What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-03-30 compared with 2020-03-16 · 11 added, 556 removed, 21 unchanged (96% of the section changed)

Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases

of Equity Securities

for Common Equity

common stock trades on the NYSE American under the symbol “CRMD.”

common stock trades on the Nasdaq Global Market under the symbol “CRMD.”

Based upon information

furnished by our transfer agent, at March 25, 2021, we had approximately 272 holders of record of our common stock.

comparison of the performance of our common stock is found in Item 12 of the Report under the heading “Stock Performance

Graph.”

comparison of the performance of our common stock is found in Item 12 of the report under the heading “Stock Performance

have never declared dividends on our equity securities, and currently do not plan to declare dividends on shares of our common

11 unchanged sentences

Plan Category

securities to be

issued upon exercise

of outstanding options,

warrants and rights

Weighted-average

exercise price of

outstanding options,

warrants and rights

of securities

remaining available for

future issuance under

equity compensation

plans (excluding

securities reflected

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)

Equity compensation plans approved by security holders (1)

1 unchanged sentence

Amended and Restated 2006 Stock Incentive Plan was approved by our stockholders on February

Our 2013 Stock Incentive

Plan was approved by our stockholders on July 30, 2013.

Our 2019 Omnibus Stock Incentive Plan was approved by our stockholders

on November 26, 2019.

of 1,376,394 shares underlying stock options and 2,490 shares of unvested restricted stock units.

Our 2013 Stock Incentive Plan was approved by our stockholders on July 30,

Our 2019 Omnibus Stock Incentive Plan was approved by our stockholders on November

of underlying stock options.

(3) Applicable

to shares underlying outstanding stock options only.

Selected Financial Data

Management’s Discussion and Analysis of Financial Condition and Results of Operations

should read the following discussion and analysis together with our audited financial statements and the accompanying notes contained

elsewhere in this report.

This discussion contains forward-looking statements, within the meaning of Section 27A of Securities

Act, Section 21E of the Exchange Act, and the Private Securities Litigation Reform Act of 1995, including statements regarding

our expected financial condition, business and financing plans.

These statements involve risks and uncertainties.

results could differ materially from the results described in or implied by these forward-looking statements as a result of various

factors, including those discussed below and elsewhere in this report, particularly under the heading “Risk Factors.”

and our wholly owned German subsidiary, CorMedix Europe GmbH (collectively referred to herein as “we,”

“us,”

“our”

and the “Company”), is a biopharmaceutical company focused on developing and commercializing therapeutic

products for the prevention and treatment of infectious and inflammatory diseases.

Our primary focus is on the development

of our lead product candidate, Neutrolin®, for potential commercialization in the United States, or U.S., and other key markets.

We have in-licensed the worldwide rights to develop and commercialize Neutrolin.

Neutrolin is a novel anti-infective solution

(a formulation of taurolidine 1.35%, citrate 3.5%, and heparin 1000 u/ml) intended for the reduction and prevention of catheter-related

infections and thrombosis in patients requiring central venous catheters in clinical settings such as hemodialysis, critical/intensive

care, and oncology.

Infection and thrombosis represent key complications among hemodialysis, critical care/intensive care and

cancer patients with central venous catheters.

These complications can lead to treatment delays and increased costs to the healthcare

system when they occur due to hospitalizations, need for IV antibiotic treatment, long-term anticoagulation therapy, removal/replacement

of the central venous catheter, related treatment costs and increased mortality.

We believe Neutrolin addresses a significant

unmet medical need and a potential large market opportunity.

January 2015, the U.S.

Food and Drug Administration, or FDA, designated Neutrolin as a Qualified Infectious Disease Product, or

QIDP, for prevention of catheter related blood stream infections in patients with end stage renal disease receiving hemodialysis

through a central venous catheter.

Catheter-related blood stream infections and clotting can be life-threatening.

The QIDP designation

provides five years of market exclusivity in addition to the five years granted for a New Chemical Entity upon approval of a New

Drug Application, or NDA.

In addition, in January 2015, the FDA granted Fast Track designation to Neutrolin Catheter Lock Solution,

a designation intended to facilitate development and expedite review of drugs that treat serious and life-threatening conditions

so that the approved drug can reach the market expeditiously.

