UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 001-34673

CORMEDIX INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		20-5894890
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

300 Connell Drive, Suite 4200, Berkeley Heights, NJ		07922
(Address of Principal Executive Offices)		(Zip Code)

(908) 517-9500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, $0.001 par value		CRMD		Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the issuer’s common stock, as of August 5, 2025 was 74,648,992.

CORMEDIX INC. AND SUBSIDIARIES

INDEX

		Page
PART I FINANCIAL INFORMATION		1

Item 1.	Unaudited Condensed Consolidated Financial Statements	1

	Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024	1

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2025 and 2024	2

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024	3

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024	5

	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	35

Item 4.	Controls and Procedures	35

PART II OTHER INFORMATION		36

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 3.	Defaults Upon Senior Securities	39

Item 4.	Mine Safety Disclosure	39

Item 5.	Other Information	39

Item 6.	Exhibits	40

SIGNATURES		41

PART I
FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements.

CorMedix Inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	159,308,966		$	40,650,770
Short-term investments		31,402,850			11,036,857
Trade receivables, net		42,911,634			51,653,583
Inventories		9,634,438			7,599,535
Prepaid research and development expenses		123,116			152,823
Other prepaid expenses and current assets		4,675,885			3,481,868
Total current assets		248,056,889			114,575,436
Property and equipment, net		1,641,152			1,828,016
Other assets		642,066			-
License intangible asset, net		1,740,260			1,844,156
Restricted cash, long-term		105,084			105,368
Operating lease right-of-use asset		413,652			492,697
TOTAL ASSETS	$	252,599,103		$	118,845,673

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	5,815,366		$	1,720,177
Accrued expenses		25,718,305			31,951,533
Operating lease liability, short-term		177,172			167,922
Total current liabilities		31,710,843			33,839,632
Operating lease liability, net of current portion		258,073			349,091
TOTAL LIABILITIES		31,968,916			34,188,723

COMMITMENTS AND CONTINGENCIES (Note 5)

STOCKHOLDERS’ EQUITY
Preferred stock - $0.001 par value: 2,000,000 shares authorized; 91,623 and 136,623 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		92			137
Common stock - $0.001 par value: 160,000,000 shares authorized; 74,620,742 and 64,411,295 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		74,621			64,411
Accumulated other comprehensive gain		79,435			90,646
Additional paid-in capital		519,634,193			424,131,789
Accumulated deficit		(299,158,154	)		(339,630,033	)
TOTAL STOCKHOLDERS’ EQUITY		220,630,187			84,656,950
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	252,599,103		$	118,845,673

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CorMedix Inc. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2025			2024			2025			2024
Revenue:
Net sales	$	39,736,790		$	806,119		$	78,818,447		$	806,119
Cost of sales		(1,862,448	)		(509,839	)		(3,459,162	)		(1,328,377	)
Gross profit (loss)		37,874,342			296,280			75,359,285			(522,258	)
Operating Expenses:
Research and development		(2,442,709	)		(650,988	)		(5,635,149	)		(1,488,432	)
Selling and marketing		(6,384,072	)		(7,386,841	)		(10,857,913	)		(13,724,061	)
General and administrative		(9,504,056	)		(7,559,277	)		(19,197,437	)		(16,270,310	)
Total Operating Expenses		(18,330,837	)		(15,597,106	)		(35,690,499	)		(31,482,803	)
Income (loss) From Operations		19,543,505			(15,300,826	)		39,668,786			(32,005,061	)
Other Income (Expense):
Interest income		828,949			657,366			1,395,747			1,514,551
Foreign exchange transaction loss		(16,295	)		(1,473	)		(54,468	)		(5,481	)
Other income		-			500,000			-			500,000
Interest expense		(6,671	)		(6,556	)		(16,679	)		(16,391	)
Total Other Income		805,983			1,149,337			1,324,600			1,992,679
Income (loss) before income taxes		20,349,488			(14,151,489	)		40,993,386			(30,012,382	)
Tax (expense) benefit		(521,507	)		-			(521,507	)		1,394,770
Net Income (Loss)		19,827,981			(14,151,489	)		40,471,879			(28,617,612	)
Other Comprehensive Income (Loss):
Unrealized income (loss) from investments		(1,971	)		2,030			(6,481	)		(8,872	)
Foreign currency translation (loss) gain		(3,150	)		240			(4,730	)		495
Total Other Comprehensive (Loss) Income		(5,121	)		2,270			(11,211	)		(8,377	)
Comprehensive Income (Loss)	$	19,822,860		$	(14,149,219	)	$	40,460,668		$	(28,625,989	)
Net Income (Loss) Per Common Share – Basic	$	0.29		$	(0.25	)	$	0.60		$	(0.50	)
Net Income (Loss) Per Common Share - Diluted	$	0.28		$	(0.25	)	$	0.58		$	(0.50	)
Weighted Average Common Shares Outstanding – Basic		67,927,710			57,620,974			66,593,438			57,562,064
Weighted Average Common Shares Outstanding – Diluted		71,918,624			57,620,974			70,354,212			57,562,064

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CorMedix Inc. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY

(Unaudited)

For the three months ended June 30, 2025

	Common Stock				Preferred Stock- Series C-3, Series E and Series G				Accumulated Other Comprehensive			Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Income			Capital			Deficit			Equity
Balance at March 31, 2025		67,711,098	$	67,711		91,623	$	92	$	84,556		$	433,721,824		$	(318,986,135	)	$	114,888,048
Stock issued in connection with public offering, net		6,604,507		6,605		-		-		-			82,360,104			-			82,366,709
Stock issued in connection with options exercised		284,868		285		-		-		-			1,122,689			-			1,122,974
Issuance of vested restricted stock, net of shares withheld for employee withholding taxes		20,269		20		-		-		-			(247,504	)		-			(247,484	)
Stock-based compensation		-		-		-		-		-			2,677,080			-			2,677,080
Other comprehensive loss		-		-		-		-		(5,121	)		-			-			(5,121	)
Net income		-		-		-		-		-			-			19,827,981			19,827,981
Balance at June 30, 2025		74,620,742	$	74,621		91,623	$	92	$	79,435		$	519,634,193		$	(299,158,154	)	$	220,630,187

For the three months ended June 30, 2024

	Common Stock				Preferred Stock- Series C-3, Series E and Series G				Accumulated Other Comprehensive		Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Income		Capital			Deficit			Equity
Balance at March 31, 2024		54,959,270	$	54,959		181,622	$	182	$	83,461	$	394,040,254		$	(336,166,136	)	$	58,012,720
Stock issued in connection with ATM sale of common stock, net		231,097		231		-		-		-		1,009,369			-			1,009,600
Stock issued in connection with options exercised		49,165		49		-		-		-		186,433			-			186,482
Issuance of vested restricted stock, net of shares withheld for employee withholding taxes		35,259		35								(139,532	)					(139,497	)
Stock-based compensation		-		-		-		-		-		1,263,845			-			1,263,845
Other comprehensive gain		-		-		-		-		2,270		-			-			2,270
Net loss		-		-		-		-		-		-			(14,151,489	)		(14,151,489	)
Balance at June 30, 2024		55,274,791	$	55,274		181,622	$	182	$	85,731	$	396,360,369		$	(350,317,625	)	$	46,183,931

