Good day and welcome to the KORU Medical Systems Fourth Quarter and Full Year 2023 Earnings Call. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Louisa Smith from the Gilmartin Group. Please go ahead.

Thank you, operator, and good afternoon, everyone. Earlier today KORU Medical Systems released financial results for the fourth quarter and full year ended December 31, 2023. A copy of the press release is available on the company's website. During this call, we will make certain forward-looking statements regarding our business plans and other matters. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to many risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC. We assume no obligation to update any forward-looking statements. 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 the call, management will discuss certain non-GAAP financial measures in our press release and accompanying investor presentation and our filings with the SEC, each of which are posted on our website. You will find additional disclosure regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures in our press release and accompanying investor presentation and those filings. For the benefit of those listening to the replay, this call was held and recorded on Wednesday, March 13, 2024, at approximately 4:30 p.m. Eastern Time. Since then, the company may have made additional comments related to the topics discussed and please reference the company's most recent press filings and press releases and filings with the SEC. Joining us on the call today are Linda Tharby, President and CEO of KORU Medical Systems; and Tom Adams, KORU Medical's Chief Financial Officer. Linda, please go ahead.

Thank you, Louisa. Good afternoon, everyone, and thank you for joining us today. During today's call, we will use slides to support our commentary. I will begin by walking through results and key business updates for the fourth quarter and full year 2023. Tom will then review our financials and our 2024 guidance. Following the prepared remarks, we will open the line for questions. I'm very pleased with KORU's performance in the fourth quarter. We continue to execute on our growth strategy, exceeded our gross margin expectations, and, with discipline in our capital and expense management, we continued to see improvements in our quarterly cash burn. Our full-year revenues ended at $28.5 million, with growth of 2%, affected by a one-time nonrecurring engineering services revenue in our novel therapies business. Our overall revenue growth in our KORU SCIg business remains strong, with U.S. performance driven by share gains and with the overall SCIg market recovering in another quarter of sequential growth. In our international business, we delivered double-digit growth year-over-year, primarily driven by deeper penetration in current markets and successful entry into new geographies supported by strong Ig supply. In November, we announced FDA clearance of the 50 ML Hizentra prefilled syringes for the KORU FREEDOM system. Pre-filled syringes are becoming an increasingly large part of the SCIg market, and KORU is strongly positioned to capitalize on this opportunity. We believe prefills will be a critical growth driver for KORU and expand our penetration in our core markets. In novel therapies, we continue to build out the pipeline, having signed three additional collaborations in '23 and having started the year strong with two new collaborations at the beginning of 2024, both of which I will touch on later. From an operational perspective, I'll let Tom cover the financials with more granularity. For gross margins, we finished above 60% for the second consecutive quarter and generated positive cash flow of $700,000 in the fourth quarter. Additionally, we exceeded our 2023 ending cash balance projections, closing the year with $11.5 million. Each of these metrics serves as a testament to the steps we've taken in our operating expense management and inventory reduction initiatives, and we expect to continue the progression in operating performance in 2024 and beyond. Finally, we're initiating 2024 guidance for net revenues to range between $31.2 million and $32.2 million, representing 10% to 13% growth, and gross margin between 59% to 61% for the full year. Additionally, we plan to exit the year with an ending cash balance of at least $8 million and to be cash flow positive in the fourth quarter of '24 and for the full year 2025. Tom will discuss details related to the guidance and our associated assumptions later in the call. Over the last few years, we've invested in positioning KORU for growth and profitability. As we enter '24, we expect much of that investment is behind us. I'm seeing strong momentum in our core business, our best novel therapies pipeline to date, and a focused operational discipline that is critical to our future success. 2024 will be an execution year for our team, and we believe we are poised for a return to sustained double-digit growth and profitability. Vision ‘26 remains our key focus moving forward, and we are positioned for a meaningful inflection point in '24 and beyond. Moving to Slide 4. You'll recognize the three-pillar growth strategy that is the foundation of our Vision 26 initiative: domestic SCIg penetration in growth, the broadening of our novel therapies pipeline, and geographic expansion. This strategy will continue to position KORU as a leader in the growing large-volume subcutaneous drug delivery market. As it relates to our domestic core, our goal is to increase penetration into the SCIg market and further establish our leadership position. With respect to the overall SCIg market, in the fourth quarter, we saw another quarter of sequential growth in patient volumes, and the market ended the year with mid- to high single-digit growth. We delivered approximately 6% year-over-year revenue growth, and our end-user sales to pharmacies were up double-digits, reflective of share gains. Our distributor inventories were lower at the end of Q4, and we expect to see this inventory replenished in future quarters. Increased demand for pumps drove a double-digit increase in volumes for both the fourth quarter and the full year, often a leading indicator to consumable sales. We continue to see caregivers and patients try therapy to prefills due to their convenience versus traditional SCIg vial therapy. We're encouraged by these trends and believe this will benefit the commercial launch