols, the maker of Xembify runs 220 collection centers in at least 32 states.

That's a quarter of the U.S. total.

CSL Plasma which is part of CSL Behring which manufacturers Hizentra has one of the largest collection networks in the industry, operating more than 200 donor sites, plus logistics and testing facilities. Takeda which manufacturers CUVITRU and HyQvia has stated that plasma is a long-term strategic focus.

The company currently has 118 centers in the U.S. with a goal of increasing plasma supply and manufacturing capacity by more than 65% over the next five years.

On slide seven, beyond the numbers, in our view, this slide encapsulates the positive effects that SUBQ-IG therapy can have on a person's life. The ramifications of living with a chronic immune condition conditions such as PIDD or CIDP can extend far beyond how you feel.

It can impact your ability to be a productive member of society, enjoy times with your family and friends, and even hold a steady job. Dawn DuBois pictured here states that switching from IVIG to SUBQ-IG to treat her immune condition has given her 12 extra days in a month.

As a result of switching to SUBQ-IG therapy, Dawn has fewer side effects, can infuse at home, does not suffer the highs and lows associated with IVIG therapy, as serum levels are more consistent between treatments as compared to IVIG therapy. As Dawn states, she no longer has to schedule her life around treatment after switching to SUBQ-IG therapy from IVIG.

I'll point out that if you look at the lower left hand corner, Dawn is now using our Freedom system to infuse at home. We pride ourselves on being able to help individuals like Dawn who are living with and managing these types of chronic conditions.

Before turning things over to Karen, I want to speak to our roadmap to become the preferred drug delivery partner for specific infusion therapies in select markets as seen on slide eight. Although this is a multiyear multi-faceted approach, I'd like to highlight the areas of progress.

We continue to manage the business towards our goal of a $50 million run rate by year and 2022, improve our operating efficiencies to drive us towards our 70% gross margin goal by the year end 2022, and generate 20%-plus organic revenue growth each year. On slide nine, you'll see our net sales over the last three years have grown by more than 50% and our gross margin has improved by more than 400 basis points during that time.

Broadly, this reflects the combination of growing addressable markets, a clearly defined and well-executed strategy and great people. We continue to focus on penetrating our primary end markets, both domestically and overseas.

European sales increased by 18.5% in 2019 and we expect to see this growth trend continue as pharma manufacturers expand their reach into these markets with increasing IG supply. Clinical trial sales revenue rose in 2019 from 2018, which reflects our clinical trial efforts.

We view this as a key driver of our future success and we are very focused on supplying future clinical trials in IG and other drugs. Our gross margin has benefited from the efficiency is derived from higher net sales volume, but we believe that focusing on manufactured related cost reduction initiatives can provide a more meaningful and sustained benefit.

We continue to solidify improve our contractual positions with our key customers, both specialty pharmacies and home infusion providers. On slide 10, with respect to new products, I'm very happy to announce the launch of our HIgH Flo Super26 subcutaneous safety needle set commencing in Q1 of this year.

In a head-to-head study against our standard HIgH Flo 26 gauge needle set, the Super26 demonstrated superior characteristics in areas including patient fusion time, tolerability, comfort, and overall satisfaction. This data suggests that HIgH Flo Super26 may be a valuable tool to decrease infusion time and improve the patient experience with no changes in tolerability in patients requiring subcutaneous replacement therapy.

Although we are not forecasting the launch of our Super26 to have a significant impact on our results in 2020, we are very excited with the long-term prospects of this product line expansion that we feel will positively enhance the patient experience. As reflected in our 2019 results, we increased our R&D expenditures more than three-fold from 2018, reflecting the expansion of our product development initiatives and building out our team.

We're focused on developing and commercializing new infusion products and applications with a goal of solving current infusion problems, improving the user experience, and positively impacting our gross margins. On slide 11, we continue to focus on providing product support to pharmaceutical companies like CSL and can consider that relationship as a model for developing this important component of our strategic plan.

Although it's too early to quantify in -- or quantify in detail any impact to our results, we do believe the sales of new SUBQ-IG drugs such as Xembify and CUTAQUIG will produce positive incremental growth for KORU Medical through increasing patient and physician awareness and increase drug supply. Our Freedom system is currently involved in multiple clinical trials associated with the potential expansion of IG and development of other SUBQ or subcutaneous therapies for other disease days.