For the six months ended June 30, 2025

	Common Stock				Preferred Stock- Series C-3, Series E and Series G						Accumulated Other Comprehensive			Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount			Income			Capital			Deficit			Equity
Balance at January 1, 2025		64,411,295	$	64,411		136,623		$	137		$	90,646		$	424,131,789		$	(339,630,033	)	$	84,656,950
Stock issued in connection with ATM sale of common stock, net		620,444		621		-			-			-			6,760,952			-			6,761,573
Stock issued in connection with options exercised		368,959		369		-			-			-			1,472,955			-			1,473,324
Stock issued in connection with public offering, net		6,604,507		6,605		-			-			-			82,360,104			-			82,366,709
Conversion of Series G preferred stock to common stock		2,502,062		2,502		(45,000	)		(45	)		-			(2,457	)					-
Issuance of vested restricted stock, net of shares withheld for employee withholding taxes		113,475		113											(1,266,585	)					(1,266,472	)
Stock-based compensation		-		-		-			-			-			6,177,435			-			6,177,435
Other comprehensive loss		-		-		-			-			(11,211	)		-			-			(11,211	)
Net income		-		-		-			-			-			-			40,471,879			40,471,879
Balance at June 30, 2025		74,620,742	$	74,621		91,623		$	92		$	79,435		$	519,634,193		$	(299,158,154	)	$	220,630,187

For the six months ended June 30, 2024

	Common Stock						Preferred Stock- Series C-3, Series E and Series G				Accumulated Other Comprehensive			Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Amount			Shares		Amount		Income			Capital			Deficit			Equity
Balance at January 1, 2024		54,938,258		$	54,938			181,622	$	182	$	94,108		$	391,693,214		$	(321,700,013	)	$	70,142,429
Stock issued in connection with ATM sale of common stock, net		231,097			231			-		-		-			1,009,369			-			1,009,600
Stock issued in connection with options exercised		49,165			49			-		-		-			186,433			-			186,482
Issuance of vested restricted stock, net of shares withheld for employee withholding taxes		78,103			78										(236,693	)					(236,615	)
Cancellation of shares held in escrow		(21,832	)		(22	)									22						-
Stock-based compensation		-			-			-		-		-			3,708,024			-			3,708,024
Other comprehensive loss		-			-			-		-		(8,377	)		-			-			(8,377	)
Net loss		-			-			-		-		-			-			(28,617,612	)		(28,617,612	)
Balance at June 30, 2024		55,274,791		$	55,274			181,622	$	182	$	85,731		$	396,360,369		$	(350,317,625	)	$	46,183,931

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CORMEDIX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the Six Months Ended June 30,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	40,471,879		$	(28,617,612	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		6,177,435			3,708,024
Change in right-of-use assets		79,045			72,110
Depreciation		220,987			46,750
Amortization of intangible		103,896			51,948
Changes in operating assets and liabilities:
Decrease (increase) in trade receivables		8,741,948			(206,337	)
Increase in inventory		(2,034,903	)		(1,905,215	)
Increase in prepaid expenses and other assets		(1,805,687	)		(2,130,587	)
Increase (decrease) in accounts payable		4,095,158			(934,870	)
Decrease in accrued expenses		(6,239,674	)		(1,361,111	)
Decrease in operating lease liabilities		(81,767	)		(73,310	)
Net cash provided by (used in) operating activities		49,728,317			(31,350,210	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments		(38,272,474	)		(19,806,594	)
Maturity of short-term investments		17,900,000			35,116,192
Purchase of equipment		(34,122	)		(96,095	)
Net cash (used in) provided by investing activities		(20,406,596	)		15,213,503
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock from public offering, net		82,366,709			-
Payment of employee withholding taxes on vested restricted stock units		(1,266,472	)		(236,615	)
Proceeds from sale of common stock from at-the-market program, net		6,761,573			1,009,600
Proceeds from exercise of stock options		1,473,324			186,482
Net cash provided by financing activities		89,335,134			959,467
Foreign exchange effect on cash		1,057			(893	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		118,657,912			(15,178,133	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - BEGINNING OF PERIOD		40,756,138			43,823,192
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - END OF PERIOD	$	159,414,050		$	28,645,059
Cash paid for interest	$	16,679		$	16,391
Supplemental Disclosure of Non-Cash Investing Activities:
Liability related to license agreement	$	-		$	2,000,000
Unrealized loss from investments	$	(6,481	)	$	(8,872	)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Organization, Business and Basis of Presentation:

Organization and Business

CorMedix Inc. (“CorMedix” or the “Company”) was incorporated in the State of Delaware on July 28, 2006. The Company is a biopharmaceutical company focused on developing and commercializing therapeutic products for life-threatening diseases and conditions.

The Company’s primary focus is commercializing its lead product, DefenCath^® (taurolidine and heparin) in the United States, or U.S. The name DefenCath is the U.S. proprietary name approved by the U.S. Food and Drug Administration, or FDA. CorMedix launched the product commercially in April 2024 in the inpatient setting and July 2024 in the outpatient hemodialysis setting.

Acquisition of Melinta

On August 7, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Melinta Therapeutics, LLC, a Delaware limited liability company (“Melinta”), Coriander BidCo LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Merger Sub”), and Deerfield Private Design Fund IV, L.P., a Delaware limited partnership, solely in its capacity as representative, agent and attorney-in-fact of the Melinta equity holders (the “Members’ Representative”).

Pursuant to the terms of the Merger Agreement, and subject to the conditions contained therein, the Company has agreed to acquire Melinta via a merger in which Merger Sub will merge with and into Melinta (the “Merger”), with Melinta surviving as a wholly owned subsidiary of the Company. The closing of the Merger is referred to herein as the “Closing.”

The boards of directors of the Company and Melinta have both unanimously approved the proposed transaction, and the requisite members of Melinta, Deerfield Private Design Fund III, L.P. and Deerfield Private Design Fund IV, L.P. (the “Consenting Melinta Members”), have approved the Merger. The Merger is subject to the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Clearance”), and the satisfaction of other customary conditions, and the Merger currently is expected to be completed in September 2025.

Under the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time” and the date of the Effective Time, the “Closing Date”), the Company will (i) pay to the Melinta equityholders (including the Consenting Melinta Members) an aggregate of $260 million in cash (subject to adjustment for the Aggregate Exercise Price, Estimated Company Cash, Estimated Company Debt, Estimated Working Capital as compared to the Working Capital Target, and Estimated Transaction Expenses (each as defined in the Merger Agreement)), and (ii) to the Consenting Melinta Members an aggregate of $40 million worth of common shares, par value $0.001 per share, of the Company (the “Merger Shares”) or, at the election of a Consenting Melinta Member, in lieu of any of the Merger Shares it is so entitled to receive, a pre-funded warrant exercisable for such number of Merger Shares (each, a “Merger Warrant”). Additionally, the Consenting Melinta Members and certain Company Optionholders (as defined in the Merger Agreement) will be eligible to receive certain contingent payments pursuant to the terms of the Merger Agreement, the Contingent Payment Agreement and the Option Treatment Agreements (as defined in the Merger Agreement). The cash consideration will be funded by a combination of the Company’s existing cash on hand and a $150 million Convertible Notes Offering (as defined below). See Note 9, “Subsequent Events” for additional information.

Convertible Notes Offering

On August 6, 2025, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors to provide for the issuance of $150,000,000 aggregate principal amount of its convertible senior notes due 2030 (the “Notes”) in a private placement, exempt from registration pursuant to Section 4(a)(2) of the Securities Act. Such offering is herein referred to as the “Convertible Notes Offering.” Upon issuance, the Notes will be eligible for resale to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A of the Securities Act. Subject to the terms and conditions of the Subscription Agreements, the Company expects the Notes to be issued on August 12, 2025 (the “Notes Closing Date”).

