What changed in this filing

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Item 9A. Controls and Procedures

2021-03-30 compared with 2020-03-16 · 2061 added, 2239 removed, 663 unchanged (87% of the section changed)

Controls and Procedures

and Procedures

of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation, under the supervision and with

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of the design and operation of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e))

(the “Exchange Act”).

Based on the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer have

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our internal control over financial reporting.

Management’s

Annual Report on Internal Controls Over Financial Reporting

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accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records

that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;

(2) provide reasonable

assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements in accordance

with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations

of our management and directors;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized

acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of

records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;

reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements

in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance

with authorizations of our management and directors;

and (3) provide reasonable assurance regarding prevention or timely detection

of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In connection with the preparation of our

annual consolidated financial statements, management, including, our Principal Executive and Financial Officer, has undertaken

an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2019, based on the

criterial established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations

of the Treadway Commission (COSO).

Management’s assessment included an evaluation of the design of our internal control over

financial reporting and testing of the operational effectiveness of those controls.

connection with the preparation of our annual consolidated financial statements, management, including, our Principal Executive

and Financial Officer, has undertaken an assessment of the effectiveness of our internal control over financial reporting as of

December 31, 2020, based on the criterial established in Internal Control—Integrated Framework (2013) issued by the Committee

of Sponsoring Organizations of the Treadway Commission (COSO).

Management’s assessment included an evaluation of the design

of our internal control over financial reporting and testing of the operational effectiveness of those controls.

on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31,

Our independent registered public accounting

firm, Friedman, LLP, has expressed an opinion on our internal control over financial reporting as of December 31, 2019 in the audit

report which is included herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

To the Board of Directors and

Stockholders of CorMedix Inc.

Opinion on Internal Control over Financial

We have audited CorMedix Inc.’s (the

“Company’s”) internal control over financial reporting as of December 31, 2019, based on criteria established

in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway

Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial

reporting as of December 31, 2019, based on criteria established in Internal Control—Integrated Framework (2013) issued

We also have audited, in accordance with

the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets and the

related consolidated statements of operations and comprehensive loss, stockholders’

equity, and cash flows for the two years

in the period ended December 31, 2019, and our report dated March 16, 2020, expressed an unqualified opinion on the consolidated

financial statements.

Basis for Opinion

The Company’s management is responsible

for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control

over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting

appearing under item 9A.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting

based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to

the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

We conducted our audit in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over

financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a

material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that

our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal

Control over Financial Reporting

A company’s internal control over

financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and

the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s

internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records

that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with

generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with

authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely

detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the

financial statements.

Because of its inherent limitations, internal

control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness

to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree

of compliance with the policies or procedures may deteriorate.

/s/ Friedman LLP

March 16, 2020

Other Information

Directors, Executive Officers, and Corporate Governance

Executive Officers, and Corporate Governance

have adopted a written Code of Conduct and Ethics that applies to our directors, executive officers and all employees.

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This code of ethics and business conduct can be

found in the “Investors - Corporate Governance”

section of our website, www.cormedix.com .

found in the “Investors - Corporate Governance” section of our website, www.cormedix.com .

Section 16(a) Reports

Section 16(a) of the Exchange Act requires

our directors, executive officers and holders of more than 10% of our common stock to file with the SEC initial reports of ownership

and reports of changes in the ownership of our common stock and other equity securities.

Such persons are required to furnish

us copies of all Section 16(a) filings.

Based solely upon a review of the copies of the forms furnished to us, we believe that

our officers, directors and holders of more than 10% of our common stock complied with all applicable filing requirements during

the fiscal year ended December 31, 2019, with the exception of the Form 3 for Dr.

Mounts, which was due on May 13, 2019 and filed

on May 24, 2019.

16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of our common stock to file

with the SEC initial reports of ownership and reports of changes in the ownership of our common stock and other equity securities.

Such persons are required to furnish us copies of all Section 16(a) filings.

Based solely upon a review of the copies of the forms

furnished to us, we believe that our officers, directors and holders of more than 10% of our common stock complied with all applicable

filing requirements during the fiscal year ended December 31, 2020.

following table sets forth the name, age and position of each of our directors as of December 31, 2020:

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Director and Chief Executive Officer

September 2020

November 2020

February 2019

Chairman of the Board

Director and Chairman of the Board

Steven Lefkowitz

Khoso Baluch joined our Board

in October 2016 upon his appointment as our Chief Executive Officer.

As of February 1, 2020, he is serving as our acting Principal

Financial Officer and Principal Accounting Officer.

Baluch previously served as Senior Vice President and President Europe,

Middle East & Africa of UCB, SA, or UCB, from January 2015 to April 2016, Senior Vice President and President of the European

Region of UCB from February 2013 to December 2014, and Senior Vice President and Chief Marketing Officer of UCB from January 2010

to February 2013.

Baluch joined our Board in October 2016 upon his appointment as our Chief Executive Officer.

Baluch previously served

as Senior Vice President and President Europe, Middle East & Africa of UCB, SA, or UCB, from January 2015 to April 2016, Senior

Vice President and President of the European Region of UCB from February 2013 to December 2014, and Senior Vice President and

Chief Marketing Officer of UCB from January 2010 to February 2013.

Prior to joining UCB, Mr.

Baluch worked for Eli Lilly and Company for 24 years, holding international positions

spanning Europe, the Middle East and the United States in general management, business development, market access and product leadership.

He has served as an independent director of Poxel SA, a French publicly traded biotech company, since 2013, and chairs its compensation

He also serves as a member of the business development and scientific committees of Poxel SA.

Baluch holds a BSc

in Aeronautical Engineering from City University London and a Masters of Business Administration from Cranfield School of Management.

Baluch worked for Eli Lilly and Company

for 24 years, holding international positions spanning Europe, the Middle East and the United States in general management, business

development, market access and product leadership.

He has served as an independent director of Poxel SA, a French publicly traded

biotech company, since 2013, and chairs its compensation committee.

He also serves as a member of the business development and

scientific committees of Poxel SA.

Baluch holds a BSc in Aeronautical Engineering from City University London and a Masters

of Business Administration from Cranfield School of Management.

Among other qualifications, attributes and skills, Mr.

Baluch’s business expertise and significant executive management experience

in the pharmaceutical industry led to the conclusion of our Board that he should serve as a director of our Company in light of

our business and structure.

Janet Dillione has been

a director of CorMedix since August 2015.

From May 2014 until May 2019, Ms.

Dillione served as the Chief Executive Officer of

Bernoulli Enterprise (formerly known as Cardiopulmonary Corp.), a leader in medical device connectivity for EMR integration, and

integrated clinical applications and workflows for over 25 years.

Previously, she was at Nuance Communications, Inc., a leading

provider of voice and language solutions for businesses and consumers around the world, having joined Nuance in April 2010 as

Executive Vice President and General Manager of the Healthcare Division and serving as an executive officer from March 2010 until

business expertise and significant executive management experience in the pharmaceutical industry led to the conclusion of our

Board that he should serve as a director of our Company in light of our business and structure.

Costa has been a director of CorMedix since September 2020.

Costa previously served as President and Chief Executive

Officer of Novartis U.S.

Corporation, from October 2005 to August 2008.

Prior to his work at Novartis U.S.

Corporation, Mr.

was President and Chief Executive Officer of Novartis Pharmaceuticals, U.S.

from July 1999 to September 2005.

Prior to joining

Novartis, Mr.

Costa spent 30 years at Johnson & Johnson, including as President of Janssen Pharmaceutica, Inc.

2009 to August 2012, Mr.

Costa served as Chairman of the Board of Amylin Pharmaceuticals Inc, a commercial stage biopharma company,

until its sale to Bristol-Myers Squibb and AstraZeneca in a $7 billion transaction in 2012.

Costa currently serves as Chairman

of the Board of MacroGenics, Inc., a public late stage biopharma company focused on oncology, and as a director of two privately

held life science companies.

Costa received his undergraduate degree from São Paulo School of Business Administration

and earned a master’s degree in business administration from Harvard Business School.

Among other experience, qualifications,

attributes and skills, Mr.

Costa’s significant depth of experience in the pharmaceutical industry, including service as

a director and executive of pharmaceutical companies, led to the conclusion of our Board that he should serve as a director of

our Company in light of our business and structure.

Dillione has been a director of CorMedix since August 2015.

Since November 2020, Ms.

Dillione currently serves as the

Chief Executive Officer of Contact America, a nationally recognized leader in comprehensive telehealth and remote patient

monitoring solutions.

Prior to joining Contact America, she served as Chief Executive Officer of Bernoulli Enterprise, Inc.

since May 2014, a real-time connected healthcare information technology company.

Previously, she was at Nuance

Communications, Inc., a leading provider of voice and language solutions for businesses and consumers around the world,

having joined Nuance in April 2010 as Executive Vice President and General Manager of the Healthcare Division and serving as

an executive officer from March 2010 until May 2014.

From June 2000 to March 2010, Ms.

Dillione held several senior level management positions at Siemens Medical Solutions,

a global leader in medical imaging, laboratory diagnostics, and healthcare information technology, including President and CEO

of the global healthcare IT division.

Dillione held several senior level

management positions at Siemens Medical Solutions, a global leader in medical imaging, laboratory diagnostics, and healthcare

information technology, including President and CEO of the global healthcare IT division.

Dillione received her B.A.

from Brown University in 1981 and completed the Executive

Program at The Wharton School of Business of the University of Pennsylvania in 1998.

She has over 25 years of experience leading

global teams in the development and delivery of healthcare technology and services.

She is a member of the board of CortiCare,

a private U.S.

Brown University in 1981 and completed the Executive Program at The Wharton School of Business of the University of

Pennsylvania in 1998.

She has over 25 years of experience leading global teams in the development and delivery of healthcare

technology and services.

She is a member of the board of CortiCare, a private U.S.

based company.

Among other qualifications, attributes and skills, Ms.

Dillione’s financial expertise and

significant executive management experience with medical device and healthcare companies led to the conclusion of our Board that

she should serve as a director of our Company in light of our business and structure.

been a director of CorMedix since March 2019.

Dunton founded Danerius, LLC, a biotechnology and pharmaceutical consulting

Among other qualifications,

attributes and skills, Ms.

Dillione’s financial expertise and significant executive management experience with medical

device and healthcare companies led to the conclusion of our Board that she should serve as a director of our Company in

light of our business and structure.

Duncan has been a director of CorMedix since November 2020.

Duncan currently serves as the Chairman and CEO of Virios

Therapeutics, a clinical-stage biopharmaceutical company developing and commercializing innovative antiviral therapies to treat

diseases associated with a viral triggered abnormal immune response, such as fibromyalgia (FM), and has served since April 2020.

From 2014 and prior to joining his current company earlier this year, Mr.

Duncan served as President and CEO of Celtaxsys, a privately

held biotechnology company focused on cystic fibrosis and other rare, inflammatory diseases.

Duncan has spent the majority

of his career in senior leadership roles in commercial stage pharmaceutical companies.

From 2007 to 2013, he served as a senior

executive at UCB, including as President of its North America business.

Prior to his roles with UCB, Mr.

Duncan spent approximately

18 years at Pfizer where he gained significant experience across sales and marketing functions including serving as SVP of US

Marketing and later as President of Pfizer’s Latin America business from 2005 to 2007.

Duncan received his undergraduate

degree from the State University of New York, Albany, and earned an MBA degree from Emory University.

Among other experience,

qualifications, attributes and skills, Mr.

Duncan’s significant depth of experience in the pharmaceutical industry led to

the conclusion of our Board that he should serve as a director of our Company in light of our business and structure.

has been a director of CorMedix since March 2019.

Dunton founded Danerius, LLC, a biotechnology

and pharmaceutical consulting business.

From November 2015 through March 2018, Dr.

Dunton was the Head/Senior Vice President of Research, Development and Regulatory

Affairs of Purdue Pharma L.P., a private pharmaceutical company.

From January 2007 through March 2009, Dr.

Dunton served as President

and Chief Executive Officer of Panacos Pharmaceuticals, Inc.

From 2003 until 2006, Dr.

Dunton was the President and Chief Executive

Officer of Metaphore Pharmaceuticals, Inc., until it merged with ActivBiotics.

He was also President and Managing Director of the

Janssen Research Foundation, the research and development and regulatory arm of the pharmaceuticals division at Johnson & Johnson.

Dunton received his Bachelor of Science degree in biochemistry, magna cum laude, from State University of New York at Buffalo,

and received his M.D.

Dunton was the Head/Senior Vice President of

Research, Development and Regulatory Affairs of Purdue Pharma L.P., a private pharmaceutical company.

From January 2007 through

March 2009, Dr.

Dunton served as President and Chief Executive Officer of Panacos Pharmaceuticals, Inc.

From 2003 until 2006,

Dunton was the President and Chief Executive Officer of Metaphore Pharmaceuticals, Inc., until it merged with ActivBiotics.

He was also President and Managing Director of the Janssen Research Foundation, the research and development and regulatory arm

of the pharmaceuticals division at Johnson & Johnson.

Dunton received his Bachelor of Science degree in biochemistry,

magna cum laude, from State University of New York at Buffalo, and received his M.D.

from New York University School of Medicine.

In addition to CorMedix, Dr.

Dunton currently serves on the

boards of two public companies, Palatin Technologies, Inc.

and Oragenics, Inc.

Dunton currently serves on the boards of two public companies, Palatin Technologies, Inc.

and Oragenics,

and chairs the compensation committees of both companies.

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Additionally, Dr.

Dunton is a member of the board of Cytogel

Pharma LLC, a private bio-pharmaceutical development company focused on acquiring promising early-stage programs, and Regeneus,

Ltd., an Austrian public company listed on the ASX.

Among other qualifications, Dr.

Dunton’s significant depth of experience

in the pharmaceutical industry, including service as a director of public pharmaceutical companies, led to the conclusion of our

Board that he should serve as a director of our Company in light of our business and structure.

Myron Kaplan became

a director of CorMedix in April 2016.

He is a founding partner of Kleinberg, Kaplan, Wolff & Cohen, P.C., a New York City general

practice law firm, where he has practiced corporate and securities law for more than forty years.

Kaplan became a

trustee of the Lehman Brothers Plan Holding Trust.

Previously, he served as a member of the board of directors of SAirGroup Finance

(USA) Inc., a subsidiary of SAirGroup that had publicly issued debt securities, Trans World Airlines, Inc.

Dunton is a member of the board of Cytogel Pharma LLC, a private bio-pharmaceutical development company focused

on acquiring promising early-stage programs, and Regeneus, Ltd., an Austrian public company listed on the ASX.

Among other qualifications,

Dunton’s significant depth of experience in the pharmaceutical industry, including service as a director of public pharmaceutical

companies, led to the conclusion of our Board that he should serve as a director of our Company in light of our business and structure.

Kaplan became a director of CorMedix in April 2016.

He is a founding partner of Kleinberg, Kaplan, Wolff & Cohen,

P.C., a New York City general practice law firm, where he has practiced corporate and securities law for more than forty years.

Kaplan became a trustee of the Lehman Brothers Plan Holding Trust.

Previously, he served as a member of the board

of directors of SAirGroup Finance (USA) Inc., a subsidiary of SAirGroup that had publicly issued debt securities, Trans World

Airlines, Inc.

and Kitty Hawk, Inc.

Among his business and civic involvements, Mr.

Kaplan currently serves on the boards of directors of a number of private companies

and has been active for many years on the boards of trustees and various board committees of The Children’s Museum of Manhattan

and JBI International (formerly The Jewish Braille Institute of America).

Kaplan graduated from Columbia College and holds

a Juris Doctor from Harvard Law School.

Among other experience, qualifications, attributes and skills, Mr.

Kaplan’s experience

in a broad range of corporate and securities matters and service as a director of public companies led to the conclusion of our

Board that he should serve as a director of our Company in light of our business and structure.

Mehmood Khan, M.D.

a director of CorMedix in June 2017.

Since March 2019, Dr.

Khan has been the Chief Executive Officer of Life Biosciences Inc.

March 2019, Dr.

Khan served as Vice Chairman (from January 2015) and Chief Scientific Officer of Global Research and Development

(from December 2007) for PepsiCo, Inc., where he led global R&D and oversaw the company’s 2025 sustainability agenda,

which includes plans for the further transformation of its current food and beverage portfolio as well as expansion of offerings

containing positive nutrition with a focus on reaching more underserved communities and consumers with healthier choices.

positions at PepsiCo included Chief Executive Officer, Global Nutrition Group from January 2011 to September 2013.

Khan served as Head of Medical Affairs and then President of Takeda Pharmaceuticals’

Global Research & Development

Center from January 2002 to December 2007.

Earlier in his career Dr.

Khan was a faculty member at the Mayo Clinic and Mayo Medical

School in Rochester, Minnesota, serving as Director of the Diabetes, Endocrine and Nutritional Trials Unit in the division of endocrinology.

Prior to the Mayo Clinic, Dr.

Khan spent nine years leading programs in diabetes, endocrinology, metabolism, and nutrition for

the Hennepin County Medical Center in Minneapolis.

His practice included extensive work with patients with diabetes requiring hemodialysis

as well as parenteral nutrition.

Khan also currently serves as a member of the board of directors of one public company, Reckitt

Benckiser Group PLC, which is listed on the London Stock Exchange.

Khan also currently serves as a member of the board of directors

for several private companies, HemoShear Therapeutics, LLC, Indigo Ag, Inc., Life Biosciences Inc.

and Spectrum Health System.

Khan serves as a member of the compensation committee of the board of directors for Indigo Ag, Inc.

and a member of the audit

committee of the board of directors for both of Indigo Ag, Inc.

and Spectrum Health System.

He earned his medical degree from the

University of Liverpool Medical School, England.

Among other qualifications, attributes and skills, Dr.

Khan’s business expertise

and significant executive management experience, as well as his medical background and pharmaceutical company experience led to

the conclusion of our Board that he should serve as a director of our Company in light of our business and structure.

Steven Lefkowitz was a director

of CorMedix from August 2011 to June 2016.

Kaplan currently serves on the boards of directors

of a number of private companies and has been active for many years on the boards of trustees and various board committees of

The Children’s Museum of Manhattan and JBI International (formerly The Jewish Braille Institute of America).

graduated from Columbia College and holds a Juris Doctor from Harvard Law School.

Among other experience, qualifications, attributes

and skills, Mr.

Kaplan’s experience in a broad range of corporate and securities matters and service as a director of public

companies led to the conclusion of our Board that he should serve as a director of our Company in light of our business and structure.

Lefkowitz was a director of CorMedix from August 2011 to June 2016.

He was reappointed to the Board in June 2017.

He also served as our

acting Chief Financial Officer from August 2013 to July 2014.

Lefkowitz has been the President and Founder of Wade Capital

Corporation, a financial advisory services company, since June 1990.

Lefkowitz has been a director of both public and private

served as our acting Chief Financial Officer from August 2013 to July 2014.

Lefkowitz has been the President and Founder of

Wade Capital Corporation, a financial advisory services company, since June 1990.

Lefkowitz has been a director of both public

and private companies.

Lefkowitz received his A.B.

from Dartmouth College in 1977 and his M.B.A.

from Columbia University in 1985.

from Columbia University

Among other experience, qualifications, attributes and skills, Mr.

Lefkowitz’s education, experience and financial expertise

led to the conclusion of our Board that he should serve as a director of our Company in light of our business and structure.

Board Independence

Our Board has undertaken a review of the

independence of our directors and has determined that (i) all current directors except Khoso Baluch are independent within the

meaning of Section 803A(2) of the NYSE American Rules, (ii) all members of our Audit Committee meet the additional test for independence

for audit committee members imposed by SEC regulation and Section 803B(2) of the NYSE American Rules, (iii) all of the members

of our Compensation Committee are independent within the meaning of Section 805(c) of the NYSE American Rules, and (iv) all of

the members of our Nominating and Governance Committee are independent within the meaning of Section 805(c) of the NYSE American

Board Committees

Our Board has established an Audit Committee,

Compensation Committee and Nominating and Governance Committee.

Our Audit Committee currently consists of Mr.

Lefkowitz (Chair),

Dunton and Ms.

Our Compensation Committee currently consists of Ms.

Lefkowitz’s education, experience and financial

expertise led to the conclusion of our Board that he should serve as a director of our Company in light of our business and structure.

Our Board has undertaken

a review of the independence of our directors and has determined that (i) all current directors except Khoso Baluch are independent

within the meaning of Section 5605(b) of the Nasdaq Marketplace Rules, (ii) all members of our Audit Committee meet the additional

test for independence for audit committee members imposed by SEC regulation and Section 5605(c) of the Nasdaq Marketplace Rules,

(iii) all of the members of our Compensation Committee are independent within the meaning of Section 5605(d) of the Nasdaq Marketplace

Rules, and (iv) all of the members of our Nominating and Governance Committee are independent within the meaning of Section 5605(e)

of the Nasdaq Marketplace Rules.

Our Board has

established an Audit Committee, Compensation Committee and Nominating and Governance Committee.

Audit Committee currently consists of Mr.

Lefkowitz (Chair), Dr.

Dunton and Mr.

Our Compensation Committee currently

consists of Ms.

Dillione (Chair), Dr.

Dunton and Mr.

Our Nominating and Governance Committee currently consists of Dr.

Khan (Chair) and Mr.

The membership of these Committees

may be changed after the annual meeting.

Each of the above-referenced committees

operates pursuant to a formal written charter.

The charters for each committee, which have been adopted by our Board, contain a

detailed description of the respective committee’s duties and responsibilities and are available on our website at www.cormedix.com

under the “Investor Relations—Corporate Governance”

Audit Committee

The Audit Committee monitors our corporate

financial statements and reporting and our external audits, including, among other things, our internal controls and audit functions,

the results and scope of the annual audit and other services provided by our independent registered public accounting firm and

our compliance with legal matters that have a significant impact on our financial statements.

The Audit Committee also consults

with our management and our independent registered public accounting firm prior to the presentation of financial statements to

stockholders and, as appropriate, initiates inquiries into aspects of our financial affairs.

The Audit Committee is responsible

for establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls

or auditing matters, and for the confidential, anonymous submission by our employees of concerns regarding questionable accounting

or auditing matters.

In addition, the Audit Committee is directly responsible for the appointment, retention, compensation and

oversight of the work of our independent registered public accounting firm, including approving services and fee arrangements.

Our Nominating and Governance Committee currently consists of

Costa (Chair), Mr.

Kaplan and Ms.

The membership of these Committees may be changed after our next annual

of the above-referenced committees operates pursuant to a formal written charter.

The charters for each committee, which have

been adopted by our Board, contain a detailed description of the respective committee’s duties and responsibilities and

are available on our website at www.cormedix.com under the “Investor Relations—Corporate Governance” tab.

Audit Committee monitors our corporate financial statements and reporting and our external audits, including, among other things,

our internal controls and audit functions, the results and scope of the annual audit and other services provided by our independent

registered public accounting firm and our compliance with legal matters that have a significant impact on our financial statements.

The Audit Committee also consults with our management and our independent registered public accounting firm prior to the presentation

of financial statements to stockholders and, as appropriate, initiates inquiries into aspects of our financial affairs.

Committee is responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting,

internal accounting controls or auditing matters, and for the confidential, anonymous submission by our employees of concerns

regarding questionable accounting or auditing matters.

In addition, the Audit Committee is directly responsible for the appointment,

retention, compensation and oversight of the work of our independent registered public accounting firm, including approving services

and fee arrangements.

All related party transactions will be approved by the Audit Committee before we enter into them.

Both our independent registered public

accounting firm and internal financial personnel regularly meet with, and have unrestricted access to, the Audit Committee.

The Board has determined that each of Mr.

our independent registered public accounting firm and internal financial personnel regularly meet with, and have unrestricted

access to, the Audit Committee.

Board has determined that each of Mr.

Lefkowitz, Dr.

Dunton and Ms.

Dillione qualifies as an “audit committee financial expert”

as that term is defined in

the rules and regulations of the SEC.

Dunton and Mr.

Duncan qualifies as an “audit committee financial expert”

as that term is defined in the rules and regulations of the SEC.

The designation of each of Mr.

Lefkowitz, Dr.

Dunton and Ms.

Dillione as an “audit

committee financial expert”

does not impose on them any duties, obligations or liability that are greater than those that

are generally imposed on them as a member of the Audit Committee and the Board, and their designation as an “audit committee

financial expert”

pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member

of the Audit Committee or the Board.

Compensation Committee

The Compensation Committee reviews and

approves our compensation policies and all forms of compensation to be provided to our executive officers and directors, including,

among other things, annual salaries, bonuses, and other incentive compensation arrangements.

In addition, the Compensation Committee

administers our stock option and employee stock purchase plans, including granting stock options to our executive officers and

The Compensation Committee also reviews and approves employment agreements with executive officers and other compensation

policies and matters.

Since 2016, we have periodically engaged

Cook & Co., an independent compensation consultant, for input on the compensation of our Named Executive Officers

and directors.

Dunton and Mr.

Duncan as an “audit committee financial expert” does not impose on them any duties, obligations or liability that

are greater than those that are generally imposed on them as a member of the Audit Committee and the Board, and their designation

as an “audit committee financial expert” pursuant to this SEC requirement does not affect the duties, obligations

or liability of any other member of the Audit Committee or the Board.

Compensation Committee reviews and approves our compensation policies and all forms of compensation to be provided to our executive

officers and directors, including, among other things, annual salaries, bonuses, and other incentive compensation arrangements.

In addition, the Compensation Committee administers our stock option and employee stock purchase plans, including granting stock

options to our executive officers and directors.

The Compensation Committee also reviews and approves employment agreements with

executive officers and other compensation policies and matters.

Since 2016, we have

periodically engaged Frederic W.

Cook & Co., an independent compensation consultant, for input on the compensation of our

Named Executive Officers and directors.

The Compensation Committee assessed the independence of Frederic W.

Cook & Co., considering the factors required

by the NYSE American Rules and concluded that no conflict of interest exists that would prevent Frederic W.

independently representing our Company.

In the future, we, or the Compensation Committee, may engage or seek the advice of Frederic

Cook & Co., considering

the factors required by the Nasdaq Marketplace Rules and concluded that no conflict of interest exists that would prevent Frederic

from independently representing our Company.

In the future, we, or the Compensation Committee, may engage or

seek the advice of Frederic W.

Cook & Co., or another compensation consultant.

Each member of the Compensation Committee

is a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, and an outside director, as defined

pursuant to Section 162(m) of the Internal Revenue of 1986, as amended (the “Code”).

Nominating and Governance Committee

The Nominating and Governance Committee

identifies, evaluates and recommends nominees to the Board and committees of the Board, conducts searches for appropriate directors

and evaluates the performance of the Board and of individual directors.

The Nominating and Governance Committee also is responsible

for reviewing developments in corporate governance practices, evaluating the adequacy of our corporate governance practices and

reporting and making recommendations to the Board concerning corporate governance matters.

Executive Officers

The following table sets forth information

concerning our current executive officers:

member of the Compensation Committee is a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange

Act, and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue of 1986, as amended (the “Code”).

and Governance Committee

Nominating and Governance Committee identifies, evaluates and recommends nominees to the Board and committees of the Board, conducts

searches for appropriate directors and evaluates the performance of the Board and of individual directors.

The Nominating and

Governance Committee also is responsible for reviewing developments in corporate governance practices, evaluating the adequacy

of our corporate governance practices and reporting and making recommendations to the Board concerning corporate governance matters.

following table sets forth information concerning our current executive officers:

Position(s) with CorMedix

Chief Executive Officer

Matthew David

Executive Vice President and Chief Financial Officer

Phoebe Mounts

4 unchanged sentences

Executive Vice President and Head of Clinical Operations

See the biography for Khoso Baluch

under “Directors.”

Phoebe Mounts became our Executive

Vice President and General Counsel and Head of Regulatory, Compliance and Legal in May 2019.

the biography for Khoso Baluch under “Directors.”

became our Executive Vice President and Chief Financial Officer in May 2020.

David joins CorMedix after

serving as Head of Strategy at Ovid Therapeutics Inc, a late-stage clinical biopharmaceutical company focused on developing treatments

for rare neurological disorders, where he was responsible for financing strategy and investor relations, and joined in October

Prior to Ovid, Dr.

David was a Strategic Advisor to Frequency Therapeutics, advising on financing, investor relations and

strategic initiatives from 2017 to early 2019.

Prior to Frequency, Dr.

David spent the majority of his career as an investment

banker specialized in the life sciences sectors, including at Piper Jaffray, Thomas Weisel Partners, Ferghana Partners and most

recently at Bank of America Merrill Lynch.

As part of his experience as an investment banker, Dr.

David has advised on a broad

range of capital raising and strategic transactions.

Earlier in his career, Dr.

David was part of the equity research team at

Lehman Brothers, focusing on Large Pharma.

David began his career as a surgical resident at Beth Israel Hospital, after receiving

from NYU School of Medicine.

David earned his Bachelor of Arts degree in Chemistry, magna cum laude, from Dartmouth

Mounts, PhD, Esq.

became our Executive Vice President and General Counsel and Head of Regulatory, Compliance and Legal

Prior to her employment with us, Dr.

Mounts was a partner at Morgan, Lewis & Bockius LLP, where she provided legal counsel to life sciences companies for over 20

Mounts was a partner at Morgan, Lewis & Bockius LLP, where she provided

legal counsel to life sciences companies for over 20 years.

As part of her work at Morgan Lewis, Dr.

Mounts had been providing us legal services as outside counsel since 2013, with

responsibility for developing our FDA regulatory strategies for Neutrolin.

Prior to graduating from Georgetown University Law Center,

Mounts was on the faculty of the Johns Hopkins University School of Public Health for 16 years, specializing in molecular biology

and infectious disease.

Mounts had been providing

us legal services as outside counsel since 2013, with responsibility for developing our FDA regulatory strategies for Neutrolin.

Prior to graduating from Georgetown University Law Center, Dr.

Mounts was on the faculty of the Johns Hopkins University School

of Public Health for 16 years, specializing in molecular biology and infectious disease.

She received her Ph.D.

in molecular biology from the University of Edinburgh in Scotland.

John Armstrong became our

Executive Vice President for Technical Operations in March 2017.

Prior to that, he was employed by us as a consultant beginning

in November 2014, performing the same services that he now performs as our Executive Vice President for Technical Operations.

has over 45 years’

experience in the pharmaceutical industry with broad senior level cross functional experience and has

held a number of general management positions.

Most recently, from August 2010 to January 2013, he was President, Operations for

Correvio, a private pharmaceutical company supplying product to over 50 countries, and prior positions include President/CEO of

Genaera Corporation, Sr.