This includes a recently completed Phase III in the area of hematology that met its primary efficacy endpoint with yet to be defined drug launch. We continue to actively pursue these opportunities.

I'll now turn things over to our CFO, Karen Fisher, who will walk you through our results.

Thanks Don. Good morning everyone.

Beginning on slide 12, net sales rose 45.7% to $6.2 million in Q4 2019, up from $4.3 million in Q4 2018. This growth was due to continued expansion of our presence in the PIDD and CIDP markets, higher international sales, clinical trial activity, and to a lesser extent, price increases Gross profit in Q4 2019 rows to $3.9 million from $2.7 million in Q4 2018, due primarily to increased volume.

Gross margin of 63.4% was stable compared to 63.5% in Q4, reflecting the integration of new hires during the quarter, partially offset by price increases. Total operating expenses for Q4 2019 rose 30.4% to $4.1 million, up from $3.2 million in Q4 2018.

Of these SG&A expenses were $2.8 million as compared to $2.7 million in Q4 2018, slightly higher primarily due to higher consulting fees related to strategic initiatives and higher salary and related benefits, mostly offset by normal legal expenses, excluding litigation. SG&A expenses showed a substantial decline as a percentage of net sales to 44.9% of net sales in Q4 2019 as compared to 62.8% of net sales in Q4 2018.

Research and development expenses increased to $0.3 million from $0.1 million in Q4 2018, reflecting expanded product development initiatives and increased headcount. Litigation costs increased to approximately $934,000 from $306,000 in Q4 2018, reflecting increased activity and the ongoing litigation with a competitor.

While litigation continues, we have had several favorable rulings in the New York and Texas courts, dismissing those cases and have filed motions for court costs and attorney's fees of which one fee motion has been recommended to be granted by the Magistrate Judge in New York, and the fee motion in Texas has stayed pending appeal of the case. There can be no assurance that these costs will be recovered.

We operated just below breakeven on a net income GAAP basis in Q4 2019 as compared to a net loss of $355,000 or $0.01 per diluted share in Q4 2018. We've also provided the same data for the full year of 2019 where you will see record net sales, gross profit, gross margin, and adjusted EBITDA.

On slide 13, moving to our balance sheet, we ended the quarter with $5.9 million of cash, which represented a $700,000 improvement from December 31, 2018. We continued to be debt free with a $1.5 million line of credit and no outstanding amounts against it.

Cash flow of $2.1 million for the 12 months ended December 31st, 2019 included $1.8 million increase in accounts receivable as well as the $300,000 increase in inventory both commensurate with sales growth. The increase also included $1.5 million of proceeds realized from the maturation of a CD in Q2 2019 and $500,000 associated with the exercise of warrants and options and 2019.

We believe our cash on hand, our net cash expected regenerated from operating activities will be sufficient to fund our operations. We continue to maintain a clean capital structure.

We ended the quarter with 39.5 million basic shares outstanding, diluted share count of 44.1 million reflects 4.6 million of options outstanding with a weighted average exercise price of $1.92 at the end of the year. Here on slide 14, you can see the reconciliation of net income to adjusted EBITDA for the relevant periods along with the metrics that comprise this calculation.

Adjusted EBITDA for both the fourth quarter and full year rose significantly. The largest variable in the reconciliation is litigation.

Before turning things over to Don, later this week we expect to file a post-effective amendment on Form S-3 to the resale shelf registration statement on Form S-1 that was declared effective by the SEC on March 8, 2019. There are no new shares being registered and the company is not offering any securities under this registration statement.

The filing will be made simply to update the existing resale registration statement with the current information. Thank you for your attention.

And I'll turn the conversation back over to Don.

Thanks Karen. So, again, I want to thank all of you for your participation.

And I'd now like to open things up for questions.

Great. Good morning everyone and congrats on a great end to the year here.

Last quarter there were some anomalies that elevated the growth here. I was just curious, was there anything that you need to call out here as more one-time or less recurring in Q4 that we shouldn't necessarily incorporate going forward?

So, in Q3, we commented on some anomalies that we did not see in Q4. So, we saw a largely normalized Q4 revenue line.

Okay, that's great. And then just on gross margin, though it did come in a little bit from last quarter, just anything specific to call out there?