of the 50 ML Hizentra prefilled syringe, which began rollout in January. We also anticipate a new 510(k) submission for a product in the fourth quarter of 2024 within core Ig. Overall, we are increasingly confident in the SCIg market growth driving new patient starts and believe we are positioned for continuing share gains in our U.S. business in 2024. Turning to novel therapies. We have 15 collaborations signed to date, with 19 additional open opportunities across varying indications, signing three new collaborations in 2023. I'm encouraged by our progress in early '24. In recent weeks, we've announced two new collaborations, which I will discuss later. We also have two drug collaborations progressing to Phase III trials in 2024, a key milestone in the advancement to commercial launch. Looking forward, during the fourth quarter of '24, we're anticipating the submission of a 510(k) application to support a new novel therapy indication for use with our FREEDOM Infusion System in ambulatory infusion centers. I'm very pleased by the headway we're making within novel therapies, the overall strength and diversity of our pipeline, and the progress on commercialized drugs in early '25 and '26. Turning to International Core. It continues to be a great opportunity for KORU. Revenue in the fourth quarter grew 8% over Q4 '22 and 10% for the full year. Strong sales growth was driven by growth in our established markets as Ig supply stabilized, new indication growth in CIDP and FID, and entry into multiple new markets. As was the case in domestic core, pump and consumable volumes were another strong indicator of demand with double-digit growth. Our excitement in international is at an all-time high as we anticipate continued expansion into new regions in 2024. We also expect the completion of an electronic pump trial in the first half of the year, generating further evidence for our FREEDOM Infusion System. I'd like to shift our focus back to the Ig market on Slide 5 and more specifically, prefilled syringes and why we're so optimistic about the opportunities this presents for KORU moving forward. Prefills represent a major catalyst for growth within our domestic and international core markets as this delivery method is increasingly penetrating share amongst subcutaneous therapy patients and has the potential to increase overall SubQ penetration. Prefilled syringe patients grew 2.5% in the fourth quarter and increased overall penetration to 14% as the fastest-growing part of the overall Ig market. Overall, we see a number of factors that will continue to drive growth. First, patient preference, with 78% of patients preferring the use of prefilled with the FREEDOM pump versus vial administration. Additionally, the 50 ML dose clearance represents two-thirds of the prefilled market, and combined with the earlier 20 ML launch, provides KORU with a broad portfolio to fulfill all patient needs. We have been focused with our pharmaceutical partners in driving a clinical practice change to prefills, increasing usage due to the increased convenience. We expect increased penetration with CIDP patients who require significantly higher doses and twice-weekly therapy. We are excited by our position and potential for prefills to drive growth and higher penetration reaching levels of 25% for full-year penetration in '24 and 50% by the end of year '25. Turning to Slide 6. We are very pleased to announce that we will be presenting new data at the 2024 National Home Infusion Association Conference later this month. This study focused on patient adherence to the FREEDOM system and collected data from over 11,000 patients with primary immune deficiencies, who self-administered their SCIg therapy using the KORU FREEDOM pump. This retrospective study conducted over a 4.5 year period revealed an impressive adherence rate of 97% to the prescribed treatment protocol. To provide context, adherence rates for other chronic conditions such as high blood pressure, cholesterol, arthritis, and diabetes range somewhere from 62% to 87%. This comparison highlights the exceptional performance of the KORU FREEDOM pump system in promoting treatment consistency and improving patient satisfaction. Overall, these findings underscore the effectiveness of the KORU FREEDOM pump system in facilitating strong adherence to SCIg therapy among PID patients, leading to improved treatment experiences and patient satisfaction. We look forward to sharing these results at the upcoming NHIA conference with our prospective new customers. Turning to our novel therapies pipeline. We have the strongest pipeline we have reported to date. In 2023, we added three new collaborations to our pipeline, bringing our total collaborations to 15, and we are pursuing another 19 open opportunities. This pipeline translates to a total addressable market of approximately $2.7 billion through the treatment of over 1.6 million people globally. 2024 is already off to a strong start, and I want to highlight the two recent collaborations we've announced. The first being the initiation of a feasibility study with KORU's system on an already commercialized rare disease therapy. The second, a clinical supply agreement to support a pre-commercial unnamed SCIg drug entering its Phase III trials. Novel therapies is a key piece to KORU's growth strategy as it creates opportunities for future drug indications that can grow our KORU business significantly once commercialized. We also anticipate entry in Japan with increasing SCIg approvals. Our team is focused on late-stage drug opportunities with potential for commercialization over the next three years in both the home and ambulatory infusion settings. The near-term targets total six new potential entries by the end of '26 are highlighted in the lighter green on the far right of the slide. I'm encouraged by the incremental advancement in our funnel and truly believe that Novel Therapies will be transformational in increasing our leadership position as a global leader in large-volume drug delivery and driving our commercial potential in our core business. In 2023, we've laid the foundation for a strong 2024 and are on a path to continued double-digit growth with a clear line of sight to profitability in '25. I'm excited by our current momentum as we remain focused on the execution of our Vision 26 strategy and positioning KORU for continued growth and profitability. I will now turn it over to Tom to review our financials.

