CorMedix Inc. 10-K

Item 9A. Controls and Procedures As 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 the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness 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 concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting during our year ended December 31, 2023, or in other factors that could significantly affect these controls, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 42 Management’s Annual Report on Internal Controls Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements in accordance with U.S. generally 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. 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. 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, 2023, 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. Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2023. Item 9B. Other Information Not applicable . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 43 PART III Item 10. Directors, Executive Officers, and Corporate Governance We have adopted a written Code of Conduct and Ethics that applies to our directors, executive officers and all employees. We intend to disclose any amendments to, or waivers from, our code of ethics and business conduct that are required to be publicly disclosed pursuant to rules of the SEC by filing such amendment or waiver with the SEC. This code of ethics and business conduct can be found in the “Investors - Corporate Governance” section of our website, www.cormedix.com . Directors The following table sets forth the name, age and position of each of our directors as of February 15, 2024: Name Age Director Since Position(s) with CorMedix Joseph Todisco 48 March 2022 Director and Chief Executive Officer Janet Dillione 64 August 2015 Director Gregory Duncan 59 November 2020 Director Alan W. Dunton 69 March 2019 Director Myron Kaplan 78 April 2016 Director and Chairman of the Board Steven Lefkowitz 67 June 2017 Director Robert Stewart 55 April 2023 Director Joseph Todisco became a director of CorMedix in March 2022. He was a senior executive at Amneal Pharmaceuticals for 11 years prior to joining CorMedix. He held various roles at Amneal Pharmaceuticals, most recently as Executive Vice President, Chief Commercial Officer where he was responsible for Amneal Specialty, a growing branded products business. During his tenure at Amneal, Mr. Todisco held roles overseeing corporate development and international operations, leading commercial teams in several international markets including the UK, Australia and Germany, as well as leading Amneal’s merger integration with Impax Laboratories in 2018. He was previously Co-Founder and managing executive of Gemini Laboratories, a specialty pharmaceutical company focused on the sales and marketing for niche branded products in the US Market. Gemini Laboratories was established as an affiliate of Amneal Pharmaceuticals and was subsequently acquired by Amneal in 2018. Prior to joining Amneal, Mr. Todisco was Vice President, Business Development & Licensing at Ranbaxy, Inc. where he was responsible for developing and executing Ranbaxy’s North American commercial business strategy. Prior to Ranbaxy, he held various roles at Par Pharmaceutical, and in his earlier career held positions at Oppenheimer & Company and Marsh & McLennan Companies. Mr. Todisco obtained his MBA in finance from Fordham Graduate School of Business and his BA in Economics from Georgetown University. Among other qualifications, attributes and skills, Mr. Todisco’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. Since November 2020, Ms. Dillione has served as the Chief Executive Officer of Connect America, a nationally recognized leader in comprehensive telehealth and remote patient monitoring solutions. Prior to joining Connect America and starting in May 2014, she served as Chief Executive Officer of Bernoulli Enterprise, Inc., 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. Ms. Dillione currently serves as a director of Vizient, Inc., a private health care performance improvement company. Ms. 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. Among other qualifications, attributes and skills, Ms. Dillione’s financial and IT 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. 44 Gregory Duncan has been a director of CorMedix since November 2020. Mr. 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, Mr. Duncan served as President and CEO of Celtaxsys, a privately held biotechnology company focused on cystic fibrosis and other rare, inflammatory diseases. Mr. 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, as well as an executive committee member. Prior to his roles with UCB, Mr. Duncan spent approximately 17 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. Mr. 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. Alan W. Dunton, M.D. has been a director of CorMedix since March 2019. He is the founder and principal consultant of Danerius, LLC, a biotechnology and pharmaceutical consulting business which he started in 2006. From 1994, he served in senior positions in Research and Development in the Pharmaceutical Division of Johnson and Johnson including President and Managing Director of the Janssen, the major research, development and regulatory arm of the pharmaceuticals division at Johnson & Johnson. From January 2007 through March 2009, Dr. Dunton served as President and Chief Executive Officer of Panacos Pharmaceuticals, Inc. 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. In addition to CorMedix, Dr. Dunton currently serves on the boards of three public companies, as a Director at Palatin Technologies, Inc. and Oragenics, Inc. he chairs the Compensation Committees of both companies. He also serves as a member of the Audit Committees of these companies. Additionally, Dr. Dunton is a member of the board of Recce Pharma Ltd., an Australian public biotechnology company focused on developing novel anti-infectives for serious and life-threatening diseases. Dr. 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. 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 and became Chairman of the Board in August 2017. 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 fifty years. In 2012, Mr. 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). Mr. 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. Steven 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. Mr. Lefkowitz has been the President and Founder of Wade Capital Corporation, a financial advisory services company since June 1990. Mr. Lefkowitz has been a director of both public and private companies. Mr. Lefkowitz received his A.B. from Dartmouth College in 1977 and his M.B.A. from Columbia University in 1985. 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. 45 Robert Stewart became a director of CorMedix in April 2023. Mr. Stewart is the current Chief Executive Officer of Theramex, a global specialty pharmaceutical company dedicated to women’s health, and has served in this role since March 2020. Prior to this, Mr. Stewart served as Chief Executive Officer of Amneal Pharmaceuticals Inc. from 2018 to 2019, and from 2009 through 2018 Mr. Stewart served in senior roles with Allergan, formerly Watson and Actavis, most notably as Chief Operating Officer (2015 – 2018) and President, Global Operations (2009 – 2015). Mr. Stewart has also previously held management roles with Abbott Laboratories, Knoll Pharmaceutical Company, and Hoffmann La Roche, Inc. Mr. Stewart currently sits on the Board of Directors of Cipla Ltd and serves on the Board of Trustees for Fairleigh Dickinson University. Mr. Stewart obtained his bachelor’s degree in Finance & Business Management from Fairleigh Dickinson University. Among other qualifications, Mr. Stewarts significant depth of experience in the pharmaceutical industry, including service as an executive director of other 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. Board Independence Our common stock is listed on the Nasdaq Global Market. Under the rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors. In addition, the rules of Nasdaq require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent. Under the rules of Nasdaq, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Additionally, compensation committee members must not have a relationship with us that is material to the director’s ability to be independent from management in connection with the duties of a compensation committee member. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board of directors committee: (i) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or (ii) be an affiliated person of the listed company or any of its subsidiaries. Our Board has undertaken a review of the independence of our directors and has determined that (i) all current directors other than Mr. Todisco 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. Board Committees Our Board has established an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. Our Audit Committee currently consists of Mr. Lefkowitz (Chair), Dr. Dunton and Mr. Duncan. Our Compensation Committee currently consists of Ms. Dillione (Chair), Dr. Dunton and Mr. Duncan. Our Nominating and Governance Committee currently consists of Mr. Kaplan (Chair), Ms. Dillione, and Mr. Stewart. The membership of these committees may be changed after our next 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” tab. From time to time, the Board also conducts business through other duly appointed committees, such as the Strategy Committee, that are established on an ad hoc basis. The Strategy Committee was formed by the Board to evaluate and oversee certain of the Company’s strategic planning activities. In 2023, the Strategy Committee acted by unanimous written consent on one occasion and held no committee meetings. The Strategy Committee consists of Steve Lefkowitz, Myron Kaplan and Rob Stewart. 46 Audit Committee The Audit Committee assists the Board in its oversight of 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. 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. Lefkowitz, Dr. 