So, gross margins largely were driven by increasing sales with the potential to impact them going forward more with some of the things I mentioned about operational efficiencies and cost reduction initiatives, but that was the main driver.

Okay. And then I know the launch here is early with Xembify exemplified, but are you seeing a similar attach rate here with the Freedom 60 pump and your infusion sets compared to something like Hizentra?

Sorry, Alex, similar what rates?

Similar attachment rate?

Yeah, so what we've seen so far is a bit of a slow launch by Xembify, but a lot of excitement about the added supply that's coming to market. As I've mentioned in previously, we see the allotment or allocation of SUBQ-IG drugs not even meeting half of the demand.

So, we're starting to see the uptick. What we have seen is they've been very selective in who they've taken this to, but we are feeling very good about this increasing supply.

I think it's a little bit of a slow ramp with just building physician and patient awareness, but we're incredibly excited about the amount of supply that will be added as a result is Xembify and even CUTAQUIG.

Okay. And then could you expand on that Phase III hematology drug that you mentioned?

Were you actively supporting their clinical trials? If you can provide that?

And then when should we expect to learn more about that product?

So, I mentioned in the space of hematology, there is a successful Phase III trial that met its clinical efficacy endpoint. And we are hopeful that more definition will come out on the planned drug launch.

But you could probably expect for me to give them a more detailed update for the next quarterly call. And to answer the first part of your question, yes, we were involved in as part of our pharma initiatives and working very closely with them and their clinical trials.

That's great to hear. And then just last question from me.

You've been growing above this 20% growth for the last several quarters now. If you really take out some of the one-time pieces from last quarter, it's basically over 30%.

The longer term targets that you've outlined here from the past year, but also on this earnings call and going forward, having said it about 20% per year. So, I'm curious at what point do you think you'll look to raise those longer term targets?

Is the goal here really to keep 20% growth as the baseline, but ultimately beat that?

The goal is always to beat that, right? So, I think through some of this execution with strategic plan and some of the market dynamics have allowed us to overachieve that goal.

But we're not providing guidance on revenue growth going forward with the exception of what's outlined quite clearly in the strategic plan of 20%-plus, and there's a reason why there's a plus after the 20% in there.

Nope, understood here loud and clear. Thank you.

Appreciate and congrats on a good year.

Yes, thank you Alex.

Hey, good morning. Congrats on the progress last year.

Got a couple quick questions. If you could, could you discuss exactly what actually gets Freedom implemented as a preferred infusion system?

Is it going through the actual partnering process with your biopharma product suppliers? Or is it more relevant to become integrated within the distribution channels that they work with, specifically, like specialty pharmacies or care providers?

Kind of curious to see where your sales and marketing initiatives and dynamics break out into?

Okay. Good question, Andrew.

So, the answer is really twofold. So, what you'll see is us being a first mover into this space and the familiarity from the patients, physicians, and specialty pharmacies is a really huge advantage for us.

So, one of the things I mentioned earlier in the call was how sticky our revenue model is with the disposable component. Once patients are familiar or caregivers are familiar with our product, there's not a -- there's rarely a reason to change what they're using.

So, that's what's kind of got us on the map. Going forward, what you're onto is a huge component of our strategic plan.

And that's within these pharma initiatives. So, when I mentioned clinical trials, our goal is to work closely with these drug developers to use our product during clinical trials.

So, when a drug does launch, like I mentioned, with the hematology example, that we are the preferred and recommended drug delivery system. I hope that answers your question.

No, no, that was great color. Thank you very much.

And then as far as the ID shortages go, is that still highly relevant today or does some of those manufacturing issues kind of being resolved in real-time? And then as it relates to that, I always thought of the shortages being kind of a driving force to have the market moved towards SUBQ.

But you mentioned increase collections and manufacturing as being a catalyst also for the market going towards that. So, I was just curious if you could help reconcile the differences there?

Yeah. So, if you're a pharma manufacturer, I think you see a few things.

You see what's being preferred and requested by physicians and patients. And it's really obvious that that preference has leaned heavily in favor of SUBQ.

With that said and the backdrop is in IVIG drug that was the first mover. So, again, I kind of talked about that stickiness of the business.

That's where the supply has been. And you're talking seven to 12 months to develop IG from the collection -- through the collection process.