The Fast Track designation of Neutrolin provides us with the opportunity

to meet with the FDA on a more frequent basis during the development process, and also ensures eligibility to request priority

review of the marketing application.

In December 2015, we initiated a prospective,

multicenter, double-blind, randomized, active control Phase 3 clinical trial in the U.S.

which aimed to demonstrate the efficacy

and safety of Neutrolin in preventing catheter-related bloodstream infections, or CRBSI, in subjects receiving hemodialysis therapy

as a treatment for end stage renal disease, referred to as LOCK-IT-100.

The primary endpoint for the trial was time to CRBSI.

The trial evaluated Neutrolin relative to the active control heparin by documenting the incidence of CRBSI and the time

until the occurrence of CRBSI for each study subject.

Secondary endpoints were catheter patency, which was defined as required

use of tissue plasminogen activating factor, or tPA, or removal of catheter due to dysfunction, and removal of catheter for any

consultation with the FDA, we established the Clinical Adjudication Committee, or CAC, to critically and independently assess

As announced in July 2018, the CAC, while remaining blinded to treatment assignment, reviewed potential cases of CRBSI

in our LOCK-IT-100 study that occurred through early December 2017 and identified 28 such cases.

As previously agreed with the

FDA, an interim efficacy analysis was performed when the first 28 CRBSIs were identified.

On July 25, 2018, we announced that

the independent Data Safety Monitoring Board, or DSMB, had completed its review of the interim analysis of the data from the LOCK-IT-100

Because the pre-specified level of statistical significance was reached for the primary endpoint and efficacy had been

demonstrated with no safety concerns, the DSMB recommended the study be terminated early.

discussions with the FDA, we proceeded with an orderly termination of LOCK-IT-100.

In late January

2019, we announced the topline results of the full data set of the LOCK-IT-100 study.

The study continued enrolling and

treating subjects until study termination, and the final efficacy analysis was based on a total of 795 subjects.

Although the FDA usually requires two pivotal

clinical trials to provide substantial evidence of safety and effectiveness for approval of a New Drug Application, or the NDA,

we have had discussions with the FDA and plan to proceed with the submission of the NDA for Neutrolin based on the results of

LOCK-IT-100 study.

The FDA has agreed that the Neutrolin NDA is eligible for both priority review and for submission under rolling

In January 2020, the FDA granted the request for rolling review.

A determination on priority review will not be made until

the submitted NDA is reviewed by the FDA to determine the acceptance for filing.

FDA also agreed that we could request consideration of Neutrolin for approval under the Limited Population Pathway for Antibacterial

and Antifungal Drugs, or LPAD.

LPAD, passed as part of the 21 st Century Cures Act, is a new program intended to expedite

the development and approval of certain antibacterial and antifungal drugs to treat serious or life-threatening infections in

limited populations of patients with unmet needs.

We believe that LPAD will provide additional flexibility for the FDA to approve

Neutrolin to prevent CRBSIs in the limited population of patients with end-stage renal disease receiving hemodialysis through

a central venous catheter.

In the European Union, or EU, Neutrolin

is regulated as a Class 3 medical device.

In July 2013, we received CE Mark approval for Neutrolin.

In December 2013, we

commercially launched Neutrolin in Germany for the prevention of CRBSI, and maintenance of catheter patency in hemodialysis patients

using a tunneled, cuffed central venous catheter for vascular access.

To date, Neutrolin is registered and may be sold in

certain European Union and Middle Eastern countries for such treatment.

September 2014, the TUV-SUD and The Medicines Evaluation Board of the Netherlands, or MEB, granted a label expansion for Neutrolin

for these same expanded indications for the EU.

In December 2014, we received approval from the Hessian District President in

Germany to expand the label to include use in oncology patients receiving chemotherapy, IV hydration and IV medications via central

venous catheters.

The expansion also adds patients receiving medication and IV fluids via central venous catheters in intensive

or critical care units (cardiac care unit, surgical care unit, neonatal critical care unit, and urgent care centers).