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 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 The Compensation Committee reviews and approves our compensation policies and all forms of compensation to be provided to our executive officers, including, among other things, annual salaries, bonuses, and other incentive compensation arrangements. The Compensation Committee also reviews and makes recommendations to our Board regarding changes in director compensation. In addition, the Compensation Committee administers our equity compensation plans, including granting stock options to our executive officers. The Compensation Committee also reviews and approves employment agreements with executive officers and other compensation policies and matters. Pursuant to its charter, the Compensation Committee has the power to form and delegate authority to subcommittees and to delegate authority to one or more members of the Compensation Committee. Since 2016, the Company and the Compensation Committee 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 Nasdaq Global Market Listing Rules and concluded that no conflict of interest exists that would prevent Frederic W. Cook & Co. 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. 47 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 the name, age and position of each of our executive officers as of December 31, 2023: Name Age Position(s) with CorMedix Joseph Todisco 48 Chief Executive Officer Matthew David 46 Executive Vice President and Chief Financial Officer Beth Zelnick Kaufman 63 Executive Vice President and Chief Legal Officer and Corporate Secretary Erin Mistry 42 Executive Vice President and Chief Commercial Officer Elizabeth Hurlburt 45 Executive Vice President and Head, Clinical and Medical Affairs Phoebe Mounts 73 Former Executive Vice President and General Counsel and Head of Regulatory, Compliance and Legal See the biography for Joseph Todisco under “Directors.” Matthew David . M.D ., became our Executive Vice President and Chief Financial Officer in May 2020. From October 4, 2021 through May 10, 2022, Dr. David also served as our interim Chief Executive Officer in addition to his role as Chief Financial Officer. Prior to joining us, he most recently served 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 2018. 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. Dr. David began his career as a surgical resident at Beth Israel Hospital, after receiving an M.D. from NYU School of Medicine. Dr. David earned his Bachelor of Arts degree in Chemistry, magna cum laude, from Dartmouth College. Beth Zelnick Kaufman became our Executive Vice President and Chief Legal Officer and Corporate Secretary on December 12, 2023. She has more than two decades of legal, compliance and operations experience in the life sciences industry. Prior to joining CorMedix, she most recently served as Chief Legal and Administrative Officer and Corporate Secretary of Akorn Pharmaceuticals, a specialty and generic pharmaceuticals company. Ms. Zelnick Kaufman also served in several roles at Amneal Pharmaceuticals, a publicly traded global generics, biosimilars and branded pharmaceuticals company, including roles as Assistant General Counsel, Vice President, Legal Affairs, and Head of Government Affairs. During her tenure at these and other pharmaceutical companies, Ms. Zelnick Kaufman gained deep experience in the pharmaceutical industry across legal, regulatory, government affairs, and other operational areas. Earlier in her career, Ms. Zelnick Kaufman held roles at Actavis, Alpharma and Topcon America and spent time as an Associate in the law firm Brown, Rudnick. Erin Mistry became our Senior Vice President of Payer Strategy, Government Affairs and Trade in March 2020. Her current role is Executive Vice President and Chief Commercial Officer, effective January 2023. Prior to joining CorMedix, Erin held roles as VP market access at Intarcia therapeutics as well as Senior Managing Director of the global Value and Access practice at Syneos Health. During her career, Erin has worked with emerging, mid-size, and large biopharma companies with a focus on pricing, access and reimbursement. She currently serves on the boards of Incubate Coalition and the AntiMicrobial Working Group, both in Washington, DC. Erin holds a B.S. in Industrial Engineering (healthcare) and an M.S. in Biomechanical Engineering from North Carolina State University. Elizabeth Hurlburt became our Executive Vice President and Head of Clinical Operations in March 2018. Her current role is Executive Vice President and Head of Clinical and Medical Affairs, effective May 2022. Prior to her employment, Ms. 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. Ms. Hurlburt received her B.A. in Leadership and Organizational Management from Bay Path College and a M.S. in Management and Leadership from Western Governors University. On December 31, 2023, Phoebe Mounts, our former Executive Vice President and General Counsel and Head of Regulatory, Compliance and Legal, voluntarily resigned effective December 31, 2023. See Item 11, Executive Compensation , for further detail on the terms of Ms. Mounts’ separation with the Company. 48 Item 11. Executive Compensation DIRECTOR COMPENSATION Director Compensation in Fiscal 2023 The following table shows the compensation earned by each of our non-employee directors for the year ended December 31, 2023: Name Fees Earned or Paid in Cash ($) Option Awards (1)(2) ($) Total ($) Paulo F. Costa (3) 65,242 69,420 134,662 Janet Dillione 78,000 69,420 147,420 Gregory Duncan 72,000 69,420 141,420 Alan W. Dunton 72,000 69,420 141,420 Myron Kaplan 122,543 69,420 191,963 Steven Lefkowitz 93,000 69,420 162,420 Robert Stewart 43,587 158.995 202,582 (1) The amounts included in this column are the dollar amounts representing the full grant date fair value of each stock option 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. For information on the valuation assumptions used in calculating these amounts, see Note 7 to our audited financial statements included in this Annual Report on Form 10-K. 49 (2) As of December 31, 2023, the number of shares underlying options held by each non-employee director was as follows: 83,750 shares for Mr. Costa; 145,000 shares for Ms. Dillione; 82,500 for Mr. Duncan; 112,500 shares for Dr. Dunton; 126,000 shares for Mr. Kaplan; 108,000 shares for Mr. Lefkowitz; and 39,200 shares for Mr. Stewart. (3) Effective October 15, 2023, Mr. Costa ceased as a member of the Company’s board of directors. Director Compensation Plan The Board, following the recommendation of the Compensation Committee and, based on advice of Frederic W. Cook & Co., determined that no adjustment was needed with regard to Board and committee cash compensation for 2023. The 2023 compensation program is set forth below in the table. Each year we make an annual grant of stock options to each non-employee director with respect to 20,000 shares and we make an initial grant of stock options to new non-employee directors with respect to 25,000 shares, prorated as appropriate. On March 5, 2024, the Board approved an increase in the annual and initial grant of stock options to non-employee directors, whereby such directors will receive an annual option grant with respect to 30,000 shares (from 20,000 shares) and new non-employee directors will receive an initial option grant with respect to 30,000 shares (from 25,000 shares). All stock options 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 based upon the closing sales price for our stock on the date of grant. Cash ($) Stock Options (#) Annual Fee 55,000 First Election to Board 25,000 (1) Annual Grant, Prorated in First Year Following Election to the Board 20,000 (2) Additional Annual Fee - Board Chair 45,000 Additional Annual Fee - Audit Chair 23,000 Additional Annual Fee - Compensation Chair 18,000 Additional Annual Fee - Nomination and Governance Chair 14,000 Additional Annual Fee - Audit Committee Non-Chair Members 10,000 Additional Annual Fee - Compensation Committee Non-Chair Members 7,000 Additional Annual Fee - Nomination and Governance Committee Non-Chair Members 5,000 Additional Annual Fee - Strategic Committee Members 15,000 (1) Vests one third each on the date of grant and the first and second anniversary date of grant. (2) Vests monthly over one year after the grant date. We maintain 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 to 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 is 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 beneficiary, as applicable. 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. 50 EXECUTIVE COMPENSATION 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, 2023 and 2022: Name and Principal Position Year Salary ($) Stock Awards (1) ($) Option Awards (1) ($) Non-equity Incentive Plan Compensation ($) All Other Compensation ($) Total ($) Joseph Todisco 2023 616,962 -- 1,388,400 401,700 52,370 (2) 2,459,342 Chief Executive Officer 2022 378,461 701,245 1,273,500 305,760 32,223 2,691,189 Matthew David 2023 389,135 -- 433,875 156,000 52,140 (2) 1,031,150 Chief Financial Officer 2022 393,462 -- 305,900 389,485 47,697 1,136,544 Erin Mistry (3) 2023 389,577 -- 694,200 156,800 -- 1,240,577 Executive Vice President and Chief Commercial Officer Phoebe Mounts (4) 2023 375,000 -- 433,875 112,500 333,207 (5) 1,254,582 Former Executive Vice President and General Counsel and Head of Regulatory, Compliance and Legal 2022 375,000 -- 428,260 195,075 12,146 1,010,481 (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. (2) Represents premiums paid by us for health benefits and 401(k) plan employer match. (3) Ms. Mistry became our Chief Commercial Officer on January 15, 2023. Ms. Mistry was not an executive officer during 2022. (4) Dr. Mounts’ service as an executive officer ceased on December 12, 2023, but her employment continued through December 31, 2023. (5) Represents premiums paid by us for health benefits, Dr. Mounts’ 401(k) employer match for 2023, Dr. Mounts’ cash severance and accrued but unpaid paid time off through her termination date. Narrative Disclosure to Summary Compensation Table Employment Agreements with Named Executive Officers Joseph Todisco On March 16, 2022, we entered into an employment agreement with Mr. Todisco, our Chief Executive Officer. The term of the employment agreement will automatically renew for additional successive one-year periods on March 16 th of each calendar year, unless either party notifies the other in writing at least 90 days before the expiration of the then-current term that the term will not be renewed. Mr. Todisco is entitled to an annual salary of $618,000 (effective January 2023), and his target annual bonus is 65% of his base salary, with the actual bonus entitlement based on the achievement of specified Company objectives. Matthew David On May 11, 2020, we entered into an employment agreement with Dr. David to serve as our Executive Vice President and Chief Financial Officer. The term will automatically renew for additional successive one-year periods on May 11 th of each calendar year, unless either party notifies the other in writing at least 90 days before the expiration of the then-current term that the term will not be renewed. Dr. David is entitled to an annual salary of $390,000 (effective January 2023), and his target annual bonus is 40% of his base salary, with the actual bonus entitlement based on the achievement of specified Company objectives. 