Thank you, Linda, and good afternoon, everyone. We closed the quarter with a total net revenue of $7.2 million, which was below the prior year by 2%. We were pleased with our quarterly performance in our domestic and international core business. For the quarter, we reported domestic core revenues of $5.6 million, reflecting 5% year-over-year growth. This growth was driven by share gains in new accounts, double-digit growth in infusion pump sales, and an overall healthy SCIg market. In addition, as Linda pointed out, the end-user sales, which are indicative of our demand, were very strong during the quarter, which we expect to be reflected in future replenishments of distributor inventory. The international core business increased 8% year-over-year with revenues of $1.3 million driven by improved Ig supply across Europe, expansion into new geographies, and double-digit growth in pump and consumable volumes. Our novel therapies business reported revenues of $200,000, or a 62% decrease driven by a large revenue milestone we completed for non-recurring engineering services in 2022. Moving to Slide 9. For the full year 2023, total net revenues were $28.5 million, increasing 2% over the prior year. Domestic core sales totaled $22.4 million, which was a 6% year-over-year increase driven by growth in pumps and consumables attributed to share gains in national and regional accounts. 2023 also marked a record year in infusion pump unit sales. With this growth, we expect our consumables revenue to follow as our pumps make it into the hands of nurses and patients. International core revenues were $4.6 million, representing a 10% increase compared to the prior year. Growth internationally was driven by increased sales in established markets as well as expansion into new geographies. Novel therapies revenues were $1.5 million, reflecting a decrease of 41% in the year. The decline was a result of higher NRE recognized and increased clinical trial orders from the prior year. We carried revenue potential from a number of pipeline opportunities into 2024. Moving on to gross margins on Slide 10. For the fourth quarter, we delivered GAAP gross margins of 60.3%, which was a 470 basis point improvement over the prior year. Our non-GAAP gross margin for the quarter was 63.1%. The non-GAAP gross margin allowed for a one-time inventory adjustment related to a product discontinuation that had no impact on revenues. Margin improvements in the quarter were driven by increases in manufacturing efficiencies relating to a site closure, outsourcing of consumable manufacturing, and favorable changes in product mix. For the full year 2023, GAAP gross margin was 58.6%, a 350 basis point improvement over the full year of 2022, driven primarily by our outsourcing efforts and improvements in manufacturing productivity and product mix. Non-GAAP gross margin for the year was 59.6%, which will include, again, a one-time adjustment for a product discontinuation. On Slide 11, at the end of the fourth quarter, we finished the year with a cash balance of $11.5 million, representative of a $700,000 cash gain for the quarter. Our Q4 cash improvement was driven by lower losses in the second half of 2023, driven by improved gross margin and disciplined operating expense control. Additionally, there was an increase in CapEx in the quarter on tooling related to the development of our next-generation products. Offsetting these uses of cash, we achieved significant working capital improvement led by the completion of our inventory reduction plan, collection of earned retention credits, and typical year-end accruals. During the fourth quarter, we also recorded a non-cash valuation allowance against our deferred tax assets of $6 million. As we review our cash usage by quarter, we improved directionally throughout 2023. The first quarter had a higher level of spending as a result of one-time investments in CapEx and onboarding of new hires, which tapered off significantly throughout the year. Moving into 2024, we expect quarterly cash usage to remain consistent, following a similar cadence, but at a significantly lower burn rate. As Linda noted earlier, given our improved operating leverage and our planning reduced cash usage, we expect to be cash flow positive in the fourth quarter of 2024 and for the full year 2025. Net loss for the fourth quarter of 2023 was $7.5 million or negative $0.16 per diluted share compared to a net loss of $2 million or negative $0.04 per diluted share for the same period of 2022. Net loss for the full year 2023 was $13.7 million or negative $0.30 per diluted share compared to a net loss of $8.7 million or negative $0.19 per diluted share for the same period of '22. Our net loss and EPS for both the quarter and the full year included a tax valuation allowance of $6 million. Adjusted EBITDA for the quarter was negative $1 million or negative $0.02 per diluted share versus negative $1.6 million or negative $0.04 from the prior year. Adjusted EBITDA for the full year was a negative $6 million or negative $0.13 per diluted share versus negative $6.1 million or negative $0.14 in the prior year. Moving on to Slide 13. We are setting our revenue guidance for the full year of 2024 between $31.2 million and $32.2 million, representing roughly a 10% to 13% growth. Key drivers behind these estimates include: first, core SCIg drug market growth in the mid- to high single digits; second, adding three new collaborations to the novel therapies pipeline; and third, prefilled syringe penetration of approximately 20% to 25% of the overall SCIg market. We expect gross margins to range between 59% to 61%, primarily as a result of geographic expansion into lower ASP markets, supply chain inflationary pressure, and start-up costs for our new production line in the second half of the year. Finally, we expect our 2024 ending cash balance to be greater than $8 million, implying a significant cash burn decrease from prior years. Assumptions to this guidance are driven by managing operating expenses of approximately $23.5 million to $24 million, exclusive of stock compensation expenses. We are also expecting cash flow to breakeven in Q4 and to be cash flow positive for the full year 2025. Finally, all our cash guidance I just mentioned is exclusive of our new $10 million credit facility. Our new credit facility consists of a $5 million line of credit and a $5 million term loan with HSBC USA, with which we have established a new commercial banking relationship. We are pleased to have this new reserve available to us for strategic growth capital opportunities. I will now turn the call back to Linda for closing comments.

Thanks, Tom. In the last several years, we've invested in our R&D pipeline and new product innovation to drive increased market penetration, share gains, and accelerated growth. As we discussed, we have already received FDA approval for the 50 ML Hizentra on our FREEDOM60 platform, which will aid in expanding our customer base. In the near term, we expect a 510(k) submission for our new infusion set, which will provide a more comfortable and convenient experience, and our next-generation infusion pump for Ig. In the longer term, we expect a pump platform for Novel Therapies that will be customizable to pharmaceutical partners' needs. We are very excited to bring each of these products to market as we look to assist both customers and pharmaceutical drug manufacturers in providing the best subcutaneous infusion experience to patients. In closing, we have a few key milestones that I would like to highlight for 2024 within our financial and operational performance. We anticipate returning to double-digit net revenue growth versus the full year '23. We look to accelerate our U.S. core share gains through increased penetration of 50 ML prefilled syringes while also continuing our international expansion in current and new markets. On the novel therapies front, we expect to enter three new collaborations in the year focusing on late-stage candidates that have higher probabilities of reaching commercialization prior to 2026. We are projecting the submission of two 510(k)s, one for a new product and the other for a new drug indication on the FREEDOM platform. Finally, it is our commitment to breakeven cash flows in Q4 of '24 and cash flow positive for full year 2025. Each of these milestones are strong indicators of the progress we are making through our KORU's overarching Vision 26 goals. Overall, I am pleased with our fourth quarter and '23 results, and I'm strongly encouraged by our strategic outlook across all of our businesses heading into '24. We continue to strive to evolve our company to a leader in drug delivery in both the clinic and at-home setting through the convenience of our products, as demonstrated by our long-term plan and milestones for the year. In closing, I would like to thank the entire KORU team for their continued passion and dedication. Operator, I will now turn the call over to you for Q&A.