An indication

for use in total parenteral nutrition was also approved.

addition to Neutrolin, we are sponsoring a pre-clinical research collaboration for the use of taurolidine as a possible treatment

for rare orphan pediatric tumors.

In February 2018, the FDA granted orphan drug designation to taurolidine for the treatment of

neuroblastoma in children.

We may seek one or more strategic partners or other sources of capital to help us develop and commercialize

taurolidine for the treatment of neuroblastoma in children.

We are also evaluating opportunities for the possible expansion of

taurolidine as a platform compound for use in certain medical devices.

Patent applications have been filed in several indications,

including wound closure, surgical meshes, and wound management.

Based on initial feasibility work, we are advancing pre-clinical

studies for taurolidine-infused surgical meshes, suture materials and hydrogels.

We will seek to establish development/commercial

partnerships as these programs advance.

The FDA regards taurolidine as a new chemical

entity and therefore an unapproved new drug.

Consequently, there is no appropriate predicate medical device currently marketed

on which a 510(k) approval process could be based.

As a result, we will be required to submit a premarket approval

application, or PMA, for marketing authorization for any medical device indications that we may pursue.

In the event that an NDA

for Neutrolin is approved by the FDA, the regulatory pathway for these medical device product candidates may be revisited with

Although there may be no appropriate predicate, de novo Class II designation can be proposed, based on a risk assessment

and a reasonable assurance of safety and effectiveness.

In April 2019, we received net proceeds of approximately $5,100,000

from the sale of a portion of our unused New Jersey NOL for the state fiscal year 2018.

The NOL was sold through the State of New

Jersey’s Economic Development Authority, or NJEDA, Technology Business Tax Certificate Transfer program, which allowed us

to sell approximately $5,400,000 of our total $6,100,000 in available NOL tax benefits for the state fiscal year 2018.

September 2019, our registration with the Saudi Arabia Food and Drug Administration, or the SFDA, expired.

As a result, we cannot

sell Neutrolin in Saudi Arabia.

We intend to complete the documentation required to renew our registration with the SFDA, however,

we cannot predict how long the renewal process will take.

There is no assurance that the registration will be renewed by the SFDA.

our inception, our operations have been primarily limited to conducting clinical trials and establishing manufacturing for our

product candidates, licensing product candidates, business and financial planning, research and development, seeking regulatory

approval for our products, initial commercialization activities for Neutrolin in the EU and other foreign markets, and maintaining

and improving our patent portfolio.

We have funded our operations primarily through debt and equity financings.

have generated significant losses to date, and we expect to use substantial amounts of cash for our operations as we prepare and

submit a NDA for Neutrolin to the FDA, commence pre-launch commercial activities for Neutrolin for the U.S.

market and commercialize

Neutrolin in the EU and other foreign markets, pursue business development activities, and incur additional legal costs to defend

our intellectual property.

As of December 31, 2019, we had an accumulated deficit of approximately $195.4 million.

are unable to predict the extent of any future losses or when we will become profitable, if ever.

Operations Overview

have not generated substantial revenue since our inception.

Through December 31, 2019, we have funded our operations primarily

through debt and equity financings.

and Development Expense

and development, or R&D, expense consists of:

(i) internal costs associated with our development activities;

(ii) payments

we make to third party contract research organizations, contract manufacturers, investigative sites, and consultants;

(iii) technology

and intellectual property license costs;

(iv) manufacturing development costs;

(v) personnel related expenses, including salaries,

stock–based compensation expense, benefits, travel and related costs for the personnel involved in drug development;

activities relating to regulatory filings and the advancement of our product candidates through pre-clinical studies and clinical

and (vii) facilities and other allocated expenses, which include direct and allocated expenses for rent, facility maintenance,

as well as laboratory and other supplies.

All R&D is expensed as incurred.

a significant amount of development is central to our business model.

Product candidates in later-stage clinical development generally

have higher development costs than those in earlier stages of development, primarily due to the significantly increased size and

duration of the clinical trials.

We expect to incur significant R&D expenses for the foreseeable future in order to complete

development of Neutrolin in the U.S., including the planned filing of an NDA for Neutrolin.

process of conducting pre-clinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming.