51 Erin Mistry On January 15, 2023, we entered into an employment agreement with Ms. Mistry to serve as Executive Vice President and Chief Commercial Officer. After the initial three-year term of the employment agreement, the term 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 term will not be renewed. Ms. Mistry receives an annual salary of $392,000, and her target annual bonus is 40% of her base salary, with the actual bonus entitlement based on the achievement of specified Company objectives. Phoebe Mounts Until December 12, 2023, Dr. Mounts served as our Executive Vice President and General Counsel and Head of Regulatory, Compliance and Legal and received an annual salary of $375,000, with a target annual bonus of 30% of her base salary, with the actual bonus entitlement based on the achievement of specified Company objectives. In connection with her departure, the Company and Dr. Mounts entered into a separation agreement which provided for severance benefits, including continued payment of her base salary for nine months, payment of her 2023 target annual bonus, and accelerated vesting of her time-based stock options that were otherwise scheduled to vest on or before the first anniversary of her termination date. For additional information regarding Dr. Mounts’ separation agreement, please see the section titled “ Potential Payments on a Qualifying Termination .” Potential Payments Upon Termination or Change in Control The following provisions of the employment agreements with our Named Executive Officers are identical except where noted. In the event that a Named Executive Officer’s employment is terminated during the term of his or her employment agreement by the Company other than for Cause (other than as a result of death or disability), or by the Named Executive Officer for Good Reason (as defined in the employment agreement), the Named Executive Officer will, subject to execution of a general release of claims, be entitled to: (i) a continuation of base salary for a period of nine months; except that Mr. Todisco’s base salary will continue for 12 months (or 18 months if such termination occurs within 24 months following a corporate transaction (as defined in the employment agreement)); (ii) payment on a prorated basis for any target bonus for the year of termination based on the actual achievement of the specified bonus objectives (or in the case of Mr. Todisco only, for 18 months, if such termination occurs within 24 months following a corporate transaction); (iii) subsidized COBRA premiums for up to nine months (or in the case of Mr. Todisco only, for 18 months, if such termination occurs within 24 months following a corporate transaction); and (iv) one year of additional time vesting of the Named Executive Officer’s then-outstanding equity awards (and in the case of Mr. Todisco, accelerated vesting of the restricted stock units granted to him on May 10, 2022), or full vesting if such termination occurs within 24 months following a corporate transaction. Dr. Mounts’ separation agreement provides for severance benefits consistent with the terms of her employment agreement in connection with a termination without “cause” prior to a corporate transaction. Specifically, in exchange for a general release of claims in favor of the Company and its affiliates, Dr. Mounts’ cooperation with the transition of her position, and continued compliance with certain restrictive covenants, the Company agreed to provide Dr. Mounts with (i) a continuation of base salary ($31,250 per month) for a period of nine months, (ii) payment of her full 2023 target annual bonus (as reflected in the “ Non-equity Incentive Plan Compensation ” column of the Summary Compensation Table), and (iii) one year of additional time vesting of her then-outstanding options. 52 Non-Compete Covenants Each of our Named Executive Officers 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 DefenCath/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 (or in the case of Dr. David and Mr. Todisco, worldwide) on the date of termination of his or her employment for a period of 12 months following any termination of employment. Equity Plan The Company maintains the CorMedix Inc. Amended and Restated 2019 Omnibus Stock Incentive Plan pursuant to which it has granted equity awards to the Named Executive Officers, as well as other employees and service providers. 2023 Equity Awards Mr. Todisco was granted stock options to purchase 400,000 shares of the Company’s Common Stock on January 14, 2023. The options granted to Mr. Todisco are scheduled to vest over a period of three years (with the first 25% vesting on the date of the grant, and the remainder scheduled to vest in equal annual installments over the next three years thereafter, subject to continued employment). Dr. David was granted stock options to purchase 125,000 shares of the Company’s Common Stock on January 14, 2023. The options granted to Dr. David are scheduled to vest over a period of three years (with the first 25% vesting on the date of the grant, and the remainder scheduled to vest in equal annual installments over the next three years thereafter, subject to continued employment). Ms. Mistry was granted stock options to purchase 200,000 shares of the Company’s Common Stock on January 14, 2023. The options granted to Ms. Mistry are scheduled to vest over a period of three years (with the first 25% vesting on the date of the grant, and the remainder scheduled to vest in equal annual installments over the next three years thereafter, subject to continued employment). Dr. Mounts was granted stock options to purchase 125,000 shares of the Company’s Common Stock on January 14, 2023. The options granted to Dr. Mounts were scheduled to vest over a period of three years (with the first 25% vesting on the date of the grant, and the remainder scheduled to vest in equal annual installments over the next three years thereafter, subject to continued employment). 53 Outstanding Equity Awards at Fiscal Year-End 2023 The following table contains certain information concerning unexercised options for the Named Executive Officers as of December 31, 2023. Option Awards Stock Awards Name Number of Shares Underlying Unexercised Options (#) Exercisable Number of Shares Underlying Unexercised Options (#) Unexercisable (1) Equity Incentive Plan Awards: Number of Shares Underlying Unexercised Unearned Options # (2) Option Exercise Price ($) Option Expiration Date Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested # Equity Incentive Plan Awards: FMV or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested $ (3) Joseph Todisco 125,000 375,000 -- 3.38 05/09/2032 103,735 (4) 390,044 100,000 300,000 -- 4.43 01/14/2033 -- -- Matthew David 101,917 20,750 -- 5.63 05/11/2030 -- -- 101,917 20,750 -- 4.08 05/11/2030 -- -- 30,000 10,000 -- 8.32 01/10/2031 -- -- 93,750 31,250 -- 5.56 10/31/2031 -- -- 50,000 50,000 -- 4.03 02/17/2032 -- -- 31,250 93,750 -- 4,43 01/14/2033 Erin Mistry 77,500 2,500 -- 3.57 04/13/2030 -- -- 7,500 2,500 -- 8.32 01/10/2031 -- -- 10,500 10,500 -- 4.03 02/17/2032 -- -- 60,000 60,000 -- 5.45 07/20/2032 -- -- 50,000 150,000 -- 4.43 01/14/2033 -- -- Phoebe Mounts (5) 60,000 -- -- 7.92 12/31/2024 -- -- 24,764 -- -- 5.63 12/31/2024 -- -- 50,000 -- -- 4.08 12/31/2024 -- -- 50,000 -- -- 5.63 12/31/2024 -- -- 70,000 -- -- 8.32 12/31/2024 -- -- 100,000 -- -- 5.56 12/31/2024 -- -- 105,000 -- -- 4.03 12/31/2024 -- -- 62,500 -- -- 4.43 12/31/2024 (1) Vesting based on continued employment over four years. 54 (2) Options vest based on achievement of specific milestones and continued employment and become exercisable if and when a milestone is achieved. (3) Fair market value of the shares that could be acquired based on the closing sale price per share of our common stock on the Nasdaq Global Market on December 31, 2023, which was $3.76. (4) Each restricted stock unit represents the right to receive one share of our common stock. The restricted stock units vest as follows: 50% on the first anniversary of the grant date, 30% on the second anniversary of the grant date, and the remaining 20% on the third anniversary of the grant date, subject to continued service through the applicable vesting date. (5) Dr. Mounts ceased serving as our General Counsel and Head of Regulatory, Compliance and Legal effective December 12, 2023, but her employment continued through December 31, 2023. Potential Payments on a Qualifying Termination If the severance payments called for in our employment agreements for Mr. Todisco, Dr. David and Ms. Mistry had been triggered on December 31, 2023, we would have been obligated to make the following payments as described in more detail under the “ Potential Payments Upon Termination or Change in Control ” summary above: Name Cash Severance ($) COBRA Subsidy ($) Accelerated Equity Vesting ($) (1) Total ($) Joseph Todisco (no Corporate Transaction) 618,000 42,831 437,544 1,098,375 Joseph Todisco (within 24 months following a Corporate Transaction) 927,000 64,246 532,544 1,230,790 Matthew David (no Corporate Transaction) 292,500 31,863 0 324,363 Matthew David (within 24 months following a Corporate Transaction) 292,500 31,863 0 324,363 Erin Mistry (no Corporate Transaction) 294,003 0 475 294,578 Erin Mistry (within 24 months following a Corporate Transaction) 294,003 0 475 294,578 (1) With respect to outstanding stock options, represents 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 Nasdaq Global Market on December 31, 2023, which was $3.76, and the exercise prices of the applicable stock options. With respect to restricted stock units, represents 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 Nasdaq Global Market on December 31, 2023, which was $3.76. Pursuant to Dr. Mounts’ separation agreement, her departure was treated as a termination by the Company without Cause and she will be entitled to receive the severance benefits and payments described under the “ Potential Payments Upon Termination or Change in Control ” summary above. Dr. Mounts is subject to a noncompete covenant that runs through September 30, 2024, consistent with the terms described above under “ Non-Compete Covenants ”. 