Vice President of Urocor Corporation, CEO of Mills Biopharma, President of Oread CMO, President of Endo

Laboratories (subsidiary of DuPont Merck), President of World-wide Manufacturing for DuPont Merck Pharmaceuticals, Vice President

Operations for Marion/ Marion Merrill Dow, and he has held varied roles in manufacturing, quality assurance, and integrated business

systems development for three companies, as well as having expertise in business development.

in molecular biology

from the University of Edinburgh in Scotland.

Armstrong became our Executive Vice President for Technical Operations in March 2017.

Prior to that, he was employed by

us as a consultant beginning in November 2014, performing the same services that he now performs as our Executive Vice President

for Technical Operations.

Jack has over 45 years’ experience in the pharmaceutical industry with broad senior level cross

functional experience and has held a number of general management positions.

Most recently, from August 2010 to January 2013,

he was President, Operations for Correvio, a private pharmaceutical company supplying product to over 50 countries, and prior

positions include President/CEO of Genaera Corporation, Sr.

Vice President of Urocor Corporation, CEO of Mills Biopharma, President

of Oread CMO, President of Endo Laboratories (subsidiary of DuPont Merck), President of World-wide Manufacturing for DuPont Merck

Pharmaceuticals, Vice President Operations for Marion/ Marion Merrill Dow, and he has held varied roles in manufacturing, quality

assurance, and integrated business systems development for three companies, as well as having expertise in business development.

Armstrong holds a B.S.

College and an executive M.B.A.

from Juniata College and an executive M.B.A.

from Century University.

He is also a CPIM (Certified in Production and Inventory Management).

Elizabeth Masson-Hurlburt

became our Executive Vice President and Head of Clinical Operations in March 2018.

Prior to her employment, Ms.

Masson-Hurlburt

had been providing us clinical operations expertise as a consultant since late November 2017.

Before she began her consulting career,

she held several progressive management roles in clinical operations, most recently at Gemphire Therapeutics, as a Senior Director,

Clinical Operations from April 2015 to October 2016, then as Vice President, Clinical Operations from October 2016 to March 2018.

He is also a CPIM (Certified

in Production and Inventory Management).

Masson-Hurlburt became our Executive Vice President and Head of Clinical Operations in March 2018.

Prior to her employment,

Masson-Hurlburt had been providing us clinical operations expertise as a consultant since late November 2017.

Before she began

her consulting career, she held several progressive management roles in clinical operations, most recently at Gemphire Therapeutics,

as a Senior Director, Clinical Operations from April 2015 to October 2016, then as Vice President, Clinical Operations from October

2016 to March 2018.

Masson-Hurlburt received her B.A.

in Leadership and Organizational Management from Bay Path College.

Executive Compensation

DIRECTOR COMPENSATION

Director Compensation in Fiscal 2019

The following table shows the compensation

earned by each non-employee director of our company for the year ended December 31, 2019.

Awards (1) (3)

Compensation in Fiscal 2020

following table shows the compensation earned by each non-employee director of our company for the year ended December 31, 2020.

Paulo Costa (3)

Greg Duncan (5)

Mehmood Khan (6)

Steven Lefkowitz

The amounts included in this column are the dollar amounts representing the full grant date fair value of each stock option award or restricted stock unit award calculated in accordance with FASB ASC Topic 718 and do not represent the actual value that may be recognized by the directors upon option exercise or payment of restricted stock units.

For information on the valuation assumptions used in calculating these amounts, see Note 8 to our audited financial statements included in this Annual Report on Form 10-K.

(2) As of December 31, 2019, the number of shares underlying

options held by each non-employee director was as follows:

60,000 shares for Ms.

27,500 shares for Dr.

amounts included in this column are the dollar amounts representing the full grant date fair value of each stock option award

or restricted stock unit award calculated in accordance with FASB ASC Topic 718 and do not represent the actual value that may

be recognized by the directors upon option exercise or payment of restricted stock units.

For information on the valuation assumptions

used in calculating these amounts, see Note 8 to our audited financial statements included in this Annual Report on Form 10-K.

of December 31, 2020, the number of shares underlying options held by each non-employee

director was as follows:

23,750 shares for Mr.

38,000 shares for Dr.

and 38,000 shares for Mr.

(3) As of December 31, 2019, the number of restricted stock

units held by each non-employee director was as follows:

75,000 shares for Ms.

730 shares for Dr.

709 shares for

22,500 for Mr.

42,500 shares for Dr.

and 500 shares for Mr.

(4) Includes fees of $36,500 for Ms.

56,000 shares for Mr.

53,000 shares for Mr.

Costa became a director on September 15, 2020.

fees of $62,250 for Ms.

Dillione that were deferred.

See “Director Compensation Plan”

below for a description of the deferral plan pursuant to which the deferrals were

Director Compensation Plan

In July 2014, we adopted a Deferred Compensation

Plan for Directors, pursuant to which our non-employee directors may defer all of their cash director fees and restricted stock

Any cash fees due a participating director will be converted into a number of shares of our common stock by dividing the

dollar amount of fees payable by the closing price of our common stock on the date such fees would be payable, and the director’s

unfunded account would be credited with the shares.

The shares that accumulate in a director’s account will be paid to the

director on the tenth business day in January following the year in which the director’s service terminates for whatever

reason, other than death, in which case the account will be paid within 30 days of the date of death.

In the event of a change

in control of our Company, the director would receive cash in an amount equal to the number of shares in the account multiplied

by the fair market value of our common stock on the change in control date, and the payment would be accelerated to five business

days after the effective date of the change in control.

In late 2016 and again in late 2018, with

the assistance of Frederic W.

Cook & Co., the Compensation Committee reviewed a peer group of 14 public companies, which group

was used by Frederic W.

See “Director Compensation

Plan” below for a description of the deferral plan pursuant to which the deferrals

Duncan became a director on November 2, 2020.

Khan resigned as a director on October 30, 2020 and unvested stock options as of his resignation date with respect to 5,000 shares were forfeited.

Compensation Plan

July 2014, we adopted a Deferred Compensation Plan for Directors, pursuant to which our non-employee directors may defer all of

their cash director fees and restricted stock units.

Any cash fees due a participating director will be converted into a number

of shares of our common stock by dividing the dollar amount of fees payable by the closing price of our common stock on the date

such fees would be payable, and the director’s unfunded account would be credited with the shares.

The shares that accumulate

in a director’s account will be paid to the director on the tenth business day in January following the year in which the

director’s service terminates for whatever reason, other than death, in which case the account will be paid within 30 days

of the date of death to the designated beneficiaries, if any.

If there are no designated beneficiaries, the account will be paid

out the same as with any other termination of service.

In the event of a change in control of our Company, the director would

receive cash in an amount equal to the number of shares in the account multiplied by the fair market value of our common stock

on the change in control date, and the payment would be accelerated to five business days after the effective date of the change

late 2018, with the assistance of Frederic W.

Cook & Co., the Compensation Committee reviewed a peer group of 14 public companies,

which group was used by Frederic W.

to conduct a compensation study for purposes of establishing director compensation.

composition of the peer group was based on the following criteria:

(i) companies operating in a similar industry sector, (ii) publicly

traded companies, (iii) companies of similar size, and (iv) companies of similar business operation and stage of research and development.

The Compensation Committee also used this data in various combinations in an effort to establish director compensation that reflects

our particular facts and circumstances.

In February 2017, based upon the information

provided by Frederic W.

in late 2016, we adopted a cash and equity compensation program for non-employee directors.

In December 2018, as a result of the 2018

compensation study provided by Frederic W.

Cook & Co., we determined that our non-employee director compensation program was

significantly below market.

Accordingly, we increased compensation levels effective January 1, 2019 to bring non-employee director

compensation closer to our peer group.

Effective as of July 1, 2019, we implemented Board committee fees (differentiating fees

between heads of committees and committee members) to recognize the substantial work done by our Board committees.

As of January

1, 2020, we will discontinue granting restricted stock units to non-employee directors and will correspondingly increase the cash

retainers, in order to bring the compensation program more in line with the forms of payment provided by peer companies and to

minimize dilution.

The composition of the peer group was based on the following criteria:

(i) companies operating in a similar industry sector, (ii)

publicly traded companies, (iii) companies of similar size, and (iv) companies of similar business operation and stage of research

and development.

The Compensation Committee also used this data in various combinations in an effort to establish director compensation

that reflects our particular facts and circumstances.

We continue to grant stock options to our non-employee directors.

December 2018, as a result of the 2018 compensation study provided by Frederic W.

Cook & Co., we determined that our non-employee

director compensation program was significantly below market.

Accordingly, we increased compensation levels effective January

1, 2019 to bring non-employee director compensation closer to our peer group.

Effective as of July 1, 2019, we implemented Board

committee fees (differentiating fees between heads of committees and committee members) to recognize the substantial work done

by our Board committees.

As of January 1, 2020, we discontinued granting restricted stock units to non-employee directors and

correspondingly increased the cash retainers, in order to bring the compensation more in line with the forms of payment provided

by peer companies and to minimize dilution.

Each of the 2020 and 2021 compensation programs are set forth below in the table.

All equity awards are subject to

continued service on the Board through the vesting date.

The exercise price per share of each stock option granted to our non-employee

directors is equal to the fair market value of our common stock as determined in good faith by our Board on the date of the grant.

Effective January 1, 2019 to December 31,

All equity awards are subject to continued service on the Board through the vesting date.

The exercise price per share of each

stock option granted to our non-employee directors is equal to the fair market value of our common stock as determined in good

faith by our Board on the date of the grant.

Effective January 1, 2020

Effective January 1, 2021

First Election to Board

Annual Grant, Prorated in First Year Following Election to the Board

Lesser of 2,500 units or $30,000 divided by stock price on grant date (2)

Additional Annual Fee - Board Chair

Lesser of 3,000 units or $30,000 divided by stock price on grant date (2)

Additional Annual Fee - Audit Chair

Lesser of 1,500 units or $15,000 divided by stock price on grant date (2)

Additional Annual Fee - Compensation Chair

Lesser of 1,000 units or $10,000 divided by stock price on grant date (2)

Additional Annual Fee - Nomination and Governance Chair

Lesser of 600 units or $6,000 divided by stock price on grant date (2)

Additional Annual Fee - Strategic Finance Committee has two Co-Chairs (4)

Lesser of 2,000 units or $10,000 divided by stock price on grant date (2)

$20,000 each (if continued after its current expiration date of December 31, 2019)

Annual Fee - Audit Committee Non-Chair Members (4)

Annual Fee - Compensation Committee Non-Chair Members (4)

Annual Fee - Nomination and Governance Committee Non-Chair Members (4)

(1) Vest one third each on

the date of grant and the first and second anniversary date of grant.

(2) Vest monthly over one year

after the grant date.

(3) Increased from $5,000 effective

July 1, 2019.

(4) Effective July 1, 2019.

EXECUTIVE COMPENSATION

Components of Compensation

The key components of our executive compensation

package are cash compensation (salary and annual bonuses), long-term equity incentive awards and change in control and other severance

These components are administered with the goal of providing total compensation that recognizes meaningful differences

in individual performance, is competitive, varies the opportunity based on individual and corporate performance, and is valued

by our Named Executive Officers.

For 2019, our Named Executive officers were Khoso Baluch, Phoebe Mounts, John Armstrong,

Elizabeth Masson-Hurlburt and our former Chief Financial Officer, Robert W.

Cook, who served in such capacity until January 31,

It is the Compensation Committee’s

objective to set a competitive rate of annual base salary for each Named Executive Officer.

The Compensation Committee believes

competitive base salaries are necessary to attract and retain top quality executives, since it is common practice for public companies

to provide their named executive officers with a guaranteed annual component of compensation that is not subject to performance

The Compensation Committee, on its own or with outside consultants, may establish salary ranges for the Named Executive

Officers, with minimum to maximum opportunities that cover the normal range of market variability.

The actual base salary for

each Named Executive Officer is then derived from those salary ranges based on his or her responsibility, tenure and past performance

and market comparability.

Annual base salaries for the Named Executive Officers are reviewed and approved by the Compensation

Committee in the first quarter following the end of the previous performance year.

Changes in base salary are based on the scope

of an individual’s current job responsibilities, individual performance in the previous performance year, target pay position

relative to the peer group, and our salary budget guidelines.

The Compensation Committee reviews established goals and objectives

and determines an individual’s achievement of those goals and objectives and considers the recommendations provided by the

Chief Executive Officer to assist it in determining appropriate salaries for the Named Executive Officers other than the Chief

Additional Annual Fee - Audit Committee Non-Chair Members

Additional Annual Fee - Compensation Committee Non-Chair Members

Additional Annual Fee – Nomination and Governance Committee Non-Chair Members

Additional Annual Fee – Strategic Committee Members

Additional Annual Fee – Strategic Finance Committee Two Co-Chairs

Vest one third each

on the date of grant and the first and second anniversary date of grant.

Vest monthly over

one year after the grant date.

June 30, 2020.

of Compensation

key components of our executive compensation package are cash compensation (salary and annual bonuses), long-term equity incentive

awards and change in control and other severance agreements.

These components are administered with the goal of providing total

compensation that recognizes meaningful differences in individual performance, is competitive, varies the opportunity based on

individual and corporate performance, and is valued by our Named Executive Officers.

For 2020, our Named Executive Officers were

Khoso Baluch, Phoebe Mounts, John Armstrong and Elizabeth Masson-Hurlburt.

In addition, Robert W.

Cook served as our Chief Financial

Officer until January 31, 2020, and Matthew David served as our Chief Financial Officer starting May 11, 2020.

is the Compensation Committee’s objective to set a competitive rate of annual base salary for each Named Executive Officer.

The Compensation Committee believes competitive base salaries are necessary to attract and retain top quality executives, since

it is common practice for public companies to provide their named executive officers with a guaranteed annual component of compensation

that is not subject to performance risk.

The Compensation Committee, on its own or with outside consultants, may establish salary

ranges for the Named Executive Officers, with minimum to maximum opportunities that cover the normal range of market variability.

The actual base salary for each Named Executive Officer is then derived from those salary ranges based on his or her responsibility,

tenure and past performance and market comparability.

Annual base salaries for the Named Executive Officers are reviewed and approved

by the Compensation Committee in the first quarter following the end of the previous performance year.

Changes in base salary

are based on the scope of an individual’s current job responsibilities, individual performance in the previous performance

year, target pay position relative to the peer group, and our salary budget guidelines.

The Compensation Committee reviews established

goals and objectives, and determines an individual’s achievement of those goals and objectives and considers the recommendations

provided by the Chief Executive Officer to assist it in determining appropriate salaries for the Named Executive Officers other

than the Chief Executive Officer.

For the year ended December 31, 2020 and the three month period ended March 31, 2021, with the

advice of outside consultants, including Frederic W.

Cook & Co., the Compensation Committee increased the salaries of certain

of our Named Executive Officers, to account for adjustments in the market.

The base salary information

for our Named Executive Officers for 2019 and 2020 is set forth in the Summary Compensation Table below.

In September 2019, February

2017, May 2020, March 2019, April 2020 and March 2021, respectively, we entered into an employment agreement with each of Khoso

Baluch, our Chief Executive Officer, Robert Cook, our Chief Financial Officer (at such time), Matthew David, our Executive Vice

President and Chief Financial Officer, Phoebe Mounts, our Executive Vice President and General Counsel and Head of Regulatory,

Compliance and Legal, John Armstrong, our Executive Vice President for Technical Operations, and Elizabeth Masson-Hurlburt, our

Executive Vice President and Head of Clinical Operations.

These agreements provide for a salary for each Named Executive Officer

and are described under the caption “Employment Agreements.”

part of their compensation package, our Named Executive Officers generally have the opportunity to earn annual non-equity incentive

Annual non-equity bonuses are designed to reward superior executive performance while reinforcing our short-term strategic

operating goals.

The Compensation Committee establishes each year a corporate target award for the Named Executive Officers based

on a percentage of base salary and any applicable terms in any individual employment agreements.

Annual bonus targets as a percentage

of salary increase with executive rank so that for the more senior executives, a greater proportion of their total cash compensation

is contingent upon annual performance.

the beginning of the performance year, the Named Executive Officers, in conjunction with the Chief Executive Officer, establish

annual corporate goals and objectives.

Actual bonus awards for each Named Executive Officer are based on the achievement of the

pre-established corporate goals.

For any given performance year, proposed annual bonuses may range from 0% to 100% of target,

or higher under certain circumstances, based solely on the achievement of corporate objectives.

Corporate performance has a significant

impact on the annual bonus amounts because the Compensation Committee believes it is a precise measure of how the Named Executive

Officer contributed to business results.

to their respective employment agreements, Messrs.

Baluch and Armstrong, Dr.

Mounts and Ms.

Masson-Hurlburt are each

eligible for an annual bonus, which may equal up to 80%, 35%, 30%, 30% and 30%, respectively, of his or her base salary then in

effect, as determined by our Board or Compensation Committee.

In determining such bonus, our Board or Compensation Committee will

take into consideration the achievement of specified Company objectives, predetermined by the Board in consultation with the Chief

Executive Officer.

The base salary information for our Named

Executive Officers for 2018 and 2019 is set forth in the Summary Compensation Table below.

In September 2019, February 2017, March

2019, March 2017 and March 2018, respectively, we entered into an employment agreement with each of Khoso Baluch, our Chief Executive

Officer, Robert Cook, our Chief Financial Officer (at such time), Phoebe Mounts, our Executive Vice President and General Counsel

and Head of Regulatory, Compliance and Legal, John Armstrong, our Executive Vice President for Technical Operations, and Elizabeth

Masson-Hurlburt, our Executive Vice President and Head of Clinical Operations.

These agreements provide for a salary for each Named

Executive Officer and are described under the caption “Employment Agreements.”

Annual Bonuses

As part of their compensation package,

our Named Executive Officers generally have the opportunity to earn annual non-equity incentive bonuses.

Annual non-equity bonuses

are designed to reward superior executive performance while reinforcing our short-term strategic operating goals.

The Compensation

Committee establishes each year a corporate target award for the Named Executive Officers based on a percentage of base salary

and any applicable terms in any individual employment agreements.

Annual bonus targets as a percentage of salary increase with

executive rank so that for the more senior executives, a greater proportion of their total cash compensation is contingent upon

annual performance.

At the beginning of the performance year,

the Named Executive Officers, in conjunction with the Chief Executive Officer, establish annual corporate goals and objectives.

Actual bonus awards for each Named Executive Officer are based on the achievement of the pre-established corporate goals.

any given performance year, proposed annual bonuses may range from 0% to 100% of target, or higher under certain circumstances,

based solely on the achievement of corporate objectives.

Corporate performance has a significant impact on the annual bonus amounts

because the Compensation Committee believes it is a precise measure of how the Named Executive Officer contributed to business

Pursuant to their respective employment

agreements, Messrs.

Baluch and Armstrong, Ms.

Masson-Hurlburt and Dr.

Mounts are each eligible for an annual bonus, which may

equal up to 80%, 30%, 35%, 30% and 30%, respectively, of his or her base salary then in effect, as determined by our Board or

Compensation Committee.

In determining such bonus, our Board or Compensation Committee will take into consideration the achievement

of specified Company objectives, predetermined by the Board in consultation with the Chief Executive Officer.

Long-Term Incentive Equity Awards

We believe that long-term performance is

achieved through an ownership culture that encourages high performance by our Named Executive Officers through the use of stock-based

Our 2006 Plan and our 2013 Plan were each established to provide our employees, including our Named Executive Officers,

with incentives to help align employees’

interests with the interests of our stockholders.

Effective upon the approval by

our stockholders of our 2013 Plan and 2019 Plan, we were no longer able to issue any award under the 2006 Plan and 2013 Plan,

respectively.

The compensation committee believes that the use of stock-based awards offers the best approach to achieving our

compensation goals.

We have historically elected to use stock options as the primary long-term equity incentive vehicle;

the compensation committee has used restricted stock in the past and may in the future utilize restricted stock as part of our

long-term incentive program.

We have selected the Black-Scholes method of valuation for share-based compensation.

Due to the early

stage of our business and our desire to preserve cash, we may provide a greater portion of total compensation to our Named Executive

Officers through stock options and restricted stock grants than through cash-based compensation.

The Compensation Committee generally

oversees the administration of our 2006 Plan and our 2013 Plan and 2019 Plan.

Stock Options

Our 2019 Omnibus Stock Incentive Plan approved

by the shareholders on November 26, 2019, (and formerly our 2013 and 2006 Stock Plans) authorizes us to grant options to purchase

shares of common stock to our employees, directors and consultants.

The Compensation Committee reviews and approves

stock option awards to Named Executive Officers based upon a review of competitive compensation data, its assessment of individual

performance, a review of each Named Executive Officer’s existing long-term incentives, and retention considerations.

stock option grants are made at the discretion of the Compensation Committee to eligible employees and, in appropriate circumstances,

the Compensation Committee considers the recommendations of our Chief Executive Officer.

Stock options granted to employees have

an exercise price equal to the fair market value of our common stock on the day of grant, typically vest over a time or upon the

achievement of certain performance-based milestones and are based upon continued employment, and generally expire 10 years after

the date of grant.

The fair value of the options granted to the Named Executive Officers in the Summary Compensation Table is determined

in accordance with the Black-Scholes method of valuation for share-based compensation.

Incentive stock options also include certain

other terms necessary to ensure compliance with the Code.

Incentive Equity Awards

We believe that long-term performance is achieved through an

ownership culture that encourages high performance by our Named Executive Officers through the use of stock-based awards.

Our long-term

incentive plans were established to provide our employees, including our Named Executive Officers, with incentives to help align

employees’ interests with the interests of our stockholders.

The Compensation Committee believes that the use of stock-based

awards offers the best approach to achieving our compensation goals.

We have historically elected to use stock options as the primary

long-term equity incentive vehicle;

however, the Compensation Committee has used restricted stock in the past and may in the future

utilize restricted stock or other forms of equity grant as part of our long-term incentive program.

We have selected the Black-Scholes

method of valuation for share-based compensation.

Due to the early stage of our business and our desire to preserve cash, we may

provide a greater portion of total compensation to our Named Executive Officers through stock options and other equity grants than

through cash-based compensation.

The Compensation Committee generally oversees the administration of our equity plans.

Our 2019 Omnibus Stock Incentive Plan (the 2019 Plan), which

was approved by the shareholders on November 26, 2019 authorizes us to grant options to purchase shares of common stock and other

equity awards to our employees, directors and consultants.

In 2020, we granted stock options to the Named Executive Officers.

The Compensation Committee reviews and approves stock option

awards to Named Executive Officers based upon a review of competitive compensation data, its assessment of individual performance,

a review of each Named Executive Officer’s existing long-term incentives, and retention considerations.

Periodic stock option

grants are made at the discretion of the Compensation Committee to eligible employees and, in appropriate circumstances, the Compensation

Committee considers the recommendations of our Chief Executive Officer.

Stock option grants made to Named Executive Officers are

approved by the Board, based on the Compensation Committee’s recommendation.

options granted to employees have an exercise price equal to the fair market value of our common stock on the day of grant,

typically vest over a time period or upon the achievement of certain performance-based milestones and are based upon

continued employment, and generally expire 10 years after the date of grant.

The fair value of the options granted to the

Named Executive Officers in the Summary Compensation Table is determined in accordance with the Black-Scholes method of

valuation for share-based compensation.

Incentive stock options also include certain other terms necessary to ensure

compliance with the Code.

expect to continue to use stock options as a long-term incentive vehicle because:

13 unchanged sentences

In determining the number of stock options to be granted to our Named

Executive Officers, we take into account the individual’s position, scope of responsibility,

ability to affect profits and stockholder value and the individual’s historic and

Executive Officers, we take into account the individual’s position, scope of responsibility,

ability to affect profits and stockholder value and the individual’s historic and

recent performance and the value of stock options in relation to other elements of the

individual Named Executive Officer’s total compensation.

Restricted Stock

Our 2019 Omnibus Stock Incentive Plan (and

formerly our 2013 and 2006 Stock Plans) authorizes us to grant restricted stock.

In order to implement our long-term incentive

goals, we may grant shares of restricted stock in the future.

Executive Benefits and Perquisites

Our Named Executive Officers are parties

to employment agreements, as described below.

In addition, consistent with our compensation philosophy, we intend to continue to

maintain our current benefits for our Named Executive Officers, including medical, dental and life insurance and the ability to

contribute to a 401(k) plan;

however, the Compensation Committee in its discretion may revise, amend or add to the officer’s

executive benefits if it deems it advisable.

We believe these benefits are currently comparable to benefit levels for comparable

Employment Agreements

Employment Agreements with Current Named Executive Officers

On September 27, 2016, we entered into

an employment agreement with Khoso Baluch, our Chief Executive Officer, which, upon its expiration in September 2019, was

replaced with a new agreement, dated September 26, 2019, that is nearly identical to the old agreement (except as noted

On March 1, 2017, we entered into an employment agreement with John Armstrong to serve as our Executive Vice

President for Technical Operations.

On March 19, 2018, we entered into an employment agreement with Elizabeth Masson-Hurlburt

to serve as our Executive Vice President and Head of Clinical Operations.

On March 19, 2019, we entered into an

employment agreement with Phoebe Mounts to serve as our Executive Vice President and General Counsel effective May 1,

After the initial three-year term of each

employment agreement, the agreement will automatically renew for additional successive one-year periods, unless either party notifies

the other in writing at least 90 days before the expiration of the then current term that the agreement will not be renewed.

On January 30, 2017, we entered into an

employment agreement, effective February 1, 2017, with Robert Cook to serve as our Chief Financial Officer.

On November 6, 2019,

individual Named Executive Officer’s total compensation.

Benefits and Perquisites

Named Executive Officers are parties to employment agreements as described below.

In addition, consistent with our compensation

philosophy, we intend to continue to maintain our current benefits for our Named Executive Officers, including medical, dental

and life insurance and the ability to contribute to a 401(k) plan;

however, the Compensation Committee in its discretion may revise,

amend, or add to the officer’s executive benefits if it deems it advisable.

We believe these benefits are currently comparable

to benefit levels for comparable companies.

Agreements with Current Named Executive Officers

On September 27, 2016,

we entered into an employment agreement with Khoso Baluch, our Chief Executive Officer, which, upon its expiration in September

2019, was replaced with a new agreement, dated September 26, 2019, that is nearly identical to the old agreement (except as noted

On March 1, 2017, we entered into an employment agreement with John Armstrong to serve as our Executive Vice President

for Technical Operations, which upon its expiration in March 2020, was replaced with a new agreement dated April 17, 2020.

March 19, 2018, we entered into an employment agreement with Elizabeth Masson-Hurlburt to serve as our Executive Vice President

and Head of Clinical Operations, which upon its expiration in March 2021, was replaced with a new agreement dated March 10, 2021.

On March 19, 2019, we entered into an employment agreement with Phoebe Mounts to serve as our Executive Vice President and General

Counsel effective May 1, 2019.

On May 11, 2020 we entered into an employment agreement with Matthew David to serve as our Chief

Financial Officer.

After the initial three-year term of each employment agreement, the agreement will automatically renew for

additional successive one-year periods, unless either party notifies the other in writing at least 90 days before the expiration

of the then current term that the agreement will not be renewed.

to their respective agreements, Mr.

Baluch receives an annual salary of $425,000, Mr.

Armstrong an annual salary of $325,000,

Masson-Hurlburt an annual salary of $315,000 (effective March 2021), Dr.

Mounts an annual salary of $350,000 (amended to

$375,000 in January 2021) and Dr.

David an annual salary of $330,000, which cannot be decreased unless all officers and/or

members of our executive management team experience an equal or greater percentage reduction in base salary and/or total

compensation, provided that any reduction in an executive’s salary may be no greater than 25%.

Each executive will be

eligible for an annual bonus, which may equal up to 80% for Mr.

Baluch (the target amount is 80%, but the bonus may exceed

that amount), up to 35% for Mr.

Armstrong, up to 30% for Ms.

Masson-Hurlburt, up to 30% for Dr.

Mounts and up to 30% for Dr.

David, of his or her base salary then in effect, as determined by our Board or the Compensation Committee.

In determining

such bonus, our Board or the Compensation Committee will take into consideration the achievement of specified Company

objectives, predetermined by our Board or the Compensation Committee and Chief Executive Officer, and such other factors as

our Board or the Compensation Committee deems appropriate, and approved by the Board or the Compensation Committee.

executive must be employed through December 31 of a given year to be eligible to earn that year’s annual bonus.

On January 30, 2017,

we entered into an employment agreement, effective February 1, 2017, with Robert Cook to serve as our Chief Financial Officer.

On November 6, 2019, Mr.

Cook and the Company mutually agreed not to renew his employment agreement, which expired on January 31,

assist the Company in transitioning his responsibilities.

Pursuant to their respective agreements,

Baluch receives an annual salary of $375,000 (amended to $425,000 in September 2019), Mr.

Armstrong an annual salary

of $310,000, Ms.

Masson-Hurlburt an annual salary of $280,000, and Dr.

Mounts an annual salary of $350,000, which cannot be decreased

unless all officers and/or members of our executive management team experience an equal or greater percentage reduction in base

salary and/or total compensation, provided that any reduction in an executive’s salary may be no greater than 25%.

executive will be eligible for an annual bonus, which may equal up to 80% for Mr.

Baluch (effective September 2019, pursuant to

Baluch’s new agreement, the target amount is 80%, but the bonus may exceed that amount), up to 35% for Mr.

up to 30% for Ms.

Masson-Hurlburt, and up to 30% for Dr.

Mounts, of his or her base salary then in effect, as determined by our

Board or the Compensation Committee.

In determining such bonus, our Board or the Compensation Committee will take into consideration

the achievement of specified Company objectives, predetermined by our Board and Chief Executive Officer, in the case of Mr.

and by our Chief Executive Officer in the case of Mr.

Armstrong, Ms.

Masson-Hurlburt, and Dr.

Mounts, and approved by the Board

or the Compensation Committee, and personal objectives, for each executive.

For fiscal year 2018, Ms.

Masson-Hurlburt’s

bonus was prorated, and for fiscal year 2019, Dr.

Mounts’

bonus was contingent upon each meeting performance objectives.

Each executive must be employed through December 31 of a given year to be eligible to earn that year’s annual bonus.

The following provisions of the

employment agreements with Messrs.

Baluch and Armstrong, Ms.

Masson-Hurlburt and Dr.

Mounts are identical except where noted.

If we terminate the executive’s employment

for Cause (as defined below), the executive will be entitled to receive only the accrued compensation due to him or

her as of the date of such termination, rights to indemnification and directors’

and officers’

liability insurance,

and as otherwise required by law.

All unvested equity awards then held by any executive, as well as, in the case of Mr.

any vested equity awards granted after September 26, 2019, will be forfeited to us as of such date.