The probability of success for each product candidate and clinical trial may be affected by a variety of factors, including, among

others, the quality of the product candidate’s early clinical data, investment in the program, competition, manufacturing

capabilities and commercial viability.

As a result of the uncertainties associated with clinical trial enrollments and the risks

inherent in the development process, we are unable to determine the duration and completion costs of current or future clinical

stages of our product candidates or when, or to what extent, we will generate revenues from the commercialization and sale of

any of our product candidates.

timelines, probability of success and development costs vary widely.

We are currently focused on completing the necessary requirements

for filing an NDA for Neutrolin in the U.S.

as well as on continuing sales in foreign markets where Neutrolin is approved.

December 2015, we signed an agreement with a CRO, to help us conduct our LOCK-IT-100 Phase 3 clinical trial in hemodialysis patients

with central venous catheters to demonstrate the efficacy and safety of Neutrolin in preventing catheter-related bloodstream infections

and blood clotting in subjects receiving hemodialysis therapy as treatment for end stage renal disease.

During 2018, we contested

a substantial amount of the unpaid clinical trial expense due to the unexpected delay and additional costs we incurred in preparing

for the interim analysis of the LOCK-IT-100 study.

In November 2018, we signed a settlement agreement with the CRO.

with the settlement agreement, a new work order under the Master Service Agreement was executed specifying certain services the

CRO would provide to us related to the closeout of the study.

The budgeted amount of the new work order was approximately $1.4

million, which has been completed.

are pursuing additional opportunities to generate value from taurolidine, an active component of Neutrolin.

Based on initial feasibility

work, we have completed an initial round of pre-clinical studies for taurolidine-infused surgical meshes, suture materials, and

hydrogels, which require a PMA regulatory pathway for approval.

We are also involved in a pre-clinical research collaboration

for the use of taurolidine as a possible treatment for rare orphan pediatric tumors.

In February 2018, the FDA granted orphan

drug designation to taurolidine for the treatment of neuroblastoma in children.

We may seek one or more strategic partners or

other sources of capital to help us develop and commercialize taurolidine for the treatment of neuroblastoma in children.

General and Administrative Expense

general and administrative, or SG&A, expense includes costs related to commercial personnel, medical education professionals,

marketing and advertising, salaries and other related costs, including stock-based compensation expense, for persons serving in

our executive, sales, finance and accounting functions.

Other SG&A expense includes facility-related costs not included in

R&D expense, promotional expenses, costs associated with industry and trade shows, and professional fees for legal services

and accounting services.

Currency Exchange Transaction Gain (Loss)

currency exchange transaction gain (loss) is the result of re-measuring transactions denominated in a currency other than our

functional currency and is reported in the consolidated statement of operations as a separate line item within other income (expense).

The intercompany loans outstanding between our company based in New Jersey and our subsidiary based in Germany are not expected

to be repaid in the foreseeable future and the nature of the funding advanced is of a long-term investment nature.

As such, unrealized

foreign exchange movements related to long-term intercompany loans are recorded in other comprehensive income (loss).

income consists of interest earned on our cash equivalents and short-term investments.

expense consists of interest incurred on our convertible debt, amortization of debt discount and on financing of expenditures.

of Operations

of the Years Ended December 31, 2019 and 2018

following is a tabular presentation of our consolidated operating results for the years ended December 31, 2019 and 2018 (in

Increase (Decrease)

Cost of sales

Gross profit (loss)

Operating Expenses:

Research and development

Selling, general and administrative

Total operating expenses

Loss from operations

Interest income

Foreign exchange transaction loss

Interest expense, including amortization of debt discount

Total other income (expense)

Loss before income taxes

Other comprehensive income (loss)

Comprehensive loss

Revenue for the year ended December 31, 2019 was $283,000 as compared to $430,000 for the same period in 2018, a decrease

The decrease was attributable to decreased sales in the Middle East of $182,000, partially offset by higher sales

in the European Union of $35,000.

The sales decrease in the Middle East was mainly due to the expiration of our registration with

the Saudi Arabia Food and Drug Administration.