55 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Beneficial Ownership The following table shows the number of shares of our common stock beneficially owned as of March 7, 2024 by: ● each 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 ● 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 7, 2024 we had 54,981,102 shares of common stock outstanding. Beneficial ownership in each case also includes shares issuable upon vesting of restricted stock units within 60 days from March 7, 2024 and exercise of outstanding options that can be exercised within 60 days after March 7, 2024 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. Common Stock Beneficially Owned (1) Name and Address of Beneficial Owner Shares % 5% or Greater Stockholders Blackrock, Inc. (2) 3,507,695 6.4 % Nomura Global Financial Products, Inc. (3) 2,946,531 5.4 % Directors: Janet Dillione (4) 198,473 * Gregory Duncan (5) 82,500 * Alan W. Dunton (6) 127,750 * Myron Kaplan (7) 307,034 * Steven Lefkowitz (8) 215,650 * Robert Stewart (9) 41,866 * Named Executive Officers: Joseph Todisco (10) 527,210 * Matthew David (11) 510,518 * Beth Kaufman 0 * Elizabeth Hurlburt (12) 415,041 * Erin Mistry (13) 303,761 * Phoebe Mounts (14) 514,464 * All executive officers and directors as a group (11 persons) (15) 2,729,803 4.8 % * Less than 1% (1) Based upon 54,981,102 shares of our common stock outstanding on March 7, 2024 and, with respect to each individual holder, rights to acquire our common stock exercisable within 60 days of March 7, 2024. 56 (2) Based solely on information contained in the Statement on Schedule 13G filed with the SEC on January 29, 2024 by Blackrock, Inc. Blackrock, Inc. reported has sole voting power with respect to 3,480,288 shares of our common stock, has shared voting power with respect to 0 shares of our common stock, has sole dispositive power with respect to 3,507,695 shares of our common stock and has shared dispositive power with respect to 0 shares of our common stock. The business address of Blackrock, Inc. is 50 Hudson Yards, New York, NY 10001. (3) Based solely on information contained in Amendment No. 2 to the Statement on Schedule 13G filed with the SEC on February 14, 2024 by Nomura Global Financial Products, Inc. (“NGFP”). NGFP is a wholly owned subsidiary of Nomura Holdings, Inc., which accordingly may be deemed to beneficially own the shares beneficially owned by NGFP. NGFP reported has sole voting power with respect to 0 shares of our common stock, shared voting power with respect to 2,946,531 shares of our common stock, sole dispositive power with respect to 0 shares of our common stock and shared dispositive power with respect to 2,946,531 shares of our common stock. The business address of NGFP is Worldwide Plaza, 309 West 49th Street, New York, NY 10019. The business address of Nomura Holdings, Inc. is 13-1, Nihonbashi 1-chome, Chuo-ku, Tokyo 103-8645, Japan. (4) Consists of (i) 53,473 shares of our common stock, and (ii) 145,000 shares of our common stock issuable upon exercise of stock options. Ms. Dillione also holds 48,909 shares of common stock deferred under Director’s Compensation Plan, which is excluded for purposes of calculating the number of shares of our common stock beneficially owned as of February 15, 2024. (5) Consists of 82,500 shares of our common stock issuable upon exercise of stock options. (6) Consists of (i) 15,250 shares of our common stock, and (ii) 112,500 shares of our common stock issuable upon exercise of stock options. (7) Consists of (i) 151,034 shares of our common stock held directly, (ii) 30,000 shares of our common stock held by Mr. Kaplan’s wife, 20,000 of which are held by her individually and 10,000 of which are held as a custodian for two of Mr. Kaplan’s grandchildren, and (iii) 126,000 shares of our common stock issuable upon exercise of stock options. (8) Consists of (i) 75,498 shares of our common stock held directly, (ii) 2,000 shares of our common stock held by Mr. Lefkowitz’s wife, (iii) 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 (iv) 108,000 shares of our common stock issuable upon exercise of stock options. (9) Consists of (i) 11,000 shares of our common stock, and (ii) 30,866 shares of our common stock issuable upon exercise of stock options. (10) Consists of (i) 135,543 shares of our common stock, and (ii) 391,667 shares of our common stock issuable upon exercise of stock options. (11) Consists of (i) 10,434 shares of our common stock, (ii) 500,084 shares of our common stock issuable upon exercise of stock options. (12) Consists of (i) 7,897 shares of our common stock, and (ii) 407,144 shares of our common stock issuable upon exercise of stock options. (13) Consists of (i) 13,011 shares of our common stock, and (ii) 290,750 shares of our common stock issuable upon exercise of stock options. (14) Consists (i) 7,200 shares of our common stock, and (ii) 507,264 shares of our common stock issuable upon exercise of stock options. (15) Consists of the following held by our directors and executive officers (i) 535,292 shares of our common stock, and (ii) 2,151,177 shares of our common stock issuable upon exercise of stock options. Equity Compensation Plan Information The following table provides information as of December 31, 2023 about our common stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans (including individual arrangements): Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c)) Equity compensation plans approved by security holders (1) 6,365,243 (2) $ 5.44 (3) 3,108,929 (1) Our 2013 Stock Incentive Plan was approved by our stockholders on July 30, 2013. Our 2019 Omnibus Stock Incentive Plan was approved by our stockholders on November 26, 2019. Our Amended and Restated 2019 Omnibus Stock Incentive Plan was approved by our stockholders on October 13, 2022. (2) Consist of 6,211,508 underlying stock options and 153,735 underlying restricted stock units. (3) Applicable to shares underlying outstanding stock options only. 57 Item 13. Certain Relationships and Related Transactions and Director Independence Related Party Transactions No related party transactions occurred during the fiscal year ended December 31, 2023. 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” tab. The information on Board independence is found in Item 10 of this Report under the heading “Board Independence.” Item 14. Principal Accounting Fees and Services Fees Paid to the Independent Registered Public Accounting Firm The following table sets forth fees billed to us by Friedman LLP and Marcum LLP, our independent registered public accounting firms for the years ended December 31, 2023 and 2022, for services relating to: auditing our annual financial statements; reviewing our financial statements included in our quarterly reports on Form 10-Q; reviewing registration statements during 2023 and 2022; and financing activities in 2023 and 2022. 2023 2022 Audit Fees (Friedman LLP) $ - $ 42,400 Audit Fees (Marcum LLP) $ 225,225 $ 127,000 Audit Related Fees - - Tax Fees - - All Other Fees $ - - Total $ 225,225 $ 169,400 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. 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 2023 were pre-approved by the Audit Committee. 58 PART IV Item 15. Exhibits, Financial Statement Schedules 1. Financial Statements . The following consolidated financial statements of CorMedix Inc. are filed as part of this Annual Report on Form 10-K: Report of Independent Registered Public Accounting Firm (PCAOB ID # 688) F-2 Consolidated Balance Sheets as of December 31, 2023 and 2022 F-3 Consolidated Statements of Operations and Comprehensive Income (Loss) Years Ended December 31, 2023 and 2022 F-4 Consolidated Statements of Changes in Stockholders’ Equity Years Ended December 31, 2023 and 2022 F-5 Consolidated Statements of Cash Flows Years Ended December 31, 2023 and 2022 F-6 Notes to Consolidated Financial Statements F-7 2. Financial Statement Schedules. The Financial Statement Schedules have been omitted because of the absence of conditions under which they are required or because the required information, where material, is shown in the financial statements or notes thereto. 3. Exhibit Index . The following is a list of exhibits filed as part of this Annual Report on Form 10-K: Exhibit Number Description of Document Registrant’s Form Dated Exhibit Number Filed or Furnished Herewith 1.1 At-the-Market Issuance Sales Agreement, dated August 12, 2021, by and among CorMedix Inc., Truist Securities, Inc. and JMP Securities LLC 8-K 08/12/2021 1.1 1.2 Underwriting Agreement, dated June 28, 2023, by and among CorMedix Inc., BC Capital Markets, LLC and Truist Securities, Inc. 8-K 06/30/2023 1.1 3.1 Form of Amended and Restated Certificate of Incorporation S-1/A 3/01/2010 3.3 3.2 Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated February 24, 2010 S-1/A 3/19/2010 3.5 3.3 Second Amended and Restated Bylaws as amended October 8, 2020 8-K 10/14/2020 3.1 3.4 Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated December 3, 2012 10-K 3/27/2013 3.3 3.5 Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated August 9, 2017 8-K 8/10/2017 3.1 3.6 Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated March 25, 2019 8-K 3/25/2019 3.1 59 Exhibit Number Description of Document Registrant’s Form Dated Exhibit Number Filed or Furnished Herewith 3.7 Amended and Restated Certificate of Designation of Series C-3 Non-Voting Convertible Preferred Stock of CorMedix Inc., filed with the Delaware Secretary of State on September 15, 2014 8-K 9/16/2014 3.16 3.8 Second Amended and Restated Certificate of Designation of Series E Convertible Preferred Stock of CorMedix Inc., filed with the Delaware Secretary of State on September 5, 2019 8-K 9/11/2019 3.2 3.9 Certificate of Designation of Series G Convertible Preferred Stock of CorMedix Inc., filed with the Delaware Secretary of State on September 5, 2019 8-K 9/11/2019 3.1 4.1 Specimen of Common Stock Certificate S-1/A 3/19/2010 4.1 4.2 Form of Warrant issued on January 8, 2014. 8-K 1/09/2014 4.23 4.3 Form of Series B Warrant to Purchase Common Stock of CorMedix Inc. issued on May 3, 2017 8-K 5/03/2017 4.2 4.4 Form of Underwriter’s Warrant to Purchase Common Stock of CorMedix Inc., issued May 3, 2017 8-K 5/03/2017 4.3 4.5 Description of Capital Stock of CorMedix Inc. 10-K 03/16/2020 4.5 4.6 Form of Pre-Funded Warrant issued June 28, 2023 8-K 06/30/2023 4.1 10.1* License and Assignment Agreement, dated as of January 30, 2008, between CorMedix Inc. and ND Partners LLC 10-K 03/16/2020 10.1 10.2+ Form of Indemnification Agreement between CorMedix Inc. and each of its directors and executive officers 10-Q 5/15/2023 10.1 10.3**+ Executive Employment Agreement, dated and effective May 11, 2020, between CorMedix Inc. and Matthew David 10-K 3/30/2021 10.10 10.4+ Letter Agreement, dated and effective October 26, 2021, between CorMedix Inc. and Matthew David, M.D. 8-K 10/29/2021 10.1 10.5 Form of Securities Purchase Agreement, dated November 17, 2017, between CorMedix Inc. and the investors signatory thereto 8-K 11/13/2017 10.1 10.6 Backstop Agreement, dated November 9, 2017, between CorMedix Inc. and the investor named therein 8-K 11/13/2017 10.2 10.7 Form of Registration Rights Agreement, dated November 9, 2017, by and between CorMedix Inc. and the investor named therein 8-K 11/13/2017 10.3 10.8 Amendment No. 1, dated as of December 11, 2017, to Registration Rights Agreement, dated November 9, 2017, by and between CorMedix Inc. and the investor named therein 8-K 12/11/2017 10.1 10.9**+ Executive Employment Agreement, dated and effective March 10, 2021, between CorMedix Inc. and Elizabeth Hurlburt 8-K 3/12/2021 10.1 10.10 Securities Purchase Agreement, dated December 31, 2018, between CorMedix Inc. and the investor named therein 8-K 1/03/2019 10.1 60 Exhibit Number Description of Document Registrant’s Form Dated Exhibit Number Filed or Furnished Herewith 10.11* Employment Agreement, dated as of March 19, 2019, between CorMedix Inc. and Phoebe Mounts 10-Q 5/13/19 10.1 10.12 Securities Exchange Agreement, dated August 14, 2019, by and among CorMedix Inc. and the Existing Security holders listed on the Schedule of Holders thereto 8-K 8/15/2019 10.1 10.13 Amended and Restated Registration Rights Agreement, dated as of September 6, 2019, by and among CorMedix Inc. and Manchester Securities Corp., and Elliot International, L.P. and Elliot Associates, L.P. 8-K 9/11/2019 10.1 10.14 Amended and Restated 2019 Omnibus Stock Incentive Plan S-8 10/26/2022 99.1 10.15+ 2021 Executive Bonus Plan 8-K 12/23/2021 10.1 10.16+ Executive Employment Agreement, dated March 16, 2022, between CorMedix Inc. and Joseph Todisco. 8-K 03/21/2022 10.2 10.17+ Separation Agreement, effective December 14, 2023, between CorMedix Inc. and Phoebe Mounts. X 21.1 List of Subsidiaries 10-K 3/27/2013 21.1 23.1 Consent of Independent Registered Public Accounting Firm X 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 32.1*** Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 32.2*** Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 97.1 Board Policy on Recouping Incentive Compensation X 101.INS Inline XBRL Instance Document X 101.SCH Inline XBRL Taxonomy Extension Schema Document. X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). X * Confidential treatment has been granted for portions of this document. The omitted portions of this document have been filed separately with the SEC. ** Portions of the exhibit have been omitted in reliance on Item 601(b)(10)(iv) of Regulation S-K. *** These certifications are furnished. + Indicates management contract or compensation plan. Item 16. Form 10-K Summary Not applicable. 61 SIGNATURES 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. March 12, 2024 By: /s/ Joseph Todisco Joseph Todisco Chief Executive Officer (Principal Executive Officer) March 12, 2024 By: /s/ Matthew David Matthew David Chief Financial Officer (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: Signature Title Date /s/ Joseph Todisco Chief Executive Officer and Director March 12, 2024 Joseph Todisco (Principal Executive Officer) /s/ Matthew David Executive Vice President and Chief Financial Officer March 12, 2024 Matthew David (Principal Financial and Accounting Officer) /s/ Myron Kaplan Director and Chairman of the Board March 12, 2024 Myron Kaplan /s/ Janet Dillione Director March 12, 2024 Janet Dillione /s/ Gregory Duncan Director March 12, 2024 Gregory Duncan /s/ Alan Dunton Director March 12, 2024 Alan Dunton /s/ Steven Lefkowitz Director March 12, 2024 Steven Lefkowitz /s/ Robert Stewart Director March 12, 2024 Robert Stewart 62 CORMEDIX INC. AND SUBSIDIARIES FINANCIAL STATEMENTS Financial Statements Index Report of Independent Registered Public Accounting Firm (PCAOB ID # 688 ) F-2 Consolidated Balance Sheets as of December 31, 2023 and 2022 F-3 Consolidated Statements of Operations and Comprehensive Income (Loss) Years Ended December 31, 2023 and 2022 F-4 Consolidated Statements of Changes in Stockholders’ Equity Years Ended December 31, 2023 and 2022 F-5 Consolidated Statements of Cash Flows Years Ended December 31, 2023 and 2022 F-6 Notes to Consolidated Financial Statements F-7 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Sh areh olders and Board of Directors of CorMedix Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of CorMedix Inc. and Subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. 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 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the 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 financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Marcum llp Marcum llp We have served as the Company’s auditor since 2014. Marlton, New Jersey March 12, 2024 F- 2 CorMedix Inc. And Subsidiaries CONSOLIDATED BALANCE SHEETS December 31, 2023 and 2022 December 31, 2023 2022 ASSETS Current assets Cash and cash equivalents $ 43,642,684 $ 43,148,323 Restricted cash 77,453 124,102 Short-term investments 32,388,130 15,644,062 Inventories, net 2,106,345 - Prepaid research and development expenses 353,574 11,016 Other prepaid expenses and current assets 882,214 623,672 Total current assets 79,450,400 59,551,175 Property and equipment, net 1,866,224 1,609,679 Restricted cash, long term 103,055 102,320 Operating lease right-of-use assets 640,278 775,085 TOTAL ASSETS $ 82,059,957 $ 62,038,259 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 4,279,679 $ 2,202,149 Accrued expenses 6,970,217 3,973,941 Operating lease liabilities, short-term 150,619 134,801 Total current liabilities 11,400,515 6,310,891 Operating lease liabilities, net of current portion 517,013 667,632 TOTAL LIABILITIES 11,917,528 6,978,523 COMMITMENTS AND CONTINGENCIES (Note 6) STOCKHOLDERS’ EQUITY Preferred stock - $ 0.001 par value: 2,000,000 shares authorized; 181,622 shares issued and outstanding at December 31, 2023 and 2022 182 182 Common stock - $ 0.001 par value: 160,000,000 shares authorized at December 31, 2023 and 2022; 54,938,258 and 42,815,196 shares issued and outstanding at December 31, 2023 and 2022, respectively 54,938 42,815 Accumulated other comprehensive gain 94,108 82,743 Additional paid-in capital 391,693,214 330,294,782 Accumulated deficit ( 321,700,013 ) ( 275,360,786 ) TOTAL STOCKHOLDERS’ EQUITY 70,142,429 55,059,736 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 82,059,957 $ 62,038,259 The accompanying notes are integral part of these consolidated financial statements. F- 3 CorMedix Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Years Ended December 31, 2023 and 2022 December 31, 2023 2022 Revenue: Net sales $ - $ 65,408 Cost of sales - ( 3,734 ) Gross profit - 61,674 Operating Expenses: Research and development ( 13,155,125 ) ( 10,679,549 ) Selling, general and administrative ( 35,802,663 ) ( 20,006,093 ) Total operating expenses ( 48,957,788 ) ( 30,685,642 ) Loss From Operations ( 48,957,788 ) ( 30,623,968 ) Other Income (Expense): Interest income 2,681,851 326,016 Foreign exchange transaction (loss) income ( 28,994 ) 37,145 Interest expense ( 34,296 ) ( 26,515 ) Total other income 2,618,561 336,646 Net Loss Before Income Taxes ( 46,339,227 ) ( 30,287,322 ) Tax benefit - 585,617 Net Loss ( 46,339,227 ) ( 29,701,705 ) Other Comprehensive Income (Loss): Unrealized gain from investments 9,683 5,055 Foreign currency translation gain (loss) 1,682 ( 9,442 ) Total other comprehensive gain (loss) 11,365 ( 4,387 ) Comprehensive Loss $ ( 46,327,862 ) $ ( 29,706,092 ) Net Loss Per Common Share – Basic and Diluted $ ( 0.91 ) $ ( 0.74 ) Weighted Average Common Shares Outstanding – Basic and Diluted 50,902,931 40,274,273 The accompanying notes are integral part of these consolidated financial statements. F- 4 CORMEDIX INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY) Years Ended December 31, 2023 and 2022 Common Stock Preferred Stock – Series C-3, Series E, Series F and Series G Accumulated Other Comprehen-sive Additional Paid-in Accumulated Total Stockholders’ Shares Amount Shares Amount Gain (Loss) Capital Deficit Equity Balance at December 31, 2021 38,086,437 $ 38,086 181,622 $ 182 $ 87,130 $ 308,331,750 $ ( 245,659,081 ) $ 62,798,067 Stock issued in connection with ATM sale of common stock, net 4,704,259 4,705 - - - 17,764,911 - 17,769,616 Stock issued in connection with warrants exercised, cash 24,500 24 - - - 128,601 - 128,625 Stock-based compensation - - - - - 4,069,520 - 4,069,520 Other comprehensive loss - - - - ( 4,387 ) - - ( 4,387 ) Net loss - - - - - - ( 29,701,705 ) ( 29,701,705 ) Balance at December 31, 2022 42,815,196 $ 42,815 181,622 $ 182 $ 82,743 $ 330,294,782 $ ( 275,360,786 ) $ 55,059,736 Stock issued in connection with ATM sale of common stock, net 2,977,637 2,978 - - - 12,946,132 - 12,949,110 Stock and pre-funded warrants issued in connection with public offering, net 9,000,093 9,000 - - - 42,869,399 - 42,878,399 Stock issued in connection with options exercised 79,041 79 - - - 287,659 - 287,738 Issuance of vested restricted stock, net of shares withheld for employee withholding taxes 66,291 66 - - - ( 198,509 ) - ( 198,443 ) Stock-based compensation - - - - - 5,493,751 - 5,493,751 Other comprehensive loss - - - - 11,365 - - 11,365 Net loss - - - - - - ( 46,339,227 ) ( 46,339,227 ) Balance at December 31, 2023 54,938,258 $ 54,938 181,622 $ 182 $ 94,108 $ 391,693,214 $ ( 321,700,013 ) $ 70,142,429 The accompanying notes are integral part of these consolidated financial statements. F- 5 CORMEDIX INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2023 and 2022 December 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 46,339,227 ) $ ( 29,701,705 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 5,493,751 4,069,520 Change in right-of-use assets 134,807 124,420 Depreciation 70,755 84,618 Changes in operating assets and liabilities: Decrease (Increase) in trade receivables - 42,143 (Increase) Decrease in inventory ( 2,106,345 ) 3,008 (Increase) Decrease in prepaid expenses and other current assets ( 600,983 ) 187,235 Increase (Decrease) in accounts payable 2,077,479 ( 6,566 ) Increase in accrued expenses 2,995,084 961,963 Decrease in operating lease liabilities ( 