If we terminate the executive’s

employment other than for Cause, death, or disability, other than by notice of nonrenewal, or if the executive resigns for Good

Reason (as defined below) (each such termination, a “Qualifying Termination”), including in each case within 24 months

of a Change of Control (as defined in the agreement, which is the same definition as in our 2013 Plan), the executive will receive

the following benefits:

(i) payment of any accrued compensation and any unpaid bonus for the prior year, as well as rights to

indemnification and directors’

and officers’

liability insurance and any rights or privilege otherwise required by

(ii) we will continue to pay his or her base salary and benefits for a period of twelve months in the case of Mr.

and nine months for the other executives following the effective date of the termination of employment;

(iii) payment on

a prorated basis for any target bonus for the year of termination based on the actual achievement of the specified bonus objectives;

(iv) if the executive timely elects continued health insurance coverage under COBRA, then we will pay the premium to continue

such coverage for him or her and his or her eligible dependents in an amount equal to the portion paid for by us during the executive’s

employment until the conclusion of the time when he or she is receiving continuation of base salary payments or until

he or she becomes eligible for group health insurance coverage under another employer’s plan, whichever occurs first, provided

however that we have the right to terminate such payment of COBRA premiums on behalf of the executive and instead pay him a lump

sum amount equal to the COBRA premium times the number of months remaining in the specified period if we determine in our discretion

that continued payment of the COBRA premiums is or may be discriminatory under Section 105(h) of the Code;

and (v) in the case

Baluch, all restricted shares and time-based stock options, and in the case of Ms.

Masson-Hurlburt, all unvested time-based

stock options that are scheduled to vest on or before the next succeeding anniversary of the date of termination shall be accelerated

and deemed to have vested as of the termination date.

The separation benefits set forth above are conditioned upon the executive

executing a release of claims against us, our parents, subsidiaries, and affiliates, and each such entities’

officers, directors,

employees, agents, successors, and assigns in a form acceptable to us, within a time specified therein, which release is not revoked

within any time period allowed for revocation under applicable law.

For purposes of the agreement,

“Cause”

is defined as:

(i) the willful failure, disregard, or refusal by the executive to perform his or her material

duties or obligations under the agreement (other than as a result of executive’s mental incapacity or illness, as confirmed

by medical evidence provided by a physician selected by us) that, in the case of Mr.

Armstrong, and Ms.

Masson-Hurlburt, is not

cured, to the extent subject to cure, by the executive to our reasonable satisfaction within 30 days after we gave written notice

thereof to executive;

(ii) any willful, intentional, or grossly negligent act by the executive having the effect of materially

injuring (whether financially or otherwise) our business or reputation or any of our affiliates;

(iii) executive’s conviction

of any felony involving moral turpitude (including entry of a guilty or nolo contendere plea);

(iv) the executive’s qualification

as a “bad actor,”

as defined by 17 CFR 230.506(a);

(v) the good faith determination by the Board, after a reasonable

and good-faith investigation by us that the executive engaged in some form of harassment or discrimination prohibited by law (including,

without limitation, harassment on the basis of age, sex or race) unless the executive’s actions were specifically directed

by the Board;

(vi) any material misappropriation or embezzlement by the executive of our or our affiliates’

(whether or not a misdemeanor or felony);

or (vii) material breach by the executive of the agreement that is not cured, to the

extent subject to cure, by executive to our reasonable satisfaction within 30 days after we give written notice thereof to the

executive (20 days in the case of Mr.

For purposes of the agreement, “Good

Reason”

is defined as:

Cook and the Company entered into a consulting agreement.

following provisions of the employment agreements with Messrs.

Baluch, Armstrong, Ms.

Masson-Hurlburt, Dr.

Mounts and Dr.

are identical except where noted.

If we terminate the executive’s employment for Cause (as

defined below), the executive will be entitled to receive only the accrued compensation due to him or her as of the date of such

termination, rights to indemnification and directors’ and officers’ liability insurance, and as otherwise required

All unvested equity awards then held by the executive in the case of Mr.

Armstrong, Dr.

David and Ms.

Masson-Hurlburt,

any vested equity awards granted after September 26, 2019, April 17, 2020, May 11, 2020 and March 20, 2021, respectively, will

be forfeited to us as of such date.

If we terminate the

executive’s employment other than for Cause, death, or disability, other than by notice of nonrenewal, or if the executive

resigns for Good Reason (as defined below), including in each case within 24 months of a Corporation Transaction (as defined in

the agreement, which is the same definition as in our 2019 Plan), the executive will receive the following benefits:

of any accrued compensation and any unpaid bonus for the prior year, as well as rights to indemnification and directors’

and officers’ liability insurance and any rights or privilege otherwise required by law;

(ii) we will continue to pay his

or her base salary and benefits for a period of twelve months in the case of Mr.

Baluch and nine months for the other executives

following the effective date of the termination of employment;

(iii) payment on a prorated basis for any target bonus for the year

of termination based on the actual achievement of the specified bonus objectives;

(iv) if the executive timely elects continued

health insurance coverage under COBRA, then we will pay the premium to continue such coverage for him or her and his or her eligible

dependents in an amount equal to the portion paid for by us during the executive’s employment until the conclusion of the

time when he or she is receiving continuation of base salary payments or until he or she becomes eligible for group health insurance

coverage under another employer’s plan, whichever occurs first, provided however that we have the right to terminate such

payment of COBRA premiums on behalf of the executive and instead pay him or her a lump sum amount equal to the COBRA premium times

the number of months remaining in the specified period if we determine in our discretion that continued payment of the COBRA premiums

is or may be discriminatory under Section 105(h) of the Code;

(v) unvested equity awards that are scheduled to vest on or before

the next succeeding anniversary of the date of termination shall be accelerated and deemed to have vested as of the termination

provided that any performance based equity awards or stock options whose vesting requirements have not been successfully

met as of the date of termination of employment or resignation with Good Reason will not accelerate;

and (vi) in the event of a

Corporate Transaction all equity awards and stock options shall become fully vested and exercisable;

and (vii) vested stock options

will remain exercisable for a specified period of time following termination or resignation or, if earlier, the expiration date

of the stock option.

The separation benefits set forth above are conditioned upon the executive executing a release of claims against

us, our parents, subsidiaries, and affiliates, and each such entities’ officers, directors, employees, agents, successors,

and assigns in a form acceptable to us, within a time specified therein, which release is not revoked within any time period allowed

for revocation under applicable law.

For purposes of the agreement, “Cause” is defined

(i) the willful failure, disregard, or refusal by the executive to perform his or her material duties or obligations under

the agreement (other than as a result of executive’s mental incapacity or illness, (ii) any willful, intentional, or grossly

negligent act by the executive having the effect of materially injuring (whether financially or otherwise) our business or reputation

or any of our affiliates;

(iii) executive’s conviction of any felony involving moral turpitude (including entry of a guilty

or nolo contendere plea);

(iv) the executive’s qualification as a “bad actor,” as defined by 17 CFR 230.506(a);

(v) the good faith determination by the Board, after a reasonable and good-faith investigation by us that the executive engaged

in some form of harassment or discrimination prohibited by law (including, without limitation, harassment on the basis of age,

sex or race) unless the executive’s actions were specifically directed by the Board;

(vi) any material misappropriation or

embezzlement by the executive of our or our affiliates’ property (whether or not a misdemeanor or felony);

or (vii) material

breach by the executive of the agreement that is not cured, to the extent subject to cure, by executive to our reasonable satisfaction.

For purposes of the agreement, “Good Reason” is

(i) any material breach of the agreement by us;

(ii) any material diminution by us of the executive’s

duties, responsibilities, or authority;

(iii) a material reduction in the executive’s annual base salary unless all

officers and/or members of our executive management team experience an equal or greater percentage reduction in annual base salary

and/or total compensation, provided that, for Mr.

Baluch, any reduction may be no greater than 25%;

(iv) in the case

Armstrong, a required relocation of the primary place of performance of the executive’s duties to a location

more than 50 miles from our then location in Bedminster, New Jersey, provided that a change in the location of the primary place

of performance of the executive’s duties will not constitute Good Reason if such change occurs prior to a change in control

and we only require the executive to physically work at that new location two days or less per workweek and provide reimbursement

of the executive’s reasonable travel expenses in commuting to such new location;

or (v) a material reduction in the executive’s

target bonus level unless all officers and/or members of our executive management team experience an equal or greater percentage

reduction related to target bonus levels, provided that, for Mr.

Baluch, any reduction may be no greater than 25%.

If the executive terminates his

or her employment by written notice of termination or if the executive or we terminate his or her employment by providing a notice

of nonrenewal at least 90 days before the agreement is set to expire, the executive will not be entitled to receive any payments

or benefits other than any accrued compensation, any unpaid prior year’s bonus, rights to indemnification and directors’

and officers’

liability insurance, and as otherwise required by law.

If the executive’s employment is

terminated as a result of his or her death or disability, we will pay him or her or his or her estate, as applicable, any accrued

compensation and any unpaid prior year’s bonus.

(ii) any material diminution by us of the executive’s duties,

responsibilities, or authority;

(iii) a material reduction in the executive’s annual base salary unless all officers and/or

members of our executive management team experience an equal or greater percentage reduction in annual base salary and/or total

compensation, provided that any reduction may be no greater than 25%;

or (iv) a material reduction in the executive’s target

bonus level unless all officers and/or members of our executive management team experience an equal or greater percentage reduction

related to target bonus levels, provided that any reduction may be no greater than 25%.

the executive terminates his or her employment by written notice of termination or if the executive or we terminate his or her

employment by providing a notice of nonrenewal at least 90 days before the agreement is set to expire, the executive will not

be entitled to receive any payments or benefits other than any accrued compensation, any unpaid prior year’s bonus, rights

to indemnification and directors’ and officers’ liability insurance, and as otherwise required by law.

the executive’s employment is terminated as a result of his or her death or disability, we will pay him or her or his or

her estate, as applicable, any accrued compensation and any unpaid prior year’s bonus.

Our agreements with Messrs.

Armstrong, Ms.

Masson-Hurlburt and Dr.

Mounts each contain a non-compete provision that provides that during the term of each

agreement and the 12-month period immediately following the executive’s separation from employment for any reason, the executive

is prohibited from engaging in any business involving the development or commercialization of a preventive anti-infective product

that would be a direct competitor of Neutrolin or a product containing taurolidine or any other product being actively developed

or produced by us within the United States and the European Union (in the case of Mr.

Baluch, worldwide, effective September 2019,

pursuant to his new agreement) on the date of termination of his or her employment.

Tax and Accounting Considerations

federal income tax generally limits

the tax deductibility of compensation we pay to our Named Executive Officers to $1.0 million each in the year the compensation

becomes taxable to the executive officers.

Although deductibility of compensation is preferred, tax deductibility is not a primary

objective of our compensation programs.

Rather, we seek to maintain flexibility in how we compensate our executive officers

so as to meet a broader set of corporate and strategic goals and the needs of stockholders, and as such, we may be limited in our

ability to deduct amounts of compensation from time to time.

Accounting rules require us to expense the cost of our stock

option grants.

Because of option expensing and the impact of dilution on our stockholders, we pay close attention to, among

other factors, the type of equity awards we grant and the number and value of the shares underlying such awards.

Pension Benefits

We do not maintain any qualified or non-qualified

defined benefit pension plans.

As a result, none of our Named Executive Officers participate in or have benefits under qualified

or non-qualified defined benefit pension plans sponsored by us.

Our Compensation Committee may elect to adopt qualified or non-qualified

benefit plans in the future if it determines that doing so is in our best interests.

Nonqualified Deferred Compensation

None of our Named Executive Officers participate

in our have account balances in nonqualified defined contribution plans or other non-qualified deferred compensation plans maintained

Baluch, Armstrong, Ms.

Masson-Hurlburt,

Mounts and Dr.

David each contain a non-compete provision that provides that during the term of each agreement and the 12-month

period immediately following the executive’s separation from employment for any reason, the executive is prohibited from

engaging in any business involving the development or commercialization of a preventive anti-infective product that would be a

direct competitor of Neutrolin or a product containing taurolidine or any other product being actively developed or produced by

us within the United States and the European Union (in the case of Mr.

Masson-Hurlburt and Mr.

worldwide) on the date of termination of his or her employment.

and Accounting Considerations

federal income tax generally limits the tax deductibility of compensation we pay to our Named Executive Officers and certain

other officers to $1.0 million each in the year the compensation becomes taxable to the executive officers.

deductibility of compensation is preferred, tax deductibility is not a primary objective of our compensation programs.

Rather, we seek to maintain flexibility in how we compensate our executive officers so as to meet a broader set of corporate

and strategic goals and the needs of stockholders, and as such, we may be limited in our ability to deduct amounts of

compensation from time to time.

Accounting rules require us to expense the cost of our stock option grants.

Because of option

expensing and the impact of dilution on our stockholders, we pay close attention to, among other factors, the type of equity

awards we grant and the number and value of the shares underlying such awards.

do not maintain any qualified or non-qualified defined benefit pension plans.

As a result, none of our Named Executive

Officers participate in or have benefits under qualified or non-qualified defined benefit pension plans sponsored by us.

Compensation Committee may elect to adopt qualified or non-qualified defined benefit plans in the future if it determines

that doing so is in our best interests.

Deferred Compensation

None of our Named Executive

Officers participate in nonqualified defined contribution plans or other non-qualified deferred compensation plans maintained

Our Compensation Committee may elect to provide our officers and other employees with non-qualified defined contribution

or other non-qualified deferred compensation benefits in the future if it determines that doing so is in our best interests.

Summary Compensation Table

The following table sets forth information

with respect to compensation earned by our Named Executive Officers in the years ended December 31, 2019 and 2018:

Compensation Table

following table sets forth information with respect to compensation earned by our Named Executive Officers in the years ended

December 31, 2020 and 2019:

Name and Principal Position

Restricted Stock Units Awards (1)

Non-equity Incentive Plan Compensation

Stock Units Awards (1)

Incentive Plan Compensation

All Other Compensation ($)

Chief Executive Officer

Matthew David (2)

Chief Financial Officer

5 unchanged sentences

Executive Vice President and Head of Clinical Operations

(1) The amounts included in this column are the dollar amounts

representing the full grant date fair value of each award calculated in accordance with FASB ASC Topic 718 and do not represent

the actual value that may be recognized by the Named Executive Officers upon option exercise.

Cook and the Company mutually agreed not to renew his

employment agreement which expired on January 31, 2020.

Mounts became our Executive Vice President and General Counsel and Head of Regulatory, Compliance and Legal on May 1, 2019.

Masson-Hurlburt became our Executive Vice President

and Head of Clinical Operations on March 19, 2018.

Her salary for 2018 included fees as a consultant.

(5) The non-equity incentive plan bonuses reflected in 2019

were for the performance for the year 2019 which were accrued in 2019 but will be paid in 2020.

The non-equity incentive bonuses

reflected in 2018 were for the performance for the year 2018 which were accrued in 2018 and paid in 2019.

(6) Consists of health benefits, 401(k) employer match, and

reimbursed commuter expenses.

(7) Consists of health benefits, 401(k) employer match and

reimbursed moving expenses.

(8) Consists of health benefits and 401(k) employer match.

(9) Consists of health benefits.

Outstanding Equity Awards at Fiscal Year-End 2019

The following table contains certain information

concerning unexercised options for the Named Executive Officers as of December 31, 2019.

Number of Shares Underlying Unexercised Options (#) –

Unexercisable

Equity Incentive Plan Awards:

amounts included in this column are the dollar amounts representing the full grant date

fair value of each award calculated in accordance with FASB ASC Topic 718 and do not

represent the actual value that may be recognized by the Named Executive Officers upon

option exercise.

David became our Executive Vice President and Chief Financial Officer on May 11, 2020.

Mounts became our Executive Vice President and General Counsel and Head of Regulatory,

Compliance and Legal on May 1, 2019.

salary increases effective February 25, 2020.

non-equity incentive plan bonuses reflected in 2020 were for the performance for the

year 2020 which were accrued in 2020 but will be paid in 2021.

The non-equity incentive

bonuses reflected in 2019 were for the performance for the year 2019 which were accrued

in 2019 and paid in 2020.

of health benefits, 401(k) employer match, and reimbursed commuter expenses.

of health benefits and 401(k) employer match.

of health benefits.

Equity Awards at Fiscal Year-End 2020

following table contains certain information concerning unexercised options for the Named Executive Officers as of December 31,

Number of Shares Underlying Unexercised Options (#) – Exercisable

of Shares Underlying Unexercised Options (#) – Unexercisable (1)

Incentive Plan Awards:

Number of Shares Underlying Unexercised Unearned Options # (2)

1 unchanged sentence

Option Expiration Date

Matthew David

Phoebe Mounts

1 unchanged sentence

Elizabeth Masson-Hurlburt

Cook and the Company mutually agreed not to renew his employment agreement, which expired on January 31, 2020.

31,250 of his unvested stock options were forfeited upon termination of his employment.

His vested options may be exercised until 90 days following his cessation of transition services to the Company.

Option Repricings

We did not engage in any repricings or other

modifications to any of our Named Executive Officers’

outstanding options during the year ended December 31, 2019.

Potential Payments on a Qualifying Termination

If the severance payments called for in

our agreements for Mr.

(1) Options vest based on continued employment over three or

(2) Options vest based on achievement of specific milestones

and continued employment, and become exercisable if and when a milestone is achieved.

did not engage in any repricings or other modifications to any of our Named Executive Officers’ outstanding options

during the year ended December 31, 2020.

Payments on a Qualifying Termination

the severance payments called for in our employment agreements for Mr.

Armstrong and Ms.

Masson-Hurlburt had been triggered on December 31,

2019, we would have been obligated to make the following payments:

Masson-Hurlburt had been triggered on December 31, 2020, we would have been obligated to make the following

Severance Payment

per month) and

2 unchanged sentences

of months paid) (1)

Number of Options

that would vest) and

market value) (2)

Matthew David

Phoebe Mounts

1 unchanged sentence

Elizabeth Masson-Hurlburt

(1) The market value equals the difference the fair market

value of the shares that could be acquired based on the closing sale price per share of our common stock on the NYSE American

on December 31, 2019, which was $7.28, and the exercise prices of the applicable stock options.

(2) Represents severance based on monthly base salary, payable

for 12 months.

Consists of COBRA and 401(k) employer match.

The market value equals the difference between the fair market value of the shares that could be acquired based on the closing sale price per share of our common stock on the NYSE American on December 31, 2020, which was $7.43, and the exercise prices of the applicable stock options.

Represents severance based on monthly base salary, payable for 12 months.

Any bonus for the year of termination based on performance would also be paid.

(3) Represents severance based on monthly base salary, payable

for 9 months.

Represents severance based on monthly base salary, payable for 9 months.

Any bonus for the year of termination based on performance would also be paid.

(4) Represents severance based on monthly base salary, payable

for 9 months.

Represents severance based on monthly base salary, payable for 9 months.

Any bonus for the year of termination based on performance would also be paid.

(5) Represents severance based on monthly base salary, payable

for 9 months.

Represents severance based on monthly base salary, payable for 9 months.

Any bonus for the year of termination based on performance would also be paid.

(6) Represents severance based on monthly base salary, payable

for 9 months.

Represents severance based on monthly base salary, payable for 9 months.

Any bonus for the year of termination based on performance would also be paid.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Principal Stockholders

The following table

shows the number of shares of our common stock beneficially owned as of December 31, 2019 by:

each person known by us to own beneficially more than 5% of the outstanding shares of our common stock;

Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

following table shows the number of shares of our common stock beneficially owned as of March 15, 2021 by:

person known by us to own beneficially more than 5% of the outstanding shares of our common stock;

each director;

each of our Named Executive Officers and our current executive officers;

all of our current directors and executive officers as a group.

This table is based upon the information

supplied by our Named Executive Officers, directors and principal stockholders and from Schedules 13D and 13G filed with the SEC.

Except as indicated in footnotes to this table, the persons named in this table have sole voting and investment power with respect

to all shares of common stock shown, and their address is c/o CorMedix Inc., 400 Connell Drive, Suite 5000, Berkeley Heights, New

Jersey 07922.

As December 31, 2019, we had 25,665,350 shares of common stock outstanding.

Beneficial ownership in each case also

includes shares issuable upon exercise of outstanding options that can be exercised within 60 days after December 31, 2019 for

purposes of computing the percentage of common stock owned by the person named.

Options owned by a person are not included for

purposes of computing the percentage owned by any other person.

Name and Address of Beneficial Owner

each of our Named

Executive Officers and our current executive officers;

all of our current

directors and executive officers as a group.

This table is based

upon the information supplied by our Named Executive Officers, directors and principal stockholders and from Schedules 13D and

13G filed with the SEC.

Except as indicated in footnotes to this table, the persons named in this table have sole voting and investment

power with respect to all shares of common stock shown, and their address is c/o CorMedix Inc., 300 Connell Drive, Suite 4200,

Berkeley Heights, New Jersey 07922.

As March 15, 2021, we had 38,024,194 shares of common stock outstanding.

Beneficial ownership

in each case also includes shares issuable upon exercise of outstanding options that can be exercised within 60 days after March

15, 2021 for purposes of computing the percentage of common stock owned by the person named.

Options owned by a person are not

included for purposes of computing the percentage owned by any other person.

Beneficially Owned (1)

Name and Address of Beneficial Owner

5% or Greater Stockholders

1 unchanged sentence

BlackRock, Inc.

and Named Executive Officers:

Directors and Named Executive Officers:

Khoso Baluch (4)

Robert Cook (5)

Matthew David (5)

Phoebe Mounts (6)

1 unchanged sentence

Elizabeth Masson-Hurlburt (8)

Paulo Costa (9)

Dillione (10)

Greg Duncan (11)

Alan Dunton (12)

Myron Kaplan (13)

Mehmood Khan (12)

Steven Lefkowitz (14)

All executive officers and directors as a group (11 persons) (1.5)

* Less than 1%

(1) Based upon 25,665,350 shares of our common stock outstanding

on December 31, 2019 and, with respect to each individual holder, rights to acquire our common stock exercisable within 60 days

of December 31, 2019.

(2) Based solely on information contained in a Schedule 13D

filed with the SEC on September 10, 2019 by Elliott Associates, L.P.

(“Elliott Associates”), Elliott International,

(“Elliott International”) and Elliott International Capital Advisors Inc.

(“Elliott International Capital

Advisors”, and together with Elliott Associates and Elliott International, the “Elliott Reporting Entities”),

the investment manager of Elliott International, and other information known to us.

Due to the Ownership Limitation (as defined

below), the Elliott Reporting Entities may be deemed to collectively beneficially own 1,303,411 shares of our common stock through

securities held by Elliott Associates and Elliott International.

Based upon 38,024,194 shares of our common stock outstanding on March 15, 2021 and, with respect to each individual holder, rights to acquire our common stock exercisable within 60 days of March 15, 2021.

Based solely on information contained in Amendment No.

1 to the Statement on Schedule 13D filed with the SEC on February 11, 2021 by Elliott Associates, L.P.

(“Elliott Associates”), Elliott International, L.P.

(“Elliott International”) and Elliott International Capital Advisors Inc.

(“Elliott International Capital Advisors”, and together with Elliott Associates and Elliott International, the “Elliott Reporting Entities”), the investment manager of Elliott International, and other information known to us.

Due to the Ownership Limitation (as defined below), the Elliott Reporting Entities may be deemed to collectively beneficially own 1,303,411 shares of our common stock through securities held by Elliott Associates and Elliott International.

Elliott Associates beneficially holds:

(i) 464,706 shares of

our common stock, (ii) 32,480 shares of Series G preferred stock convertible into 1,805,932 shares of our common stock (subject

to the Ownership Limitation) and (iii) 89,623 shares of our Series E preferred stock convertible into 391,953 shares of our common

stock (subject to the Ownership Limitation).

Elliott International beneficially holds (i) 368,668 shares of our common stock and

(ii) 67,520 shares of Series G preferred stock convertible into 3,754,205 shares of our common stock (subject to the Ownership

In accordance with Rule 13d-4 under the Exchange Act, the number of shares of our common stock into which the Series

E and Series G preferred stock are convertible into, as applicable, are limited pursuant to the terms of the convertible securities

to that number of shares of our common stock which would result in the Elliott Reporting Entities having aggregate beneficial

ownership of not more than 4.99% of the total issued and outstanding shares of our common stock (the “Ownership Limitation”).

The Elliott Reporting Entities disclaim beneficial ownership of any and all shares of our common stock issuable upon any conversion

of the convertible securities if such conversion would cause the Elliott Reporting Entities aggregate beneficial ownership of

our common stock to exceed or remain above the Ownership Limitation (as is currently the case).

Therefore, the Elliott Reporting

Entities disclaim beneficial ownership of any shares of our common stock, issuable upon any conversion of the Series E preferred

stock and the Series G preferred stock, which conversion would be prohibited by the Ownership Limitation.

The Ownership Limitation

does not prevent the Elliott Reporting Entities or their affiliates from voting the shares of Series E and Series G preferred

stock held by Elliott Associates and Elliott International.

Accordingly, the shares of Series E preferred stock and Series G preferred

stock, as of the record date, will be entitled to an aggregate of 2,918,776 votes.

The business address of Elliott Associates

is 40 West 57th Street, 30th Floor, New York, New York 10019.

The business address of Elliott International is c/o Maples &

(i) 464,706 shares of our common stock, (ii) 32,383 shares of Series G preferred stock convertible into 1,800,539 shares of our common stock (subject to the Ownership Limitation) and (iii) 89,623 shares of our Series E preferred stock convertible into 391,953 shares of our common stock (subject to the Ownership Limitation).

Elliott International beneficially holds (i) 368,668 shares of our common stock and (ii) 67,617 shares of Series G preferred stock convertible into 3,759,599 shares of our common stock (subject to the Ownership Limitation.

In accordance with Rule 13d-4 under the Exchange Act, the number of shares of our common stock into which the Series E and Series G preferred stock are convertible into, as applicable, are limited pursuant to the terms of the convertible securities to that number of shares of our common stock which would result in the Elliott Reporting Entities having aggregate beneficial ownership of not more than 4.99% of the total issued and outstanding shares of our common stock (the “Ownership Limitation”).

The Elliott Reporting Entities disclaim beneficial ownership of any and all shares of our common stock issuable upon any conversion of the convertible securities if such conversion would cause the Elliott Reporting Entities aggregate beneficial ownership of our common stock to exceed or remain above the Ownership Limitation (as is currently the case).

Therefore, the Elliott Reporting Entities disclaim beneficial ownership of any shares of our common stock, issuable upon any conversion of the Series E preferred stock and the Series G preferred stock, which conversion would be prohibited by the Ownership Limitation.

The Ownership Limitation does not prevent the Elliott Reporting Entities or their affiliates from voting the shares of Series E and Series G preferred stock held by Elliott Associates and Elliott International.

Accordingly, the shares of Series E preferred stock and Series G preferred stock, as of the record date, will be entitled to an aggregate of 2,918,776 votes.

The business address of Elliott Associates is 40 West 57th Street, 30th Floor, New York, New York 10019.

The business address of Elliott International is c/o Maples & Calder, P.O.

Box 309, Ugland House, South Church Street, George Town, Cayman Islands, British West Indies.

(3) Based solely on information contained in a statement

on Schedule 13G filed with the SEC on February 7, 2020 by BlackRock, Inc.

Based solely on information contained in Amendment No.

1 to the Statement on Schedule 13G filed with the SEC on January 29, 2021 by BlackRock, Inc.

BlackRock, Inc.

has the sole voting power with respect

to 1,693,926 shares of our common stock and the sole dispositive power with respect to 1,712,901 shares of our common stock.

business address of BlackRock, Inc.

has the sole voting power with respect to 1,969,743 shares of our common stock and the sole dispositive power with respect to 1,995,193 shares of our common stock.

The business address of BlackRock, Inc.

is 55 East 52 nd Street, New York, New York 10055.

(4) Consists of (i) 52,575 shares of our common stock held in a joint account with Mr.

Baluch’s spouse, and (ii) 263,100 shares of our common stock

issuable upon exercise of stock options.

(5) Consists of (i) 27,517 shares of our common stock, and

(ii) 58,800 shares of our common stock issuable upon exercise of stock options.

(6) Consists of 1,425 shares of our common stock.

(7) Consists of (i) 69,378 shares of our common stock, of which 23,606 shares are directly owned by Mr.

Armstrong’s

spouse, and (ii) 57,855 shares of our common stock

issuable upon exercise of stock options.

(8) Consists of (i) 8,000 shares of our common stock, and

(ii) 42,780 shares of our common stock issuable upon exercise of stock options.

(9) Consists of (i) 53,181 shares of our common stock, (ii)

60,000 shares of our common stock issuable upon exercise of stock options, and (iii) 292 shares of our common stock upon issuance

of restricted stock units.

(10) Consists of (i) 520 shares of our common stock, (ii) 17,708 shares of our common stock issuable

upon exercise of stock options.

and (iii) 208 shares of our common stock upon issuance of restricted stock units.

(11) Consists of (i) 109,025 shares of our common stock, and (ii) 41,000 shares of our common stock

issuable upon exercise of stock options, and (iii) 709 shares of our common stock upon issuance of restricted stock

(12) Consists of (i) 132,758 shares of our common stock, and (ii) 38,000 shares of our common stock

issuable upon exercise of stock options, and (iii) 259 shares of our common stock upon issuance of restricted stock

(13) Consists of (i) 83,928 shares of our common stock, of which 24,963 shares are held for the benefit of Mr.

Lefkowitz’s

minor son and 2,000 shares are directly owned by Mr.

Lefkowtiz’s spouse, (ii) 38,000 shares of our common stock

issuable upon exercise of stock options, (iii) 4,500 shares of our common stock issuable upon exercise of warrants, and (iv)

3,000 shares of our common stock issuable upon exercise of warrants through Wade Capital Corporation Money Purchase Plan, an

entity for which Mr.

Lefkowitz has voting and investment control, and (v) 500 shares of our common stock upon issuance of

restricted stock units.

(14) Consists

of (i) the following held by our directors and executive officers (A) 538,307 shares of our common stock, (B) 590,579 shares of

our common stock issuable upon exercise of stock options, (C) 7,500 shares of our common stock upon exercise of warrants, and

(D) 1,968 shares of our common stock upon issuance of restricted stock units, as referenced in footnotes 9 through 13.

Stock Performance Graph

The following performance graph shall not

be deemed to be “soliciting material”

or “filed”

or incorporated by reference in future filings with the

SEC, or subject to the liabilities of Section 18 of the Exchange Act except as shall be expressly set forth by specific reference

in such filing.

The performance graph compares the performance of our common stock to the NASDAQ Composite Index and the NASDAQ

Biotechnology Index.

Consists of (i) 60,905 shares of our common stock, and (ii) 492,915 shares of our common stock issuable upon exercise of stock options.

Consists of (i) 1,150 shares of our common stock, and (ii) 95,834 shares of our common stock issuable upon exercise of stock options.

Consists of (i) 7,200 shares of our common stock, and (ii) 118,882

shares of our common stock issuable upon exercise of stock options.

Consists of (i) 96,878 shares of our common stock, and (ii) 126,024 shares of our common stock issuable upon exercise of stock options.