The registration must be renewed in order for us to resume selling in Saudi Arabia.

Cost of Sales.

Cost of sales for the

year ended December 31, 2019 was $373,000 as compared to $397,000 for the same period in 2018, a decrease of $24,000.

was primarily attributable to a decrease in costs related to stability studies of $58,000, a decrease in cost of materials of $25,000

as a result of lower sales, and a decrease in the cost related to replacement of products shipped under warranty of $7,000, partially

offset by the write-off in 2019 of expired raw material of $39,000 and increase in inventory reserve of $27,000.

Research and Development Expense .

R&D expense for the year ended December 31, 2019 was $11,053,000, a decrease of $7,769,000 from $18,822,000 for the same period

The decrease was primarily attributable to the winding down and close out of our LOCK-IT-100 clinical trial.

Selling, General and Administrative Expense .

SG&A expense for the year ended December 31, 2019 was $9,865,000, an increase of $1,790,000 from $8,075,000 for the same period

The increase was primarily attributable to higher non-cash charges for stock-based compensation of $1,114,000, an increase

in consulting fees of $723,000, mainly due to fees related to recruitment of additional personnel, and an increase in personnel

expenses of $553,000, mainly due to additional hires.

These increases were partially offset, among other items of lesser significance,

by a reduction in legal fees related to general legal advice of $242,000, lower costs related to business development activities

of $120,000, reduced selling and distribution expenses in the EU of $104,000, and decreases in marketing and research studies and

investor relations activities of $100,000 and $92,000, respectively.

Interest Income .

Interest income

for the year ended December 31, 2019 was $323,000, an increase of $286,000 from $37,000 for the same period in 2018.

was attributable to higher average interest-bearing cash balances and short-term investments during the year ending December 31,

2019 as compared to the same period in 2018.

Foreign Exchange Transaction Gain (Loss) .

Foreign exchange transaction losses for the year ended December 31, 2019 and 2018 were due to the re-measuring of transactions

denominated in a currency other than our functional currency.

Interest Expense .

Interest expense

for the year ended December 31, 2019 was $787,000 as compared to $2,000 for the same period in 2018.

The increase is due primarily

to the amortization of debt discount and non-cash interest expense recognized in connection with the senior secured convertible

note issued in December 2018.

Tax benefit for the year

ended December 31, 2019 of $5,061,000 represents an income tax benefit due to the sale of our unused NOL for state fiscal year

2018 through the NJEDA Technology Business Tax Certificate Transfer program.

No unused NOL was sold during the year ended December

Other Comprehensive Income (Loss) .

Unrealized foreign exchange gains and losses are related to long-term intercompany loans and the translation of the foreign affiliate

financial statements to U.S.

dollars and unrealized changes related to short-term investments resulted in a gain of $1,000 in 2019

compared to a loss of $2,000 for the same period in 2018.

Liquidity and Capital Resources

Sources of Liquidity

As a result of our cost of sales, R&D

and SG&A expenditures and the lack of substantial product sales revenue, we have not been profitable and have generated operating

losses since we began operations.

During the year ended December 31, 2019, we received net proceeds of $15,235,000 from the issuance

of 1,768,012 shares of common stock under our at-the-market-issuance sales agreement, $8,674,000 and $123,000 from the exercise

of warrants and stock options, respectively, and $2,000,000 in connection with the exchange agreement.

We will continue to be reliant

on external sources of cash for the foreseeable future until we are able to generate revenue.

In April 2019, we received net proceeds of

approximately $5,100,000 from the sale of a portion of our unused New Jersey NOL for the state fiscal year 2018.

The NOL was sold

through the NJEDA Technology Business Tax Certificate Transfer program, which allowed us to sell approximately $5,400,000 of our

total $6,100,000 in available NOL tax benefits for the state fiscal year 2018.

During January 2020, we raised approximately

$2.5 million through the use of our current at-the-market program (ATM) and have approximately $2.1 million remaining under the

At December 31, 2019, we also had approximately $30.3 million available under our current shelf registration for the

issuance of equity, debt or equity-linked securities unrelated to the current ATM program.