Our first question comes from Frank Takkinen with Lake Street Capital.

Congrats on all the progress and strong start to the year. I was hoping to start with one on guidance. I saw and heard the comments around some of your assumptions about SCIg market growth, novel therapies, prefilled syringe penetration. I was hoping you could kind of break it down by line, maybe domestic, international and novel therapies. How should we think about the growth profile, the guide for 2024? And then to add on to that, how should we think about the contribution from the Hizentra 50 ML?

I think I got it all. I'll start and then turn it over to Tom. First, yes, our overall performance, $31.2 million to $32.2 million expectation for 2024. We do not guide by business, but let me give you a couple of the key points. In our U.S. business, we would anticipate the market overall to grow somewhere in that 7.5% range and we expect our performance to be a couple of points above that, driven by share gain, primarily from prefilled syringe and increasing prefilled penetration, particularly in the CIDP patient base. Our international performance, you can expect so that our U.S. business is a nice acceleration from where we ended this year. On our overall international business, we would expect the overall year in our international business to be up appreciably from where we ended this year, probably think about a growth trajectory somewhere in the 15% to 20% range. And then finally, for our novel therapies business, we would say, overall, you can expect that business somewhere between the $1.5 million and $2 million mark overall in the year.

And then maybe just as a follow-up to one of the earlier PRs from this week on the ambulatory infusion setting. Maybe talk about that specific opportunity and extend that into kind of how you think about the ambulatory infusion market as an overall opportunity going forward?

Yes. So, ambulatory infusion centers, just to set the stage there, are a market that exists between the hospital and the home setting, where drugs have been launched in the last three years, which require administration by a healthcare professional in that setting. As I noted in our Investor Day, that was a key area of progress for us because the drugs are already commercialized. So I'm very excited that we were able to finalize the steal and announce it in the first quarter for a drug asset that is already commercialized in those settings. On top of that, that asset will use a customized KORU platform and we anticipate that we will file a 510(k) for that in the U.S., followed by ex-U.S. geographies. We continue to see the infusion centers as being an opportunity for incremental growth, a new area that represents near-term commercial potential, and just overall, I'm very excited about the opportunity. We have several more that we are focused on in our pipeline and hopefully more to report in the coming quarters.

The next question comes from Alex Nowak with Craig-Hallum Capital.

Maybe to follow up around the core business for KORU. We've spoken a lot about the 50-milliliter prefilled launch. But I'm curious, I've been seeing a lot of TV ads on CIDP recently. So are we seeing a bigger uptake in that part of the market than maybe we would have thought. What are your thoughts there?

So currently, of our total user base, CIDP would account for about 10% of our total user base and is only today about 10% penetrated into SCIg therapy. So this is a major focus of all of the SCIg players to convert them from IV to SCIg therapy. With the advancement of prefills because of the convenience—about 80% of patients prefer these and the very large doses that they require. This is a significant opportunity to take that 10% penetration level and grow it to levels similar, for example, in PID, where we see about 50% penetration in that patient base. Overall, CIDP in the coming years is a significant area of growth. Speaking to our customers, they are reporting daily patients coming in asking and being converted with doctor prescriptions to go from IV to subcutaneous therapy. So we are very excited overall for the opportunity.

So certainly, the 50 milliliter prefilled is going to be very helpful, whether it be PID or CIDP. So that makes a little sense. What do you need for KORU to get ready to help the cade with their launch in Japan?

An approval by the regulatory bodies. We have been waiting for this one. So as you know, we submitted that file some time ago. We continue to progress commercial discussions with all of the pharmaceutical partners for that entry. So we are excited, and it's just a regulatory approval is what we need.

And then a clarification and then just one more question. Three new collaborations that were mentioned in the prepared remarks a couple of times. Do you mean three new collaborations in total for 2024 or three more than what we've already been— that's not even announced so far up until now?

That is three in total, which would include the two we've already announced. And what I would say is we have a lot of work to do on the 15 that are already in the pipeline. These generally start with feasibility; many of them involve innovation agreements. They then go into clinical trial approvals. So a lot of work to do in there. But three is the number; we obviously hope to exceed that number, but three is what we're counting on for our guidance right now. So obviously excited that we have two of those out of the way a couple of months in here.

And then just lastly, 2024, it should be a good year and should be building up into, I think, a very strong 2025. If you put together the core Ig business, the launch in Japan, the 50-millimeter prefilled, the rare disease launch. What is a realistic view on what the longer-term growth can start to look like for KORU? Is the growth that provided in the 2024 number the longer-term growth? Or could we get above that?

I would say, thank you because you just named off all of the key areas that we're looking at, right? And I would say in addition to that, continued strength in the Ig market, our share gains here in the U.S., the NT progression and successful commercial entries, all of which I laid out today; six shots on goal coming into '25 and '26 and then incremental expansion internationally, that's become a real driver for us. So overall, we believe our numbers can hit 25% growth in 2025-plus, which is what we're looking at for '25 and a little bit stronger. Sorry, the only thing I missed was new products, obviously. Those new products launching add to that share gain perspective.

Our next question comes from Caitlin Cronin with Canaccord Genuity.

Just to start off with 2024 guidance, what does that really imply from a quarterly cadence perspective for both revenue and gross margin?

Maybe I'll let Tom handle that question.

Sure. So we typically don't guide by quarter, Caitlin. But you can expect increasing revenues throughout the quarter. And I would say that on the novel therapies side, as you know, that business is rather lumpy, and revenue is reflected as work has performed and the milestones are completed. But I would say on the core side, that's more of an increasing type of revenue that you can model out. And then in terms of gross margin, yes, I mean, gross margin—there are three things that are impacting the year. And the first thing is we are launching new products, and we're ramping up our facilities in the second half of the year. And when you do that, you typically have some inefficiencies within manufacturing as you start up a new facility. Again, that's the second half of the year. And then I would say also with that, we are growing internationally. And those ASPs are generally at a lower ASP than what you'd see in the U.S. market. So I would say, all in all, you can model out gross margin that would be pretty consistent with maybe a little bit of a drop in the Q3 timeline and then a bounce back up in Q4.

And Caitlin, maybe the only additional thing that I would add to what Tom had to say is you would expect that our quarterly revenues would follow prior year patterns. We typically tend to have a stronger Q1, generally driven by new insurance, so where people switch providers and we get new pumps and/or new consumables with that provider.