Consists of (i) 8,000 shares of our common stock, and (ii) 130,862 shares of our common stock issuable upon exercise of stock options.

Consists of 15,516 shares of our common stock issuable upon exercise of stock options.

Consists of (i) 53,473 shares of our common stock, and (ii) 85,000 shares of our common stock issuable upon exercise of stock options.

Consists of 14,580 shares of our common stock issuable upon exercise of stock options.

Consists of (i) 6,250 shares of our common stock, and (ii) 52,500 shares of our common stock issuable upon exercise of stock options.

Consists of (i) 150,034 shares of our common stock, and (ii) 66,000 shares of our common stock issuable upon exercise of stock options.

Consists of (i) 60,498 shares of our common stock held directly, (ii) 2,000 shares of our common stock held by Mr.

Lefkowitz’s wife, (iv) 30,152 shares of our common stock held by Wade Capital Corporation Money Purchase Plan, an entity for which Mr.

Lefkowitz has voting and investment control, and (v) 63,000 shares of our common stock issuable upon exercise of stock options.

Consists of the following held by our directors and executive

officers (A) 476,540 shares of our common stock, and (B) 1,261,113 shares of our common stock issuable upon exercise of stock options.

Performance Graph

following performance graph shall not be deemed to be “soliciting material” or “filed” or incorporated

by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act except as shall be

expressly set forth by specific reference in such filing.

The performance graph compares the performance of our common stock to

the NASDAQ Composite Index and the NASDAQ Biotechnology Index.

The graph covers the most recent five-year period ended December

The graph assumes that the

value of the investment in our common stock and each index was $100.00 at December 31, 2014, and that all dividends are reinvested.

On March 26, 2019, we effected a 1-for-5

reverse stock split of our issued and outstanding shares of common stock, par value $0.001, per share, by combining, reclassifying

and changing each authorized and outstanding five shares of “old”

common stock into one share of “new”

common stock.

No fractional shares were issued, and, in lieu thereof, where applicable, one whole share was issued.

the reverse stock split, reclassification, combination and change, proportional adjustments were also made to our number of shares

of common stock issuable upon conversion of outstanding preferred shares and the convertible note payable, warrants and options

and other equity awards.

The reverse stock split did not affect the par value per share of our common stock (which remains at $0.001

per share) or the total number of shares of common stock that are authorized to be issued pursuant to our Amended and Restated

Certificate of Incorporation, as amended, which remains at 160 million shares.

All issued and outstanding share and per share amounts

included in the accompanying consolidated financial statements and in this report have been adjusted to reflect the reverse stock

split, reclassification, combination and change for all periods presented.

Cumulative Total Return

The graph assumes that the value of the investment in our common stock and each index was $100.00 at December 31, 2015,

and that all dividends are reinvested.

CorMedix Inc.

NASDAQ Biotechnology

Certain Relationships and Related Transactions and Director Independence

Related Party Transactions

On September 6, 2019, we consummated a

securities exchange agreement (the “Exchange Agreement”), dated as of August 14, 2019, with Elliott Associates,

Elliott International, and Manchester Securities Corp.

(together “Elliott”), pursuant to which we exchanged

certain of our outstanding securities (the “Exchanged Securities”) together with an aggregate cash payment of

$2,000,000 for 100,000 shares of Series G Preferred Stock.

The Exchanged Securities, which in the aggregate were exercisable

or convertible for 5,017,769 shares of common stock, consisted of (i) all of the shares of our Series C-2 Preferred Stock,

Series D Preferred Stock and Series F Preferred Stock held by Elliott, (ii) all of the warrants held by Elliott, and (iii)

all of the 10% Senior Secured Convertible Notes issued on December 31, 2018 held by Elliott, with an aggregate principal

amount of $7,879,688, including accrued interest compounded quarterly of $379,688.

The Exchanged Securities, other than the

Series E Warrants, were cancelled upon delivery of such Exchanged Securities to us and the issuance of the Series G Preferred

Stock to the holders.

No shares of Series G Preferred Stock were issued in exchange for the surrender and cancellation

of the Series E Warrants owned by Elliott, which were cancelled upon delivery to the Company.

Additionally, our Series E

Preferred Stock, which is owned by Elliott, was amended to conform certain of the restrictive covenants to those in the

Series G Preferred Stock, and to provide the shares of Series E Preferred Stock with similar rights to vote on an

as-converted basis.

Additionally, on September 6, 2019, in connection

with the closing of the transactions under the Exchange Agreement, we also amended and restated the Registration Rights Agreement,

dated as of November 9, 2017, by and between us and Elliott, in order to include the shares of common stock currently held by Elliott,

and the shares of common stock issuable upon conversion of the Series G Preferred Stock and the Series E Preferred Stock as registrable

securities thereunder.

Procedures for Review and

Approval of Transactions with Related Persons

Pursuant to the Audit Committee Charter,

the Audit Committee is responsible for reviewing and approving all related party transactions as defined under Item 404 of Regulation

S-K, after reviewing each such transaction for potential conflicts of interests and other improprieties.

Our policies and procedures

for review and approval of transactions with related persons are in writing in our Code of Conduct and Ethics available on our

website at www.cormedix.com under the “Investor Relations—Corporate Governance”

The information on Board independence is

found in Item 10 of this Report under the heading “Board Independence.”

Principal Accounting Fees and Services

Fees Paid to the Independent Registered Public Accounting

The following table sets forth fees billed

to us by Friedman LLP, our independent registered public accounting firm for the years ended December 31, 2019 and 2018, for services

2021 Russell Investment Group.

Relationships and Related Transactions and Director Independence

Party Transactions

September 6, 2019, we consummated a securities exchange agreement (the “Exchange Agreement”), dated as of August 14,

2019, with Elliott Associates, Elliott International, and Manchester Securities Corp.

(together “Elliott”), pursuant

to which we exchanged certain of our outstanding securities (the “Exchanged Securities”) together with an aggregate

cash payment of $2,000,000 for 100,000 shares of Series G Preferred Stock.

The Exchanged Securities, which in the aggregate were

exercisable or convertible for 5,017,769 shares of common stock, consisted of (i) all of the shares of our Series C-2 Preferred

Stock, Series D Preferred Stock and Series F Preferred Stock held by Elliott, (ii) all of the warrants held by Elliott, and (iii)

all of the 10% Senior Secured Convertible Notes issued on December 31, 2018 held by Elliott, with an aggregate principal amount

of $7,879,688, including accrued interest compounded quarterly of $379,688.

The Exchanged Securities, other than the Series E

Warrants, were cancelled upon delivery of such Exchanged Securities to us and the issuance of the Series G Preferred Stock to

No shares of Series G Preferred Stock were issued in exchange for the surrender and cancellation of the Series E

Warrants owned by Elliott, which were cancelled upon delivery to the Company.

Additionally, our Series E Preferred Stock, which

is owned by Elliott, was amended to conform certain of the restrictive covenants to those in the Series G Preferred Stock, and

to provide the shares of Series E Preferred Stock with similar rights to vote on an as-converted basis.

Additionally, on September

6, 2019, in connection with the closing of the transactions under the Exchange Agreement, we also amended and restated the Registration

Rights Agreement, dated as of November 9, 2017, by and between us and Elliott, in order to include the shares of common stock currently

held by Elliott, and the shares of common stock issuable upon conversion of the Series G Preferred Stock and the Series E Preferred

Stock as registrable securities thereunder.

for Review and Approval of Transactions with Related Persons

to the Audit Committee Charter, the Audit Committee is responsible for reviewing and approving all related party transactions

as defined under Item 404 of Regulation S-K, after reviewing each such transaction for potential conflicts of interests and other

improprieties.

Our policies and procedures for review and approval of transactions with related persons are in writing in our

Code of Conduct and Ethics available on our website at www.cormedix.com under the “Investor Relations—Corporate Governance”

information on Board independence is found in Item 10 of this Report under the heading “Board Independence.”

Accounting Fees and Services

Paid to the Independent Registered Public Accounting Firm

following table sets forth fees billed to us by Friedman LLP, our independent registered public accounting firm for the years

ended December 31, 2020 and 2019, for services relating to:

auditing our annual financial statements;

reviewing our financial statements included in our quarterly reports on

reviewing our financial

statements included in our quarterly reports on Form 10-Q;

reviewing registration statements during 2020 and 2019;

financing activities in 2019 and 2018;

and services rendered

in connection with tax compliance, tax advice and tax planning, and all other fees for services rendered.

financing activities

in 2020 and 2019;

and services rendered in connection with tax compliance, tax advice and tax planning, and all other fees for

services rendered.

Audit Related Fees

All Other Fees

Audit Committee Pre-Approval Policies and Procedures

Pursuant to its charter, the Audit

Committee is responsible for reviewing and approving in advance any audit and any permissible non-audit engagement or

relationship between us and our independent registered public accounting firm.

The Audit Committee may delegate to one or

more designated members of the Audit Committee the authority to grant pre-approvals, provided such approvals are presented to

the Audit Committee at a subsequent meeting.

Committee Pre-Approval Policies and Procedures

to its charter, the Audit Committee is responsible for reviewing and approving in advance any audit and any permissible non-audit

engagement or relationship between us and our independent registered public accounting firm.

The Audit Committee may delegate

to one or more designated members of the Audit Committee the authority to grant pre-approvals, provided such approvals are presented

to the Audit Committee at a subsequent meeting.

If the Audit Committee elects to establish pre-approval policies and procedures

regarding non-audit services, the Audit Committee must be informed of each non-audit service provided by our independent

registered public accounting firm.

Audit Committee pre-approval of audit and non-audit services will not be required if the

engagement for the services is entered into pursuant to pre-approval policies and procedures, provided the policies and

procedures are detailed as to the particular service, the Audit Committee is informed of each service provided and such

policies and procedures do not include delegation of the Audit Committee’s responsibilities under the Exchange Act to

our management.

Audit Committee pre-approval of non-audit services (other than review and attestation services) also will not

be required if such services fall within available exceptions established by the SEC.

All services performed by our

independent registered public accounting firm during 2019 were pre-approved by the Audit Committee.

Exhibits, Financial Statement Schedules

(a) List of documents filed as part of this report:

Financial Statements:

The financial statements

of the Company and the related reports of the Company’s independent registered public accounting firms thereon have been

filed under Item 8 hereof.

regarding non-audit services, the Audit Committee must be informed of each non-audit service provided by our independent registered

public accounting firm.

Audit Committee pre-approval of audit and non-audit services will not be required if the engagement for

the services is entered into pursuant to pre-approval policies and procedures, provided the policies and procedures are detailed

as to the particular service, the Audit Committee is informed of each service provided and such policies and procedures do not

include delegation of the Audit Committee’s responsibilities under the Exchange Act to our management.

Audit Committee pre-approval

of non-audit services (other than review and attestation services) also will not be required if such services fall within available

exceptions established by the SEC.

All services performed by our independent registered public accounting firm during 2020 were

pre-approved by the Audit Committee.

Financial Statement Schedules

Exhibit Index

The following is a

list of exhibits filed as part of this Form 10-K:

of documents filed as part of this report:

financial statements of the Company and the related reports of the Company’s independent registered public accounting firms

thereon have been filed under Item 8 hereof.

Statement Schedules:

following is a list of exhibits filed as part of this Form 10-K:

Exhibit Number

Description of Document

Registrant’s Form

Exhibit Number

2 unchanged sentences

Riley FBR, Inc.

Amended and Restated At Market Issuance Sales Agreement, dated November 27, 2020, by and among CorMedix Inc., B.

Riley Securities, Inc.

and Needham & Company LLC

Form of Amended and Restated Certificate of Incorporation.

Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated February 24, 2010.

Form of Amended and Restated Bylaws as amended April 19, 2016.

Second Amended and Restated Bylaws as amended October 8, 2020.

Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated December 3, 2012.

8 unchanged sentences

issued on May 3, 2017.

Form of Underwriter’s Warrant to Purchase Common Stock of CorMedix Inc., issued May 3, 2017.

Description of Capital Stock of CorMedix Inc.

8 unchanged sentences

Release of Claims and Severance Modification, dated July 17, 2015, between Randy Milby and CorMedix Inc.

Executive Employment Agreement, dated as of September 26, 2019, between CorMedix Inc.

and Khoso Baluch

Executive Employment Agreement, dated and effective May 11, 2020, between CorMedix Inc.

and Matthew David.

Exhibit Number

Description of Document

Registrant’s Form

Exhibit Number

Filed Herewith

Executive Employment Agreement, dated as of September 26, 2019, between CorMedix Inc.

and Khoso Baluch

Employment Agreement, effective February 1, 2017, between CorMedix Inc.

and Robert Cook.

Employment Agreement, effective March 1, 2017, between CorMedix Inc.

Executive Employment Agreement, dated and effective April 17, 2020, between CorMedix Inc.

and John Armstrong.

8 unchanged sentences

and the investor named therein.

Employment Agreement, effective March 19, 2018, between CorMedix Inc.

Executive Employment Agreement, dated and effective March 10, 2021, between CorMedix Inc.

and Elizabeth Masson-Hurlburt

14 unchanged sentences

The following materials from CorMedix Inc.

Form 10-K for the year ended December 31, 2019, formatted in Extensible Business Reporting Language (XBRL):

(i) Balance Sheets at December 31, 2019 and 2018, (ii) Statements of Operations for the years ended December 31, 2019 and 2018, (iii) Statements of Changes in Stockholders’

Equity for the years ended December 31, 2019 and 2018, (iv) Statements of Cash Flows for the years ended December 31, 2019 and 2018 and (v) Notes to the Financial Statements.**

* Confidential treatment has been granted for portions

of this document.

The omitted portions of this document have been filed separately with the SEC.

Form 10-K Summary

Not applicable.

Pursuant to the requirements

of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned

thereunto duly authorized.

CORMEDIX INC.

Form 10-K for the year ended December 31, 2020, formatted

in Extensible Business Reporting Language (XBRL):

(i) Balance Sheets at December 31, 2020 and 2019, (ii) Statements of Operations

for the years ended December 31, 2020 and 2019, (iii) Statements of Changes in Stockholders’ Equity for the years ended

December 31, 2020 and 2019, (iv) Statements of Cash Flows for the years ended December 31, 2020 and 2019 and (v) Notes to the

Financial Statements.

treatment has been granted for portions of this document.

The omitted portions of this document have been filed separately with

Portions of the exhibit have been omitted in reliance on Item 601(b)(10)(iv) of Regulation S-K.

Indicates management contract or compensation plan.

to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf

by the undersigned thereunto duly authorized.

March 30, 2021

/s/ Khoso Baluch

Chief Executive Officer

(Principal Executive Officer and Principal Financial

and Accounting Officer)

Pursuant to the requirements

of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant

and in the capacities and on the dates indicated:

/s/ Khoso Baluch

Executive Officer

Executive Officer)

March 30, 2021

/s/ Matthew David

Matthew David

Financial Officer

Financial and Accounting Officer)

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf

of the Registrant and in the capacities and on the dates indicated:

Chief Executive Officer and Director

March 30, 2021

(Principal Executive Officer and Principal Financial and Accounting Officer)

/s/ Myron Kaplan

Chairman of the Board and Director

(Principal Executive Officer)

Chief Financial Officer

March 30, 2021

/s/ Janet Dillione

Matthew David

(Principal Financial and Accounting Officer)

Director and Chairman of the Board

March 30, 2021

Janet Dillione

/s/ Alan Dunton

March 30, 2021

/s/ Mehmood Khan

March 30, 2021

/s/ Steven Lefkowitz

Steven Lefkowitz

March 30, 2021

Steven Lefkowitz

AND SUBSIDIARY

AND SUBSIDIARIES

Statements Index

2 unchanged sentences

Consolidated Statements of Operations and Comprehensive Income (Loss) Years Ended December 31, 2020 and 2019

Consolidated Statements of Changes in Stockholders’

Equity Years Ended December 31, 2019 and 2018

Consolidated Statements of Cash Flows Years Ended December 31, 2019 and 2018

Consolidated Statements of Changes in Stockholders’ Equity Years Ended December 31, 2020 and 2019

Statements of Cash Flows Years Ended December 31, 2020 and 2019

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and

To the Board of Directors and

Stockholders of CorMedix Inc.

2 unchanged sentences

balance sheets of CorMedix Inc.

and subsidiary (the “Company”) as of December 31, 2019 and&ensp;2018, and the related

consolidated statements of operations and comprehensive loss, stockholders’

equity, and cash flows for each of the years

in the two-year period ended December 31, 2019, and the related notes (collectively referred to as the “consolidated financial

statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the

years in the two-year period ended December 31, 2019, in conformity with accounting principles generally accepted in the United

States of America.

We also have audited, in accordance with

the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal

control over financial reporting as of December 31, 2019, based on criteria established in Internal Control—Integrated

Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated

March 16, 2020, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

and Subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related

consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity, and cash flows for

each of the years in the two-year period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated

financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each

of the years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the

United States of America.

Basis for Opinion

These consolidated financial statements

are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated

are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated

financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent

with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the

Securities and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with

2 unchanged sentences

the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing

procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,

and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial

We believe that our audits provide a reasonable basis for our opinion.

The Company is not required

to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are

required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing

procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and

disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matters communicated

below are matters arising from the current period audit of the consolidated financial statements that were communicated or required

to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated

financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical

audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not,

by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts

or disclosures to which they relate.

Critical Audit Matter

During the year ended December

31, 2020, the Company recorded stock-based compensation expense of $2.5 million.

As discussed in Note 8 to the consolidated financial

statements, the Company issues various types of equity awards, including stock options and restricted stock units.

Auditing the Company’s accounting

for stock-based compensation required complex auditor judgment due to the number and variety of equity awards outstanding, the

inclusion of performance vesting criteria in certain awards, and the subjectivity of assumptions used to value stock-based awards.

In particular, judgment was required to evaluate the nature of the performance conditions, as well as to assess the satisfaction

of the performance targets.

How We Addressed

the Matter in Our Audit

To test stock based compensation

expense, we performed audit procedures that included, among others, obtaining an understanding of the Company’s controls

over stock-based compensation, assessing the completeness of the awards granted and evaluating the methodologies used to estimate

the fair value of these awards.

We also tested the accuracy of the data used in measuring the awards by agreeing the underlying

inputs, such as grant date, grant price, performance targets and vesting terms, among others, back to source documents, such as

compensation meeting minutes or award letters and testing the clerical accuracy of the calculation of the expense recorded.

determined whether milestone targets were satisfied in accordance with the contractual conditions and recalculated grant date fair

We also evaluated the adequacy of the Company’s stock-based compensation disclosures included in Note 8 in relation

to these matters.

/s/ Friedman LLP

We have served as the Company’s auditor since 2014.

Marlton, New Jersey

We have served as the Company’s auditor since 2014.

March 30, 2021

And Subsidiary

And Subsidiaries

BALANCE SHEETS

8 unchanged sentences

Security deposit

Other prepaid expenses and current

Other prepaid expenses and current assets

Total current assets

Property and equipment, net

LIABILITIES AND STOCKHOLDERS’

Operating lease right-of-use assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

1 unchanged sentence

Accrued expenses

Operating lease liabilities, short-term

Deferred revenue

1 unchanged sentence

Operating lease liabilities, net of current portion

Convertible note, related party,

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES (Note 7)

STOCKHOLDERS’

STOCKHOLDERS’ EQUITY

Preferred stock - $ 0.001 par value:

2,000,000 shares authorized;

241,623 and 419,585 shares issued and outstanding at December 31, 2019 and 2018

241,623 shares issued and outstanding at December 31, 2020 and 2019

Common stock - $ 0.001 par value:

shares authorized at December 31, 2019;

25,665,350 and 21,775,173 shares issued and outstanding at December 31, 2019 and 2018,

160,000,000 shares authorized at December 31, 2020 and 2019;

33,558,096 and 25,665,350 shares issued and outstanding at December 31, 2020 and 2019, respectively

Accumulated other comprehensive gain

3 unchanged sentences

( 195,421,172 )

TOTAL STOCKHOLDERS’

TOTAL LIABILITIES

AND STOCKHOLDERS’

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes are integral part of these consolidated financial statements.

and Subsidiary

and Subsidiaries

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

6 unchanged sentences

Selling, general and administrative

( 13,877,944 )

( 9,865,005 )

Total operating expenses

7 unchanged sentences

Foreign exchange transaction loss

Interest expense including amortization

of debt discount

Interest expense including amortization of debt discount

Total other income (expense)

5 unchanged sentences

Other Comprehensive Income (Loss):

Unrealized gain from investments

Foreign currency translation (loss)

Total other comprehensive (loss)

Comprehensive

Unrealized gain (loss) from investments

Foreign currency translation gain

Total other comprehensive income

Comprehensive Loss

$ ( 22,022,934 )

3 unchanged sentences

Deemed dividend as a result of warrant modification

Deemed dividend as a result of

exchange of convertible note and Series C-2, Series D and Series F preferred stock, related party

Deemed dividend as a result of exchange of convertible note and Series C-2, Series D and Series F preferred stock, related party

( 26,733,098 )

Net Loss Attributable

to Common Shareholders

Net Loss Attributable to Common Shareholders

( 22,027,683 )

( 43,535,672 )

Common Share –

Basic and Diluted

Weighted Average

Common Shares Outstanding –

Basic and Diluted

Net Loss Per Common Share – Basic and Diluted

Weighted Average Common Shares Outstanding – Basic and Diluted

accompanying notes are integral part of these consolidated financial statements.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Years Ended December 31, 2020 and 2019

Preferred Stock –

C-2, C-3, Series D, Series E, Series F and Series G

Other Comprehensive

Total Stockholders’

Balance at December 31, 2017

Stock – Series C-2, C-3, Series D, Series E, Series F and Series G

Other Comprehen-sive Gain

Stockholders’

at December 31, 2018

$ 183,803,636

$ ( 178,988,098 )

Stock issued in connection with ATM sale of common stock,

Value of warrants related to convertible note

Beneficial conversion feature related to convertible

Stock issued in connection with warrants exercised

Stock issued in connection with warrants cashless exercised

Stock issued in connection with stock options exercised

Issuance of restricted stock

Stock issued for payment of deferred fees

Stock issued in connection

with ATM sale of common stock, net

Stock issue in connection

with warrants exercised

Exchange of convertible

note for Series G preferred stock, net, related party

Exchange of Series

C-2, Series D and Series F preferred stock for Series G preferred stock, related party

Issuance of Series

G preferred stock, related party

Stock issued in connection

with stock options exercised

Conversion of Series

C-3 non-voting preferred stock to common stock

Issuance of vested

restricted stock

Issuance of common

stock as a result of reverse stock split rounding

Stock-based compensation

Cumulative effect of adoption of ASC 606

Other comprehensive gain

Other comprehensive

( 16,433,074 )

Balance at December 31, 2018

at December 31, 2019

( 195,421,172 )

Stock issued in connection with ATM sale of common stock,

Stock issue in connection with warrants exercised

Exchange of convertible note for Series G preferred stock,

net, related party

Exchange of Series C-2, Series D and Series F preferred

stock for Series G preferred stock, related party

Issuance of Series G preferred stock, related party

Stock issued in connection with stock options exercised

Conversion of Series C-3 non-voting preferred stock to

Issuance of vested restricted stock

Issuance of common stock as a result of reverse stock

split rounding

Stock issued in connection

with public offering, net

Stock issued in connection

with ATM sale of common stock, net

Stock issue in connection

with warrants exercised

Issuance of vested

restricted stock

Stock-based compensation

Other comprehensive loss

Other comprehensive

( 22,027,683 )

Balance at December 31, 2019

at December 31, 2020

$ 261,536,061

1 unchanged sentence

accompanying notes are integral part of these consolidated financial statements.

AND SUBSIDIARY

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December

31, 2019 and 2018

Ended December 31, 2020 and 2019

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Non-cash interest expense

Non-cash lease expense

Inventory reserve

Changes in operating assets and liabilities:

Decrease in trade receivables

(Increase) decrease in trade receivables

Decrease in inventory

(Increase) decrease in prepaid expenses and other current assets

Increase in prepaid expenses and other current assets

Increase (decrease) in accounts payable

Increase (decrease) in accrued expenses

( 1,564,381 )

Decrease in accrued expenses

( 1,883,149 )

Decrease in deferred revenue

5 unchanged sentences

( 8,549,758 )

Sale of short-term investments

( 14,106,369 )

Maturity of short-term investments

Purchase of equipment

Net cash used in (provided by) investing activities

Net cash provided by (used in) investing activities

( 12,020,459 )

1 unchanged sentence

Proceeds from sale of common stock from at-the-market program, net

Proceeds from senior convertible note

Payment of debt issuance costs in connection with senior convertible note

Proceeds from the public offering, net

Proceeds from exchange agreement, related party

4 unchanged sentences

Foreign exchange effects on cash

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH –

BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH –

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

( 1,270,136 )

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH – BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH – END OF YEAR

Cash paid for interest

2 unchanged sentences

Deemed dividend as a result of exchange of convertible note, Series C-2, Series D and Series F convertible preferred shares, related party

Non-cash portion of debt discount on senior convertible notes

Issuance of common stock for vested restricted stock units

Issuance of common stock for payment of deferred fees

Right-of-use asset and lease liability recognized under ASC 842

Unrealized gain (loss) from investments

Conversion of preferred stock to common stock

1 unchanged sentence

accompanying notes are integral part of these consolidated financial statements.

CORMEDIX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 — Organization, Business and Basis of Presentation:

and Business:

(“CorMedix”

or the “Company”) was incorporated in the State of Delaware on July 28, 2006.

(“CorMedix” or the “Company”) was incorporated in the State of Delaware on July 28, 2006.

is a biopharmaceutical company focused on developing and commercializing therapeutic products for the prevention and treatment

of infectious and inflammatory diseases.

In 2013, the Company formed a wholly-owned subsidiary, CorMedix Europe GmbH.

The Company’s primary focus is to

develop its lead product candidate, Neutrolin ®

, for potential commercialization in the United States (“U.S.”)

and other key markets.

The Company has in-licensed the worldwide rights to develop and commercialize Neutrolin, which is a novel

anti-infective solution (a formulation of 1.35% taurolidine, 3.5% citrate and 1000 u/ml heparin) 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.

In late 2013, the Company met with the

Food and Drug Administration (“FDA”) to determine the pathway for U.S.

marketing approval of Neutrolin.

launched the Phase 3 clinical trial in patients with hemodialysis catheters in the U.S.

in December 2015.

In 2013, the Company formed a wholly-owned subsidiary, CorMedix Europe GmbH and in May

2020, the Company formed a wholly-owned Spanish subsidiary, CorMedix Spain, S.L.U.

The Company’s

primary focus is to develop its lead product candidate, DefenCath™, for potential commercialization in the United States

(“U.S.”) and other key markets.

The Company has in-licensed the worldwide rights to develop and commercialize DefenCath/Neutrolin®,

which is a novel anti-infective solution (a formulation of taurolidine 1.35% 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, total parenteral nutrition, and oncology.

The name DefenCath is the U.S.

proprietary name conditionally approved

Food and Drug Administration (“FDA”), while the name Neutrolin is currently used in the European Union

(“EU”) and other territories where the Company has received CE-Mark approval for the commercial distribution of Neutrolin

as a catheter lock solution (“CLS”) regulated as a medical device.

January 2015, the FDA designated DefenCath as a Qualified Infectious Disease Product (“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 (“NDA”).

in January 2015, the FDA granted Fast Track designation to DefenCath 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 DefenCath 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.

December 2015, the Company launched its Phase 3 Prospective, Multicenter, Double-blind, Randomized, Active Control Study to Demonstrate

Safety & Effectiveness of DefenCath/Neutrolin in Preventing Catheter-related Bloodstream Infection in Subjects on Hemodialysis

for End Stage Renal Disease (“LOCK-IT-100”), in patients with hemodialysis catheters in the U.S.

The clinical trial

named Phase 3 Prospective, Multicenter, Double-blind, Randomized, Active Control Study to Demonstrate Safety and Effectiveness

of Neutrolin in Preventing Catheter-related Bloodstream Infection in Subjects on Hemodialysis for End Stage Renal Disease (“LOCK-IT-100”),

was a prospective, multicenter, randomized, double-blind, active control trial which aimed to demonstrate the efficacy and safety

of Neutrolin in preventing catheter-related bloodstream infections (“CRBSI”), in subjects receiving hemodialysis therapy

as treatment for end stage renal disease.

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 (“tPA”), or removal of catheter due to dysfunction, and removal of catheter for any reason.

The Company established the Clinical Adjudication

Committee (“CAC”), to critically and independently assess CRBSI while being blinded to treatment assignment.

2018, the CAC reviewed potential cases of CRBSI in the Company’s LOCK-IT-100 study that occurred through early December

2017 and identified 28 such cases.

An interim efficacy analysis was performed when the first 28 CRBSIs were identified.

2018, the independent Data Safety Monitoring Board (“DSMB”), had completed its review of the interim analysis of the

data from the LOCK-IT-100 study.

Based on the first 28 cases, there was a highly statistically significant 72% reduction in CRBSI

relative to the control (p=0.0034).

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.

Following discussions with the FDA, the

Company proceeded with an orderly termination of LOCK-IT-100.

Although the FDA usually requires two pivotal clinical trials to

provide substantial evidence of safety and effectiveness for approval of an NDA, the FDA will in some cases accept one adequate

and well-controlled trial, where it is a large multicenter trial with a broad range of subjects and investigation sites with procedures

to include trial quality that has demonstrated a clinically meaningful and statistically very persuasive effect on prevention

of a disease with potentially serious outcome.

The Company plans to proceed with submission of the NDA for Neutrolin®

on the results of LOCK-IT-100.

Whether data from LOCK-IT-100 are sufficient will be a review issue with the FDA.

The FDA has agreed that the Neutrolin NDA

is eligible for both priority review and for submission under rolling review.

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.

The FDA informs the applicant of a Priority Review designation within sixty days of the receipt of

the complete original application, if it determines the criteria have been met.

Priority Review designation would mean FDA’s

goal is to take action on an application within 6 months, compared to a standard review period of ten months.

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

Antibacterial and Antifungal Drugs (“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.

Given that the LPAD pathway provides for a streamlined clinical

development program for a limited population that may involve smaller, shorter, or fewer clinical trials, the Company believes

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.

the European Union (“EU”), Neutrolin is regulated as a Class 2 medical device.

In July 2013, the Company received

CE Mark approval for Neutrolin.

In December 2013, the Company started commercial sales of 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

To date, Neutrolin is registered and may be sold in certain EU and Middle Eastern countries for such treatment.

September 2014, the TUV-SUD and The Medicines Evaluation Board of the Netherlands (“MEB”), granted a label expansion

for Neutrolin for these same expanded indications for the EU.