Upon issuance, the Notes will be governed by an Indenture (the “Indenture”), by and between the Company and U.S. Bank Trust Company, National Association, as trustee (in such capacity, the “Trustee”). Upon issuance, the Notes will bear interest at a rate of 4.00% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2026. The Notes will mature on August 1, 2030 (the “Maturity Date”) and will be senior, unsecured obligations of the Company. See Note 9, “Subsequent Events” for additional information.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and with the instructions for Quarterly Reports on Form 10-Q and Article 8 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary to fairly state the interim results. Interim operating results are not necessarily indicative of results that may be expected for the full year ending December 31, 2025, or for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 25, 2025. The accompanying condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited financial statements included in such Annual Report on Form 10-K.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 2 - Summary of Significant Accounting Policies and Liquidity and Uncertainties:

Liquidity and Other Uncertainties

The unaudited condensed consolidated financial statements have been prepared in conformity with GAAP which contemplates continuation of the Company as a going concern. For the first half of 2025, the Company generated net income and net cash from operating activities from the product sales of DefenCath. The Company’s future profitability will depend on the continued successful commercialization of DefenCath. The Company’s current commercial and development expenses for DefenCath and its other operating requirements are expected to be funded for at least twelve months from the issuance of this Quarterly Report on Form 10-Q by the Company’s existing cash, cash equivalents and short-term investments at June 30, 2025, as well as the additional expected liquidity from commercial operations. Also, as of June 30, 2025, approximately $23.2 million of the Company’s common stock remains available for sale under the 2024 ATM program, with $15.0 million of remaining capacity under the 2024 Shelf Registration Statement for the issuance of Company securities (see Note 6).

The Company’s operations are subject to other factors that can affect its operating results and cash flows over the next twelve months from the issuance of these financial statements. Such factors include, but are not limited to: the ability to continue to successfully market DefenCath and generate necessary revenue in the time periods required; ability to continue to manufacture successfully with our third party contract manufacturers; competition from other products being sold or developed by other companies; the price of, and reimbursement environment for, the Company’s product; and the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities and disclosure of contingent assets and liabilities in the Company’s condensed consolidated balance sheets and the reported amounts of revenue and expenses reported for each of the periods presented are affected by estimates and assumptions. The more significant areas in which estimates and the exercise of judgment relate include; variable consideration for product returns, Medicaid utilization rates; realization of receivables, valuation of inventory, share-based payment grant date valuation, deferred tax asset valuation changes and contingent liability recognition and disclosures. Estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. They are continuously reviewed but may vary from the actuals.

Reclassifications

Certain reclassifications were made to the prior year’s amounts to conform to the 2025 presentation.

Basis of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Trade Accounts Receivable and Allowances

The Company recognizes an allowance that reflects a current estimate of credit losses expected to be incurred over the life of a financial asset, including trade receivables. The allowance for credit losses reflects the best estimate of expected credit losses of the accounts receivable portfolio determined on the basis of current information, forecasts of future economic conditions, industry knowledge and to some extent our historical experience. The Company determines its allowance methodology by pooling receivable balances at the customer level. The Company considers various factors, including individual credit risk associated with each customer, the current and future condition of the general economy and industry knowledge. These credit risk factors are monitored on a quarterly basis and updated as necessary. Also, to the extent any individual debtor is identified whose credit quality has deteriorated, the Company establishes allowances based on the individual risk characteristics of such customer. The Company makes concerted efforts to collect all outstanding balances due, however account balances are charged off against the allowance when management believes it is probable the receivable will not be recovered. The Company does not have any off-balance sheet credit exposure related to its customers. Allowances recorded for credit losses as of June 30, 2025 and December 31, 2024 were approximately $0.1 million, there were no write-offs or recoveries during the six months ended June 30, 2025.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Concentrations

The following table summarizes revenue from each of the Company’s customers, who individually represent at least 10% of total revenue.

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Customer A		59	%		0	%		68	%		0	%
Customer B		18	%		23	%		16	%		23	%
Customer C		7	%		77	%		6	%		77	%
Customer D		11	%		-			5	%		-

The following table summarizes accounts receivable concentrations for each of the Company’s customers, who individually represent at least 10% of total accounts receivable.

	June 30, 2025			December 31, 2024
Customer A		45	%		87	%
Customer D		29	%		0	%
Customer B		20	%		12	%

The Company currently has one FDA approved source for each of our two key active pharmaceutical ingredients (“APIs”) for DefenCath, taurolidine and heparin sodium, respectively. With regards to taurolidine, the Company has a drug master file (“DMF”) filed with the FDA. There is a master commercial supply agreement between a third-party manufacturer which has been in place since August 2018. With respect to heparin sodium API, the Company has identified an alternate third-party supplier and may qualify such supplier under the DefenCath NDA over the next twelve months.

The Company received FDA approval of DefenCath with finished dosage production from its European based contract manufacturing organization (“CMO”) Rovi Pharma Industrial Services. The Company believes this CMO has adequate capacity to produce the volumes needed to meet near-term projected demand for the commercial launch of DefenCath. The Company also qualified Siegfried Hameln as an alternate finished dosage manufacturing site.

Financial Instruments

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, short-term investments and accounts receivable. The Company maintains its cash and cash equivalents in bank deposit and other interest-bearing accounts, the balances of which, may exceed federally insured limits.

The following table is the reconciliation of the accounting standard that modifies certain aspects of the recognition, measurement, presentation and disclosure of financial instruments as shown on the Company’s consolidated statement of cash flows:

	June 30,
	2025		2024
Cash and cash equivalents	$	159,308,966	$	28,540,633
Restricted cash		105,084		104,426
Total cash, cash equivalents and restricted cash	$	159,414,050	$	28,645,059

The appropriate classification of marketable securities is determined at the time of purchase and reevaluated as of each balance sheet date. Investments in marketable debt classified as available-for-sale are reported at fair value. Fair value is determined using quoted market prices in active markets for identical assets or liabilities or quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Changes in fair value that are considered temporary are reported in other comprehensive income. Realized gains and losses, amortization of premiums and discounts and interest and dividends earned are included in other income (expense). The Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. There were no deemed permanent impairments at June 30, 2025 or December 31, 2024.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company’s marketable securities are highly liquid and consist of U.S. government agency securities, high-grade corporate obligations and commercial paper with original maturities of more than 90 days. As of June 30, 2025 and December 31, 2024, all of the Company’s investments had contractual maturities of less than one year. The following table summarizes the amortized cost, unrealized gains and losses and the fair value at June 30, 2025 and December 31, 2024.

	Amortized Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
June 30, 2025:
Money Market Funds included in Cash Equivalents	$	33,535,292	$	(1,318	)	$	-	$	33,533,974
U.S. Government Agency Securities		15,248,548		(813	)		791		15,248,526
Commercial Paper		16,155,214		(1,669	)		779		16,154,324
Subtotal		31,403,762		(2,482	)		1,570		31,402,850
Total June 30, 2025	$	64,939,054	$	(3,800	)	$	1,570	$	64,936,824
December 31, 2024:
Money Market Funds included in Cash Equivalents	$	23,121,752	$	-		$	-	$	23,121,752
U.S. Government Agency Securities		11,032,606		-			4,251		11,036,857
Total December 31, 2024	$	34,154,358	$	-		$	4,251	$	34,158,609

Fair Value Measurements

In accordance with Accounting Standards Codification (“ASC”) 825, Financial Instruments, disclosures of fair value information about financial instruments is required, whether or not recognized in the unaudited consolidated balance sheet, for which it is practicable to estimate that value. The Company’s financial instruments recorded in the unaudited consolidated balance sheets include cash and cash equivalents, accounts receivable, investment securities, accounts payable and accrued expenses. The carrying value of certain financial instruments, primarily cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their estimated fair values based upon the short-term nature of their maturity dates.

The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial assets recorded at fair value on the Company’s condensed consolidated balance sheets are categorized as follows:

	●	Level 1 inputs—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

	●	Level 2 inputs— Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs).

	●	Level 3 inputs—Unobservable inputs for the asset or liability, which are supported by little or no market activity and are valued based on management’s estimates of assumptions that market participants would use in pricing the asset or liability.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table provides the carrying value and fair value of the Company’s financial assets measured at fair value on a reoccurring basis as of June 30, 2025 and December 31, 2024:

	Carrying Value		Level 1		Level 2		Level 3
June 30, 2025:
Money Market Funds and Cash Equivalents	$	33,533,974	$	33,533,974	$	-	$	-
U.S. Government Agency Securities		15,248,526		15,248,526		-		-
Commercial Paper		16,154,324		-		16,154,324
Subtotal		31,402,850		15,248,526		16,154,324
Total June 30, 2025	$	64,936,824	$	48,782,500	$	16,154,324	$	-
December 31, 2024:
Money Market Funds and Cash Equivalents	$	23,121,752	$	23,121,752	$	-	$	-
U.S. Government Agency Securities		11,036,857		11,036,857		-		-
Total December 31, 2024	$	34,158,609	$	34,158,609	$	-	$	-

Inventories

The Company engages third parties to manufacture and package inventory held for sale and warehouse such goods until packaged for final distribution and sale. Costs related to the manufacturing of DefenCath incurred prior to FDA approval to support the preparation for commercial launch of its product were expensed as research and development expenses (R&D) as incurred. Upon FDA approval, costs related to the manufacturing of inventory are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis.

Inventory is valued utilizing the standard cost method. The Company regularly reviews inventory quantities on hand and writes down to its net realizable value any inventory that it believes to be impaired. Management considers forecasted demand in relation to the inventory on hand, competitiveness of product offering and sales volume assumptions, market conditions and product life cycle and expiration dating when determining net realizable value adjustments. Once inventory is written down and a new cost basis is established, it is not written back up if demand increases. The Company has not experienced any write-downs for any items listed above during the six months ended June 30, 2025.

Inventories consist of raw materials (including labeling and packaging), work-in-process, and finished goods for DefenCath. Inventories consist of the following:

	June 30, 2025		December 31, 2024
Raw materials	$	1,112,726	$	1,111,409
Work in progress		5,201,054		3,528,401
Finished goods		3,320,658		2,959,725
Total	$	9,634,438	$	7,599,535

License Agreement

The Company’s rights under the License and Assignment Agreement with ND Partners, LLP are capitalized and stated at cost. The Company amortizes the intangible asset utilizing the straight-line method over the estimated economic life of the intangible asset based on the Company’s assessment of various factors impacting estimated useful lives and cash flows of the acquired rights. Such factors include the launch date of DefenCath, the strength of the intellectual property protection of DefenCath and associated technology and various other competitive, developmental and regulatory considerations, and contractual terms. See Note 5 – Commitments and Contingencies for further discussion.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities and operating lease liabilities, net of current portion, on the condensed consolidated balance sheets (see Note 7).

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

The Company has elected, as an accounting policy, not to apply the recognition requirements in ASC 842, Accounting for Leases, to short-term leases. Short-term leases are leases that have a term of 12 months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes the lease payments for short-term leases on a straight-line basis over the lease term.

The Company has also elected, as a practical expedient, by underlying class of asset, not to separate lease components from non-lease components and, instead, account for them as a single component.

Revenue Recognition

The Company recognizes revenue from the sale of its product, DefenCath, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The provisions of ASC 606 require the following steps to determine revenue recognition: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company recognizes revenue when it believes that it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that will be transferred to the customer. The Company’s product revenue is recognized at a point in time when the performance obligation is satisfied by transferring control of the promised goods or services to a customer. In accordance with the Company’s contracts with customers, control of the product is transferred upon the conveyance of title, which occurs when the product is received by a customer. The Company’s customers are located in the United States and consist primarily of outpatient service providers and wholesale distributors.

Variable Consideration

The Company includes an estimate of variable consideration in its transaction price at the time of sale when control of the product transfers to the customer. Variable consideration includes:

	●	Distribution service fees;

	●	Prompt pay and other discounts;

	●	Product returns;

	●	Chargebacks;

	●	Rebates;

	●	Volume incentive rebates;

	●	Shelf-stock adjustments;

	●	Data fees.

The Company assesses whether or not an estimate of variable consideration is constrained based on the probability that a significant reversal in the amount of cumulative revenue may occur in the future when the uncertainty associated with the variable consideration is subsequently resolved. Actual amounts of consideration ultimately received may vary from our estimates. If actual results in the future vary from estimates, the Company adjusts these estimates, which would affect product sales and earnings in the period such variances become known.

The specific considerations that the Company uses in estimating these amounts related to variable considerations are as follows:

Distribution services fees – The Company pays distribution service fees primarily to its wholesale distributors. The Company reserves these fees based on actual net sales and the contractual fee rates negotiated with the customers in the distribution channel. The Company records these fees as contra accounts receivable on the balance sheet.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Prompt pay and other discounts – The Company provides customers with prompt pay discounts. The specific prompt pay terms vary by customer and are contractually fixed. Prompt pay discounts are expected to be taken by the Company’s customers, so an estimate of the discount is recorded at the time of sale based on the invoice price. Prompt pay discount estimates are recorded as contra accounts receivable on the balance sheet.

Product returns – Customers have the right to return product that is within six months or less of the labeled expiration date or that is past the expiration date by no more than six months. The Company determines its estimate for product returns based on: (i) data provided to the Company by its distributors (including weekly reporting of distributors’ sales and inventory held by distributors that provided the Company with visibility into the distribution channel in order to determine what quantities were sold to both inpatient and outpatient facilities), and (ii) the estimated remaining shelf life of DefenCath held by the wholesale distributors and outpatient service providers. Since the returns primarily consist of expired and short dated products that will not be resold, the Company does not record a return asset for the right to recover the goods returned by the customer at the time of the initial sale (when recognition of revenue is deferred due to the anticipated return). Estimated product returns are recorded as accrued expenses on the balance sheet.

Chargebacks – Certain covered entities, group purchasing organizations (“GPO”) and government entities will be able to purchase the product at a price discounted below wholesaler acquisition cost (“WAC”). The difference between the GPO, government or covered entity purchase price and the wholesale distributor purchase price of WAC will be charged back to the Company. The Company estimates the amount in chargebacks based on the expected number of claims and related cost that is associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period. Estimated chargebacks are recorded as contra accounts receivable on the balance sheet.

Rebates – The Company is or may become subject to negotiated discount obligations to different GPO, direct purchasers, other commercial organizations or government programs, including Medicaid. The rebate amounts for these programs are determined by statutory requirements or contractual arrangements. Rebates are owed after the product has been dispensed to an end user and the Company has been invoiced. Rebates are typically invoiced in arrears. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter based on expected product utilization, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel at the end of each reporting period. Rebate estimates are recorded as accrued expenses on the balance sheet.

Volume Incentive Rebates – The Company is subject to negotiated volume incentive rebates with certain direct and indirect customers (primarily outpatient service providers). Rebates are owed based on predetermined volume levels and payable per the terms in the customer contracts. The Company estimates and records volume incentive rebates based on anticipated purchase volume with specific customers based on communications with the customer. Volume incentive rebates are recorded as accrued expenses on the balance sheet.

Shelf-stock adjustments – The Company is subject to quarterly shelf-stock adjustments with certain direct customers to account for contract price changes as related to quarterly decreases to our published ASP. Inventory levels subject to shelf-stock adjustment are determined based on current customer utilization rates and current inventory levels at the customer. Shelf-stock adjustments are recorded as accrued expenses on the balance sheet.

Data fees – The Company is subject to negotiated data fees with certain direct customers.

Provisions for the revenue variable consideration described above totaled $22,279,000 and $41,273,000 for the three and six months ended June 30, 2025, respectively. As of June 30, 2025 and December 31, 2024, total accrued reserves and allowances to accounts receivable on the balance sheet associated with variable consideration were $23,079,000 and $23,161,000, respectively.

A roll forward of the major categories of variable consideration deductions for the six months ended June 30, 2025 is as follows:

	Volume Incentive Rebates			Medicaid and Commercial Rebates			Distribution Service Fees			Accrued Shelf- stock Liability		Accrued Returns Allowance		Prompt Pay and Other Discounts
Balance at December 31, 2024	$	20,917,991		$	41,882		$	301,937		$	-	$	746,310	$	935,286
Provisions related to sales recorded in the period		15,249,107			383,260			484,936			-		637,787		973,059
Credits/payments issued during the period		(12,893,145	)		(24,867	)		(262,720	)		-		-		(951,139
Effect of change in estimate		-			292,700			-			-		-		-
Balance at March 31, 2025		23,273,953			692,975			524,153			-		1,384,097		957,206
Provisions related to sales recorded in the period		10,543,682			1,273,639			2,656,370			2,060,141		823,717		972,436
Credits/payments issued during the period		(23,720,183	)		(186,259	)		(584,074	)		-		-		(1,223,746	)
Effect of change in estimate		-			2,029,000			-			-		-		-
Balance at June 30, 2025	$	10,097,452		$	3,809,355		$	2,596,449		$	2,060,141	$	2,207,814	$	705,896

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the three and six months ended June 30, 2025, a change in estimate was recorded for variable consideration pertaining to Medicaid and commercial rebates. During the three months ended June 30, 2025, new information was obtained by the Company surrounding Medicaid utilization rates for certain states that reimburse service providers using DefenCath. The resulting change in accounting estimate negatively impacted net sales, income from continuing operations and net income for the three and six months ended June 30, 2025. For the three months ended June 30, 2025, net income was impacted by $2,029,000, basic and diluted earnings per share were negatively impacted by $0.03 and $0.02 cents per share, respectively, which would have caused earnings per share and diluted earnings per share to be $0.32 and $0.30, respectively. Excluding the impact of the change in accounting estimate, net income would have been $21,856,000. The resulting change in estimate negatively impacts year to date revenue, continuing operations and net income in the amount of $1,695,000. Basic and diluted earnings per share were negatively impacted by $0.02 cents per share, which would have caused earnings per share and diluted earnings per share to be $0.62 and $0.60, respectively. Excluding the impact of the change in accounting estimate, net income would have been $42,167,000.

Income (Loss) Per Common Share

Income (loss) per common share requires consideration of the two-class method when an entity has participating securities. The Company’s outstanding shares of Series E preferred stock entitle the holders to receive dividends on a basis equivalent to the dividends paid to holders of common stock, participating pro-rata in the earnings of the Company as if the Series E preferred stock was converted into common shares of the Company. As a result, the Series E preferred stock meets the definition of participating securities and the Company is required to apply the two-class method. Under the two-class method, earnings available to common shareholders, including both distributed and undistributed earnings, are allocated to each class of common stock and participating securities according to dividends declared and participating rights in undistributed earnings. Since the Series E preferred stock does not have contractual obligations that require participation in the Company’s losses, the two-class method is not required for periods in which Company has a net loss.

Basic income (loss) per common share excludes dilution and is computed by dividing net income (loss) by the weighted average number of common shares, including applicable participating securities, outstanding during the period. For the three and six months ended June 30, 2025, basic income per common share is calculated assuming the Series E preferred stock was converted into common shares and participates in the earnings of the Company on a pro-rata basis. As a result, net income for the three and six months ended June 30, 2025 is allocated pro-rata between the Company’s weighted average outstanding common shares and Series E preferred stock (on an as-if converted basis). On an as-if converted basis, the Series E preferred stock is equal to 391,953 common shares of the Company and would be allocated $114,000 and $237,000 of the Company’s earnings for the three and six months ended June 30, 2025, respectively.

For periods of net income, diluted net income per share is computed using the more dilutive of the treasury method or two class method. Because the Company’s Series E preferred stock does not contain non-forfeitable rights to dividends, the “two class” method results in the same diluted net income per share as the “treasury method.” Diluted net income (loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. The Company calculates dilutive potential common shares using the treasury stock method for stock options and restricted units, which assumes the Company will use the proceeds from the exercise of stock options and vesting of restricted stock units to repurchase shares of common stock to hold in its treasury stock reserves. The Company calculates dilutive potential common shares using the if-converted method for preferred stock, which assumes the preferred stock is converted at the beginning of the period (or at time of issuance, if later).

For the three and six months ended June 30, 2024, the two-class method was not required since the Company was in a net loss position and the participating securities do not have contractual obligations that require participation in the Company’s losses.

A reconciliation of the Company’s basic and diluted income (loss) per common share is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2025		2024			2025		2024
Numerator:
Net income (loss)	$	19,827,981	$	(14,151,489	)	$	40,471,879	$	(28,617,612	)
Denominator:
Basic weighted average common shares outstanding		67,927,710		57,620,974			66,593,438		57,562,064
Effect of potentially dilutive securities		3,990,914		-			3,760,774		-
Diluted weighted average common shares outstanding		71,918,624		57,620,974			70,354,212		57,562,064

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as they would be antidilutive:

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Number of Shares of Common Stock Issuable)				(Number of Shares of Common Stock Issuable)
Series C-3 non-voting preferred stock		-		4,000		-		4,000
Series E non-voting preferred stock		-		391,953		-		391,953
Series G non-voting preferred stock		-		5,004,069		-		5,004,069
Shares issuable for payment of deferred board compensation		-		48,909		-		48,909
Shares underlying outstanding stock options		88,502		8,048,134		108,613		8,048,134
Shares underlying restricted stock units		121,426		303,994		984,918		303,994
Total potentially dilutive shares		209,928		13,801,059		1,093,531		13,801,059

Stock-Based Compensation

Stock option-based compensation cost is measured at grant date, based on the estimated fair value of the award using the Black-Scholes option pricing model for options with service conditions. Restricted stock unit (“RSU”) compensation is based upon the fair value of the Company’s common stock on the date of the grant for RSU’s that vest upon service or performance conditions. Performance stock units (“PSU’s”) which vest upon market conditions, utilize a Monte-Carlo simulation model. Stock-based compensation is recognized as expense over the requisite service period on a straight-line basis. See Note 6.

Research and Development

Research and development costs are charged to expense as incurred. Research and development include fees associated with operational consultants, contract clinical research organizations, contract manufacturing organizations, clinical site fees, contract laboratory research organizations, contract central testing laboratories, licensing activities, and allocated executive, human resources and facilities expenses. The Company accrues for costs incurred as the services are being provided by monitoring the status of the trial and the invoices received from its external service providers. As actual costs become known, the Company adjusts its accruals in the period when actual costs become known. Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development expense.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Due to the uncertainty of the Company’s ability to realize the benefit of the deferred tax assets, the net deferred tax assets are offset by a valuation allowance at June 30, 2025 and June 30, 2024.

The provision for income taxes during interim reporting periods is computed by applying an estimated annual effective tax rate to year-to-date income, adjusted for discrete items occurring within the quarter. The estimated annual effective tax rate is updated quarterly based on changes in the forecast of full-year income and tax expense.