And then just on gross margin again, are the supply chain inflationary pressures that you noted in the press release? Are these new or are these just pressures that have been going on for some time and you’ve noticed them in the guidance?

I'd say a combination. As you know, inflation has not gone away. It's still out there. And so we still anticipate some pricing pressures from some of our vendors. And also, we just completed our budget, and typically a lot of our new contracts renew in the first quarter. So there are some pricing increases from those renewals that we're working with.

Operator, further questions?

Our next question comes from Jason Bednar with Piper Sandler.

I want to follow up on some items that have been discussed and hopefully clarify a few things. Regarding Caitlin's question about cadence, if I connect that with a previous question about acceleration to '25, it seems that your comparisons between the first half and second half suggest there should be an acceleration. The growth rate this year indicates that we should avoid a significant jump in the growth rate as we approach '25. Is that the right way to think about it? Tom, about your comments on gross margins, particularly related to Caitlin's question about supply chain costs rising a bit, do we need to adjust our expectations for gross margins in your '26 plan? Are those increases additional to the '26 plan, or are they already included? I'm trying to understand if anything has changed.

So let me start with the gross margin since we were just on that topic. I would say that there are some one-time gross margin impacts. Again, as I mentioned, the start-up of a new production line definitely creates inefficiencies when you do that as you're trading off volumes from one site to the other. So that's one piece that I would imagine will resolve itself in future periods after this year. And then just in terms of your question around the revenue growth, sure. We will see increasing, and we will see— as we see the prefilled syringes uptake over the quarters, we will see upticks. We are also expecting approval for the Japanese market, and there are some other drivers that are included in the back half of the year, which will help our revenue.

And maybe the only other thing I would add to that is given the revenues we carried into the novel therapies this year, you can expect a more even cadence in our novel therapies revenues throughout the year. They will not be as back-end loaded as what we anticipated last year because of what we carried into this year.

I want to shift gears. I don't think it's been touched on yet. Apologies if I missed it, but you mentioned your PR today, an assessment report from your European notified body. What does this mean for your European business? Does it affect at all your ability to sell in that market or get products approved in that market? When do you expect to hear an update from BSI? Just anything additional there because again, it could be important, just hard to tell if it is or not.

So let me start by saying that we are currently certified for sale in the EU. So no issue there. Every year, you go through an annual recertification process. They were in BSI as our auditor. They were in February, to which we had zero non-conformances. So that's awesome in our manufacturing and quality systems. We had one open technical file on one product, and they recommended we submit our response to that open file to BSI, and we had been informed by them that they would come back with questions or that the file was closed. That was in March of 2023. So we were quite surprised when we got this report last week saying that they were not recommending our recertification due to this one product and open technical file. We have launched an appeal as of last evening; they came back and acknowledged that they have received that appeal, and we expect to resolve this in cooperation with them in the coming months. We expect little to no interruption in our sales in the European market. Our products continue to remain certified, marketed, and sold in the EU.

And Linda, again, I don't want to throw out like the worst case, but just so we're prepared. I mean, what's that best case as we come back and there's like no impact whatsoever or it's de minimis or what's the worst case here just so we can prepare accordingly?

So best case is that there is no interruption at all. We are well aware of this situation. Any product that we have in the market, we can continue to sell. So that's best case. And worst case, what I would say is a worst-case would be that they say we are not— they stand by their original and do not accept our appeal. Again, I feel that's highly unlikely given what we've sent them on their prior communication to us, which is why we're appealing. But if they decide to uphold that, then I would say it would take us several months to resolve. We feel we can resolve it on our end within several months, and we feel it may take them some time to review the file. So you take all of those things into impact; I would say the worst-case scenario would be several months of non-supply in Europe, which I would cap at probably three months of non-supply products.

This concludes our question-and-answer session. I would like to turn the conference back over to Linda for any closing remarks.

In closing, I just want to say thank you to the KORU team and to all of our investors for the continued progress in 2023, and we look forward to a great year in 2024. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.