In December 2014, the Company 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, the Company is sponsoring a pre-clinical research collaboration for the use of taurolidine as a possible

was designed to demonstrate the safety and effectiveness of DefenCath compared to the standard of care CLS, Heparin, in preventing

The primary endpoint for the trial assessed the incidence of CRBSI and time to CRBSI for each study subject.

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 reason.

previously agreed with the FDA, an interim efficacy analysis was performed when the first 28 potential CRBSI cases were identified

in our LOCK-IT-100 study that occurred through early December 2017.

Based on these first 28 cases, there was a highly statistically

significant 72% reduction in CRBSI by DefenCath relative to the active control of heparin (p=0.0034).

Because the pre-specified

level of statistical significance was reached for the primary endpoint and efficacy had been demonstrated with no safety concerns,

the LOCK-IT-100 study was terminated early.

The study continued enrolling and treating subjects until study termination, and the

final analysis was based on a total of 795 subjects.

In a total of 41 cases, there was a 71% reduction in CRBSI by DefenCath relative

to heparin, which was highly statistically significant (p=0.0006), with a good safety profile.

The FDA granted the

Company’s request for a rolling submission and review of the NDA which is designed to expedite the approval process for products

being developed to address an unmet medical need.

Although the FDA usually requires two pivotal clinical trials to provide substantial

evidence of safety and effectiveness for approval of an NDA, the FDA will in some cases accept one adequate and well-controlled

trial, where it is a large multicenter trial with a broad range of subjects and investigation sites with procedures to include

trial quality that has demonstrated a clinically meaningful and statistically very persuasive effect on prevention of a disease

with potentially serious outcome.

In March 2020,

the Company began the modular submission process for the NDA for DefenCath for the prevention of CRBSI in hemodialysis

patients, and in August 2020, the FDA accepted for filing the DefenCath NDA.

The FDA also granted the Company’s request

for priority review, which provides for a six-month review period instead of the standard ten-month review period.

Company announced in March 2021, the FDA informed the Company that it will not approve the NDA for DefenCath in its present

The FDA noted concerns at the third-party manufacturing facility after a review of records requested by the FDA and

provided by the manufacturing facility.

The Company is working with the manufacturing facility to develop plans for

resolution of the deficiencies.

Additionally, the FDA is requiring a manual extraction study to demonstrate that the labeled

volume can be consistently withdrawn from the vials despite an existing in-process control to demonstrate fill volume within

specifications.

The Company expects to be able to complete this requirement expeditiously.

Satisfactory resolution of these

issues is required for approval of the DefenCath NDA by a pre-approval inspection and/or adequate manufacturing facility

responses addressing these concerns.

If an inspection is required, the Company may encounter delays in obtaining FDA approval

because the FDA is currently facing a backlog due to the pandemic and is actively working to define an approach for

scheduling outstanding inspections once safe travel may resume.

The Company will request a meeting with the FDA, which the

Company estimates will occur in mid-April, to obtain agreement with the FDA on the proposed resolutions of the

deficiencies.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

FDA did not request additional clinical data and did not identify any deficiencies related to the data submitted on the efficacy

or safety of DefenCath from LOCK-IT-100.

In draft labeling discussed with the FDA, the FDA added that the initial approval will

be for the limited population of patients with kidney failure receiving chronic hemodialysis through a central venous catheter.

This is consistent with our request for approval pursuant to the Limited Population Pathway for Antibacterial and Antifungal Drugs

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.

LPAD provides for a streamlined clinical development program involving smaller, shorter,

or fewer clinical trials and is intended to encourage the development of safe and effective products that address unmet medical

needs of patients with serious bacterial and fungal infections.

We believe that LPAD will provide additional flexibility for the

FDA to approve DefenCath to reduce CRBSIs in the limited population of patients with kidney failure receiving hemodialysis through

a central venous catheter.

The Company intends

to pursue additional indications for DefenCath use as a CLS in populations with an unmet medical need that also represent a significant

market opportunity.

For example, the Company intends to pursue marketing authorization in the U.S.

for use as a CLS to reduce CRBSIs

in oncology and total parenteral nutrition patients using a central venous catheter.

addition to DefenCath, the Company is sponsoring a pre-clinical research collaboration for the use of taurolidine as a possible

treatment for rare orphan pediatric tumors.

7 unchanged sentences

filed in several indications, including wound closure, surgical meshes, and wound management.

The FDA regards taurolidine as a new chemical

entity and therefore, it is currently an unapproved new drug.

The Company might in the future pursue product candidates that would

involve devices impregnated with taurolidine, and the Company believes that at the current time such products would be combination

products subject to device premarket submission requirements (while subject also, under review by the FDA, to the standards for

drug approvability).

Consequently, given that there is no appropriate predicate medical device currently marketed in the U.S.

on which a 510(k) approval process could be based and that taurolidine is not yet approved in any application, the Company anticipates

that it would be required to submit a premarket approval application (“PMA”) for marketing authorization for any medical

device indications that we may pursue for devices containing taurolidine.

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 the FDA.

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.

The Company was granted

a deferral by the FDA under the Pediatric Research Equity Act (“PREA”), that requires sponsors to conduct pediatric

studies for NDAs for a new active ingredient, such as taurolidine in DefenCath, unless a waiver or deferral is obtained from the

A deferral acknowledges that a pediatric assessment is required but permits the applicant to submit the pediatric assessment

after the submission of an NDA.

The Company has made a commitment to conduct the pediatric study after approval of the NDA for

use in adult hemodialysis patients.

Pediatric studies for an approved product conducted under PREA may qualify for pediatric exclusivity,

which if granted would provide an additional six months of marketing exclusivity.

DefenCath would then have the potential to receive

a total marketing exclusivity period of 10.5 years, including exclusivity pursuant to NCE and QIDP.

FDA regards taurolidine as a new chemical entity and therefore, it is currently an unapproved new drug.

The Company might in the

future pursue product candidates that would involve devices impregnated with taurolidine, and the Company believes that at the

current time such products would be combination products subject to device premarket submission requirements (while subject also,

under review by the FDA, to the standards for drug approvability).

Consequently, given that there is no appropriate predicate

medical device currently marketed in the U.S.

on which a 510(k) approval process could be based and that taurolidine is not yet

approved in any application, the Company anticipates that it would be required to submit a premarket approval application (“PMA”)

for marketing authorization for any medical device indications that we may pursue for devices containing taurolidine.

that an NDA for DefenCath is approved by the FDA, the regulatory pathway for these medical device product candidates may be revisited

with the FDA.

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 the European Union

(“EU”), Neutrolin is regulated as a Class 3 medical device.

In July 2013, the Company received CE Mark approval for

In December 2013, the Company 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.

In September 2014,

the TUV-SUD and The Medicines Evaluation Board of the Netherlands (“MEB”), granted a label expansion for Neutrolin

to include use in oncology patients receiving chemotherapy, intravenous (“IV”) hydration and IV medications via CVC

In December 2014, the Company received approval from the Hessian District President in Germany to expand the label

for these same expanded indications.

The expansion also adds patients receiving medication and IV fluids via CVC 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.

In September 2019,

the Company’s registration with the Saudi Arabia Food and Drug Administration, or the SFDA, expired.

As a result, the Company

cannot sell Neutrolin in Saudi Arabia.

The Company intends to complete the documentation required to renew its registration with

the SFDA, however, the Company cannot predict how long the renewal process will take.

There is no assurance that the registration

will be renewed by the SFDA.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

March 26, 2019, the Company effected a 1-for-5 reverse stock split of its issued and outstanding shares of common stock, par value

$0.001, per share (“Common Stock”), by combining, reclassifying and changing each authorized and outstanding five

shares of “old”

common stock into one share of “new”

common stock.

$0.001, per share (“Common Stock”), by combining, reclassifying and changing each authorized and outstanding five

shares of “old” common stock into one share of “new” common stock.

No fractional shares were issued, and,

10 unchanged sentences

for all periods presented.

The Company is using its current cash resources

for the preparation and submission of the NDA for Neutrolin and for certain pre-launch activities.

Commercial preparations are

dependent on the Company’s ability to raise sufficient additional funds through various potential sources, such as equity,

debt financings, and/or strategic relationships and potential strategic transactions.

The Company can provide no assurances that

financing or strategic relationships will be available on acceptable terms, or at all, to complete its clinical development program

for Neutrolin.

Company is using its current cash resources for certain pre-launch activities.

Commercial preparations are dependent on the Company’s

ability to raise sufficient additional funds through various potential sources, such as equity, debt financings, and/or strategic

relationships and potential strategic transactions.

The Company can provide no assurances that financing or strategic relationships

will be available on acceptable terms, or at all, to complete its clinical development program for DefenCath.

The novel coronavirus

has been declared a pandemic and has spread to multiple global regions.

The outbreak and government measures taken in response

have also had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred;

chains have been disrupted;

facilities and production have been suspended;

and demand for certain goods and services, such as medical

services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen.

In response to the COVID-19

outbreak, “shelter in place” orders and other public health guidance measures have been implemented across much of

the United States, Europe and Asia, including in the locations of the Company’s offices, clinical trial sites, key vendors

and partners.

The Company’s program timelines may be negatively affected by COVID-19, which could materially and adversely

affect its business, financial conditions and results of operations.

2 — Liquidity and Uncertainties:

The financial statements have been prepared in conformity with

generally accepted accounting principles which contemplate continuation of the Company as a going concern.

To date, the Company’s

commercial operations have not generated sufficient revenues to enable profitability.

As of December 31, 2019, the Company had

an accumulated deficit of $195.4 million, and incurred net losses of $16.4 million and $26.8 million for the years ended December

31, 2019 and 2018, respectively.

Based on the Company’s current development plans for Neutrolin in both the U.S.

markets and its other operating requirements, the Company’s existing cash and cash equivalents at December 31, 2019 are expected

to fund its operations into the second quarter of 2021, after taking into consideration the net proceeds received through March

12, 2020 from the At-the-Market Issuance Sales Agreement (the “ATM program”) of $2.5 million and the exercise of warrants

of $0.4 million (see Note 11).

The Company’s continued operations will depend on its

ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic relationships,

potential strategic transactions or out-licensing of its products in order to undertake a second Phase 3 clinical trial, if required

by the FDA, commercially launch Neutrolin upon NDA approval and until profitability is achieved, if ever.

Management can provide

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

As of the filing

date of this Annual Report on Form 10-K, the Company has approximately $2.1 million available under its current ATM program and

$30.3 million available under its current shelf registration for the issuance of equity, debt or equity-linked securities unrelated

to the current ATM program.

Company’s operations are subject to a number of other factors that can affect its operating results and financial condition.

The consolidated financial

statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the

Company as a going concern.

To date, the Company’s commercial operations have not generated sufficient revenues to enable

profitability.

As of December 31, 2020, the Company had an accumulated deficit of $ 217.4 million, and incurred net losses of $ 22.0

million and $ 16.4 million for the years ended December 31, 2020 and 2019, respectively.

Based on the Company’s current development

plans for DefenCath/Neutrolin in both the U.S.

and foreign markets and its other operating requirements, the Company’s existing

cash and cash equivalents and short-term investments at December 31, 2020 are expected to fund its operations for at least twelve

months after the filing date of this report after taking into consideration the $ 41.5 million of net proceeds received in January

and February 2021 from the At-the-Market Issuance Sales Agreement (the “ATM program”) (see Note 11) and the costs

for the initial preparations for the commercial launch for DefenCath.

The Company’s

continued operations will depend on its ability to raise additional capital through various potential sources, such as equity and/or

debt financings, strategic relationships, potential strategic transactions or out-licensing of its products in order to commercially

launch DefenCath upon NDA approval and until profitability is achieved, if ever.

Management can provide no assurances that such

financing or strategic relationships will be available on acceptable terms, or at all.

As of the filing date of this Annual Report

on Form 10-K, the Company has no available balance under its ATM program and has $50.0 million available under its current shelf

registration for the issuance of equity, debt or equity-linked securities (see Note 8).

Company’s operations are subject to a number of other factors that can affect its operating results and financial condition.

Such factors include, but are not limited to:

the results of clinical testing and trial activities of the Company’s product

the ability to obtain regulatory approval to market the Company’s products;

the results of clinical testing and trial activities of the Company’s product

the ability to obtain regulatory approval to market the Company’s products;

ability to manufacture successfully;

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the price of, and demand for, Company products;

the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products;

and the Company’s ability to raise capital to support its operations.

the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products;

and the Company’s ability to raise capital to support its operations.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

3 — Summary of Significant Accounting Policies:

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of Consolidation

consolidated financial statements include the accounts of the Company and CorMedix Europe GmbH, a wholly owned subsidiary.

significant intercompany accounts and transactions have been eliminated in consolidation.

consolidated financial statements include the accounts of the Company, CorMedix Europe GmbH and CorMedix Spain, S.L.U.

owned subsidiaries.

All significant intercompany accounts and transactions have been eliminated in consolidation.

instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents

3 unchanged sentences

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:

Cash and cash equivalents

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at December 31, 2020 or 2019.

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 December 31, 2019 and 2018, all of the Company’s

As of December 31, 2020 and 2019, all of the Company’s

investments had contractual maturities which were less than one year.

1 unchanged sentence

gains and losses and the fair value at December 31, 2020 and 2019:

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

Gross Unrealized

December 31, 2020:

Money Market Funds and Cash Equivalents

Government Agency Securities

Corporate Securities

2 unchanged sentences

December 31, 2019:

Money Market Funds

Money Market Funds and Cash Equivalents

Government Agency Securities

Corporate Securities

Commercial Paper

Total December 31, 2019

Value Measurements

Company’s financial instruments recorded in the consolidated balance sheets include cash and cash equivalents, accounts

receivable, investment securities, accounts payable and accrued expenses.

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values based upon the short-term nature of their maturity dates.

The Company’s senior secured convertible note (prior

to its extinguishment in August 2019) falls into the Level 3 category within the fair value level hierarchy.

The fair value was

determined using market data for valuation.

The Company’s senior secured convertible note (prior to

its extinguishment in August 2019) falls into the Level 3 category within the fair value level hierarchy.

The fair value was determined

using market data for valuation.

Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation

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input that is significant to the fair value measurement of the instrument.

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

2 inputs—

Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for

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

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).

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.

following table provides the carrying value and fair value of the Company’s financial assets measured at fair value as of

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.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

following table provides the carrying value and fair value of the Company’s financial assets measured at fair value as of

December 31, 2020 and 2019:

December 31, 2019 :

Carrying Value

December 31, 2020:

Money Market Funds and Cash Equivalents

Government Agency Securities

Corporate Securities

2 unchanged sentences

December 31, 2019:

Money Market Funds

Money Market Funds and Cash

Government Agency Securities

Corporate Securities

Commercial Paper

Total December 31, 2019

Currency Translation and Transactions

consolidated financial statements are presented in U.S.

The consolidated financial

statements are presented in U.S.

Dollars (USD), the reporting currency of the Company.

For the financial

statements of the Company’s foreign subsidiary, whose functional currency is the EURO, foreign currency asset and liability

amounts, if any, are translated into USD at end-of-period exchange rates.

Foreign currency income and expenses are translated

at average exchange rates in effect during the year.

For the financial statements of the Company’s

foreign subsidiaries, whose functional currency is the EURO, foreign currency asset and liability amounts, if any, are translated

into USD at end-of-period exchange rates.

Foreign currency income and expenses are translated at average exchange rates in effect

during the year.

Translation gains and losses are included in other comprehensive income (loss).

The Company had a foreign currency translation gain of $467 in 2019 and a loss of $1,911 in 2018.

The Company had a foreign currency

translation gain of $ 6,020 in 2020 and a gain of $ 467 in 2019.

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

functional currency of the entity recording the transaction.

following table summarizes the segment and geographic information:

following table summarizes the geographic information:

Reported revenues

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Total assets located in the United States, with the remainder in the European Union

As of December 31, 2019 and 2018 the Company

has restricted cash in connection with the patent and utility model infringement proceedings against TauroPharm (see Note 7).

Company was required by the District Court Mannheim to provide a security deposit of approximately €110,000 to cover legal

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

As of December 31, 2020, and 2019 the Company has restricted

cash in connection with the patent and utility model infringement proceedings against TauroPharm (see Note 7).

The Company was

required by the District Court Mannheim to provide a security deposit of approximately $ 135,000 (€ 110,000 ) to cover legal

fees in the event TauroPharm is entitled to reimbursement of these costs.

The Company furthermore had to provide a deposit

in the amount of €36,000 and €10,000 for the first and second instances, respectively, in connection with the unfair

competition proceedings in Cologne.

The Company furthermore had to provide a deposit in the

amount of $ 44,000 (€ 36,000 ) and $ 12,000 (€ 10,000 ) for the first and second instances, respectively, in connection with

the unfair competition proceedings in Cologne.

During the year ended December 31, 2020, the Company reimbursed TauroPharm approximately

$ 30,000 for the costs in connection with the utility model infringement proceedings.

In January 2021, approximately $ 48,000 (€ 40,000 )

was released by the court to the Company’s account which will be deducted from the restricted cash.

Research and Development and Other Prepaid Expenses

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Inventories consist of raw materials (including

labeling and packaging), work-in-process, and finished goods, if any, for the Neutrolin product.

labeling and packaging), work-in-process, and finished goods, if any, for the DefenCath product.

Inventories consist of the following:

Raw materials

Work in process

Finished goods

5 unchanged sentences

related assets.

Leasehold improvements are amortized using the straight-line method over the remaining lease term or

the life of the asset, whichever is shorter.

Property and equipment, as of December 31, 2019 and 2018 were $126,820

and $160,860, respectively, net of accumulated depreciation of $244,328 and $218,948, respectively.

Depreciation and amortization

of property and equipment is included in selling, general and administrative expenses.

equipment and furniture

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 (included in accrued expenses), and operating lease liabilities, net of

current portion, on the consolidated balance sheet.

Leasehold improvements are amortized using the straight-line method over the remaining lease term or the life

of the asset, whichever is shorter.

Property and equipment, as of December 31, 2020 and 2019 were $ 111,499 and $ 122,130 , respectively,

net of accumulated depreciation of $ 303,279 and $ 244,328 , respectively.

Depreciation and amortization of property and equipment

is included in selling, general and administrative expenses.

Office equipment and furniture

Leasehold improvements

Computer equipment

Computer software

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

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 (included in accrued expenses), and operating lease liabilities, net of current

portion, on the consolidated balance sheet (see Note 10).

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

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.

1 unchanged sentence

Company has elected, as an accounting policy, not to apply the recognition requirements in ASC 842 to short-term leases.

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.

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

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Manufacturing development related

Product development

In December 2015, the

Company entered into a Master Service Agreement and Work Orders (the “Master Service Agreement”) with a clinical research

organization (“CRO”) to help the Company conduct its LOCK-IT-100 Phase 3 multicenter, double-blind, randomized active

control study to demonstrate the safety and effectiveness 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, the

Company contested a substantial amount of the unpaid clinical trial expense accrued during 2018 due to the unexpected delay and

additional costs the Company incurred in preparing for the interim analysis of the LOCK-IT-100 study.

Negotiations with the CRO

concluded in November 2018 with the signing of a confidential settlement agreement.

In parallel with the settlement agreement,

a new work order under the Master Service Agreement was executed specifying certain services the CRO will continue to provide to

the Company related to the closeout of the study.

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

which $1.4 million was incurred through December 31, 2019.

Through December

31, 2019, approximately $30.0 million of clinical trial expense has been recorded in connection with the Master Service Agreement

and new work orders, of which approximately $27.4 million has been paid.

During the years ended December 31, 2019 and 2018, the

Company recognized $1.5 and $7.7 million, respectively, in research and development expense related to this agreement.

31, 2019, the Company had accrued approximately $2.4 million in accounts payable and accrued expenses related to the settlement

agreement and the new work order.

The Company uses Accounting Standards Codification

(“ASC”) 606, “

Revenue from Contracts with Customers,”

issued by the Financial Accounting Standards

Board (“FASB”), that prescribes a five-step model for recognizing revenue which includes (i) identifying contracts

with customers;

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

Company uses Accounting Standards Codification (“ASC”) 606, “ Revenue from Contracts with Customers,”

issued by the Financial Accounting Standards Board (“FASB”), that 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

(iii) determining the

transaction price;

(iv) allocating the transaction price;

and (v) recognizing revenue.

1 unchanged sentence

by ASC 606 outlined above.

August 2014, the Company entered into an exclusive distribution agreement (the “Wonik Agreement”) with Wonik Corporation,

a South Korean company, to market, sell and distribute Neutrolin for hemodialysis and oncolytic patients upon receipt of regulatory

approval in South Korea.

Upon execution, Wonik paid the Company a non-refundable $50,000 payment and will pay an additional $50,000

upon receipt of the product registration necessary to sell Neutrolin in South Korea (the “Territory”).

the Wonik Agreement commenced on August 8, 2014 and will continue for three years after the first commercial sale of Neutrolin

in the Territory.

The non-refundable up-front payment has been recorded as deferred revenue and will be recognized as revenue

on a straight-line basis over the contractual term of the Agreement.

Deferred revenue related to this agreement at December 31,

2019 and 2018 amounted to approximately $2,000 and $11,000, respectively.

In August 2014, the

Company entered into an exclusive distribution agreement (the “Wonik Agreement”) with Wonik Corporation, a South Korean

company, to market, sell and distribute Neutrolin for hemodialysis and oncolytic patients upon receipt of regulatory approval in

Upon execution, Wonik paid the Company a non-refundable $ 50,000 payment and will pay an additional $ 50,000 upon receipt

of the product registration necessary to sell Neutrolin in South Korea (the “Territory”).

The term of the Wonik Agreement

commenced on August 8, 2014 and will continue for three years after the first commercial sale of Neutrolin in the Territory.

non-refundable up-front payment has been recorded as deferred revenue and will be recognized as revenue on a straight-line basis

over the contractual term of the Agreement.

Deferred revenue related to this agreement was fully amortized at December 31, 2020.

Per Common Share

4 unchanged sentences

in the earnings of the entity.

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.

As a result, the Series E preferred stock meet the definition of participating securities

requiring the application of 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, which may cause diluted earnings per share to be more

dilutive than the calculation using the treasury stock method.

No loss has been allocated to these participating securities since

they do not have contractual obligations that require participation in the Company’s losses.

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.

As a result, the Series E preferred stock meet the definition of participating

securities requiring the application of 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, which may cause diluted earnings per share

to be more dilutive than the calculation using the treasury stock method.

No loss has been allocated to these participating securities

since they do not have contractual obligations that require participation in the Company’s losses.

the Company has only incurred losses, basic and diluted loss per share are the same as potentially dilutive shares have been excluded

4 unchanged sentences

Series C non-voting preferred stock

Series D non-voting preferred stock

Series E voting preferred stock

Series F non-voting preferred stock

Series G voting preferred stock

Shares issuable upon conversion of convertible debt

Restricted stock units

3 unchanged sentences

Total potentially dilutive shares

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

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

4 unchanged sentences

and development costs are charged to expense as incurred.

Research and development includes fees associated with operational consultants,

Research and development include fees associated with operational consultants,

contract clinical research organizations, contract manufacturing organizations, clinical site fees, contract laboratory research

15 unchanged sentences

that some or all of the deferred tax assets will not be realized.

Issuance Costs

Company accounts for debt issuance costs as a direct deduction from the carrying amount of the respective debt liability, consistent

with debt discounts.

The Company amortizes the debt discount, including debt issuance costs over the term of the associated debt

using the effective interest method.

Recently Adopted Authoritative Pronouncements

In June 2018, the Financial Accounting Standards

Board (“FASB”) issued new guidance which expands the scope of the FASB’s Accounting Standards Codification (“ASC”)

718, to include share-based payment transactions for acquiring goods and services from nonemployees.

Early adoption is permitted

and the Company elected to adopt the guidance effective in the first quarter of fiscal year 2019.

This adoption on January 1, 2019

did not have a material impact on the Company’s consolidated financial statements.

In July 2017, the FASB issued new guidance

which changes the classification analysis of certain equity-linked financial instruments (or embedded features) with down round

features and recharacterizes the indefinite deferral of certain provisions within the guidance for distinguishing liabilities from

Early adoption is permitted and the Company elected to adopt the guidance effective in the first quarter of fiscal year

This adoption on January 1, 2019 did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued new guidance

related to how an entity should recognize lease assets and lease liabilities.

The guidance specifies that an entity who is a lessee

under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases

under previous FASB guidance.

The Company adopted the standard on January 1, 2019 using the transition method provided by the FASB.

Under this transition method, the Company applied the new requirements to only those leases that exist as of January 1, 2019, rather

than at the earliest comparative period presented in the financial statements.

Prior periods will be presented under existing lease

Upon transition, the Company applied the package of practical expedients permitted under ASC 842 transition guidance.

As a result, the Company did not reassess (1) whether expired or existing contracts contain leases under the new definition of

a lease, including whether an existing or expired contract contains an embedded lease, (2) lease classification for expired or

existing leases and (3) any initial direct costs of existing leases.

As a result of the adoption, the Company recorded right-of-use

assets and lease liabilities of approximately $6,000 each.

Adoption of the standard did not have a material impact on the Company’s

consolidated statements of operations and comprehensive loss or cash from or used in operating, investing or financing activities

on its consolidated statements of cash flows.

Recent Authoritative Pronouncements

In 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.

has assessed the impact of adopting this guidance and the adoption on January 1, 2020 will not have a significant impact on its

consolidated financial statements.

In August 2018, the FASB issued a new guidance

which modifies the disclosure requirements on fair value measurements.

The guidance is effective for the Company beginning in the

first quarter of fiscal year 2020.

Early adoption is permitted.

The Company assessed the impact of adopting this guidance and the

adoption on January 1, 2020 will not have a significant impact on its consolidated financial statements

In 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 the Company beginning

in the first quarter of fiscal year 2020.

Early adoption is permitted.

The Company has assessed the impact of adopting this guidance

and the adoption on January 1, 2020 will not have a significant impact on its consolidated financial statements.

In 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

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

Early adoption is permitted.

The Company has assessed the impact of adopting this guidance and the adoption on January 1, 2020 will not have a significant impact

on its consolidated financial statements.

In 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.

The guidance is effective for

the Company beginning in the first quarter of fiscal year 2021.

Adopted Authoritative Pronouncements

June 2016, the Financial Accounting Standards Board (“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.

This adoption on January 1, 2020 did

not have a material impact on the Company’s consolidated financial statements.

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

was effective for the Company beginning in the first quarter of fiscal year 2020.

This adoption on January 1, 2020 did not have

a material impact on the Company’s consolidated financial statements.

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, in a transaction with a collaborative arrangement participant who is not

a customer, precludes presenting the transaction together with revenue recognized under contracts with customers.

was effective for the Company beginning in the first quarter of fiscal year 2020.

This adoption on January 1, 2020 did not have

a material impact on the Company’s consolidated financial statements.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

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 FASB ASC 718.

The guidance was effective for the Company beginning in the first quarter

of fiscal year 2020.

This adoption on January 1, 2020 did not have a material impact on the Company’s consolidated financial

Authoritative Pronouncements

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 the company beginning in the first quarter of fiscal year 2021.

Early adoption is permitted.

The Company is assessing the

impact of adopting this guidance on its consolidated financial statements.

Note 4 —

The Company is assessing

the impact of adopting this guidance on its consolidated financial statements.

4 — Related Party Transactions:

On August 14, 2019, the Company entered

into an exchange agreement (the “Exchange Agreement”) with Manchester Securities Corp.

(“Manchester”),

an existing institutional investor and a wholly owned subsidiary of Elliott Associates, L.P.

(together with Manchester, “Elliott”),

who collectively beneficially own the largest portion of the Company’s common stock, pursuant to which Elliott agreed to

exchange all of its outstanding warrants, its 10% senior secured convertible note and its shares of Series C-2 preferred stock,

Series D preferred stock and Series F preferred stock, and make a cash payment of $2.0 million to the Company, for 100,000 shares

of Series G preferred stock (see Notes 6 and 8).

On September 6, 2019, the Company completed the transactions contemplated by the

Exchange Agreement.

On December 31, 2018, the Company entered

into a securities purchase agreement with Elliott, for the purchase and sale of a 10% senior secured convertible note in the aggregate

principal amount of $7,500,000 and a warrant to purchase up to an aggregate of 90,000 shares of the Company’s common stock,

for gross proceeds of $7,500,000 (see Note 6).

The warrant with a grant date fair value of $433,365, is immediately exercisable,

has an exercise price of $7.50 per share, subject to adjustment in the event of stock dividends and distributions, stock splits,

stock combinations, or reclassifications affecting our common stock, and has a term of five years.

The note has a conversion price

of $7.50 per share.

The conversion price is subject to appropriate adjustment in the event of stock dividends and distributions,

stock splits, stock combinations, or reclassifications affecting our common stock.

As of December 31, 2019, this note is no longer

outstanding as a result of the Exchange Agreement (see Notes 6 and 8).

In May 2013, the Company issued a warrant to purchase up to

100,000 shares of the Company’s common stock to Elliott.

The warrant had an expiration date of May 30, 2019.

to allow the Company and Elliott time to discuss and possibly conclude the Exchange Agreement, the Company extended the expiration

date of the warrant to July 1, 2019, which was subsequently extended to August 16, 2019.

The warrant, which was canceled in connection

with the terms of the Exchange Agreement, had an exercise price of $0.005 (see Note 6).

The incremental value of the warrant extended

was immaterial.

Note 5 —

August 14, 2019, the Company entered into an exchange agreement (the “Exchange Agreement”) with Manchester Securities

(“Manchester”), an existing institutional investor and a wholly owned subsidiary of Elliott Associates, L.P.

(together with Manchester, “Elliott”), who collectively beneficially own the largest portion of the Company’s

common stock, pursuant to which Elliott agreed to exchange all of its outstanding warrants, its 10% senior secured convertible

note and its shares of Series C-2 preferred stock, Series D preferred stock and Series F preferred stock, and make a cash payment

of $2.0 million to the Company, for 100,000 shares of Series G preferred stock (see Notes 6 and 8).

On September 6, 2019, the

Company completed the transactions contemplated by the Exchange Agreement.

December 31, 2018, the Company entered into a securities purchase agreement with Elliott, for the purchase and sale of a 10 % senior

secured convertible note in the aggregate principal amount of $ 7,500,000 and a warrant to purchase up to an aggregate of 90,000

shares of the Company’s common stock, for gross proceeds of $ 7,500,000 (see Note 6).

The warrant with a grant date fair

value of $ 433,365 , is immediately exercisable, has an exercise price of $ 7.50 per share, subject to adjustment in the event of

stock dividends and distributions, stock splits, stock combinations, or reclassifications affecting our common stock, and has

a term of five years.

The note has a conversion price of $7.50 per share.

The conversion price is subject to appropriate adjustment

in the event of stock dividends and distributions, stock splits, stock combinations, or reclassifications affecting our common

As of December 31, 2019, this note is no longer outstanding as a result of the Exchange Agreement (see Notes 6 and 8).

May 2013, the Company issued a warrant to purchase up to 100,000 shares of the Company’s common stock to Elliott.

had an expiration date of May 30, 2019.

In May 2019, to allow the Company and Elliott time to discuss and possibly conclude the

Exchange Agreement, the Company extended the expiration date of the warrant to July 1, 2019, which was subsequently extended to

August 16, 2019.

The warrant, which was canceled in connection with the terms of the Exchange Agreement, had an exercise price

of $ 0.005 (see Note 6).

The incremental value of the warrant extended was immaterial.

5 — Income Taxes:

The Company’s U.S.

and foreign loss

before income taxes are set forth below:

Company’s U.S.

and foreign loss before income taxes are set forth below:

United States

3 unchanged sentences

$ ( 21,493,852 )

There were no current or deferred income

tax provision for the years ended December 31, 2019 and 2018 because the Company has incurred operating losses since inception.

The Company’s deferred tax assets

consist of the following:

Net operating loss carryforwards –

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

were no current or deferred income tax provision for the years ended December 31, 2020 and 2019 because the Company has incurred

operating losses since inception.

Company’s deferred tax assets consist of the following:

Net operating loss carryforwards – Federal

Net operating loss carryforwards – State

Net operating loss carryforwards – Foreign

Capitalized licensing fees

5 unchanged sentences

Deferred tax assets

The Company had the following potentially

utilizable net operating loss tax carryforwards:

$ 155,400,000

Company had the following potentially utilizable net operating loss tax carryforwards:

$ 185,650,000

$ 155,400,000

The net operating loss tax generated before

January 1, 2019 carryforwards will start to expire in 2027 for Federal purposes and have already begun to expire for state purposes.

The Tax Cuts and Jobs Act of 2017 (the “Act”) limits the net operating loss deduction to 80% of taxable income for

losses arising in tax years beginning after December 31, 2017.

The net operating losses

generated will start to expire in 2026 for Federal purposes whereas the operating losses for state purposes will begin expiring

The Tax Cuts and Jobs Act of 2017 (the “Act”) limits the net operating loss deduction to 80 % of taxable income

for losses arising in tax years beginning after December 31, 2017.

However, the net operating losses now have an indefinite carryforward

as opposed to the current 20-year carryforward.

as opposed to the former 20-year carryforward.

The foreign net operating loss tax carryforwards do not expire.

1 unchanged sentence

state operating loss carryforwards include windfall tax deductions from stock option exercises.

The utilization of the Company’s net

operating losses may be subject to a substantial limitation due to the “change of ownership provisions”

under Section

382 of the Internal Revenue Code and similar state provisions.

Such limitation may result in the expiration of the net operating

loss carryforwards before their utilization.

The Company’s foreign earnings are

derived from its German subsidiary.

The Company does not expect any foreign earnings to be repatriated in the U.S.

The Company’s effective tax rate varied

from the statutory rate as follows:

utilization of the Company’s net operating losses may be subject to a substantial limitation due to the “change of

ownership provisions” under Section 382 of the Internal Revenue Code and similar state provisions.

Such limitation may result

in the expiration of the net operating loss carryforwards before their utilization.

Company’s foreign earnings are derived from its German subsidiary.

The Company does not expect any foreign earnings to be

repatriated in the U.S.

in the near future.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

Company’s effective tax rate varied from the statutory rate as follows:

Statutory federal tax rate

6 unchanged sentences

Effective tax rate

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

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income of the appropriate

character during the periods in which those temporary differences become deductible and the loss carryforwards are available to

reduce taxable income.

In making its assessment, the Company considered all sources of taxable income including carryback potential,

future reversals of existing deferred tax liabilities, prudent and feasible tax planning strategies, and lastly, objectively verifiable

projections of future taxable income exclusive of reversing temporary differences and carryforwards.

At December 31, 2019 and 2018,

the Company maintained a full valuation allowance against its net deferred tax assets.

The Company will continue to assess all

available evidence during future periods to evaluate the realization of its deferred tax assets.

The following table presents the changes

in the deferred tax asset valuation allowance for the periods indicated:

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 of the appropriate character during the periods in which those temporary differences become

deductible and the loss carryforwards are available to reduce taxable income.

In making its assessment, the Company considered

all sources of taxable income including carryback potential, future reversals of existing deferred tax liabilities, prudent and

feasible tax planning strategies, and lastly, objectively verifiable projections of future taxable income exclusive of reversing

temporary differences and carryforwards.

At December 31, 2020 and 2019, the Company maintained a full valuation allowance against

its net deferred tax assets.

The Company will continue to assess all available evidence during future periods to evaluate the

realization of its deferred tax assets.

following table presents the changes in the deferred tax asset valuation allowance for the periods indicated:

Balance at Beginning of Year

4 unchanged sentences

December 31, 2019

Accounting for uncertainty in income

taxes requires uncertain tax positions to be classified as non-current income tax liabilities unless they are expected to be

paid within one year.

The Company has concluded that there are no uncertain tax positions requiring recognition in its

consolidated financial statements as of December 31, 2019 and 2018.

The Company recognizes interest and penalties related to

uncertain tax positions if any as a component of income tax expense.

The Company files income tax returns in

for uncertainty in income taxes requires uncertain tax positions to be classified as non-current income tax liabilities unless

they are expected to be paid within one year.

The Company has concluded that there are no uncertain tax positions requiring recognition

in its consolidated financial statements as of December 31, 2020 and 2019.

The Company recognizes interest and penalties related

to uncertain tax positions if any as a component of income tax expense.

Company files income tax returns in the U.S.

federal, state and foreign jurisdictions.

Tax years 2014 to 2018 remain open to examination for both the U.S.

and state jurisdictions.

Tax years 2014 to 2018 remain open to examination

for both the U.S.

federal and state jurisdictions.

Tax years 2015 to 2018 remain open for Germany.

In April 2019, the Company sold a portion

of its unused net operating losses (“NOL”) carryforwards through the State of New Jersey’s Economic Development

Authority (“NJEDA”) Technology Business Tax Certificate Transfer program which allowed the Company to sell $5,413,000

of its total $6,085,000 in available NOL tax benefits for the state fiscal year 2018.

The Company realized net proceeds of $5,061,000

from the sale of its NOL.

Note 6 —

Secured Convertible Note, Related Party:

the years ended December 31, 2020 and 2019, the Company received net proceeds of $ 5,169,395 and $ 5,060,778 , respectively, from

the sale of most of its remaining unused New Jersey net operating losses (“NOL”) eligible for sale under the State

of New Jersey’s Economic Development Authority’s New Jersey Technology Business Tax Certificate Transfer program (“NJEDA

The NJEDA Program allowed the Company to sell $ 5,529,000 of its total $ 6,018,000 in available NOL tax benefits

for the state fiscal year 2019 and $ 5,413,000 of its total $ 6,085,000 for the state fiscal year 2018.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

6 — Senior Secured Convertible Note, Related Party:

On December 31, 2018,

the Company entered into a securities purchase agreement with Elliott for the purchase and sale of a 10 % senior secured convertible

note in the aggregate principal amount of $7,500,000 and a warrant to purchase up to an aggregate of 90,000 shares of the Company’s

note in the aggregate principal amount of $ 7,500,000 and a warrant to purchase up to an aggregate of 90,000 shares of the Company’s

common stock, for gross proceeds of $ 7,500,000 .

The senior secured convertible note and warrant to purchase up to an aggregate

of 90,000 shares of the Company’s common stock were cancelled in connection with the terms of the Exchange Agreement.

The note was a

senior obligation, secured by all of the Company’s assets.

The note bore interest at a rate of 10.0% per annum, compounded

Interest was first payable on January 2, 2019, and on the first trading day of each month thereafter, until its cancellation.

The note was to mature on December 30, 2021.

Any accrued but unpaid interest for the applicable interest period was added to the

principal outstanding under the notes.

The note had a conversion price of $7.50 per share.

The conversion price was subject to

appropriate adjustment in the event of stock dividends and distributions, stock splits, stock combinations, or reclassifications

affecting the Company’s common stock.

The noteholder was able to convert its outstanding note principal amount, and

any accrued and unpaid interest, at any time into shares of common stock at the conversion rate.

Additionally, the note would automatically

convert into shares of common stock if, prior to the maturity date, the average closing sale price of the Company’s common

stock for any 20 trading days during any consecutive 30 trading days equals or exceeds 150% of the conversion price.

held the right to pay any accrued interest in cash for any calendar month during which the average closing sale price of its common

stock averaged at least 150% of the conversion price of the notes.

On or after July 1, 2020, the Company was able to prepay any

principal amount outstanding on the notes in amounts of $2,000,000 (or in full, if less than $2,000,000), provided that if the

prepayment occurs between July 2, 2020 and March 30, 2021, the prepayment amount would have equaled 110% of the principal amount

being repaid and if the prepayment occurs after March 31, 2021, the prepayment amount would have equaled 105% of the principal

amount being repaid.

For year ended December 31, 2019, approximately $462,000 was recognized as interest expense on the consolidated

statement of operations and comprehensive loss.

The senior secured convertible note, including accrued interest, was exchanged

as a result of the Exchange Agreement.

The warrant was

immediately exercisable, had an exercise price of $7.50 per share, subject to adjustment in the event of stock dividends and distributions,

stock splits, stock combinations, or reclassifications affecting our common stock, and had a term of five years.

The closing of

the note and warrant sale and purchase occurred simultaneously with entry into the securities purchase agreement.

agent or underwriter was involved in the offering.

On the same date,

and in connection with the sale of the note and warrant, the Company amended and restated the following warrants held by Elliott

and its affiliates to reduce the exercise price of each warrant to $0.005 per share:

warrants issued in May 2013 to purchase up

to an aggregate of 100,000 shares of the Company’s common stock with a pre-amendment exercise price of $3.25 per share and

an expiration date of May 30, 2019, which was subsequently extended to August 16, 2019 (the “May 30, 2019 Warrants”),

(see Note 4);

and warrants issued in October 2013 to purchase up to an aggregate of 150,000 shares of the Company’s common

stock with a pre-amendment exercise price of $4.50 per share and an expiration date of October 22, 2019 (the “October 22,

2019 Warrants”).

For year ended December 31, 2019, $ 462,000 was recognized as interest expense on

the consolidated statement of operations and comprehensive loss.

The senior secured convertible note, including accrued interest,

and warrant to purchase up to an aggregate of 90,000 shares of the Company’s common stock were cancelled in connection with

the terms of the Exchange Agreement.

the same date, and in connection with the sale of the note and warrant, the Company amended and restated the following warrants

held by Elliott and its affiliates to reduce the exercise price of each warrant to $0.005 per share:

warrants issued in May 2013

to purchase up to an aggregate of 100,000 shares of the Company’s common stock with a pre-amendment exercise price of $3.25

per share and an expiration date of May 30, 2019, which was subsequently extended to August 16, 2019 (the “May 30, 2019

Warrants”), (see Note 4);

and warrants issued in October 2013 to purchase up to an aggregate of 150,000 shares of the Company’s

common stock with a pre-amendment exercise price of $4.50 per share and an expiration date of October 22, 2019 (the “October

22, 2019 Warrants”).

These warrants were subsequently cancelled in connection with the Exchange Agreement, (see Note 8).

conjunction with the December 2018 securities purchase agreement, the Company and Elliott and certain of its affiliates that

hold shares of various series of the Company’s preferred stock and warrants to purchase shares of the Company’s

common stock agreed to waive any rights of conversion or exercise for all of the shares of its Series C-2, D, E and F

preferred stock and shares issuable upon the exercise of certain warrants (collectively with the shares of Series C-2, D, E,

and F preferred stock, the “Elliott Derivative Securities”), until the earliest to occur of (i) the

effective date on which the Company’s Certificate of Incorporation is amended to increase the number of authorized

shares of common stock, (ii) the effective date on which the Company effects a reverse stock split of its common stock, (iii)

one business day immediately prior to the consummation of a fundamental transaction (as defined in the instruments governing

the applicable Elliott Derivative Securities), and (iv) April 30, 2019.

The 1-for-5 reverse stock split that was

effective on March 26, 2019 satisfied this condition, however, with the exception of the Series E preferred stock, the Elliot

Derivative Securities were cancelled in connection with the Exchange Agreement.

The Company was

required to have a majority of the Series C-2, Series D, Series E and Series F non-voting preferred stock consent to any indebtedness

other than trade payables incurred in the ordinary course of business consistent with past practice, and letters of credit incurred

in an aggregate amount of $3,000,000 at any point in time.

At the time of the securities purchase agreement, Elliott was the holder

of all of the shares of the Series C-2, Series D, Series E and Series F non-voting preferred stock and implicitly consented

to the convertible note financing.

Elliott is currently the holder of all of the shares of the Series E and Series G preferred

The $7,500,000

in gross proceeds, along with the legal fees of approximately $267,000, were allocated between the senior secured convertible note

and warrants based on their relative fair values.

in conjunction with the December 2018 securities purchase agreement, the Company and Elliott and certain of its affiliates that

hold shares of various series of the Company’s preferred stock and warrants to purchase shares of the Company’s common

stock agreed to waive any rights of conversion or exercise for all of the shares of its Series C-2, D, E and F preferred stock

and shares issuable upon the exercise of certain warrants (collectively with the shares of Series C-2, D, E, and F preferred stock,

the “Elliott Derivative Securities”), until the earliest to occur of (i) the effective date on which the Company’s

Certificate of Incorporation is amended to increase the number of authorized shares of common stock, (ii) the effective date on

which the Company effects a reverse stock split of its common stock, (iii) one business day immediately prior to the consummation

of a fundamental transaction (as defined in the instruments governing the applicable Elliott Derivative Securities), and (iv)

April 30, 2019.

The 1-for-5 reverse stock split that was effective on March 26, 2019 satisfied this condition, however, with the

exception of the Series E preferred stock, the Elliot Derivative Securities were cancelled in connection with the Exchange Agreement.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

Company was required to have a majority of the Series C-2, Series D, Series E and Series F non-voting preferred stock consent

to any indebtedness other than trade payables incurred in the ordinary course of business consistent with past practice, and letters

of credit incurred in an aggregate amount of $ 3,000,000 at any point in time.

At the time of the securities purchase agreement,

Elliott was the holder of all of the shares of the Series C-2, Series D, Series E and Series F non-voting preferred stock and

implicitly consented to the convertible note financing.

Elliott is currently the holder of all of the shares of the Series E and

Series G preferred stock.

$ 7,500,000 in gross proceeds, along with the legal fees of approximately $ 267,000 , were allocated between the senior secured convertible

note and warrants based on their relative fair values.

The portion of the proceeds allocated to the warrants of approximately

$ 396,000 , net of allocated fees of approximately $ 6,000 , was accounted for as additional paid-in capital.

The remainder of the proceeds of

approximately $7,000,000, net of allocated fees of approximately $103,000 was allocated to the senior convertible note, with the

fair value of the warrants resulting in a debt discount.

In addition, the incremental cost of approximately $710,000 associated

with the warrant modification was recorded as a debt discount.

An additional debt discount of approximately $143,000 was recorded

as a beneficial conversion feature as the stock price was greater than the effective conversion price (after allocation of the

total proceeds) on the measurement date.

The debt discount

was being amortized to interest expense using the effective interest method in accordance with ASC 835 over the term of the agreement.

For the year ended December 31, 2019, approximately $313,000 was recognized as amortization of debt discount and is included in

interest expense on the consolidated statement of operations and comprehensive loss.

The Company used

a hybrid valuation model to determine the fair value of the senior secured convertible note.

The remainder of the

proceeds of approximately $ 7,000,000 , net of allocated fees of approximately $ 103,000 was allocated to the senior convertible

note, with the fair value of the warrants resulting in a debt discount.

In addition, the incremental cost of approximately $ 710,000

associated with the warrant modification was recorded as a debt discount.

An additional debt discount of approximately $ 143,000

was recorded as a beneficial conversion feature as the stock price was greater than the effective conversion price (after allocation

of the total proceeds) on the measurement date.

debt discount was being amortized to interest expense using the effective interest method in accordance with ASC 835 over the

term of the agreement.

For the year ended December 31, 2019, approximately $ 313,000 was recognized as amortization of debt discount

and is included in interest expense on the consolidated statement of operations and comprehensive loss.

Company used a hybrid valuation model to determine the fair value of the senior secured convertible note.

The hybrid model incorporated

both a present value analysis and the use of the Black Scholes option pricing model to reflect the senior secured convertible note’s

conversion feature.

The Black-Scholes option pricing model was also used to determine the fair value of the warrants in order

to allocate the gross proceeds based on relative fair values (see Note 1).

ASC 820, “Fair Value Measurements,”

both a present value analysis and the use of the Black Scholes option pricing model to reflect the senior secured convertible

note’s conversion feature.

The Black-Scholes option pricing model was also used to determine the fair value of the warrants

in order to allocate the gross proceeds based on relative fair values (see Note 1).

ASC 820, “Fair Value Measurements,”

states that the reporting entity should use the valuation technique(s) appropriate for the measurement, considering the availability

of data with which to develop inputs that represent the assumptions that market participants would use when pricing the asset or

of data with which to develop inputs that represent the assumptions that market participants would use when pricing the asset

or liability.

Market participants price options based on expected volatility, not historical volatility.

In estimating

the expected volatility of the Company’s common stock, the Company followed the guidance of ASC 820 and considered a number

of factors - including the implied volatility of put and call options on the Company’s common stock that are traded over

In estimating the expected

volatility of the Company’s common stock, the Company followed the guidance of ASC 820 and considered a number of factors

- including the implied volatility of put and call options on the Company’s common stock that are traded over the counter.

summary of the assumptions used in the Black Scholes pricing model are as follows:

5 unchanged sentences

Risk-free interest rate

of the Exchange Agreement, the senior secured convertible note, along with certain warrants and the Series C-2, Series D and Series

F preferred stock, and the payment of $2,000,000, was exchanged for 100,000 shares of Series G preferred stock.

As a result of

this transaction, the Company recognized a deemed dividend of $26,733,098 on its consolidated statement of operations and comprehensive

loss for the year ended December 31, 2019 (see Note 8).

Note 7 —

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

part of the Exchange Agreement, the senior secured convertible note, along with certain warrants and the Series C-2, Series D

and Series F preferred stock, and the payment of $2,000,000, was exchanged for 100,000 shares of Series G preferred stock.

a result of this transaction, the Company recognized a deemed dividend of $26,733,098 on its consolidated statement of operations

and comprehensive loss for the year ended December 31, 2019 (see Note 8).

7 — Commitments and Contingencies:

Contingency Matters

On September 9, 2014, the Company filed

in the District Court of Mannheim, Germany, a patent infringement action against TauroPharm GmbH and Tauro-Implant GmbH as well

as their respective CEOs (the “Defendants”) claiming infringement of the Company’s European Patent EP 1 814

562 B1, which was granted by the European Patent Office (the “EPO”) on January 8, 2014 (the “Prosl European

Patent”).

The Prosl European Patent covers the formulation of taurolidine and citrate with low dose heparin in a catheter

lock solution for maintaining patency and preventing infection in hemodialysis catheters.

In this action, the Company claims that

the Defendants infringe on the Prosl European Patent by manufacturing and distributing catheter locking solutions to the extent

they are covered by the claims of the Prosl European Patent.

The Company believes that its patent is sound and is

seeking injunctive relief and raising claims for information, rendering of accounts, calling back, destruction and damages.

TauroPharm has filed an opposition with the EPO against the Prosl European Patent alleging that it lacks novelty and inventive

The Company cannot predict what other defenses the Defendants may raise, or the ultimate outcome of either of

these related matters.

At present, the EPO has revoked the Prosl European Patent as invalid, and the Company has filed an appeal,

which is currently pending.

In the same complaint against the same Defendants,

the Company also alleged an infringement (requesting the same remedies) of ND Partners’

utility model DE 20 2005 022 124

U1 (the “Utility Model”), which the Company believes is fundamentally identical to the Prosl European Patent in its

main aspects and claims.

The Court separated the two proceedings and the Prosl European Patent and the Utility Model claims are

now being tried separately.

TauroPharm has filed a cancellation action against the Utility Model before the German Patent and Trademark

Office (the “German PTO”) based on the similar arguments as those in the opposition against the Prosl European Patent.

On March 27, 2015, the District Court held

a hearing to evaluate whether the Utility Model has been infringed by TauroPharm in connection with the manufacture, sale and distribution

of its TauroLock-HEP100 TM and TauroLock-HEP500 TM products.

A hearing before the same court was held on January

30, 2015 on the separate, but related, question of infringement of the Prosl European Patent by TauroPharm.

The Court issued its decisions on May 8,

2015, staying both proceedings.

In its decisions, the Court found that the commercialization by TauroPharm in Germany of its TauroLock

catheter lock solutions Hep100 and Hep500 infringes both the Prosl European Patent and the Utility Model and further that

there is no prior use right that would allow TauroPharm to continue to make, use or sell its product in Germany.

However, the Court

declined to issue an injunction in favor of the Company that would preclude the continued commercialization by TauroPharm based

upon its finding that there is a sufficient likelihood that the EPO, in the case of the Prosl European Patent, or the German PTO,

in the case of the Utility Model, may find that such patent or utility model is invalid.

Specifically, the Court noted the possible

publication of certain instructions for product use that may be deemed to constitute prior art.

As such, the District Court determined

that it will defer any consideration of the request by the Company for injunctive and other relief until such time as the EPO or

the German PTO made a final decision on the underlying validity of the Prosl European Patent and the Utility Model.

to assume that the complaint regarding the infringement of the Utility Model will be dismissed now that the German PTO has voided

the Utility Model (see below).

This does, however, not have a direct effect on the infringement proceedings concerning the Prosl

European Patent.

The opposition proceeding against the Prosl

European Patent before the EPO is ongoing.

The EPO held a hearing in the opposition proceeding on November 25, 2015.

In its preliminary

consideration of the matter, the EPO (and the German PTO) had regarded the patent as not inventive or novel due to publication

of prior art.

However, the EPO did not issue a decision at the end of the hearing but adjourned the matter due to the fact that

the panel was of the view that Claus Herdeis, one of the managing directors of TauroPharm, has to be heard as a witness in a further

hearing in order to close some gaps in the documentation presented by TauroPharm as regards the publication of the prior art.

The German PTO held a hearing in the validity

proceedings relating to the Utility Model on June 29, 2016, at which the panel affirmed its preliminary finding that the Utility

Model was invalid based upon prior publication of a reference to the benefits that may be associated with adding heparin to a

taurolidine based solution.

September 9, 2014, the Company filed in the District Court of Mannheim, Germany, a patent infringement action against TauroPharm

GmbH and Tauro-Implant GmbH as well as their respective CEOs (the “Defendants”) claiming infringement of the Company’s

European Patent EP 1 814 562 B1, which was granted by the European Patent Office (the “EPO”) on January 8, 2014 (the

“Prosl European Patent”).

The Prosl European Patent covers the formulation of taurolidine and citrate with low dose

heparin in a catheter lock solution for maintaining patency and preventing infection in hemodialysis catheters.

In this action,

the Company claims that the Defendants infringe on the Prosl European Patent by manufacturing and distributing catheter locking

solutions to the extent they are covered by the claims of the Prosl European Patent.

The Company believes that its patent is sound

and is seeking injunctive relief and raising claims for information, rendering of accounts, calling back, destruction and damages.

Separately, TauroPharm has filed an opposition with the EPO against the Prosl European Patent alleging that it lacks novelty and

inventive step.

The Company cannot predict the ultimate outcome of either of these related matters.

At present, the EPO has revoked

the Prosl European Patent as invalid, and the Company has filed an appeal, which is currently pending.

the same complaint against the same Defendants, the Company also alleged an infringement (requesting the same remedies) of ND

Partners’ utility model DE 20 2005 022 124 U1 (the “Utility Model”), which the Company believes is fundamentally

identical to the Prosl European Patent in its main aspects and claims.

The Court separated the two proceedings and the Prosl European

Patent and the Utility Model claims were tried separately.

TauroPharm has filed a cancellation action against the Utility Model

before the German Patent and Trademark Office (the “German PTO”) based on the similar arguments as those in the opposition

against the Prosl European Patent.

Court issued its decisions on May 8, 2015, staying both proceedings.

In its decisions, the Court found that the commercialization

by TauroPharm in Germany of its TauroLock catheter lock solutions Hep100 and Hep500 infringes both the Prosl European Patent and

the Utility Model and further that there is no prior use right that would allow TauroPharm to continue to make, use or sell its

product in Germany.

However, the Court declined to issue an injunction in favor of the Company that would preclude the continued

commercialization by TauroPharm based upon its finding that there is a sufficient likelihood that the EPO, in the case of the

Prosl European Patent, or the German PTO, in the case of the Utility Model, may find that such patent or utility model is invalid.

Specifically, the Court noted the possible publication of certain instructions for product use that may be deemed to constitute

As such, the District Court determined that it will defer any consideration of the request by the Company for injunctive

and other relief until such time as the EPO or the German PTO made a final decision on the underlying validity of the Prosl European

Patent and the Utility Model.

opposition proceeding against the Prosl European Patent before the EPO is ongoing.

The EPO held a hearing in the opposition proceeding

on November 25, 2015.

However, the EPO did not issue a decision at the end of the hearing but adjourned the matter due to the

fact that the panel was of the view that Claus Herdeis, one of the managing directors of TauroPharm, had to be heard as a witness

in a further hearing in order to close some gaps in the documentation presented by TauroPharm as regards the publication of the

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

German PTO held a hearing in the validity proceedings relating to the Utility Model on June 29, 2016, at which the panel affirmed

its preliminary finding that the Utility Model was invalid based upon prior publication of a reference to the benefits that may

be associated with adding heparin to a taurolidine based solution.

The Company filed an appeal against the ruling on September

An oral hearing was held on September

17, 2019 in which the German Federal Patent affirmed the first instance decision that the Utility Model was invalid.

has only a declaratory effect, as the Utility Model had expired in November 2015.

In October 2016, TauroPharm submitted a

further writ to the EPO requesting a date for the hearing and bringing forward further arguments, in particular in view of the

June 2016 decision of the German PTO on the invalidity of the utility model.

On November 22, 2017, the EPO in Munich, Germany held

a further oral hearing in this matter.

At the hearing, the panel held that the Prosl European Patent would be invalidated because

it did not meet the requirements of novelty based on a technical aspect of the European intellectual property law.

disagrees with this decision and, after the written opinion was issued by the Opposition Division in September 2018, has appealed

the decision.

The Company continues to believe that the Prosl European Patent is indeed novel and that its validity should be maintained.

There can be no assurance that the Company will prevail in this matter.

In addition, the ongoing Unfair Competition litigation

brought by the Company against TauroPharm is not affected and will continue.

On January 16, 2015, the Company filed a

complaint against TauroPharm GmbH and its managing directors in the District Court of Cologne, Germany.

complaint, the Company alleges violation of the German Unfair Competition Act by TauroPharm for the unauthorized use of its proprietary

information obtained in confidence by TauroPharm.

The Company alleges that TauroPharm is improperly and unfairly using

its proprietary information relating to the composition and manufacture of Neutrolin, in the manufacture and sale of TauroPharm’s

products TauroLock TM , TauroLock-HEP100 and TauroLock-HEP500.

The Company seeks a cease and desist order against

TauroPharm from continuing to manufacture and sell any product containing taurolidine (the active pharmaceutical ingredient (“API”)

of Neutrolin) and citric acid in addition to possible other components, damages for any sales in the past and the removal

of all such products from the market.

An initial hearing in the District Court of Cologne, Germany was held on November 19, 2015

to consider the Company’s claims.

In this hearing, the presiding judge explained that the court needed more information with

regard to several aspects of the case.

As a consequence, the court issued an interim decision in the form of a court order outlining

several issues of concern that relate primarily to the court's interest in clarifying the facts and reviewing any and all available

documentation, in particular with regard to the question which specific know-how was provided to TauroPharm by whom and when.

Company's legal team has prepared the requested reply and produced the respective documentation.

TauroPharm has also filed another

writ within the same deadline and both parties have filed further writs at the end of April 2016 setting out their respective argumentation

in more detail.

An oral hearing was held on September 17, 2019 in which the German Federal Patent Court affirmed the first instance decision

that the Utility Model was invalid.

The decision has only a declaratory effect, as the Utility Model had expired in November 2015.

On April 28, 2020, the Company filed a withdrawal of the complaint on the German utility model, thereby waiving its claims on

these proceedings.

November 22, 2017, the EPO in Munich, Germany held a further oral hearing in this matter.

At the hearing, the panel held that

the Prosl European Patent would be invalidated because it did not meet the requirements of novelty based on a technical aspect

of the European intellectual property law.

The Company disagrees with this decision and has appealed the decision.

continues to believe that the Prosl European Patent is indeed novel and that its validity should be maintained.

There can be no

assurance that the Company will prevail in this matter.

In addition, the ongoing Unfair Competition litigation brought by the

Company against TauroPharm is not affected and will continue.

January 16, 2015, the Company filed a complaint against TauroPharm GmbH and its managing directors in the District Court of Cologne,

In the complaint, the Company alleges violation of the German Unfair Competition Act by TauroPharm for the unauthorized

use of its proprietary information obtained in confidence by TauroPharm.

The Company alleges that TauroPharm is improperly and

unfairly using its proprietary information relating to the composition and manufacture of Neutrolin, in the manufacture and sale

of TauroPharm’s products TauroLock TM , TauroLock-HEP100 and TauroLock-HEP500.

The Company seeks a cease and desist

order against TauroPharm from continuing to manufacture and sell any product containing taurolidine (the active pharmaceutical

ingredient (“API”) of Neutrolin) and citric acid in addition to possible other components, damages for any sales in

the past and the removal of all such products from the market.

An initial hearing in the District Court of Cologne, Germany was

held on November 19, 2015 to consider the Company’s claims.

In this hearing, the presiding judge explained that the court

needed more information with regard to several aspects of the case.

As a consequence, the Court issued an interim decision in

the form of a court order outlining several issues of concern that relate primarily to the court’s interest in clarifying

the facts and reviewing any and all available documentation, in particular with regard to the question which specific know-how

was provided to TauroPharm by whom and when.

A further oral hearing in this matter was held on November 15, 2016.

In this hearing, the court heard arguments

from CorMedix and TauroPharm concerning the allegations of unfair competition.

The court made no rulings from the bench and indicated

that it is prepared to further examine the underlying facts of the Company's allegations.

On March 7, 2017, the court issued another

interim decision in the form of a court order outlining again several issues relating to the argumentation of both sides in the

In particular the court requested the Company to further specify its requests and to further substantiate in even

more detail which know-how was provided by Biolink (the company who developed Neutrolin that was acquired by ND Partners) to TauroPharm

by whom and when.

The court also raised the question whether the know-how provided at the time to TauroPharm could still be considered

to be secret know-how or may have become public in the meantime.