So, at the end of the day, it's a big allocation question for these pharma manufacturers. How much of the supply are they going to allocate for IV and how much are they going to convert to SUBQ?

And I think with the recent additions of Xembify and CUTAQUIG, I'll use Xembify as an example. Grifols is the largest market shareholder of IVIG drug.

And they've come out with a SUBQ formulation. So, there's a couple messages there, but the main message is it's really validating the movement and demand in the SUBQ market and it's also showing their ability to -- if they choose to, to cannibalize their own business and move internally from their IV product to their SUBQ product.

So, I think those are really strong tailwinds for KORU.

Okay. So, fair maybe to think about the backdrop, as you know, the markets continuing to grow, even though manufacturing is increasing, there's still going to remain to be supply constraints just due to the lengthy process after collections.

And couple that with patient preference, they're seeing a move towards SUBQ?

I'd say that's an accurate summary there. There's one other piece in there and that is I mentioned earlier that the U.S.

is the largest exporter of IG. So, we are talking mostly about the U.S.

opportunity where it's incredibly supply constrained. But another contributor to that is a lot of this IG being exported.

So, it creates other opportunities for us, but -- and for them, but it doesn't satisfy the current demand in the U.S. market.

Okay. And just a last question for me.

You had a five SUBQs listed. And I was just looking to the FDA website, they had more SUBQs listed, I'm not sure if they've all launched, but have you heard anything about GAMMAGARD or GAMUNEX, for example, be going to SUBQ?

Or have they hit the market in any sort of capacity that could be relevant for you?

Yes, so you're talking about the IV formulations and typically it's the difference between IV and SUBQ is the concentration. So, a typical difference in concentration would be 20% for SUBQ and 10% for IV.

But we are aware of the five SUBQ formulations and we're expecting some of the other formulas or formulations that are currently IV. We expect those companies and I speculate that these companies are certainly looking at trying to get into the SUBQ formulation space.

Okay, great. Yeah, maybe they haven't launched yet.

The FDA actually has them listed as both SUBQ and IV formulations, but I'm assuming it's probably really early. So, but great.

Either way, good backdrop. Thank you very much for the time and good luck going forward in 2020.

Thank you. Appreciate the questions.

Hi, Don. I have a question -- specifically two questions really the same thing.

Last quarter you talked about McKesson, buying your largest distributor and just want to know if you could comment on how that relationship is progressing and anything going on in McKesson that could really excite you about that? And also, maybe you can discuss your overall just the distributor kind of partnership kind of strategy going forward -- other partner issues kind of targeting that could really help the company, and maybe even go internationally?

Yeah, so thanks for the question Marsh. So, McKesson, they dominate the home infusion Specialty Pharmacy distribution space.

I feel that we have a very good relationship with them. We meet with them quite regularly and collaborate exceptionally well with them.

And they are the preferred distributor in the home infusion Specialty Pharmacy space. So, there's a handful of other distributors in the space.

But they at the end of the day, we let our customers decide what distributor best meets their needs. And as the dust is settled, McKesson who's obviously the largest, it's been the preferred distributor.

With that said, we work openly with all the distributors that are supplying into this market, not necessarily just to get new distributors and fill pipelines, we really let the customer decide what's best for them. And if they prefer a certain distributor for whatever reason that might be, we will work with that distributor in the spirit of best customer experience.

As far as the second part of the question our distribution strategy going forward, it really is to have a very solid working relationship with all these distributors. We do see the potential for other distributors to enter the market, which we think is probably a net positive for the customers that have additional choices.

And as we look outside the U.S., depending on the country that we're talking about, it's very dependent on having a solid distribution network. So, we'll have unlike the consolidation, you'll see in the U.S., you'll see a reliance on a handful of key distributors in the European market space.

Thanks Don.

Yes, thank you.

Thank you, Brock. So, I really appreciate everyone's continued interest in KORU Medical.

We're incredibly excited about the prospects for 2020 as we continue to build on a solid foundation that was significantly strengthened in 2019. We have a number of upcoming and events scheduled including the BTIG Med-Tech Life Science and Diagnostics Tool Conference in March, as well as the Craig-Hallum institutional Investor Conference in May and we hope to see some use these events.

Otherwise, I really appreciate the attention and interest in KORU Medical and wish everybody a wonderful day.