Net Cash Used in Operating Activities

Net cash used in operating activities for

the year ended December 31, 2019 was $15,052,000 as compared to $23,701,000 in 2018, a decrease in net cash use of $8,649,000.

The decrease was mainly attributable to a decrease in research and development expenses of $7,769,000, primarily due to the winding

down and close out of our LOCK-100 clinical trial and the sale of our unused NOL of $5,060,000 during the year ended December 31,

2019, partially offset by decreases in accounts payable and accrued expenses for the year ended December 31, 2019 of $1,564,000

and $363,000, respectively, as compared to increases in accounts payable and accrued expenses for the same period in 2018 of $782,000

and $998,000, respectively.

Cash (Used in) Provided by Investing Activities

used in investing activities for the year ended December 31, 2019 was $12,020,000 as compared to $1,555,000 of cash provided by

investing activities for the same period in 2018.

The increase in cash used during the year ended December 31, 2019 as compared

to the year ended December 31, 2018 was primarily due to the purchase of short-term investments of $14,100,000 in 2019.

Cash Provided by Financing Activities

cash provided by financing activities for the year ended December 31, 2019 was $25,804,000 as compared to $29,397,000 for the

same period in 2018.

During the year ended December 31, 2019, we recognized net proceeds of $15,235,000 from the sale of our common

stock in our at-the-market, or ATM program, $8,674,000 from the exercise of warrants, $2,000,000 as part of the exchange agreement,

and $123,000 from the exercise of stock options, partially offset by payment of financing fees of $227,000.

In the same period

last year, we recognized net proceeds of $21,968,000 from the sale of our common stock in our at-the-market program;

from issuance of a 10% convertible note, net of debt issuance costs of $109,000;

$26,000 from the exercise of warrants;

from the exercise of stock options.

Requirements and Liquidity

total cash and cash equivalents and short-term investments as of December 31, 2019 was $28.3 million excluding restricted cash

of $0.2 million compared with $17.6 million at December 31, 2018.

At December 31, 2019, we had approximately $4.6 million available

under our current at-the-market program, of which $2.5 million was utilized during January 2020, and approximately $30.3 million

available under our current shelf registration for the issuance of equity, debt or equity-linked securities unrelated to the current

We may utilize our ATM program, if conditions allow, to support our activities in connection with our planned filing

of the NDA for Neutrolin and for activities required for commercial launch of Neutrolin, as well as general corporate expenses.

Because our business has not generated

positive operating cash flow, we will need to raise additional capital in order to continue to fund our research and development

activities, as well as to fund operations generally.

Our continued operations are focused primarily in activities leading to the

preparation and submission of an NDA for Neutrolin to the FDA and will depend on our ability to raise sufficient funds through

various potential sources, such as equity, debt financings, and/or strategic relationships and potential strategic transactions.

We can provide no assurances that financing or strategic relationships will be available on acceptable terms, or at all.

expect to continue to fund operations from cash on hand and through capital raising sources as previously described, which may

be dilutive to existing stockholders, through revenues from the licensing of our products, or through strategic alliances.

expect to continue to utilize our ATM program, if conditions allow, to support our ongoing funding requirements.

Additionally,

we may seek to sell additional equity or debt securities through one or more discrete transactions, or enter into a strategic

alliance arrangement, but can provide no assurances that any such financing or strategic alliance arrangement will be available

on acceptable terms, or at all.

Moreover, the incurrence of indebtedness would result in increased fixed obligations and could

contain covenants that would restrict our operations.

Raising additional funds through strategic alliance arrangements with third

parties may require significant time to complete and could force us to relinquish valuable rights to our technologies, future

revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us or our

stockholders.

Our actual cash requirements may vary materially from those now planned due to a number of factors, any change in

the focus and direction of our research and development programs, any acquisition or pursuit of development of new product candidates,

competitive and technical advances, the costs of commercializing any of our product candidates, and costs of filing, prosecuting,

defending and enforcing any patent claims and any other intellectual property rights.

of Neutrolin outside the U.S.

are not expected to generate significant product revenues for the foreseeable future, and while

we expect to grow product sales for Neutrolin in the U.S., should we receive FDA approval, such approval is not anticipated before

the second half of 2020.