The court granted both sides the opportunity to reply to this

court order and provide additional facts and evidence until May 15, 2017.

Both parties have submitted further writs in this matter

and the court scheduled a further hearing on May 8, 2018.

After having been rescheduled several times, the hearing took place on

November 20, 2018.

A decision was rendered by the court on December 11, 2018, dismissing the complaint in its entirety.

the Company intends to continue to pursue this matter, and still believes firmly that its claims are well-founded.

therefore appealed in January 2019 and filed its grounds of appeal in March 2019.

An oral hearing was held on September 6, 2019

in which the legal counsel of the Company brought forward further arguments for the fact that the manufacturing process of the

respective catheter locking solution is indeed protectable as a trade secret.

In view of these new arguments, the court issued

an evidentiary order on September 27, 2019 ordering an expert opinion.

Next steps will be taken after the receipt of the expert

In connection with the aforementioned

patent and utility model infringement and unfair competition proceedings against TauroPharm, the Company was required by the

District Courts of Mannheim and Cologne to provide security deposits of an aggregate of approximately $170,000, to cover

legal fees in the event TauroPharm is entitled to reimbursement of these costs.

The Company recorded the deposits as

restricted cash on the consolidated balance sheets.

In 2008, the Company entered into a License

and Assignment Agreement (the “NDP License Agreement”) with ND Partners, LLP (“NDP”).

Pursuant to the NDP

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”).

The Company acquired such licenses and patents

through its assignment and assumption of NDP’s rights under certain separate license agreements by and between NDP and Dr.

In this hearing,

the court heard arguments from CorMedix and TauroPharm concerning the allegations of unfair competition.

On March 7, 2017, the

Court issued another interim decision in the form of a court order outlining again several issues relating to the argumentation

of both sides in the proceedings.

Both parties have submitted further writs in this matter and the Court scheduled a further hearing

on May 8, 2018.

After having been rescheduled several times, the hearing took place on November 20, 2018.

A decision was rendered

by the court on December 11, 2018, dismissing the complaint in its entirety.

However, the Company intends to continue to pursue

this matter, and still believes firmly that its claims are well-founded.

The Company therefore appealed in January 2019 and filed

its grounds of appeal in March 2019.

An oral hearing was held on September 6, 2019 in which the legal counsel of the Company brought

forward further arguments for the fact that the manufacturing process of the respective catheter locking solution is indeed protectable

as a trade secret.

In view of these new arguments, the Court issued an evidentiary order on September 27, 2019 ordering an expert

The expert opinion was not in the Company’s favor but the Company has filed a response to the expert opinion in

reaction to which the Court asked the expert to supplement his opinion to address the issues brought forward in the Company’s

In the supplementary expert opinion, the expert confirmed his view.

The Company has filed a response and an oral hearing

has been scheduled for February 5, 2021 but was postponed to June 18, 2021 due to the COVID19 situation in Germany.

connection with the aforementioned patent and utility model infringement and unfair competition proceedings against TauroPharm,

the Company was required by the District Courts of Mannheim and Cologne to provide security deposits to cover legal fees in the

event TauroPharm is entitled to reimbursement of these costs.

As of December 31, 2020, the aggregate deposit was approximately

$ 191,000 , which the Company recorded as restricted cash on the consolidated balance sheets.

During the year ended December 31,

2020, costs in connection with the utility model infringement proceedings of approximately $ 30,000 was reimbursed to TauroPharm .

In January 2021, approximately $ 48,000 was released by the court to the Company’s account which will be deducted from

restricted cash.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

2008, the Company entered into a License and Assignment Agreement (the “NDP License Agreement”) with ND Partners,

Pursuant to the NDP 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”).

The Company acquired such licenses and patents through its assignment and assumption of NDP’s rights under certain separate

license agreements by and between NDP and Dr.

Hans-Dietrich Polaschegg, Dr.

1 unchanged sentence

Johannes Reinmueller.

As consideration in part for the rights to the NDP Technology,

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.

The Company is required to make payments

to NDP upon the achievement of certain regulatory and sales-based milestones.

Certain of the milestone payments are to be made

in the form of shares of common stock currently held in escrow for NDP, and other milestone payments are to be paid in cash.

maximum aggregate number of shares issuable upon achievement of milestones is 29,109 shares.

In 2014, a certain milestone was achieved

resulting in the release of 7,277 shares held in escrow.

The number of shares held in escrow as of December 31, 2019 is 21,832

shares of common stock.

The maximum aggregate amount of cash payments due upon achievement of milestones is $3,000,000 with the

balance being $2,500,000 as of December 31, 2019 and 2018.

Events that trigger milestone payments include but are not limited to

the reaching of various stages of regulatory approval and upon achieving certain worldwide net sales amounts.

There were no milestones

achieved during the years ended December 31, 2019 and 2018.

The NDP License Agreement may be terminated

by the Company on a country-by-country basis upon 60 days prior written notice.

If the NDP License Agreement is terminated by either

party, the Company’s rights to the NDP Technology will revert back to NDP.

In September 2017, the Company 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 to the Company.

A notice of an intention not to

renew the Company’s current lease has been received and as a result, the Company is actively seeking for a new space to

lease that will meet its current needs.

Note 8 —

Stockholders’

Common Stock:

The Company had a prior sales agreement

Riley for its ATM program, which expired on April 16, 2018, under which the Company could issue and sell up to an aggregate

of $60.0 million of shares of its common stock.

As consideration

in part for the rights to the NDP Technology, 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.

Company is required to make payments to NDP upon the achievement of certain regulatory and sales-based milestones.

the milestone payments are to be made in the form of shares of common stock currently held in escrow for NDP, and other milestone

payments are to be paid in cash.

The maximum aggregate number of shares issuable upon achievement of milestones is 29,109 shares.

In 2014, a certain milestone was achieved resulting in the release of 7,277 shares held in escrow.

The number of shares held in

escrow as of December 31, 2020 is 21,832 shares of common stock.

The maximum aggregate amount of cash payments due upon achievement

of milestones is $ 3,000,000 with the balance being $ 2,500,000 as of December 31, 2020 and 2019.

Events that trigger milestone

payments include but are not limited to the reaching of various stages of regulatory approval and upon achieving certain worldwide

net sales amounts.

There were no milestones achieved during the years ended December 31, 2020 and 2019.

NDP License Agreement may be terminated by the Company on a country-by-country basis upon 60 days prior written notice.

NDP License Agreement is terminated by either party, the Company’s rights to the NDP Technology will revert back to NDP.

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

The lease agreement, with a monthly average of approximately $ 17,000 commenced on September 16, 2020.

The Company’s

sublease on its previous premises at 400 Connell Drive, Berkeley Heights, New Jersey 07922 terminated on November 30, 2020 (see

8 — Stockholders’ Equity:

On July 30, 2020, the

Company completed an underwritten public offering of its common stock, par value $ 0.001 per share, which yielded net proceeds of

approximately $ 21.3 million.

The public offering was made pursuant to an underwriting agreement with SunTrust Robinson Humphrey,

and JMP Securities LLC (collectively, the “Underwriters”), relating to the issuance and sale of an aggregate of

5,111,110 shares of common stock, including 666,666 shares of common stock pursuant to the full exercise of the Underwriters’

option to purchase additional shares, at a public offering price of $ 4.50 per share.

The offering was made pursuant to the Company’s

effective registration statement on Form S-3 Registration Statement No.

333-223562 previously filed with and declared effective

by the SEC and a prospectus supplement and accompanying prospectus filed with the SEC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

The Company had a prior sales agreement with FBR Securities, Inc., (formerly known as B.

Riley FBR, Inc.) (“B.

for its ATM program, which expired on April 16, 2018, under which the Company could issue and sell up to an aggregate of $60.0

million of shares of its common stock.

On March 9, 2018, the Company entered into a new agreement with B.

Riley for the

sale of up to $14.7 million of the Company’s common stock under the ATM program, pursuant to a registration statement filed

on March 9, 2018 for an aggregate of $70 million of the Company’s securities, which became effective on April 16, 2018.

new ATM agreement replaced a prior sales agreement with B.

Riley for the sale of

up to $14.7 million of the Company’s common stock under the ATM program, pursuant to a registration statement filed on March

9, 2018 for an aggregate of $70 million of the Company’s securities, which became effective on April 16, 2018.

agreement replaced a prior sales agreement with B.

Riley that expired on April 16, 2018.

The ATM program amount was increased

by $25.0 million in November 2018.

Under the ATM program, the Company may issue and sell common stock from time to time through

The ATM program amount was increased by

$25.0 million in November 2018.

Under the ATM program, the Company may issue and sell common stock from time to time through B.

Riley acting as agent, subject to limitations imposed by the Company and subject to B.

Riley’s acceptance, such as the

number or dollar amount of shares registered under the registration statement to which the offering relates.

Riley is entitled

to a commission of up to 3% of the gross proceeds from the sale of common stock sold under the ATM program.

During the years ended

December 31, 2019 and 2018, the Company sold 1,768,012 and 7,177,755 shares of common stock under the new and expired ATM programs,

respectively, and realized net proceeds of approximately $15.2 million and $22.0 million during the years ended December 31, 2019

and 2018, respectively.

At December 31, 2019, the Company has approximately $4.6 million available under its current ATM program

and $30.3 million available under its current shelf registration for the issuance of equity, debt or equity-linked securities unrelated

to the current ATM program (see note 11 for subsequent event sales under ATM).

Restricted Stock Units

During the year ended December 31, 2019

and 2018, the Company granted an aggregate of 24,850 and 18,900 restricted stock units (“RSUs”) to its officers and

directors under its 2013 Stock Incentive Plan with a weighted average grant date fair value of $8.33 and $3.50 per share, respectively.

The fair value of each RSU was estimated to be the closing price of the Company’s common stock on each date of grant.

RSUs vest monthly over one year after grant date, subject to continued service on the board through the vesting date.

year ended December 31, 2019 and 2018, compensation expense recorded for these RSUs was $198,000 and $93,000, respectively.

compensation expense as of December 31, 2019 and 2018 was $11,000 and $23,000, respectively.

The expected weighted average period

for the expense to be recognized is 0.19 years.

During the year ended December 31, 2019, 2,830 RSU’s were forfeited and no

RSUs were forfeited during the year ended December 31, 2018.

At December 31, 2019, there were 2,490 RSUs outstanding to vest.

During the year ended December 31, 2019,

the Company issued an aggregate of 25,346 shares of its common stock upon the vesting of restricted stock units issued to the Company’s

board of directors.

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

Riley’s acceptance, such as the number

or dollar amount of shares registered under the registration statement to which the offering relates.

Riley is entitled to a

commission of up to 3% of the gross proceeds from the sale of common stock sold under the ATM program.

During the years ended December

31, 2020 and 2019, the Company sold 1,854,970 and 1,768,012 shares of common stock under the new and expired ATM programs, respectively,

and realized net proceeds of approximately $11.4 million and $15.2 million during the years ended December 31, 2020 and 2019, respectively.

At December 31, 2020, this current ATM program and the current shelf registration for the issuance of equity, debt or equity-linked

securities has been exhausted.

November 2020, the Company filed a new registration statement, under which the Company could issue and sell up to an aggregate

of $100.0 million of shares of its common stock, $0.001 par value per share.

On November 27, 2020, the Company entered into an

Amended and Restated At Market Issuance Sales Agreement (“Amended Sales Agreement”) with B.

Riley and Needham &

Company, LLC (“Needham”), together with B.

Riley, acting as sales agents (“Sales Agent”).

Sales Agreement relates to the sale of shares of up to $25.0 million of the Company’s common stock under its ATM program, of which the Company

may issue and sell common stock from time to time through the Sales Agent, subject to limitations imposed by the Company and subject

to Sales Agent’s acceptance, such as the number or dollar amount of shares registered under the registration statement to

which the offering relates.

Sales Agent is entitled to a commission of up to 3% of the gross proceeds from the sale of common

stock sold under the ATM program.

During the year ended December 31, 2020, the Company sold 832,676 shares of common stock under

the Amended Sales Agreement at the weighted average price of $8.69 per share and realized net proceeds of approximately $7.0 million.

At December 31, 2020, the Company had approximately $17.8 million available under the Amended Sales Agreement and $75.0 million

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

Sales Agreement.

During the year ended

December 31, 2020 the Company did not grant any restricted stock units (“RSUs”) and granted an aggregate of 24,850

RSUs during the year ended December 31, 2019 to its officers and directors under its 2013 Stock Incentive Plan with a weighted

average grant date fair value of $ 8.33 per share.

The fair value of each RSU was estimated to be the closing price of the Company’s

common stock on each date of grant.

These RSUs vest monthly over one year after grant date, subject to continued service on the

board through the vesting date.

During the year ended December 31, 2020 and 2019, compensation expense recorded for these RSUs

was $ 11,000 and $ 198,000 , respectively.

There was no unrecognized compensation expense as of December 31, 2020 as all RSU’s

outstanding had vested.

At December 31, 2020, there are no RSUs outstanding.

the years ended December 31, 2020 and 2019, the Company issued an aggregate of 2,490 and 25,346 shares of its common stock upon

the vesting of restricted stock units issued to the Company’s board of directors, respectively.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

Company is authorized to issue up to 2,000,000 shares of preferred stock in one or more series without stockholder approval.

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

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 December 31, 2020

As of December 31, 2019

On November 9, 2017, the Company entered

into a securities purchase agreement which, on November 16, 2017, resulted in the Company selling $2.0 million of its Series F

preferred stock (“Series F Stock”) at $1,000 per share.

Based on the terms of the Series F Stock, the conversion price

The conversion price of the Series F Stock was subject to anti-dilution adjustment for customary recapitalization events

such as stock splits, as well as full ratchet anti-dilution protection in the event that the Company did not obtain the subordination

of the Series C-3 preferred stock to that of the Series F Stock or obtain stockholder approval, if required by NYSE American rules,

of the issuance of common stock that exceeds NYSE American rules.

All outstanding shares of Series F Stock were cancelled in connection

with the terms of the Exchange Agreement, as described below.

On August 14, 2019, the Company entered

into the Exchange Agreement with Elliott, pursuant to which Elliott agreed to exchange all of its outstanding warrants, its 10%

senior secured convertible note and its shares of Series C-2 preferred stock, Series D preferred stock and Series F preferred stock,

and make a cash payment of $2.0 million to the Company, for 100,000 shares of Series G preferred stock, with an aggregate liquidation

preference of $18,736,452, which are convertible into an aggregate of 5,560,138 shares of the Company’s common stock at a

conversion price of $3.37 per share.

Elliott retained the shares of the Company’s common stock and Series E preferred

stock that it held at the time of the consummation of the Exchange Agreement.

Other than with respect to conversion

price and liquidation preference, the Series G preferred stock has substantially the same terms as the Company’s outstanding

Series E preferred stock, including the restrictive covenants contained therein as modified as set forth in the Exchange Agreement.

However, Elliott is prohibited from converting the Series G preferred stock into shares of the Company’s common stock to

the extent that, as a result of such conversion, Elliott would own more than 4.99% of the total number of shares of the Company’s

common stock then issued and outstanding.

The shares of Series G preferred stock are entitled to vote on an as-converted basis

with respect to the number of shares of common stock into which they are convertible, based upon an assumed conversion price, solely

for the purpose of the voting rights, equal to $7.93, the closing price of the Company’s common stock on August 14, 2019,

Shares Outstanding

Liquidation Preference

Shares Outstanding

Liquidation Preference

On November 9, 2017,

the Company entered into a securities purchase agreement which, on November 16, 2017, resulted in the Company selling $ 2 .0 million

of its Series F preferred stock (“Series F Stock”) at $ 1,000 per share.

All outstanding shares of Series F Stock were

cancelled in connection with the terms of the Exchange Agreement, as described below.

August 14, 2019, the Company entered into the Exchange Agreement with Elliott, pursuant to which Elliott agreed to exchange all

of its outstanding warrants, its 10 % senior secured convertible note and its shares of Series C-2 preferred stock, Series D preferred

stock and Series F preferred stock, and make a cash payment of $ 2 .0 million to the Company, for 100,000 shares of Series G preferred

stock, with an aggregate liquidation preference of $ 18,736,452 , which are convertible into an aggregate of 5,560,138 shares of

the Company’s common stock at a conversion price of $ 3.37 per share.

Elliott retained the shares of the Company’s

common stock and Series E preferred stock that it held at the time of the consummation of the Exchange Agreement.

Other than with

respect to conversion price and liquidation preference, the Series G preferred stock has substantially the same terms as the Company’s

outstanding Series E preferred stock, including the restrictive covenants contained therein as modified as set forth in the Exchange

However, Elliott is prohibited from converting the Series G preferred stock into shares of the Company’s common

stock to the extent that, as a result of such conversion, Elliott would own more than 4.99 % of the total number of shares of the

Company’s common stock then issued and outstanding.

The shares of Series G preferred stock are entitled to vote on an as-converted

basis with respect to the number of shares of common stock into which they are convertible, based upon an assumed conversion price,

solely for the purpose of the voting rights, equal to $ 7.93 , the closing price of the Company’s common stock on August 14,

2019, and the Series E preferred stock was modified to provide for similar rights to vote on an as-converted basis.

The Company filed

the Certificate of Designation of the Series G preferred stock and the Second Amended and Restated Certificate of Designation of

the Series E preferred stock with the Secretary of State of the State of Delaware on September 5, 2019.

On September 6, 2019, the

Company closed this transaction and issued the Series G preferred stock.

Pursuant to the terms of the Exchange Agreement,

the exchange of the Series C-2 preferred stock, Series D preferred stock, Series F preferred stock and the 10% senior secured convertible

note was considered an extinguishment.

As a result, the difference between the fair value allocated to the Series G preferred stock

and the carrying value of the Series C-2 preferred stock, Series D preferred stock, Series F preferred stock and the 10% senior

secured convertible note is being treated as a deemed dividend and is added to net loss to arrive at loss available to common stockholders.

The Series G preferred stock was valued

using the Black Scholes option pricing model.

The Black-Scholes option pricing model was also used to determine the fair value

of the warrants and the Series C-2 preferred stock, Series D preferred stock and Series F preferred stock.

These fair values, along

with the fair value of the 10% senior secured convertible note were utilized to allocate the fair value of the Series G preferred

stock based on relative fair values.

ASC 820, Fair Value Measurements, states that the reporting entity should use the valuation

technique(s) appropriate for the measurement, considering the availability of data with which to develop inputs that represent

the assumptions that market participants would use when pricing the asset or liability.

Market participants price options

based on expected volatility, not historical volatility.

In estimating the expected volatility of the Company’s common

stock, the Company followed the guidance of ASC 820 and considered a number of factors - including the implied volatility of the

Company’s listed warrant contracts.

A summary of the assumptions used in the

Black Scholes pricing model are as follows:

filed the Certificate of Designation of the Series G preferred stock and the Second Amended and Restated Certificate of Designation

of the Series E preferred stock with the Secretary of State of the State of Delaware on September 5, 2019.

On September 6, 2019,

the Company closed this transaction and issued the Series G preferred stock.

to the terms of the Exchange Agreement, the exchange of the Series C-2 preferred stock, Series D preferred stock, Series F preferred

stock and the 10 % senior secured convertible note was considered an extinguishment.

As a result, the difference between the fair

value allocated to the Series G preferred stock and the carrying value of the Series C-2 preferred stock, Series D preferred stock,

Series F preferred stock and the 10 % senior secured convertible note is being treated as a deemed dividend and is added to net

loss to arrive at loss available to common stockholders.

Series G preferred stock was valued using the Black Scholes option pricing model.

The Black-Scholes option pricing model was also

used to determine the fair value of the warrants and the Series C-2 preferred stock, Series D preferred stock and Series F preferred

These fair values, along with the fair value of the 10 % senior secured convertible note were utilized to allocate the fair

value of the Series G preferred stock based on relative fair values.

ASC 820, Fair Value Measurements, states that the reporting

entity should use the valuation technique(s) appropriate for the measurement, considering the availability of data with which

to develop inputs that represent the assumptions that market participants would use when pricing the asset or liability.

participants price options based on expected volatility, not historical volatility.

In estimating the expected volatility of the

Company’s common stock, the Company followed the guidance of ASC 820 and considered a number of factors - including the

implied volatility of the Company’s listed warrant contracts.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

summary of the assumptions used in the Black Scholes pricing model are as follows:

Expected term, years

1 unchanged sentence

Risk-free interest rate

As a result of the Exchange Agreement,

the Company recognized a deemed dividend of $26,733,098.

The deemed dividend was comprised of (1) a beneficial conversion

related to the 10% secured senior convertible note recognized at extinguishment;

(2) the difference between the allocated

fair value of the Series G Preferred Stock issued and the carrying values of the 10% secured senior convertible note, the

Series C-2 Preferred Stock, Series D Preferred Stock and Series F Preferred Stock;

(3) the difference between the fair value

of the exchanged warrants before and after the Exchange Agreement;

a result of the Exchange Agreement, the Company recognized a deemed dividend of $ 26,733,098 .

The deemed dividend was comprised

of (1) a beneficial conversion related to the 10% secured senior convertible note recognized at extinguishment;

(2) the difference

between the allocated fair value of the Series G Preferred Stock issued and the carrying values of the 10% secured senior convertible

note, the Series C-2 Preferred Stock, Series D Preferred Stock and Series F Preferred Stock;

(3) the difference between the fair

value of the exchanged warrants before and after the Exchange Agreement;

and (4) the difference between the fair value and the

carrying value of Series E Preferred Stock, less the fair value of the Series E warrants that were cancelled as part of the

Exchange Agreement.

During the year ended December 31, 2019,

the Company issued 104,000 shares of its common stock upon conversion of 52,000 shares of Series C-3 non-voting preferred stock.

The following rights, privileges, terms

and condition apply to the outstanding preferred stock at December 31, 2019:

Series C-3 Non-Voting Preferred Stock

The Series C-3 non-voting

preferred stock will rank senior to our common stock;

senior to any class or series of capital stock created after

the issuance of the Series C-3 non-voting preferred stock;

and junior to the Series E voting convertible preferred stock in each

case, as to dividends or distributions of assets upon our liquidation, dissolution or winding up whether voluntarily or involuntarily.

Each share of

Series C-3 preferred stock is convertible into 2 shares of our common stock (subject to adjustment in the event of stock dividends

and distributions, stock splits, stock combinations, or reclassifications affecting our common stock) at a per share price of

$5.00 at any time at the option of the holder, except that a holder will be prohibited from converting shares of Series C-3 preferred

stock into shares of common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially

own more than 9.99% of the total number of shares of our common stock then issued and outstanding.

Liquidation Preference .

the event of our liquidation, dissolution or winding up, holders of Series C-3 preferred stock will receive a payment equal to

$10.00 per share of Series C-3 preferred stock before any proceeds are distributed to the holders of our common stock.

payment of this preferential amount, and subject to the rights of holders of any class or series of our capital stock hereafter

created specifically ranking by its terms senior to the Series C-3 preferred stock and holders of Series C-3 preferred stock will

participate ratably in the distribution of any remaining assets with the common stock and any other class or series of our capital

stock hereafter created that participates with the common stock in such distributions.

Voting Rights .

Series C-3 preferred stock will generally have no voting rights, except as required by law and except that the consent of holders

of two thirds of the outstanding Series C-3 preferred Stock will be required to amend the terms of the Series C-3 preferred stock

or the certificate of designation for the Series C-3 preferred stock.

Holders of Series

C-3 preferred stock are entitled to receive, and we are required to pay, dividends on shares of the Series C-3 preferred stock

equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends (other than dividends in the form of common

stock) actually paid on shares of the common stock when, as and if such dividends (other than dividends in the form of common stock)

are paid on shares of the common stock.

We are not obligated

to redeem or repurchase any shares of Series C-3 preferred stock.

Shares of Series C-3 preferred stock are not otherwise entitled

to any redemption rights, or mandatory sinking fund or analogous fund provisions.

There is no established

public trading market for the Series C-3 preferred stock, and we do not expect a market to develop.

In addition, we do not intend

to apply for listing of the Series C-3 preferred stock on any national securities exchange or trading system.

Fundamental Transactions .

If, at any time that shares of Series C-3 preferred stock are outstanding, we effect a merger or other change of control transaction,

as described in the certificate of designation and referred to as a fundamental transaction, then a holder will have the right

to receive, upon any subsequent conversion of a share of Series C-3 preferred stock (in lieu of conversion shares) for each issuable

conversion share, the same kind and amount of securities, cash or property as such holder would have been entitled to receive upon

the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental transaction, the

holder of a share of common stock.

Series E Voting Convertible Preferred Stock

The Series E voting preferred

stock will rank senior to our common stock;

senior to any class or series of capital stock created after the issuance of the Series

carrying value of Series E Preferred Stock, less the fair value of the Series E warrants that were cancelled as part of the Exchange

following rights, privileges, terms and condition apply to the outstanding preferred stock at December 31, 2020:

C-3 Non-Voting Preferred Stock

The Series C-3 non-voting preferred stock will rank senior to our common stock;

senior to any class or series of capital stock

created after the issuance of the Series C-3 non-voting preferred stock;

and junior to the Series E voting convertible preferred

stock in each case, as to dividends or distributions of assets upon our liquidation, dissolution or winding up whether voluntarily

or involuntarily.

Each share of Series C-3 preferred stock is convertible into 2 shares of our common stock (subject to adjustment in the event

of stock dividends and distributions, stock splits, stock combinations, or reclassifications affecting our common stock) at a

per share price of $ 5.00 at any time at the option of the holder, except that a holder will be prohibited from converting shares

of Series C-3 preferred stock into shares of common stock if, as a result of such conversion, such holder, together with its affiliates,

would beneficially own more than 9.99 % of the total number of shares of our common stock then issued and outstanding.

In the event of our liquidation, dissolution or winding up, holders of Series C-3 preferred stock will receive

a payment equal to $ 10.00 per share of Series C-3 preferred stock before any proceeds are distributed to the holders of our common

After the payment of this preferential amount, and subject to the rights of holders of any class or series of our capital

stock hereafter created specifically ranking by its terms senior to the Series C-3 preferred stock and holders of Series C-3 preferred

stock will participate ratably in the distribution of any remaining assets with the common stock and any other class or series

of our capital stock hereafter created that participates with the common stock in such distributions.

Shares of Series C-3 preferred stock will generally have no voting rights, except as required by law and except that

the consent of holders of two thirds of the outstanding Series C-3 preferred Stock will be required to amend the terms of the

Series C-3 preferred stock or the certificate of designation for the Series C-3 preferred stock.

Holders of Series C-3 preferred stock are entitled to receive, and we are required to pay, dividends on shares of the Series

C-3 preferred stock equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends (other than dividends

in the form of common stock) actually paid on shares of the common stock when, as and if such dividends (other than dividends

in the form of common stock) are paid on shares of the common stock.

We are not obligated to redeem or repurchase any shares of Series C-3 preferred stock.

Shares of Series C-3 preferred stock

are not otherwise entitled to any redemption rights, or mandatory sinking fund or analogous fund provisions.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

There is no established public trading market for the Series C-3 preferred stock, and we do not expect a market to develop.

In addition, we do not intend to apply for listing of the Series C-3 preferred stock on any national securities exchange or trading

Transactions .

If, at any time that shares of Series C-3 preferred stock are outstanding, we effect a merger or other change

of control transaction, as described in the certificate of designation and referred to as a fundamental transaction, then a holder

will have the right to receive, upon any subsequent conversion of a share of Series C-3 preferred stock (in lieu of conversion

shares) for each issuable conversion share, the same kind and amount of securities, cash or property as such holder would have

been entitled to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such

fundamental transaction, the holder of a share of common stock.

E Voting Convertible Preferred Stock

senior to the Series C-3 non-voting convertible preferred stock;

The Series E voting preferred stock will rank senior to our common stock;

senior to any class or series of capital stock created

after the issuance of the Series E voting convertible preferred stock;

senior to the Series C-3 non-voting convertible preferred

and on parity with the Series G voting convertible preferred stock in each case, as to dividends or distributions of assets

upon our liquidation, dissolution or winding up whether voluntarily or involuntarily.

Each share of Series E preferred stock is convertible into 4.3733 shares of our common stock (subject to adjustment as provided

in the certificates of designation for the Series E preferred stock) at a per share price of $ 3.75 at any time at the option of

the holder, except that a holder will be prohibited from converting shares of Series E preferred stock into shares of common stock

if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than 4.99 % of the total

number of shares of our common stock then issued and outstanding.

In the event of our liquidation, dissolution or winding up, holders of Series E preferred stock will receive a

payment equal to $ 49.20 per share of Series E preferred stock on parity with the payment of the liquidation preference due the

Series G preferred stock, but before any proceeds are distributed to the holders of common stock, and the Series C-3 non-voting

convertible preferred stock.

After the payment of this preferential amount, holders of Series E preferred stock will participate

ratably in the distribution of any remaining assets with the common stock and any other class or series of our capital stock that

participates with the common stock in such distributions.

Shares of Series E preferred stock are entitled to vote on an as-converted basis, based upon an assumed conversion

price of $ 7.93 .

Holders of Series E preferred stock are entitled to receive, and we are required to pay, dividends on shares of the Series

E preferred stock equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends (other than dividends

in the form of common stock) actually paid on shares of the common stock when, as and if such dividends (other than dividends

in the form of common stock) are paid on shares of the common stock.

We are not obligated to redeem or repurchase any shares of Series E preferred stock.

Shares of Series E preferred stock are

not otherwise entitled to any redemption rights, or mandatory sinking fund or analogous fund provisions.

There is no established public trading market for the Series E preferred stock, and we do not expect a market to develop.

In addition, we do not intend to apply for listing of the Series E preferred stock on any national securities exchange or trading

Transactions.

If, at any time that shares of Series E preferred stock are outstanding, we effect a merger or other change

of control transaction, as described in the certificate of designation and referred to as a fundamental transaction, then a holder

will have the right to receive, upon any subsequent conversion of a share of Series E preferred stock (in lieu of conversion shares)

for each issuable conversion share, the same kind and amount of securities, cash or property as such holder would have been entitled

to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental

transaction, the holder of a share of common stock.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

As long as any of the Series E preferred stock is outstanding, we cannot create, incur, guarantee, assume or

suffer to exist any indebtedness, other than (i) trade payables incurred in the ordinary course of business consistent with past

practice, and (ii) up to $10 million aggregate principal amount of indebtedness with a maturity less than twelve months outstanding

at any time, which amount may include up to $5 million of letters of credit outstanding at any time.

In addition to the debt restrictions above, as long as any of the Series E preferred stock is outstanding, we cannot,

among others things:

create, incur, assume or suffer to exist any encumbrances on any of our assets or property;

redeem, repurchase

or pay any cash dividend or distribution on any of our capital stock (other than as permitted, which includes the dividends on

the Series E preferred stock and Series G preferred stock);

redeem, repurchase or prepay any indebtedness (other than as permitted);

or engage in any material line of business substantially different from our current lines of business.

In the event we issue any options, convertible securities or rights to purchase stock or other securities pro rata

to the holders of common stock, then a holder of Series E preferred stock will be entitled to acquire, upon the same terms a pro

rata amount of such stock or securities as if the Series E preferred stock had been converted to common stock.

G Voting Convertible Preferred Stock

The Series G voting convertible preferred stock will rank senior to our common stock;

senior to any class or series of capital

stock created after the issuance of the Series G voting convertible preferred stock;

junior to the Series C-3 non-voting convertible

preferred stock, pending the consent of the holders of such series to the subordination thereof;

and on parity with the Series

G voting convertible preferred stock in each case, as to dividends or distributions of assets upon our liquidation, dissolution

E voting convertible preferred stock in each case, as to dividends or distributions of assets upon our liquidation, dissolution

or winding up whether voluntarily or involuntarily.

Each share of Series

E preferred stock is convertible into 4.3733 shares of our common stock (subject to adjustment as provided in the certificates

of designation for the Series E preferred stock) at a per share price of $3.75 at any time at the option of the holder, except

that a holder will be prohibited from converting shares of Series E preferred stock into shares of common stock if, as a result

of such conversion, such holder, together with its affiliates, would beneficially own more than 4.99% of the total number of shares

of our common stock then issued and outstanding.

Liquidation Preference.

of our liquidation, dissolution or winding up, holders of Series E preferred stock will receive a payment equal to $49.20 per share

of Series E preferred stock on parity with the payment of the liquidation preference due the Series G preferred stock, but before

any proceeds are distributed to the holders of common stock, and the Series C-3 non-voting convertible preferred stock.

payment of this preferential amount, holders of Series E preferred stock will participate ratably in the distribution of any remaining

assets with the common stock and any other class or series of our capital stock that participates with the common stock in such

distributions.

Voting Rights.

Shares of Series E

preferred stock are entitled to vote on an as-converted basis, based upon an assumed conversion price of $7.93.

Holders of Series E preferred

stock are entitled to receive, and we are required to pay, dividends on shares of the Series E preferred stock equal (on an as-if-converted-to-common-stock

basis) to and in the same form as dividends (other than dividends in the form of common stock) actually paid on shares of the common

stock when, as and if such dividends (other than dividends in the form of common stock) are paid on shares of the common stock.

We are not obligated

to redeem or repurchase any shares of Series E preferred stock.

Shares of Series E preferred stock are not otherwise entitled to

any redemption rights, or mandatory sinking fund or analogous fund provisions.

There is no established

public trading market for the Series E preferred stock, and we do not expect a market to develop.

In addition, we do not intend

to apply for listing of the Series E preferred stock on any national securities exchange or trading system.

Fundamental Transactions.

any time that shares of Series E preferred stock are outstanding, we effect a merger or other change of control transaction, as

described in the certificate of designation and referred to as a fundamental transaction, then a holder will have the right to

receive, upon any subsequent conversion of a share of Series E preferred stock (in lieu of conversion shares) for each issuable

conversion share, the same kind and amount of securities, cash or property as such holder would have been entitled to receive upon

the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental transaction, the

holder of a share of common stock.

Debt Restriction.

As long as any

of the Series E preferred stock is outstanding, we cannot create, incur, guarantee, assume or suffer to exist any indebtedness,

other than (i) trade payables incurred in the ordinary course of business consistent with past practice, and (ii) up to $10 million

aggregate principal amount of indebtedness with a maturity less than twelve months outstanding at any time, which amount may include

up to $5 million of letters of credit outstanding at any time.

Other Covenants.

In addition to the

debt restrictions above, as long as any of the Series E preferred stock is outstanding , we cannot, among others things:

incur, assume or suffer to exist any encumbrances on any of our assets or property;

redeem, repurchase or pay any cash dividend

or distribution on any of our capital stock (other than as permitted, which includes the dividends on the Series E preferred stock

and Series G preferred stock);

redeem, repurchase or prepay any indebtedness (other than as permitted);

or engage in any material

line of business substantially different from our current lines of business.

Purchase Rights.

In the event we

issue any options, convertible securities or rights to purchase stock or other securities pro rata to the holders of common stock,

then a holder of Series E preferred stock will be entitled to acquire, upon the same terms a pro rata amount of such stock or securities

as if the Series E preferred stock had been converted to common stock.

Series G Voting Convertible Preferred Stock

The Series G voting convertible

preferred stock will rank senior to our common stock;

senior to any class or series of capital stock created after the issuance

of the Series G voting convertible preferred stock;

junior to the Series C-3 non-voting convertible preferred stock, pending the

consent of the holders of such series to the subordination thereof;

and on parity with the Series E voting convertible preferred

stock in each case, as to dividends or distributions of assets upon our liquidation, dissolution or winding up whether voluntarily

or involuntarily.

Each share of Series

G preferred stock is convertible into approximately 55.5978 shares of our common stock (subject to adjustment as provided in the

certificate of designation for the Series G preferred stock) at a per share price of $3.37 at any time at the option of the holder,

except that a holder will be prohibited from converting shares of Series G preferred stock into shares of common stock if, as a

result of such conversion, such holder, together with its affiliates, would beneficially own more than 4.99% of the total number

of shares of our common stock then issued and outstanding.

Liquidation Preference .

of our liquidation, dissolution or winding up, holders of Series E preferred stock will receive a payment equal to $187.36452 per

share of Series G preferred stock on parity with the payment of the liquidation preference due the Series E preferred stock, but

before any proceeds are distributed to the holders of Series C-3 preferred stock (pending the consent of the holders of such series

to the subordination thereof) and any proceeds are distributed to the holders of common stock.

After the payment of this preferential

amount, holders of Series G preferred stock will participate ratably in the distribution of any remaining assets with the common

stock and any other class or series of our capital stock that participates with the common stock in such distributions.

Voting Rights .

Shares of Series G

preferred stock are entitled to vote on an as-converted basis, based upon an assumed conversion price of $7.93.

Holders of Series G Preferred

stock are entitled to receive, and we are required to pay, dividends on shares of the Series G preferred stock equal (on an as-if-converted-to-common-stock

basis) to and in the same form as dividends (other than dividends in the form of common stock) actually paid on shares of the common

stock when, as and if such dividends (other than dividends in the form of common stock) are paid on shares of the common stock.

We are not obligated

to redeem or repurchase any shares of Series G preferred stock.

Shares of Series G preferred stock are not otherwise entitled to

any redemption rights, or mandatory sinking fund or analogous fund provisions.

There is no established

public trading market for the Series G preferred stock, and we do not expect a market to develop.

In addition, we do not intend

to apply for listing of the Series G preferred stock on any national securities exchange or trading system.

Fundamental Transactions .

any time that shares of Series G preferred stock are outstanding, we effect a merger or other change of control transaction, as

described in the certificate of designation and referred to as a fundamental transaction, then a holder will have the right to

receive, upon any subsequent conversion of a share of Series G preferred stock (in lieu of conversion shares) for each issuable

conversion share, the same kind and amount of securities, cash or property as such holder would have been entitled to receive upon

the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental transaction, the

holder of a share of common stock.

Debt Restriction .

As long as any

of the Series G preferred stock is outstanding, we cannot create, incur, guarantee, assume or suffer to exist any indebtedness,

other than (i) trade payables incurred in the ordinary course of business consistent with past practice, and (ii) up to $10 million

aggregate principal amount of indebtedness with a maturity less than twelve months outstanding at any time, which amount may include

up to $5 million of letters of credit outstanding at any time.

Other Covenants .

In addition to the

debt restrictions above, as long as any of the Series G preferred stock is outstanding, we cannot, among others things:

incur, assume or suffer to exist any encumbrances on any of our assets or property;

redeem, repurchase or pay any cash dividend

or distribution on any of our capital stock (other than as permitted, which includes the dividends on the Series E preferred stock

and the Series G preferred stock);

Each share of Series G preferred stock is convertible into approximately 55.5978 shares of our common stock (subject to adjustment

as provided in the certificate of designation for the Series G preferred stock) at a per share price of $ 3.37 at any time at the

option of the holder, except that a holder will be prohibited from converting shares of Series G preferred stock into shares of

common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than 4.99 %

of the total number of shares of our common stock then issued and outstanding.

In the event of our liquidation, dissolution or winding up, holders of Series E preferred stock will receive a

payment equal to $ 187.36452 per share of Series G preferred stock on parity with the payment of the liquidation preference due

the Series E preferred stock, but before any proceeds are distributed to the holders of Series C-3 preferred stock (pending the

consent of the holders of such series to the subordination thereof) and any proceeds are distributed to the holders of common

After the payment of this preferential amount, holders of Series G preferred stock will participate ratably in the distribution

of any remaining assets with the common stock and any other class or series of our capital stock that participates with the common

stock in such distributions.

Shares of Series G preferred stock are entitled to vote on an as-converted basis, based upon an assumed conversion

price of $ 7.93 .

Holders of Series G Preferred stock are entitled to receive, and we are required to pay, dividends on shares of the Series G preferred

stock equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends (other than dividends in the form

of common stock) actually paid on shares of the common stock when, as and if such dividends (other than dividends in the form

of common stock) are paid on shares of the common stock.

We are not obligated to redeem or repurchase any shares of Series G preferred stock.

Shares of Series G preferred stock are not

otherwise entitled to any redemption rights, or mandatory sinking fund or analogous fund provisions.

There is no established public trading market for the Series G preferred stock, and we do not expect a market to develop.

we do not intend to apply for listing of the Series G preferred stock on any national securities exchange or trading system.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

Transactions .

If, at any time that shares of Series G preferred stock are outstanding, we effect a merger or other change

of control transaction, as described in the certificate of designation and referred to as a fundamental transaction, then a holder

will have the right to receive, upon any subsequent conversion of a share of Series G preferred stock (in lieu of conversion shares)

for each issuable conversion share, the same kind and amount of securities, cash or property as such holder would have been entitled

to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental

transaction, the holder of a share of common stock.

Restriction .

As long as any of the Series G preferred stock is outstanding, we cannot create, incur, guarantee, assume or

suffer to exist any indebtedness, other than (i) trade payables incurred in the ordinary course of business consistent with past

practice, and (ii) up to $10 million aggregate principal amount of indebtedness with a maturity less than twelve months outstanding

at any time, which amount may include up to $5 million of letters of credit outstanding at any time.

In addition to the debt restrictions above, as long as any of the Series G preferred stock is outstanding, we cannot,

among others things:

create, incur, assume or suffer to exist any encumbrances on any of our assets or property;

redeem, repurchase

or pay any cash dividend or distribution on any of our capital stock (other than as permitted, which includes the dividends on

the Series E preferred stock and the Series G preferred stock);

redeem, repurchase or prepay any indebtedness (other than as permitted);

or engage in any material

line of business substantially different from our current lines of business.

Purchase Rights .

In the event we

issue any options, convertible securities or rights to purchase stock or other securities pro rata to the holders of common stock,

then a holder of Series G preferred stock will be entitled to acquire, upon the same terms a pro rata amount of such stock or securities

as if the Series G preferred stock had been converted to common stock.

Stock Options:

The Company’s 2013 Stock Incentive

Plan (the “2013 Plan”) was approved by the shareholders in July 2013.

The 2013 Plan provides for the issuance of equity

grants in the form of options, restricted stock, stock awards and other forms of equity compensation.

Awards under the 2013 Plan

may be made to directors, officers, employees and consultants.

Initially, an aggregate of 1,000,000 shares of the Company’s

common stock was reserved for issuance under the 2013 Plan.

On January 19, 2016, the shareholders approved an increase of the shares

issuable under the 2013 Plan from 1,000,000 to 1,600,000 and on June 13, 2016 from 1,600,000 to 2,200,000.

On November 26, 2019, the Company’s

or engage in any material line of business substantially different from our current lines of business.

In the event we issue any options, convertible securities or rights to purchase stock or other securities pro rata

to the holders of common stock, then a holder of Series G preferred stock will be entitled to acquire, upon the same terms a pro

rata amount of such stock or securities as if the Series G preferred stock had been converted to common stock.

On November 26, 2019, the Company’s

shareholders approved the CorMedix Inc.

2019 Omnibus Stock Incentive Plan (the “2019 Plan”).

Pursuant to the 2019 Plan

and subject to certain adjustments as described below, the Company may issue up to 3,000,000 shares of its common stock, plus any

shares that remain available for grant under its 2013 Plan as of the effective date (up to a maximum carry-forward of 522,606 shares

plus any outstanding options under the 2013 Plan that were canceled, forfeited and expired after the approval of the 2019 Plan),

as long-term equity incentives to the Company’s employees, consultants, and directors.

The long-term incentives may be in

the form of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, or

other rights or benefits (collectively, stock rights) to employees, consultants, and directors of the Company or a related entity

(collectively, participants).

The Company believes that the effective use of long- term equity incentives is essential to attract,

motivate, and retain employees, consultants and directors, to further align participants’

interests with those of the Company’s

stockholders, and to provide participants incentive compensation opportunities that are competitive with those offered by other

companies in the same industry and locations as the Company.

The 2019 Plan is a new equity compensation

plan for the Company’s employees, consultants, and directors which replaced the 2013 Plan.

2019 Omnibus Stock Incentive Plan (the “2019 Plan”).

Pursuant to the 2019 Plan and

subject to certain adjustments as described below, the Company may issue up to 3,000,000 shares of its common stock, plus any shares that

remain available for grant under its 2013 Stock Incentive Plan (the “2013 Plan”) as of the effective date (up to a maximum

carry-forward of 522,606 shares plus any outstanding options under the 2013 Plan that were canceled, forfeited and expired after the approval

of the 2019 Plan), as long-term equity incentives to the Company’s employees, consultants, and directors.

The long-term incentives

may be in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights,

or other rights or benefits (collectively, stock rights) to employees, consultants, and directors of the Company or a related entity (collectively,

participants).

The Company believes that the effective use of long- term equity incentives is essential to attract, motivate, and retain

employees, consultants and directors, to further align participants’ interests with those of the Company’s stockholders, and

to provide participants incentive compensation opportunities that are competitive with those offered by other companies in the same industry

and locations as the Company.

The 2019 Plan is a new equity

compensation plan for the Company’s employees, consultants, and directors which replaced the 2013 Plan.

The 2013 Plan and the Amended

and Restated 2006 Stock Incentive Plan (the “2006 Plan”) are referred to collectively as the “Prior Plans”.

No further awards will be granted under the Prior Plans after the approval of the 2019 Plan.

Awards outstanding under the Prior

Plans will remain outstanding in accordance with their terms and the Prior Plans.

During the year ended December 31, 2019,

the Company granted ten-year qualified and non-qualified stock options to its officers, directors, employees and consultants covering

an aggregate of 496,300 shares of the Company’s common stock under the 2013 Plan.

The weighted average exercise price of

these options is $7.64 per share.

During the years ended December 31, 2019

and 2018, total compensation expense for stock options issued to employees, directors, officers and consultants was $2,242,000

and $1,018,000, respectively.

As of December 31, 2019, there was $1,856,000 total unrecognized compensation expense related to

unvested stock options granted which expense is expected to be recognized over an expected remaining weighted average period of

All share-based awards are recognized on a straight-line method, assuming all awards granted will vest.

of share-based awards are recognized in the period in which they occur.

The fair value at grants dates of the grants

issued subject to service and performance-based vesting conditions were determined using the Black-Scholes option pricing model

with the following assumptions:

and Restated 2006 Stock Incentive Plan are referred to collectively as the “Prior Plans”.

No further awards will be granted

under the Prior Plans after the approval of the 2019 Plan.

Awards outstanding under the Prior Plans will remain outstanding in accordance

with their terms and the Prior Plans.

the year ended December 31, 2020, the Company granted ten-year qualified and non-qualified stock options to its officers, directors,

employees and consultants covering an aggregate of 1,111,984 shares of the Company’s common stock under the 2019 Plan.

weighted average exercise price of these options is $ 5.11 per share.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

the year ended December 31, 2019, the Company granted ten-year qualified and non-qualified stock options to its officers, directors,

employees and consultants covering an aggregate of 496,300 shares of the Company’s common stock under the 2013 Plan.

weighted average exercise price of these options is $ 7.64 per share.

During the years ended December 31, 2020 and 2019, total compensation

expense for stock options issued to employees, directors, officers and consultants was $2,489,000 and $2,242,000, respectively.

As of December 31, 2020, there was $ 3,284,000 total unrecognized compensation expense related to unvested stock options granted

which expense is expected to be recognized over an expected remaining weighted average period of 1.7 years.

All share-based awards

are recognized on a straight-line method, assuming all awards granted will vest.

Forfeitures of share-based awards are recognized

in the period in which they occur.

fair value at grants dates of the grants issued subject to service and performance-based vesting conditions were determined using

the Black-Scholes option pricing model with the following assumptions:

Year Ended December 31,

3 unchanged sentences

Expected volatility

102.7 % - 107.9 %

103 % - 110 %

Expected term (years)

1 unchanged sentence

Weighted-average grant date fair value of options granted during the period

The Company estimated the expected term

of the stock options granted based on anticipated exercises in future periods.

The expected term of the stock options granted to

consultants 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 since the initial public offering of the Company’s common

stock in March 2010.

The expected dividend yield of 0.0% 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 which is 5 years for

employees and 10 years for non-employees.

The following table summarizes

the Company’s stock options activity and related information for the year ended December 31, 2019:

Company estimated the expected term of the stock options granted based on anticipated exercises in future periods.

term of the stock options granted to consultants is based upon the full term of the respective option agreements.

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

public offering of the Company’s common stock in March 2010.

The expected dividend yield of 0.0 % 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 which is 5 years for employees and 10 years for non-employees.

following table summarizes the Company’s stock options activity and related information for the year ended December 31,

Shares Underlying Stock Options

6 unchanged sentences

Expected to vest in the future

The total intrinsic value of stock options

exercised during the years ended December 31, 2019 and 2018 was $154,589 and $42,400, respectively.

The aggregate intrinsic value

is calculated as the difference between the exercise prices of the underlying options and the quoted closing price of the common

stock of the Company at the end of the reporting period for those options that have an exercise price below the quoted closing

The following table is the summary of warrant

No stock options were exercised during the year ended December

31, 2020 and for the year ended December 31, 2019, the total intrinsic value of stock options exercised was $ 154,589 .

The aggregate

intrinsic value is calculated as the difference between the exercise prices of the underlying options and the quoted closing price

of the common stock of the Company at the end of the reporting period for those options that have an exercise price below the quoted

closing price.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

following table is the summary of warrant activities:

Shares Underlying Warrants

1 unchanged sentence

Outstanding at December 31, 2019

Canceled in connection with the Exchange Agreement

Outstanding at December 31, 2020

On December 31, 2018, the Company sold

to Elliott a senior secured convertible note in the aggregate principal amount of $7,500,000 and a warrant to purchase up to

an aggregate of 90,000 shares of common stock, for gross proceeds of $7,500,000.

The warrant is immediately exercisable, has

an exercise price of $7.50 per share, subject to adjustment in the event of stock dividends and distributions, stock splits,

stock combinations, or reclassifications affecting the Company’s common stock, and has a term of five years (see Note

On December 31, 2018, the Company amended and restated the following warrants held by Elliott and its affiliates to

reduce the exercise price of each warrant to $0.001 per share:

December 31, 2018, the Company sold to Elliott a senior secured convertible note in the aggregate principal amount of $7,500,000

and a warrant to purchase up to an aggregate of 90,000 shares of common stock, for gross proceeds of $7,500,000.

The warrant is

immediately exercisable, has an exercise price of $7.50 per share, subject to adjustment in the event of stock dividends and distributions,

stock splits, stock combinations, or reclassifications affecting the Company’s common stock, and has a term of five years

(see Note 6).

On December 31, 2018, the Company amended and restated the following warrants held by Elliott and its affiliates

to reduce the exercise price of each warrant to $0.001 per share:

warrants issued in May 2013 to purchase up to an aggregate of

100,000 shares of the Company’s common stock with a pre-amendment exercise price of $3.25 per share and an expiration

date of May 30, 2019 (the “May 30, 2019 Warrants”);

and warrants issued in October 2013 to purchase up to an

aggregate of 150,000 shares of common stock with a pre-amendment exercise price of $4.50 per share and an expiration date of

October 22, 2019 (the “October 22, 2019 Warrants”).

The incremental cost of approximately $710,000 associated

with the warrant modification was recorded as a debt discount.

The senior secured convertible note and warrant to purchase up

to an aggregate of 90,000 shares of the Company’s common stock were cancelled in connection with the terms of the

Exchange Agreement.

The fair value of the warrant was determined

using a Black-Scholes option pricing model using the following assumptions at the grant date of the warrant:

Expected Term

100,000 shares of the Company’s common stock with a pre-amendment exercise price of $3.25 per share and an expiration date

of May 30, 2019 (the “May 30, 2019 Warrants”);

and warrants issued in October 2013 to purchase up to an aggregate

of 150,000 shares of common stock with a pre-amendment exercise price of $4.50 per share and an expiration date of October 22,

2019 (the “October 22, 2019 Warrants”).

The incremental cost of approximately $710,000 associated with the warrant

modification was recorded as a debt discount.

The senior secured convertible note and warrant to purchase up to an aggregate of

90,000 shares of the Company’s common stock were cancelled in connection with the terms of the Exchange Agreement.

fair value of the warrant was determined using a Black-Scholes option pricing model using the following assumptions at the grant

date of the warrant:

Dividend yield

Exercise Price

Risk-free interest rate

Risk-free interest

September 25, 2019, the Company entered into Letter Agreements with Holders of Series B Warrants.

Pursuant to each Letter Agreement,

the Company agreed to reduce the exercise price of each Holder’s Series B Warrants from $5.25 to $4.00, provided that the

the Company agreed to reduce the exercise price of each Holder’s Series B Warrants from $ 5.25 to $ 4.00 , provided that the

Holder exercised its Warrant for cash at the time of entry into such Letter Agreement.

1 unchanged sentence

in full and the Company issued an aggregate of 1,224,263 shares of Common Stock to them.

The Company received net proceeds of approximately

As a result of the modification of the exercise price of these warrants, the Company recognized an incremental value

of $369,500, which was recorded as a deemed dividend on the consolidated statement of operations and comprehensive loss for the

year ended December 31, 2019, using the Black-Scholes pricing model with the following assumptions:

The Company received net proceeds of

approximately $ 4,900,000 .

As a result of the modification of the exercise price of these warrants, the Company recognized an incremental

value of $ 369,500 , which was recorded as a deemed dividend on the consolidated statement of operations and comprehensive loss

for the year ended December 31, 2019, using the Black-Scholes pricing model with the following assumptions:

Expected term

1 unchanged sentence

Risk-free interest rate

During the year ended

December 31, 2019, the expiration date of a warrant to purchase up to 100,000 shares of the Company’s common stock was extended

from May 30, 2019 to August 16, 2019, then subsequently canceled in connection with the Exchange Agreement transaction (see Note

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued )

the year ended December 31, 2019, the expiration date of a warrant to purchase up to 100,000 shares of the Company’s common

stock was extended from May 30, 2019 to August 16, 2019 , then subsequently canceled in connection with the Exchange Agreement

transaction (see Note 6).

The warrant had an exercise price of $ 0.005 .

The incremental value of the warrant extended was immaterial.

During the year ended December 31, 2019,

the Company issued an aggregate of 1,948,207 shares of its common stock upon exercise of warrants, resulting in net proceeds of

Stock-based Deferred Compensation Plan for Non-Employee

In 2014, the Company established an unfunded

stock-based deferred compensation plan, providing non-employee directors the opportunity to defer up to one hundred percent of

fees and compensation, including restricted stock units.

The amount of fees and compensation deferred by a non-employee director

is converted into stock units, the number of which is determined based on the closing price of the Company’s common stock

on the date such compensation would have otherwise been payable.

At all times, the plan participants are one hundred percent

vested in their respective deferred compensation accounts.

On the tenth business day of January in the year following a director’s

termination of service, the director will receive a number of common shares equal to the number of stock units accumulated in the

director’s deferred compensation account.

The Company accounts for this plan as stock-based compensation under ASC

During the year ended December 31, 2019 and 2018, the amount of compensation that was deferred under this plan was $36,500

and $30,000, respectively.

Note 9 —

the year ended December 31, 2020, the Company issued an aggregate of 91,500 shares of its common stock upon exercise of warrants,

resulting in net proceeds of approximately $ 412,000 .

Deferred Compensation Plan for Non-Employee Directors

2014, the Company established an unfunded stock-based deferred compensation plan, providing non-employee directors the opportunity

to defer up to one hundred percent of fees and compensation, including restricted stock units.

The amount of fees and compensation

deferred by a non-employee director is converted into stock units, the number of which is determined based on the closing price

of the Company’s common stock on the date such compensation would have otherwise been payable.

At all times, the plan participants

are one hundred percent vested in their respective deferred compensation accounts.

On the tenth business day of January in the

year following a director’s termination of service, the director will receive a number of common shares equal to the number

of stock units accumulated in the director’s deferred compensation account.

The Company accounts for this plan as stock-based

compensation under ASC 718.

During the year ended December 31, 2020 and 2019, the amount of compensation that was deferred under

this plan was $ 62,250 and $ 36,500 , respectively.

9 — Concentrations:

At December 31, 2019 and 2018, no net accounts

receivable was due from a customer that exceeded 10%.

During the year ended December 31, 2019, the Company had revenue from four

customers that exceeded 10% of its total sales (42%, 18%, 17% and 12%) and the Company had revenue from a single customer that

exceeded 10% of its total sales (70%) for the year ended December 31, 2018.

Note 10 —

The Company entered into an operating lease

for office space in Germany that began in July 2017.

The rental agreement has a three-month term which automatically renews and

includes a monthly cost of 400 Euros.

The Company elected to apply the short-term practical expedient to the office lease.

Company also has an operating lease for office equipment.

Prior to the adoption of ASC 842, operating

lease expense of approximately $6,000 was recognized in the Company’s consolidated statements of operations and comprehensive

loss for the year ended December 31, 2019.

Operating lease expense in the Company’s

consolidated statements of operations and comprehensive loss for the year ended December 31, 2019 was approximately $6,000, which

includes costs associated with leases for which ROU assets have been recognized as well as short-term leases.

At December 31, 2019, the Company has a

total operating lease liability of $4,000.

Approximately $2,000 each are included in accrued expenses and operating lease liabilities,

net of current portion on the consolidated balance sheet.

Operating ROU assets as of December 31, 2019 is $5,000 and is included

in property and equipment, net on the consolidated balance sheet.

For the year ended December 31, 2019, cash

paid for amounts included in the measurement of lease liabilities in operating cash flows from operating leases was $6,000.

The weighted average remaining lease term

and weighted average discount rate for operating leases were 2.8 years and 10%, respectively, as of December 31, 2019.

As of December 31, 2019, maturities of lease

liabilities were as follows:

December 31, 2020 and 2019, one customer exceeded 10 % of the Company’s accounts receivable ( 95 %) and at December 31, 2019,

no customer exceeded 10 % of the Company’s accounts receivable.

During the year ended December 31, 2020, the Company had

revenue from two customers that exceeded 10 % of its total sales ( 58 % and 12 %) and the Company had revenue from four customers

that exceeded 10 % of its total sales ( 42 %, 18 %, 17 % and 12 %) for the year ended December 31, 2019.

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.

Company’s sublease on its previous premises at 400 Connell Drive, Berkeley Heights, New Jersey 07922 terminated on November

Company entered into an operating lease for office space in Germany that began in July 2017.

The rental agreement has a three-month

term which automatically renews and includes a monthly cost of 400 Euros.

The Company elected to apply the short-term practical

expedient to the office lease.

The Company also has an operating lease for office equipment.

lease expense in the Company’s consolidated statements of operations and comprehensive loss for the year ended December

31, 2020 and 2019 was approximately $ 66,000 and $ 6,000 , respectively, which includes costs associated with leases for which ROU

assets have been recognized as well as short-term leases.

December 31, 2020 and 2019, the Company has a total operating lease liability of $ 1,033,000 and $ 4,000 , respectively.

31, 2020, approximately $ 109,000 and $ 924,000 were classified as operating lease liabilities, short-term and operating lease liabilities,

net of current portion, respectively, on the consolidated balance sheet.

At December 31, 2019, approximately $ 2,000 was included

in each operating lease liabilities, short-term and operating lease liabilities, net of current portion on the consolidated balance

Operating ROU assets as of December 31, 2020 and 2019 are $ 1,015,000 and $ 5,000 , respectively.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued)

the year ended December 31, 2020 and 2019, cash paid for amounts included in the measurement of lease liabilities in operating

cash flows from operating leases was $ 48,000 and $ 6,000 , respectively.

of December 31, 2020 and 2019, the weighted average remaining lease term were 6.8 years and 2.8 years, respectively and the weighted

average discount rate of 9% and 10% at December 31, 2020 and 2019, respectively.

of December 31, 2020, maturities of lease liabilities were as follows:

2026 and thereafter

Total future minimum lease payments

Less imputed interest

Note 11 —

11 — Subsequent Events:

During January

2020, the Company sold an aggregate of 368,144 shares of its common stock under the at-the-market program and realized net proceeds

of approximately $2.5 million.

In January 2020,

the Company issued an aggregate of 91,500 shares of its common stock upon exercise of warrants, resulting in net proceeds of approximately

On February 5, 2021,

the Company allocated to its ATM program an additional $25.0 million of the remaining $75.0 million available under its shelf

registration statement.

Giving effect to the additional $25.0 million, plus the $17.8 million available at December 31, 2020,

the Company had a total of $42.8 million available under the ATM program.

During January and February 2021, the Company sold an

aggregate of 3,737,862 shares of its common stock under the ATM program and realized net proceeds of approximately $41.5 million.

As of the filing of this Annual Report on Form 10-K, the Company has no available balance under its ATM program and it has $50.0

million available under its current shelf registration for the issuance of equity, debt or equity-linked securities.

first quarter of 2021, the Company issued an aggregate of 92,167 shares of its common stock upon cashless exercise of 95,286 warrants

and cash exercise of 21,898 warrants, resulting in net proceeds of $115,000.

During the first quarter of 2021,

the Company issued an aggregate of 656,069 shares of its common stock upon conversion of 10,001 Series G preferred shares by Elliott and

50,000 Series C-3 preferred shares by an unrelated party.

As previously announced, the NJEDA

has approved the Company’s application to participate in the NJEDA Program for the state fiscal year 2020.

The approval will

allow the Company to sell approximately $1.3 million of the total $1.3 million in available tax benefits to an unrelated, profitable New

Jersey corporation in return for approximately $1.3 million in cash.

Closing is subject to NJEDA’s typical closing conditions, which

are in process of completion.

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 9A. Controls and Procedures