134,801 ) ( 121,368 ) Net cash used in operating activities ( 38,409,480 ) ( 24,356,732 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of short-term investments ( 77,084,385 ) ( 31,140,004 ) Maturity of short-term investments 60,350,000 27,650,000 Purchase of equipment ( 327,300 ) ( 219,360 ) Net cash used in investing activities ( 17,061,685 ) ( 3,709,364 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from sale of common stock from at-the-market program, net 12,949,110 17,769,616 Proceeds from public offering of common stock and pre-funded warrants, net 42,878,399 - Payment of employee withholding taxes on vested restricted stock units ( 198,443 ) - Proceeds from exercise of warrants - 128,625 Proceeds from exercise of stock options 287,738 - Net cash provided by financing activities 55,916,804 17,898,241 Foreign exchange effects on cash 2,808 ( 8,677 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 448,447 ( 10,176,532 ) CASH AND CASH EQUIVALENTS AND RESTRICTED CASH – BEGINNING OF YEAR 43,374,745 53,551,277 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH – END OF YEAR $ 43,823,192 $ 43,374,745 Cash paid for interest $ 34,296 $ 26,516 Supplemental Disclosure of Non-Cash and Investing Activities: Unrealized gain (loss) from investments $ 9,683 $ 5,055 The accompanying notes are integral part of these consolidated financial statements. F- 6 Note 1 — Organization, Business and Basis of Presentation: Organization and Business: CorMedix Inc. (“CorMedix” or the “Company”) was incorporated in the State of Delaware on July 28, 2006 . The Company is a biopharmaceutical company focused on developing and commercializing therapeutic products for the prevention and treatment of infectious and inflammatory diseases. The Company’s primary focus is on the commercialization of our lead product, DefenCath ® in the United States. We have in-licensed the worldwide rights to develop and commercialize DefenCath. The name DefenCath is the U.S. proprietary name approved by the U.S. Food and Drug Administration, or FDA. DefenCath is an antimicrobial solution (a formulation of taurolidine 13.5 mg/mL, and heparin 1000 USP Units/mL) indicated to reduce the incidence of catheter-related bloodstream infections (CRBSI) in adult patients with kidney failure receiving chronic hemodialysis (HD) through a central venous catheter (CVC). It is indicated for use in a limited and specific population of patients. CRBSI can lead to treatment delays and increased costs to the healthcare system when they occur due to hospitalizations, need for IV antibiotic treatment, long-term anticoagulation therapy, removal/replacement of the CVC, related treatment costs, as well as increased mortality. We believe DefenCath can address a significant unmet medical need. On January 30, 2008, we entered into a License and Assignment Agreement, or the ND License Agreement, with ND Partners LLC, or NDP. Pursuant to the ND License Agreement, NDP granted us 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”). NDP also granted us exclusive licenses, with the right to grant sublicenses, to use and display certain trademarks in connection with the NDP Technology. As consideration in part for the rights to the NDP Technology, we paid NDP an initial licensing fee of $ 325,000 and granted NDP an equity interest in our Company consisting of 73,107 shares of common stock as of December 31, 2010. In addition, we are required to make cash payments to NDP upon the achievement of certain milestones. The maximum aggregate amount of cash payments upon achievement of milestones is $ 3,000,000 , with $ 2,000,000 remaining at December 31, 2023. On November 15, 2023, we announced that the FDA approved the NDA for DefenCath to reduce the incidence of CRBSI in adult patients with kidney failure receiving chronic hemodialysis through a CVC. DefenCath is indicated for use in a limited and specific population of patients. DefenCath is the first and only FDA-approved antimicrobial CLS in the U.S. and was shown to reduce the risk of CRBSI by up to 71 % in a Phase 3 clinical study. As a result of the November 2023 FDA approval, we are currently preparing for the commercial launch of DefenCath. DefenCath is listed in the Orange Book as having NCE exclusivity (5 years) expiring on November 15, 2028, and the Generating Antibiotic Incentives Now or GAIN exclusivity extension of the NCE exclusivity (an additional 5 years) expiring on November 15, 2033. The GAIN exclusivity extension of 5 years is the result of the January 2015 designation of DefenCath as a Qualified Infectious Disease Product (“QIDP”). We announced on April 26, 2023 that following the submission of a duplicate New Technology Add-On Payment (“NTAP”) application in the fourth quarter of 2022 to CMS, CMS has subsequently issued the Inpatient Prospective Payment System (“IPPS”) 2024 proposed rule that includes a NTAP of up to $ 17,111 per hospital stay for DefenCath. This NTAP represents reimbursement to inpatient facilities of 75 % of the anticipated wholesaler acquisition cost price of $ 1,170 per 3 mL vial, and an average utilization of 19.5 vials per hospital stay. The final IPPS rule was published in early August 2023 and confirmed this payment amount in that final rule. This NTAP was conditioned upon the DefenCath NDA obtaining final FDA approval prior to July 1, 2024. As the NTAP was calculated by CMS based upon an anticipated WAC price of $ 1,170 , and following FDA approval of the DefenCath NDA, an actual WAC of $ 249.99 per 3ml vial was established, we anticipate that CMS will revise the amount of the NTAP payment to reflect the actual WAC price in the next IPPS rulemaking, effective October 1, 2024. Upon the listing in the compendia of the actual WAC price of $ 249.99 per 3ml vial, the Company notified CMS of the new lower WAC pricing and recommended that CMS make an off-cycle adjustment to the NTAP to reflect the current lower WAC pricing amount. CMS subsequently communicated to the Company that they do not intend to update the NTAP reimbursement amount until the next review cycle in October 2024. F- 7 On January 25, 2024, CMS determined that DefenCath should be classified as a renal dialysis service that is subject to the Medicare end-stage renal disease prospective payment system (“ESRD PPS”). The ESRD PPS provides bundled payment for renal dialysis services, but also affords a transitional drug add-on payment adjustment, or TDAPA, which provides temporary, additional payments for certain new drugs and biologicals. We submitted an application for TDAPA on January 26, 2024, and CMS has confirmed receipt. We also submitted a HCPCS application for a J-code to CMS on December 8, 2023, for DefenCath, which is relevant to billing and the TDAPA application. CMS has confirmed the coding application is under review. TDAPA reimbursement is calculated based on 100 percent ASP (or 100 percent of wholesale acquisition price or else manufacturers’ list price, respectively, if such data is unavailable). If CMS grants TDAPA and post-TDAPA add-on payment adjustments for DefenCath, collective payments would be for five years (with such add-on payments applying to all ESRD PPS payments for years three through five). CMS confirmed to the Company that, assuming a favorable review, CMS is working towards a July 1, 2024 implementation date for TDAPA. We may pursue additional indications for DefenCath use as a CLS in populations with unmet medical needs that may also represent potentially significant market opportunities. While we are continuing to assess these areas, potential future indications may include use as a CLS to reduce CRBSIs in total parenteral nutrition patients using a central venous catheter and in certain oncology patients using a central venous catheter. In 2024, the company anticipates discussing with the FDA potential pathways for expanded indications. We currently have one FDA approved source for each of our two key APIs for DefenCath, taurolidine and heparin sodium, respectively. With regards to taurolidine, we have a DMF filed with the FDA. There is a master commercial supply agreement between a third-party manufacturer and us in place from August 2018. We are currently in the process of identifying and qualifying an alternate third-party manufacturer for taurolidine under our existing DMF. With respect to heparin sodium API, we have identified an alternate third party supplier and intend to qualify such supplier under the DefenCath NDA over the next twelve months. We received FDA approval of DefenCath with finished dosage production from our European based CMO Rovi Pharma Industrial Services. We believe this CMO has adequate capacity to produce the volumes needed to meet near term projected demand for the commercial launch of DefenCath. We previously announced commercial arrangements with additional finished dosage CMOs, Alcami Corporation and Siegfried Hameln, that provide for the manufacture of commercial sterile parenteral drug products. The Company anticipates the submission to the FDA of a supplement adding Siegfreid Hameln as an alternate manufacturing site in the second fiscal quarter of 2024. The Company will also discontinue its relationship with Alcami as a potential alternate manufacturing site for DefenCath. We announced on May 1, 2023 that the USPTO allowed our patent application directed to a locking solution composition for treating and reducing infection and flow reduction in central venous catheters. This application was granted on August 29, 2023 as U.S. Patent No. 11,738,120. Our newly granted U.S. Patent reflects the unique and proprietary formulation of our product, DefenCath, for which we received FDA approval on November 15, 2023. This patent supplements the coverage of our existing licensed U.S. Patent No. 7,696,182, and has the potential to provide an additional layer of patent protection for DefenCath through 2042. As part of the DefenCath approval letter, the FDA communicated the existence of a required pediatric assessment under the Pediatric Research Equity Act, or PREA. PREA requires sponsors to conduct pediatric studies for, among other things, NDAs for a new active ingredient, such as taurolidine in DefenCath, unless a waiver or deferral is obtained from the FDA. A deferral acknowledges that a pediatric assessment is required but permits the applicant to submit the pediatric assessment after the submission of an NDA. FDA deferred submission of the pediatric study for DefenCath because the product is ready for approval for use in adults and the pediatric study has not been completed. We are obligated to