In the absence of significant revenue, we are likely to continue generating operating cash flow deficits.

We will continue to use cash as we increase other activities leading to the preparation and submission of an NDA and commercialization

upon approval, pursue business development activities, and incur additional legal costs to defend our intellectual property.

We currently estimate that as of December

31, 2019 we have sufficient cash on hand to fund operations into the second quarter of 2021, including the submission of the NDA

for Neutrolin and initial preparations for commercial launch.

Additional financing will be required to build out our commercial

infrastructure and to continue our operations should we decide to market and sell Neutrolin in the U.S.

anticipate that the FDA marketing approval for Neutrolin could be received in the second half of 2020.

If we are unable to raise

additional funds when needed, we may be forced to slow or discontinue our preparations for the commercial launch of Neutrolin.

We may also be required to delay, scale back or eliminate some or all of our research and development programs.

Each of these

alternatives would likely have a material adverse effect on our business.

September 2017, we entered into a sublease agreement for approximately 6,960 square feet of office space in Berkeley Heights,

New Jersey, which sublease runs from September 15, 2017 to June 29, 2020.

This sublease is rent-free.

A notice of an intention

not to renew our current lease has been received and as a result, we are actively seeking a new space to lease that will meet

our current needs.

of December 31, 2019, we have no lease obligation.

Accounting Estimates

management’s discussion and analysis of our financial condition and results of operations is based on our financial statements,

which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP.

The preparation

of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities

and expenses.

On an ongoing basis, we evaluate these estimates and judgments, including those described below.

We base our estimates

on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not

readily apparent from other sources.

Actual results and experiences may differ materially from these estimates.

our significant accounting policies are more fully described in Note 3 to our financial statements included with this report,

we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported

financial results and affect the more significant judgments and estimates that we use in the preparation of our financial statements.

account for stock options according to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification

(“ASC”) No.

718, “Compensation —

Stock Compensation”

(“ASC 718”).

compensation cost is measured at grant date, based on the estimated fair value of the award using a Black-Scholes option pricing

model for options with service or performance-based conditions.

Stock-based compensation cost is recognized as expense, over the

requisite service period on a straight-line basis.

incorporate several variables, including expected term, expected volatility, expected dividend yield and a risk-free interest

We estimate the expected term of the options granted based on anticipated exercises in future periods.

stock price volatility for the Company’s stock options is calculated based on the historical volatility of the Company’s

common stock.

The expected dividend yield reflects our current and expected future policy for dividends on our common stock.

To determine the risk-free interest rate, we utilize the U.S.

Treasury yield curve in effect at the time of grant with a term

consistent with the expected term of our awards which is 5 years for employees and 10 years for non-employees.

adopted the new revenue recognition, ASC 606, “

Revenue from Contracts with Customers”

, as of January 1, 2018

using the modified retrospective method.

ASC 606 prescribes a five-step model for recognizing revenue which includes (i) identifying

contracts with customers;

(ii) identifying performance obligations;

(iii) determining the transaction price;

(iv) allocating the

transaction price;

and (v) recognizing revenue.

product Neutrolin received its CE Mark in Europe in July 2013 and shipment of product to the dialysis centers began in December

In accordance with ASC 606, we recognize revenue from product sales based on the five-step model prescribed by ASC 606 as

outlined above.

engage third parties to manufacture and package inventory held for sale and warehouse such goods until packaged for final distribution

Inventories are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis.

Inventories are reviewed periodically to identify slow-moving or obsolete inventory based on sales activity, both projected and

historical, as well as product shelf-life.

In evaluating the recoverability of our inventories, we consider the probability that

revenue will be obtained from the future sale of the related inventory and, if required, will write down inventory quantities

in excess of expected requirements.

Expired inventory is disposed of and the related costs are recognized as cost of product sales

in our consolidated statements of operations.

analyze our inventory levels to identify inventory that may expire prior to sale, inventory that has a cost basis in excess of

its estimated realizable value, or inventory in excess of expected sales requirements.