The effective income tax rates for the three and six months ended June 30, 2025 were 2.6% and 1.3%, respectively, and 0% and 4.6% for the three and six months ended June 30, 2024. The effective income tax rate differs from the federal effective tax rate of 21% due to the utilization of deferred tax assets (Federal NOLs) which have been historically offset with the Company’s valuation allowance. The effective income tax rate reflects our best estimate of the effective tax rate expected to be applicable for the full year and is significantly impacted by state income tax and our valuation allowance over our deferred tax assets.

The Company recorded an income tax expense of $0.5 million for the three and six months ended June 30, 2025 primarily related to the state operations. For the six months ended June 30, 2024 the company recorded a tax benefit of $1.4 million due to the sale of its unused NJ State net operating losses for fiscal year 2023.

Based on consideration of all available evidence, the Company has a full valuation allowance against all of the deferred tax assets as of both June 30, 2025 and December 31, 2024 due to cumulative historical losses incurred through December 31, 2024 and current year earnings being limited to the first two quarters of 2025. We will continue to maintain a full valuation allowance on our deferred tax assets until there is sufficient positive evidence to support the reversal of all or some portion of these allowances. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a corresponding income tax benefit in the period the release is recorded. The amount of the valuation allowance release will be determined based on the available sources of future taxable income as of the period in which the release is recorded.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Profit (Loss) before income taxes	$	20,349,488		$	(14,151,489	)	$	40,993,386		$	(30,012,382	)
Provision (Benefit) for income taxes		521,507			-			521,507		$	(1,394,770	)
Effective tax rate		2.6	%		0.0	%		1.3	%		4.6	%

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe the adoption of recently issued standards have or may have a material impact on its consolidated financial statements or disclosures.

ASU 2024-03

In November 2024, the FASB issued ASU 2024-03, ASC 220- Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, which requires entities, in the notes to financial statements, with specified information about certain costs and expenses. The guidance is effective for CorMedix’s annual reporting period ending December 31, 2027, with interim periods beginning with CorMedix’s interim period ended March 31, 2028. Early adoption is permitted. CorMedix is assessing the impact of adopting this guidance on its condensed consolidated financial statements.

ASU No. 2023-09

In December 2023, the FASB issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes - Improvements to Income Tax Disclosures (Topic 740). The standard requires disaggregation of the effective rate reconciliation into standard categories, enhances disclosure of income taxes paid, and modifies other income tax-related disclosures. The guidance is effective for CorMedix’s annual reporting period ending December 31, 2025. CorMedix is currently assessing the impact of adopting this guidance on the condensed consolidated financial statements.

Note 3 - Other Prepaid Expenses and Current Assets:

Other prepaid expenses and current assets consist of the following:

	June 30, 2025		December 31, 2024
Prepaid API	$	2,633,573	$	1,039,494
Commercial		759,382		666,288
FDA filing fee		149,853		449,558
Medical affairs		288,862		412,118
Subscriptions		638,659		409,774
Insurance		121,230		342,172
Clinical		22,641		70,564
Other		61,685		91,900
Total	$	4,675,885	$	3,481,868

Note 4 - Accrued Expenses:

Accrued expenses consist of the following:

	June 30,		December 31,
	2025		2024
Accrued gross-to-net-deductions	$	18,794,602	$	21,860,335
Accrued payroll and payroll taxes		3,636,601		6,530,469
License agreement payable		-		2,000,000
Professional and consulting fees		2,371,792		865,413
Income tax payable		521,507		-
Manufacturing related		257,505		572,959
Other		136,298		122,357
Total	$	25,718,305	$	31,951,533

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 5 - Commitments and Contingencies:

Contingency Matters

In re CorMedix Inc. Securities Litigation, Case No. 2:21-cv-14020 (D.N.J.)

On October 13, 2021, the United States District Court for the District of New Jersey consolidated into In re CorMedix Inc. Securities Litigation, Case No. 2:21-cv 14020-JXN-CLW, two putative class action lawsuits filed on or about July 22, 2021 and September 13, 2021, respectively, and appointed lead counsel and lead plaintiff, a purported stockholder of the Company. The lead plaintiff filed a consolidated amended class action complaint on December 14, 2021, alleging violations of Sections 10(b) and 20(a) of the Exchange Act, along with Rule 10b-5 promulgated thereunder, and Sections 11 and 15 of the Securities Act of 1933. On October 10, 2022, the lead plaintiff filed a second amended consolidated complaint that superseded the original complaints in In re CorMedix Securities Litigation. On March 21, 2024, the Court denied Defendants’ motion to dismiss without prejudice and granted lead plaintiff leave to amend the complaint. On April 22, 2024, lead plaintiff filed a third amended consolidated complaint that superseded the second amended consolidated complaint. In the third amended complaint, the lead plaintiff seeks to represent a class of shareholders who purchased or otherwise acquired CorMedix securities between October 16, 2019 and August 8, 2022, inclusive. The third amended complaint names as defendants the Company and six (6) current and former officers of CorMedix, namely Khoso Baluch, Robert Cook, Matthew David, Phoebe Mounts, John L. Armstrong, and Joseph Todisco (the “Officer Defendants” and collectively with CorMedix, the “CorMedix Defendants”). The third amended complaint alleges that the CorMedix Defendants violated Section 10(b) of the Exchange Act (and Rule 10b-5) and that the Officer Defendants violated Section 20(a). In general, the purported bases for these claims are allegedly false and misleading statements and omissions related to the NDA submissions to the FDA for DefenCath, subsequent complete response letters, as well as communications from the FDA related and directed to the Company’s contract manufacturing organization and heparin supplier. The Company filed its motion to dismiss the third amended complaint on June 6, 2024, and received from Plaintiffs their opposition to the Company’s motion to dismiss on July 22, 2024. The Company filed its response on August 21, 2024. On June 30, 2025, the Court denied the CorMedix Defendants’ motion to dismiss the third amended complaint. On July 23, 2025, in response to a letter from the CorMedix Defendants identifying errors in the motion to dismiss opinion, the Court withdrew its opinion, stating that it was “entered in error” and that a “subsequent Opinion and Order will follow.” On July 23, 2025, the Court so-ordered the parties’ proposed Pretrial Scheduling Order with deadlines for discovery. The Company intends to vigorously contest the claims.

In re CorMedix Inc. Derivative Litigation, Case No. 2:21-cv-18493-JXN-LDW (D.N.J.)

On or about October 13, 2021, a purported shareholder, derivatively and on behalf of the Company, filed a shareholder derivative complaint in the United States District Court for the District of New Jersey, in a case entitled Voter v. Baluch, et al., Case No. 2:21-cv-18493-JXN-LDW (the “Derivative Litigation”). The complaint names as defendants Khoso Baluch, Janet Dillione, Alan W. Dunton, Myron Kaplan, Steven Lefkowitz, Paulo F. Costa, Greg Duncan, Matthew David, Phoebe Mounts and Joseph Todisco along with the Company as Nominal Defendant. The complaint alleges breaches of fiduciary duties, abuse of control, and waste of corporate assets against the defendants and a claim for contribution for purported violations of Sections 10(b) and 21D of the Exchange Act against certain defendants. On January 21, 2022, pursuant to a stipulation between the parties, the Court entered an order staying the case while the motion to dismiss the class action lawsuit described in the foregoing paragraph is pending. The stay may be terminated before the motion to dismiss is resolved according to certain circumstances described in the stipulation available on the Court’s public docket.

On or about January 13, 2023, another purported shareholder, derivatively and on behalf of the Company, filed a shareholder derivative complaint in the United States District Court for the District of New Jersey, in a case entitled DeSalvo v. Costa, et al., Case No. 2:23-cv-00150-JXN-CLW. Defendants Paulo F. Costa, Janet D. Dillione, Greg Duncan, Alan Dunton, Myron Kaplan, Steven Lefkowitz, Joseph Todisco, Khoso Baluch, Robert Cook, Matthew David, Phoebe Mounts, and John L. Armstrong along with the Company as Nominal Defendant. The complaint alleges breaches of fiduciary duty and unjust enrichment against the individual defendants.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

On or about January 25, 2023, another purported shareholder, derivatively and on behalf of the Company, filed a shareholder derivative complaint in the United States District Court for the District of New Jersey, in a case entitled Scullion v. Baluch, et al., Case No. 2:23-cv-00406-ES-ESK. Defendants Khoso Baluch, Janet Dillione, Alan W. Dunton, Myron Kaplan, Steven Lefkowitz, Paulo F. Costa, Gregory Duncan, Matthew David, and Phoebe Mounts, along with the Company as Nominal Defendant. The complaint alleges breaches of fiduciary duties.

On or about April 18, 2023, the Court entered an order consolidating the above-mentioned shareholder derivative complaints for all purposes, including pretrial proceedings, trial and appeal. The consolidated derivative action is entitled, In re CorMedix Inc. Derivative Litigation, C.A. No. 2:21-cv-18493-JXN-LDW. The individual defendants intend to vigorously contest the claims set forth in the consolidated derivative action. The provisions of the Order to Stay entered in the Voter Action on January 21, 2022, apply to the consolidated derivative action. On April 20, 2023, the consolidated derivative action was administratively terminated and removed from the Court’s docket until the motion to dismiss the class action is resolved and the Private Securities Litigation Reform Act, or PSLRA, stay is lifted. On June 30, 2025, the Court denied the CorMedix Defendants’ motion to dismiss the securities class action (as discussed in the preceding section, the Court withdrew its order on July 23, 2025). On July 16, 2025, the Court in the derivative litigation entered the parties’ Joint Stipulation Governing Schedule, which provides that the derivative plaintiffs have until September 15, 2025 to file a consolidated complaint. The individual defendants intend to vigorously contest the claims.

Demand Letter

On or about June 23, 2022, the Company’s Board received a letter demanding it investigate and pursue causes of action, purportedly on behalf of the Company, against certain current and former directors, officers, and/or other employees of the Company (the “Letter”), which the Board believes are duplicative of the claims already asserted in the Derivative Litigation. As set forth in the Board’s response to the Letter, the Board will consider the Letter at an appropriate time, as circumstances warrant, as it continues to monitor the progress of the Derivative Litigation.

Commitments

License and Assignment Agreement

In 2008, the Company entered into a License and Assignment Agreement (the ND License Agreement) with ND Partners, LLP (NDP). Pursuant to the ND License Agreement, NDP granted the Company exclusive, worldwide licenses for certain antimicrobial catheter lock solutions, processes for treating and inhibiting infections, a biocidal lock system and a taurolidine delivery apparatus, and the corresponding United States and foreign patents and applications (the NDP Technology). As consideration in part for the rights to the NDP Technology, upon execution of the ND License Agreement, the Company paid NDP an initial licensing fee of $325,000 and granted NDP a 5% equity interest in the Company, consisting of 7,996 shares of the Company’s common stock.

Under the ND License Agreement, the Company is required to make cash and equity payments to NDP upon the achievement of certain milestones. Under the ND License Agreement, the maximum aggregate amount of cash payments due upon achievement of applicable milestones was $2,500,000, with the balance being $2,000,000 as of March 31, 2025. The initial licensing fee of $325,000, the fair value of the 5% equity interest (7,996 shares of the Company’s common stock) and an additional $500,000, as a result of the achievement of one milestone, were recognized on the Company’s statement of operations in R&D in prior periods, as the related milestones were achieved by the Company prior to the FDA approval. During the year ended December 31, 2024, the Company determined it was probable that the net sales milestones would be achieved in future periods and, as a result, the Company recorded a license intangible asset of $2,000,000 and a license agreement liability of $2,000,000, which was included within accrued expenses in the Company’s consolidated balance sheet as of December 31, 2024. In May 2025, the Company paid the final milestone liability in the aggregate amount of $2,000,000.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Beginning in the second quarter of 2024, the license intangible asset is amortized as cost of goods sold over its estimated economic life of approximately 10 years. The amortization start period correlates with the product launch of DefenCath and the first period in which revenue will be recognized. Amortization expense of approximately $52,000 and $104,000 was recorded during the three and six months ended June 30, 2025, respectively.

The ND License Agreement will expire on a country-by-country basis upon the earlier of (i) the expiration of the last patent claim under the ND License Agreement in a given country, or (ii) the payment of all milestone payments. Upon the expiration of the ND License Agreement in each country, we will have an irrevocable, perpetual, fully paid-up, royalty-free exclusive license to the NDP Technology in such country. The ND License Agreement also may be terminated by NDP if the Company materially breaches or defaults under the ND License Agreement and that breach is not cured within 60 days following the delivery of written notice to the Company, or by the Company on a country-by-country basis upon 60 days prior written notice in the event the Company’s Board determines not to proceed with the development of the NDP Technology. If the ND License Agreement is terminated by either party, the Company’s rights to the NDP Technology will revert back to NDP.

Other Commitments

In December 2024, the Company entered into a three-year agreement with Syneos Health Commercial Services, LLC (“Syneos”) under which Syneos will provide a dedicated inpatient field sales force that will exclusively promote DefenCath to hospitals and health systems. The Company has paid an up-front implementation and are obligated to pay a fixed monthly fee. Upon the twelve-month anniversary of the deployment date, expected to be in the second quarter of 2026, the agreement is cancelable upon 60 days’ written notice. As of June 30, 2025, the minimum amount committed under this agreement totals $7.8 million.

The Company entered into a seven-year operating lease agreement in March 2020 for an office space at 300 Connell Drive, Berkeley Heights, New Jersey 07922. The lease agreement, with a monthly average cost of approximately $17,000, commenced on September 16, 2020.

Note 6 - Stockholders’ Equity:

Common Stock

On May 9, 2024, the Company filed a shelf registration statement (the “2024 Shelf Registration Statement”) for the issuance of up to $150,000,000 of Company securities. Also on May 9, 2024, the Company entered into an At-The-Market Issuance Sales Agreement with Leerink Partners LLC, as sales agent, pursuant to which the Company may sell, from time to time, an aggregate of up to $50,000,000 of its common stock through the sales agents under the 2024 Shelf Registration Statement, subject to limitations imposed by the Company and subject to the sales agent’s acceptance (the “2024 ATM program”). The sales agent is entitled to a commission of up to 3% of the gross proceeds from the sale of common stock sold under the 2024 ATM program. During the six months ended June 30, 2025, the Company sold an aggregate of 620,444 shares of its common stock under the 2024 ATM program and realized an aggregate net proceeds of approximately $6.8 million. Approximately $23.2 million of the Company’s common stock remains available for sale under its 2024 ATM program, with $15,000,000 of capacity remaining under its 2024 Shelf Registration Statement for the issuance of Company securities.

On June 30, 2025, the Company completed an underwritten public offering of common stock pursuant to the Company’s universal shelf registration statement on Form S-3, selling an aggregate of 6,604,507 shares, at the price of $12.87 per share less an underwriting discount of $0.229 per share. The Company received aggregate net proceeds of approximately $82.4 million after deducting the underwriting discounts and commissions and offering expenses payable by the Company. The Company intends to use the proceeds for general corporate purposes, which may include working capital, expenses related to research and the development of product candidates, and potential strategic transactions, including acquisitions, joint ventures or collaborations, involving companies, products or assets that complement our business. No payments were made by the Company to directors, officers or persons owning 10% or more of the Company’s common stock or to their associates, or to the Company’s affiliates. In addition, the Company granted the underwriter a 30-day option to purchase an additional 15% of the shares of its common stock offered in the offering, which expired unexercised.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Preferred Stock

The Company is authorized to issue up to 2,000,000 shares of preferred stock in one or more series without stockholder approval. The Company’s board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. Of the 2,000,000 shares of preferred stock authorized, the Company’s board of directors has designated (all with par value of $0.001 per share) the following:

	As of June 30, 2025						As of December 31, 2024
	Preferred Shares Outstanding		Liquidation Preference (Per Share)		Total Liquidation Preference		Preferred Shares Outstanding		Liquidation Preference (Per Share)		Total Liquidation Preference
Series C-3		2,000	$	10.00		20,000		2,000	$	10.00	$	20,000
Series E		89,623	$	49.20		4,409,452		89,623	$	49.20	$	4,409,452
Series G		-	$	-		-		45,000	$	187.36	$	8,431,200
Total		91,623				4,429,452		136,623			$	12,860,652

In March 2025, 45,000 shares of Series G preferred stock were converted which resulted in the issuance of 2,502,062 shares of common stock.

Restricted and Performance Stock Units

The Company has issued restricted stock units (“RSUs”) and performance stock units (“PSUs”) to certain employees and non-employee directors as compensation for services. The grant date fair value of the RSUs is based upon the fair value of the Company’s common stock on the date of the grant for RSUs that vest upon service or performance conditions. For RSUs that vest upon market conditions, the grant date fair value of RSUs is based upon a Monte-Carlo simulation model.

During the six months ended June 30, 2025, the Company granted 1,339,250 RSUs, to its employees and non-employee directors with service based vesting conditions and a weighted average grant date fair value of $10.26 per share.

During the six months ended June 30, 2024, the Company granted 283,333 RSUs to its executive officers, with service based vesting conditions and a weighted average grant date fair value of $3.47 per share.

In addition to the RSUs noted above, during the six months ended June 30, 2025, the Company issued 487,500 PSUs to its executive officers with market performance and service based vesting conditions and, as such, the grant date fair value of $11.79 was calculated using a Monte-Carlo simulation model. The following key assumptions were used to determine the fair value of the PSUs granted during the period:

Assumption	Period 1			Period 2			Period 3
Share price	$	8.10			N/A			N/A
Equity volatility		71.2	%		69.7	%		87.0	%
Remaining term (years)		0.99			1.99			2.99
Dividend yield		0	%		0	%		0	%
Risk-free rate		4.13	%		4.20	%		4.25	%

Compensation expense related to these PSUs is recognized on a straight-line basis over the requisite service period, regardless of whether the market condition is ultimately satisfied.

As of June 30, 2025, the Company has 1,884,042 outstanding RSUs and PSUs. As of June 30, 2024, the Company has 303,994 outstanding RSUs. As of June 30, 2025, unrecognized compensation expense related to unvested RSUs and PSUs is $15,761,000, which will be recognized over a weighted average remaining period of 1.9 years at June 30, 2025.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stock Options

During the six months ended June 30, 2025 no stock options were issued. During the six months ended June 30, 2024, the Company granted ten-year qualified and non-qualified stock options covering an aggregate of 2,043,667 shares of the Company’s common stock under the Amended and Restated 2019 Omnibus Stock Incentive Plan. The weighted average exercise price of these options is $3.62 per share.

During the six months ended June 30, 2025, the Company issued 368,959 shares of common stock, upon the exercise of stock options. The Company realized net proceeds of $1,473,000 from this exercise with a weighted average exercise price of $3.99 per share. The aggregate intrinsic value amounted to $2,387,000 which was the difference between the exercise prices of the underlying options and the market prices of the common stock of the Company at the date of exercise.

As of June 30, 2025, there was approximately $4,347,000 in total unrecognized compensation expense related to stock options granted, which will be recognized over an expected remaining weighted average period of 1.2 years.

The Company uses the simplified method to calculate the expected term which takes into account the vesting term and the expiration date of the stock options. The expected term of the stock options granted to consultants, if any, is based upon the full term of the respective option agreements. The expected stock price volatility for the Company’s stock options is calculated based on the historical volatility of the Company’s stock price for the expected term. The forfeitures of share-based awards were recognized in the period in which they occur. The expected dividend yield of 0% reflects the Company’s current and expected future policy for dividends on the Company’s common stock. To determine the risk-free interest rate, the Company utilized the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected term of the Company’s awards.

The total stock-based compensation expense recognized in the condensed consolidated statements of operations is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
Award type	2025		2024		2025		2024
RSUs	$	1,398,084	$	114,089	$	3,477,345	$	475,850
PSUs		436,594		-		915,563		-
Stock options		842,402		1,149,756		1,784,527		3,232,174
Total	$	2,677,080	$	1,263,845	$	6,177,435	$	3,708,024

The following table represents the allocation of stock-based compensation expense by financial statement line item:

	Three Months Ended June 30,				Six Months Ended June 30,
Financial statement line item	2025		2024		2025		2024
Cost of sales	$	86,929	$	48,451	$	142,160	$	166,763
Research and development		196,330		77,996		320,150		259,109
Selling and marketing		244,559		137,204		357,295		345,734
General and administrative		2,149,262		1,000,194		5,357,830		2,936,418
Total	$	2,677,080	$	1,263,845	$	6,177,435	$	3,708,024

Note 7 - Leases:

Operating lease expense in the Company’s condensed consolidated statements of operations and comprehensive income (loss) for each of the three and six months ended June 30, 2025 was approximately $52,000 and $104,000, respectively, which includes costs associated with leases for which ROU assets have been recognized as well as short-term leases. For the three and six months ended June 30, 2024, operating lease expense in the Company’s condensed consolidated statements of operations and comprehensive loss was approximately $52,000 and $104,000, respectively.

CORMEDIX INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

At June 30, 2025, the Company has a total operating lease liability of $435,000, of which approximately $177,000 and $258,000 were classified as operating lease liabilities, short-term and operating lease liabilities, net of current portion, respectively, on the condensed consolidated balance sheet. At December 31, 2024, the Company’s total operating lease liability was $517,000, of which $168,000 was classified as operating lease liabilities, short-term and $349,000 was classified as operating lease liabilities, net of current portion, on the condensed consolidated balance sheet. Operating ROU assets as of June 30, 2025 and December 31, 2024 were $414,000 and $493,000, respectively.

The weighted average remaining lease term as of June 30, 2025 and 2024 were 2.3 and 3.3 years, respectively, and the weighted average discount rate for operating leases was 9% at June 30, 2025 and 2024.

As of June 30, 2025, maturities of lease liabilities were as follows:

2025 (excluding the six months ended June 30, 2025)	$	104,000
2026		211,000
2027		169,000
Total future minimum lease payments		484,000
Less imputed interest		(49,000	)
Total	$	435,000

Note 8 - Segment Reporting:

As noted above, the Company’s primary focus is the commercialization of its lead product, DefenCath, indicated to reduce the incidence of catheter-related bloodstream infections in adult patients with kidney failure receiving chronic hemodialysis through a central venous catheter (“CVC”).

The Company has determined that it currently operates in a single segment - Drug Product, located in a single geographic location – the United States. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. Since the Company operates in a single segment, the measure of segment total assets and loss from opera

SEC Form 10-Q filed by CorMedix Inc.