KORU Medical Systems, Inc. Debt Disclosure

NOTE 5 — DEBT OBLIGATIONS

On March 8, 2024, the Company entered into a loan and security agreement with a large domestic banking institution, as lender, providing for a $5,000,000 revolving credit facility and a $5,000,000 term loan facility. Borrowings are secured by a first-priority lien on substantially all of the assets of the Company, subject to customary exceptions. On March 31, 2025 the loan and security agreement was amended to extend the maturity of the revolving credit facility to December 31, 2026 and the interest-only portion of the term loan facility to October 1, 2026. In addition, certain other covenants were also modified. On December 24, 2025, the loan and security agreement was further amended to extend the term loan availability date through March 31, 2026 with a new maturity date of December 1, 2028. As of December 31, 2025, there were no outstanding borrowings under the term loan nor the revolving credit facility.

Borrowings under the revolving credit facility will bear interest at the greater of Prime or 6.50%, payable in arrears on a monthly basis and at maturity. Borrowings under the term loan will bear interest at the greater of Prime minus 0.50% or 6.50% and will be interest-only through October 1, 2026, followed by 27 equal monthly payments of principal plus interest.

In connection with our loan financings agreement dated March 8, 2024, the Company issued common stock warrants to the lender. The fair value of each warrant was estimated on the date of the grant using the Black-Scholes option-pricing model. All options and warrants were charged against income at their fair value.  The entire compensation expense of the grant was recognized over the vesting period.

The loan and security agreement contains customary affirmative covenants, a financial maintenance covenant that requires the Company to maintain a minimum Adjusted Quick Ratio (defined as the ratio of the Company’s (i) unrestricted and unencumbered cash and cash equivalents maintained with the lender and its affiliates, plus eligible accounts receivable, to (ii) current liabilities), which was modified in 2025, of not less than 1.25 to 1.00 tested on the last day of each calendar quarter.

On July 16, 2025, the Company renewed its commercial insurance premium finance and security agreement with its insurance provider, with an aggregate principal amount of the note of $406,751, for the insurance period covering July 1, 2025 through June 30, 2026. On December 28, 2025 the Company executed its option to repay the remaining balance of note, without penalty, in the amount of $262,584.