Although the manufacturing of our products

is subject to strict quality controls, certain batches or units of product may no longer meet quality specifications or may expire,

which would require adjustments to our inventory values.

the future, reduced demand, quality issues or excess supply beyond those anticipated by management may result in an adjustment

to inventory levels, which would be recorded as an increase to cost of product sales.

The determination of whether or not inventory

costs will be realizable requires estimates by our management.

A critical input in this determination is future expected inventory

requirements based on our internal sales forecasts which we then compare to the expiry dates of inventory on hand.

To the extent

that inventory is expected to expire prior to being sold, we will write down the value of inventory.

If actual results differ

from those estimates, additional inventory write-offs may be required.

determine the appropriate classification of marketable securities at the time of purchase and reevaluate such designation as of

each balance sheet date.

Investments in marketable debt and equity securities classified as available-for-sale are reported at

Fair values of our investments are 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.

Our marketable securities are highly liquid and consist

government agency securities, high-grade corporate obligations and commercial paper with maturities of more than 90 days

but less than 12 months.

Changes in fair value that are considered temporary are reported net of tax in other comprehensive income

Realized gains and losses, amortization of premiums and discounts and interest and dividends earned are included in income

(expense) on the consolidated statements of operations and comprehensive income (loss).

The cost of investments for purposes of

computing realized and unrealized gains and losses is based on the specific identification method.

Investments with maturities

beyond one year, if any, are classified as short-term based on management’s intent to fund current operations with these

securities or to make them available for current operations.

For declines, if any, in the fair value of equity securities that

are considered other-than-temporary, impairment losses are charged to other (income) expense, net.

We consider available evidence

in evaluating potential impairments of our investments, including the duration and extent to which fair value is less than cost

and, for equity securities, our ability and intent to hold the investments.

Value Measurements

categorize our financial instruments into a three-level fair value hierarchy that prioritize 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 our consolidated balance sheets are categorized

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

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.

Authoritative Pronouncements:

June 2016, the FASB issued new guidance which replaces the incurred loss impairment methodology in current GAAP with a methodology

that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to

inform credit loss estimates.

We have assessed the impact of adopting this guidance and the adoption on January 1, 2020 will not

have an impact on our consolidated financial statements.

August 2018, the FASB issued a new guidance which modifies the disclosure requirements on fair value measurements.

is effective for us beginning in the first quarter of fiscal year 2020.

Early adoption is permitted.

We have assessed the impact

of adopting this guidance and the adoption on January 1, 2020 will not have a significant impact on our consolidated financial

November 2018, the FASB issued new guidance to clarify the interaction between the authoritative guidance for collaborative arrangements

and revenue from contracts with customers.

The new guidance clarifies that, when the collaborative arrangement participant is

a customer in the context of a unit-of-account, revenue from contracts with customers guidance should be applied, adds unit-of-account

guidance to collaborative arrangements guidance, and requires, that in a transaction with a collaborative arrangement participant

who is not a customer, presenting the transaction together with revenue recognized under contracts with customers is precluded.

The guidance is effective for us beginning in the first quarter of fiscal year 2020.

Early adoption is permitted.

We have assessed

the impact of adopting this guidance and the adoption on January 1, 2020 will not have an impact on our consolidated financial

November 2019, the FASB issued new guidance which requires that an entity measure and classify share-based payment awards granted

to a customer by applying the guidance in ASC 718.

The guidance is effective for us beginning in the first quarter of fiscal year

Early adoption is permitted.

We have assessed the impact of adopting this guidance and the adoption on January 1, 2020 will

not have an impact on our consolidated financial statements.

December 2019, the FASB issued new guidance which removes certain exceptions to the general principles of the accounting for income

taxes and also improves consistent application of and simplification of other areas when accounting for income taxes.

is effective for us beginning in the first quarter of fiscal year 2021.

Early adoption is permitted.

We are assessing the impact

of adopting this guidance on our consolidated financial statements.

Sheet Arrangements

do not have any off-balance sheet arrangements.

Quantitative and Qualitative Disclosures About Market Risk

Financial Statements and Supplementary Data

the financial statements included at the end of this report beginning on page F-1.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Financial Data

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity