SCHEDULE 13D/A: Horton Capital Entities Update Significant Stake in KORU Medical Systems, Disclosing Share Distributions and Director Compensation

Horton Capital Partners and Joseph M. Manko, Jr. have filed an Amendment No. 11 to their Schedule 13D, detailing changes in their beneficial ownership of KORU Medical Systems, Inc. common stock, including share distributions to partners and director compensation.

Summary

• Horton Capital Partners Fund, LP (HCPF), Horton Capital Partners, LLC (HCP), Horton Capital Management, LLC (HCM), and Joseph M. Manko, Jr. (collectively, the "Reporting Persons") filed an Amendment No. 11 to their Schedule 13D regarding their beneficial ownership in KORU Medical Systems, Inc.
• The amendment discloses changes in beneficial ownership due to the issuance of Director Shares to HCPF for Mr. Manko's service as a director, open market transactions, and pro-rata in-kind distributions of shares from HCPF to its limited partners and from HCP to its members.
• As of January 21, 2025, HCPF, HCP, and HCM each beneficially own 5,887,864 shares of Common Stock, representing 12.85% of the Issuer's outstanding shares.
• Joseph M. Manko, Jr. beneficially owns an aggregate of 6,405,064 shares, comprising 517,200 shares directly and 5,887,864 shares through shared voting and dispositive power, representing 13.97% of the Issuer's outstanding shares.
• The percentages are calculated based on 45,837,304 shares of Common Stock issued and outstanding as of November 13, 2024, as reported in the Issuer's Form 10-Q.
• Key transactions include Horton Freedom, L.P. transferring 453,231 shares to limited partners on January 10, 2024, and HCPF transferring 27,700 shares on February 15, 2024, and 721,781 shares on July 24, 2024, to limited partners.
• Director Shares issued to HCPF included 6,329 shares on March 31, 2024, 5,545 shares on June 30, 2024, 5,454 shares on September 30, 2024, and 3,937 shares on December 31, 2024.
• On January 21, 2025, HCPF transferred 1,000,000 shares to certain limited partners, including HCP, which subsequently transferred these shares to its members, with Mr. Manko receiving 351,948 shares.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While there are distributions reducing the fund's direct stake, the continued significant ownership by Horton Capital and Joseph M. Manko, Jr., coupled with Mr. Manko's role on the board and receipt of share-based compensation, indicates ongoing commitment and belief in the company's value. The stated intent to potentially engage in strategic discussions or propose changes suggests an active, rather than passive, investment approach.

Positives

• Joseph M. Manko, Jr., a director of KORU Medical Systems, continues to receive compensation in the form of Director Shares, indicating ongoing alignment of interests with shareholders.
• The Reporting Persons maintain a significant beneficial ownership stake of 13.97% (Mr. Manko) and 12.85% (Horton Capital entities), demonstrating continued investment and interest in the company's performance.

Negatives

• Horton Capital entities have made significant pro-rata in-kind distributions of shares to their limited partners and members, which reduces the direct holdings of the funds, although Mr. Manko's direct ownership increased.

Risks

• The Reporting Persons explicitly state their intention to review their investment on a continuing basis and may, in the future, increase or decrease their position, engage in discussions with management and the Board, make proposals concerning changes to capitalization, ownership structure, board structure, or operations, or sell some or all of their shares. This introduces uncertainty regarding future shareholder activism or divestment.

Future Outlook

The Reporting Persons intend to continuously review their investment in KORU Medical Systems, Inc. They may, depending on market conditions, investment opportunities, and share prices, increase or decrease their position through open market or private transactions. They also reserve the right to engage in further communications with the Issuer's management and Board, discuss with other stockholders, and propose changes to the Issuer's capitalization, ownership structure, board composition, or operations. They may modify, change, abandon, or replace these plans at any time.

Management Comments

• "The Reporting Persons acquired the shares of Common Stock for investment purposes."
• "No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) (j) of Item 4 of the form of Schedule 13D, except as set forth herein, or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein."
• "The Reporting Persons intend to review their investment in the Issuer on a continuing basis."
• "Depending on various factors including, without limitation, the Issuer's financial position and investment strategy, the price levels of the shares of Common Stock of the Issuer, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, engaging in additional communications with management and the Board of the Issuer, engaging in discussions with stockholders of the Issuer and others about the Issuer and the Reporting Persons' investment, making proposals to the Issuer concerning changes to the capitalization, ownership structure, board structure (including board composition) or operations of the Issuer, purchasing additional shares of Common Stock, selling some or all of their shares of Common Stock, or changing their intention with respect to any and all matters referred to in Item 4."

Industry Context

This filing is a routine disclosure of changes in beneficial ownership by a significant institutional investor and a board member in a medical device company. It reflects the ongoing portfolio management and strategic considerations of a large shareholder rather than a direct operational update from the company itself. The distributions to limited partners are typical for investment funds managing their portfolios.

Management Changes

Corporate Governance

Related Party Transactions

• Director Shares were issued to HCPF in consideration for Mr. Manko's service as a director of the Issuer.
• HCPF transferred shares of Common Stock to certain of its limited partners, including HCP.
• HCP transferred shares of Common Stock received from HCPF to its members, including Joseph M. Manko, Jr.

Stakeholder Impact

• **Shareholders**: The filing provides transparency regarding significant ownership changes by a major investor group and a board member, which can influence investor sentiment and potentially future strategic directions if the Reporting Persons pursue activist initiatives.
• **Management/Board**: The Reporting Persons' stated intent to potentially engage in discussions or propose changes indicates a continued active interest in the company's strategy and governance, which could lead to increased engagement or pressure on management and the board.

Next Steps

• The Reporting Persons may endeavor to increase or decrease their position in KORU Medical Systems, Inc. through open market or private transactions.
• The Reporting Persons may engage in additional communications with the Issuer's management and Board.
• The Reporting Persons may engage in discussions with stockholders of the Issuer and others about the Issuer and their investment.
• The Reporting Persons may make proposals to the Issuer concerning changes to its capitalization, ownership structure, board structure (including board composition), or operations.

Key Dates

Keywords

KORU Medical Systems, Horton Capital Partners, Joseph M. Manko Jr., Schedule 13D/A, Beneficial Ownership, Share Distribution, Director Shares, Investment Management, SEC Filing, Common Stock