conduct the study communicated in the approval letter: an open-label, two-arm (DefenCath vs. standard of care) study to assess safety and time to CRBSI in subjects from birth to less than 18 years of age with kidney failure receiving hemodialysis via a central venous catheter. Because this is a required post-marketing study, we must make annual reports to the FDA. Pediatric studies for an approved product conducted under PREA may qualify for pediatric exclusivity, which, if granted, provides an additional six months of exclusivity that attaches to the end of existing marketing exclusivity and patent periods for DefenCath. Depending on the timing of final report submission, DefenCath could potentially receive a total marketing exclusivity period of 10.5 years. However, there are factors that could affect whether this exclusivity is received or the duration of exclusivity, and DefenCath may or may not ultimately be eligible for the additional 0.5 years of exclusivity associated with this pediatric study. F- 8 Neutrolin was previously sold in the EU and other territories where we received CE-Mark approval for the commercial distribution of Neutrolin as a CLS. The Company has elected to discontinue sales of Neutrolin for lack of commercial viability. The winding down of our operations in the EU is nearly complete and Neutrolin sales in both the EU and the Middle East have been discontinued since 2022. In addition to DefenCath, we have sponsored a pre-clinical research collaboration for the use of taurolidine as a possible treatment for rare pediatric tumors. In February 2018, the FDA granted orphan drug designation to taurolidine for the treatment of neuroblastoma in children. We may seek one or more strategic partners or other sources of capital to help us develop and commercialize taurolidine for the treatment of neuroblastoma in children. Note 2 — Liquidity and Uncertainties: 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, 2023, the Company had an accumulated deficit of $ 321.7 million, and incurred net losses of $ 46.3 million and $ 29.7 million for the years ended December 31, 2023 and 2022, respectively. Based on the Company’s current development plans for DefenCath and its other operating requirements, the Company’s existing cash and cash equivalents and short-term investments at December 31, 2023 are expected to fund its operations for at least twelve months from the issuance of this Annual Report on Form 10-K. The Company may raise additional capital through various potential sources, such as equity and/or debt financings, strategic relationships, potential strategic transactions and/or out-licensing. Management can provide no assurances that such financing or strategic relationships will be available on acceptable terms, or at all. As of December 31, 2023, the Company has $ 104.4 million available under its current shelf registration for the issuance of equity, debt or equity-linked securities (see Note 7). The 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 candidates; the ability to market the Company’s products; ability to manufacture successfully; competition from products manufactured and sold or being developed by other companies; 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. Note 3 — Summary of Significant Accounting Policies: Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Financial Instruments Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and short-term investments. The Company maintains its cash and cash equivalents in bank deposit and other interest-bearing accounts, the balances of which, at times, may exceed federally insured limits. F- 9 The following table is the reconciliation of the accounting standard that modifies certain aspects of the recognition, measurement, presentation and disclosure of financial instruments as shown on the Company’s consolidated statement of cash flows: December 31, 2023 2022 Cash and cash equivalents $ 43,642,684 $ 43,148,323 Restricted cash, short-term and long-term 180,508 226,422 Total cash, cash equivalents and restricted cash $ 43,823,192 $ 43,374,745 The appropriate classification of marketable securities is determined at the time of purchase and reevaluated as of each balance sheet date. Investments in marketable debt and equity securities classified as available-for-sale are reported at fair value. Fair value is determined using quoted market prices in active markets for identical assets or liabilities or quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Changes in fair value that are considered temporary are reported net of tax in other comprehensive income (loss). Realized gains and losses, amortization of premiums and discounts and interest and dividends earned are included in income (expense). For declines in the fair value of equity securities that are considered other-than-temporary, impairment losses are charged to other (income) expense, net. The Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. There were no deemed permanent impairments at December 31, 2023 or 2022. The Company’s marketable securities are highly liquid and consist of U.S. government agency securities, high-grade corporate obligations and commercial paper with original maturities of more than 90 days. As of December 31, 2023 and 2022, all of the Company’s investments had contractual maturities which were less than one year. The following table summarizes the amortized cost, unrealized gains and losses and the fair value at December 31, 2023 and 2022 : December 31, 2023: Amortized Cost Gross Unrealized Losses Gross Unrealized Gains Fair Value Money Market Funds and Cash Equivalents $ 32,541,862 $ - $ - $ 32,541,862 U.S. Government Agency Securities 29,701,677 - 10,506 29,712,183 Commercial Paper 2,676,740 ( 1,425 ) - 2,675,315 Subtotal 32,378,417 ( 1,425 ) 10,506 32,387,498 Total December 31, 2023 $ 64,920,279 $ ( 1,425 ) $ 10,506 $ 64,929,360 December 31, 2022: Money Market Funds and Cash Equivalents $ 7,311,327 $ - $ 572 $ 7,311,899 U.S. Government Agency Securities 12,072,127 ( 3,184 ) 2,056 12,070,999 Corporate Securities 2,684,235 ( 183 ) 909 2,684,961 Commercial Paper 888,875 ( 773 ) - 888,102 Subtotal 15,645,237 ( 4,140 ) 2,965 15,644,062 Total December 31, 2022 $ 22,956,564 $ ( 4,140 ) $ 3,537 $ 22,955,961 Fair Value Measurements The Company’s financial instruments recorded in the consolidated balance sheets include cash and cash equivalents, accounts receivable, investment securities, accounts payable and accrued expenses. The carrying value of certain financial instruments, primarily cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their estimated fair values based upon the short-term nature of their maturity dates. F- 10 The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, which is set out below. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. ● Level 1 inputs—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs— Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs). ● Level 3 inputs—Unobservable inputs for the asset or liability, which are supported by little or no market activity and are valued based on management’s estimates of assumptions that market participants would use in pricing the asset or liability. The following table provides the carrying value and fair value of the Company’s financial assets measured at fair value as of December 31, 2023 and 2022: December 31, 2023: Carrying Value Level 1 Level 2 Level 3 Money Market Funds and Cash Equivalents $ 32,541,230 $ 32,541,230 $ - $ - U.S. Government Agency Securities 29,712,183 29,712,183 - - Commercial Paper 2,675,947 - 2,675,947 - Subtotal 32,388,130 29,712,183 2,675,947 - Total December 31, 2023 $ 64,929,360 $ 62,253,413 $ 2,675,947 $ - December 31, 2022: Money Market Funds and Cash Equivalents $ 7,311,899 $ 7,311,899 $ - $ - U.S. Government Agency Securities 12,070,999 12,070,999 - - Corporate Securities 2,684,961 - 2,684,961 - Commercial Paper 888,102 - 888,102 - Subtotal 15,644,062 12,070,999 3,573,063 - Total December 31, 2022 $ 22,955,961 $ 19,382,898 $ 3,573,063 $ - Foreign Currency Translation and Transactions 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 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 $ 1,682 and a loss of $ 9,442 for the year ended December 31, 2023 and 2022, respectively. Foreign 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. F- 11 Restricted Cash As of December 31, 2023, and 2022 the Company has restricted cash in connection with the patent and utility model infringement proceedings against TauroPharm (see Note 6). The Company was required by the District Courts of Mannheim to provide security deposit to cover legal fees in the event TauroPharm is entitled to reimbursement of these costs. The Company furthermore had to provide a deposit for the first and second instances, respectively, in connection with the unfair competition proceedings in Cologne. During the year ended December 31, 2023, approximately a total of $ 47,000 was released by the court for the reimbursement of legal fees and other costs which was removed from restricted cash. As of December 31, 2023 and 2022, restricted cash in connection with the patent and utility model infringement proceedings were approximately $ 77,000 and approximately $ 124,000 , respectively. As of December 31, 2023 and 2022, the Company had $ 103,000 in long-term restricted cash for a lease security deposit. Prepaid Research and Development and Other Prepaid Expenses Prepaid expenses consist of payments made in advance to vendors relating to service contracts for clinical trial development, manufacturing, pre-clinical development and insurance policies. These advanced payments are amortized to expense either as services are performed or over the relevant service period using the straight-line method. Inventories, net The Company engages third parties to manufacture and package inventory held for sale and warehouse such goods until packaged for final distribution and sale. Costs related to the manufacturing of the product incurred prior to FDA approval in order to support the preparation for commercial launch of its product were expensed as R&D as incurred. Upon FDA approval, costs related to the manufacturing of inventory are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. Inventories previously expensed as R&D prior to FDA approval amounted to $ 6,407,266 . Inventories consist of raw materials (including labeling and packaging), work-in-process, and finished goods, if any, for the DefenCath product. Inventories consist of the following: December 31, 2023 2022 Raw materials $ 1,525,420 $ - Work in progress 580,925 - Total $ 2,106,345 $ - Property and Equipment Property and equipment consist primarily of furnishings, fixtures, leasehold improvements, office equipment and computer equipment all of which are recorded at cost. Depreciation is provided for by the straight-line method over the estimated useful lives of the 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, 2023 and 2022 were $ 1,866,224 and $ 1,609,679 , respectively, net of accumulated depreciation of $ 520,542 and $ 449,787 , respectively. Depreciation and amortization of property and equipment is included in selling, general and administrative expenses. Description Estimated Useful Life Office equipment and furniture 5 years Leasehold improvements 7 years or remaining term of the lease Computer equipment 5 years Computer software 3 years Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities (included in accrued expenses), and operating lease liabilities, net of current portion, on the consolidated balance sheet (see Note 8). F- 12 Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has elected, as an accounting policy, not to apply the recognition requirements in ASC 842 to short-term leases. Short-term leases are leases that have a term of 12 months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes the lease payments for short-term leases on a straight-line basis over the lease term. The Company has also elected, as a practical expedient, by underlying class of asset, not to separate lease components from non-lease components and, instead, account for them as a single component. Revenue Recognition The Company 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 price; and (v) recognizing revenue. The Company recognizes net sales upon shipment of product to the dialysis centers and upon meeting the five-step model prescribed by ASC 606 outlined above. Loss Per Common Share Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding during the period included 2,500,625 shares underlying outstanding pre-funded warrants. Diluted loss per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. The Company’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. Since the Company has only incurred losses, basic and diluted loss per share are the same as potentially dilutive shares have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive. The shares outstanding at the end of the respective periods presented below were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect : Number of Shares of Common Stock Issuable At December 31, 2023 2022 Series C non-voting preferred stock 4,000 4,000 Series E voting preferred stock 391,953 391,953 Series G voting preferred stock 5,004,069 5,004,069 Shares issuable for payment of deferred board compensation 48,909 48,909 Shares underlying outstanding stock options 6,211,508 4,454,369 Restricted stock units 153,735 207,469 Total potentially dilutive shares 11,814,174 10,110,769 F- 13 Stock-Based Compensation Share-based compensation cost is measured at grant date, based on the estimated fair value of the award using the Black-Scholes option pricing model for options with service or performance-based conditions. Stock-based compensation is recognized as expense over the requisite service period on a straight-line basis or when the achievement of the performance condition is probable. For options with market-based vesting, share-based compensation cost is measured at grant date using the Monte Carlo option pricing model and the expense is recognized over the derived service period. Research and Development Research and development costs are charged to expense as incurred. Research and development include fees associated with operational consultants, contract clinical research organizations, contract manufacturing organizations, clinical site fees, contract laboratory research organizations, contract central testing laboratories, licensing activities, and allocated executive, human resources and facilities expenses. The Company accrues for costs incurred as the services are being provided by monitoring the status of the trial and the invoices received from its external service providers. As actual costs become known, the Company adjusts its accruals in the period when actual costs become known. Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development expense. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. Legal Costs The Company records legal costs associated with loss contingencies when they are probable and reasonably estimable. Recent Authoritative Pronouncements In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, “ Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative ,” which modifies the disclosure or presentation requirements of various FASB topics in the Codification. The date on which this guidance is effective for the Company will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company does not expect the adoption of this guidance to have an impact on its consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, “ Improvements to Reportable Segment Disclosures ,” which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for the Company beginning in the annual reporting period ending December 31, 2024 and interim periods beginning in fiscal year 2025. Early adoption is permitted. The Company is assessing the impact of adopting this guidance on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “ Improvements to Income Tax Disclosures ,” which enhances the transparency and decision usefulness of income tax disclosures. The guidance is effective for the Company’s annual reporting period ending December 31, 2025. Early adoption is permitted. The Company is assessing the impact of adopting this guidance on its consolidated financial statements. Note 4 — Accrued Expenses: Accrued Expenses Accrued expenses consist of the following: December 31, 2023 2022 Professional and consulting fees $ 2,270,022 $ 514,354 Accrued payroll and payroll taxes 2,718,770 2,180,581 Manufacturing related 1,835,101 1,214,550 Other 146,324 64,456 Total $ 6,970,217 $ 3,973,941 F- 14 Note 5 — Income Taxes: The Company’s U.S. and foreign loss before income taxes are set forth below: December 31, 2023 2022 United States $ ( 45,946,020 ) $ ( 29,973,763 ) Foreign ( 393,207 ) ( 313,559 ) Total $ ( 46,339,227 ) $ ( 30,287,322 ) There were no current or deferred income tax provision for the years ended December 31, 2023 and 2022 because the Company has incurred operating losses since inception. The Company’s deferred tax assets consist of the following: December 31, 2023 2022 Net operating loss carryforwards – Federal $ 53,614,000 $ 47,683,000 Net operating loss carryforwards – State 4,603,000 1,592,000 Net operating loss carryforwards – Foreign 6,000 10,000 Capitalized licensing fees 165,000 304,000 Stock-based compensation 6,151,000 5,270,000 Accrued compensation 720,000 172,000 Section 174 capitalization 5,522,000 2,702,000 Other ( 4,000 ) 28,000 Totals 70,777,000 57,761,000 Less valuation allowance ( 70,777,000 ) ( 57,761,000 ) Deferred tax assets $ - $ - A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The net change in the total valuation allowance for the year ended December 31, 2023 was $ 13,016,000 . The Company had the following potentially utilizable net operating loss tax carryforwards: December 31, 2023 2022 Federal $ 255,306,000 $ 227,068,000 State $ 64,738,000 $ 23,389,000 Foreign $ 25,000 $ 38,000 Approximately $ 113,600,000 of net operating losses generated will expire in 2026 through 2037 for Federal purposes whereas the operating losses for state purposes will expire between 2039 and 2044. 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 former 20-year carryforward. The foreign net operating loss tax carryforwards do not expire. Our federal and state operating loss carryforwards include windfall tax deductions from stock option exercises. The Company’s foreign net operating loss carryforward relates to the Company’s Spanish subsidiary. During 2021, the Company’s German subsidiary was audited by the German taxing authorities for the years 2013-2015. It was determined that the amount of German income was not sufficient, so the taxing authorities made adjustments accordingly. Further, amended returns were filed for the subsequent years to provide the German subsidiary sufficient income. As a result of these changes, the German subsidiary’s net operating losses were fully utilized and no longer have a carryforward attribute. Such adjustments do not have a material effect on the Company’s financial statements. The Company’s foreign earnings are derived from its German and Spanish subsidiaries. The Company does not expect any foreign earnings to be repatriated in the U.S. in the near future. The winding down of its operations in the EU is ongoing and there was no income during the year ended December 31, 2023. F- 15 The Company’s effective tax rate varied from the statutory rate as follows: December 31, 2023 2022 Statutory federal tax rate 21.0 % 21.0 % State income tax rate (net of federal) 8.7 % ( 4.3 ) % Change in foreign NOL ( 0.2 )% ( 0.2 )% NJ NOL adjustment 0.0 % 1.9 % Other permanent differences ( 1.4 )% ( 0.8 )% Effect of valuation allowance ( 28.1 )% ( 15.7 )% Effective tax rate 0.0 % 1.9 % In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income 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, 2023 and 2022, 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: Year Ended Balance at Beginning of Year Increase (Decrease) Charged (Credited) to Income Taxes (Benefit) Increase (Decrease) Charged (Credited) to OCI Balance at End of Year December 31, 2023 $ 57,761,000 $ 13,050,000 $ ( 34,000 ) $ 70,777,000 December 31, 2022 $ 52,989,000 $ 4,804,000 $ ( 32,000 ) $ 57,761,000 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, 2023 and 2022. The Company recognizes interest and penalties related to uncertain tax positions if any as a component of income tax expense. The Company files U.S. federal and state returns. The Company’s foreign subsidiary also files a local tax return in their local jurisdiction. From a U.S. federal, state and local perspective the years that remain open to examination are consistent with each jurisdiction’s statute of limitations. From a foreign perspective, tax years 2016 to 2022 remain open to examination. During the year ended December 31, 2023 the Company did not sell any of its 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 Program”). The NJEDA Program allowed the Company to sell $ 626,000 of its total $ 626,000 in available NOL tax benefits for the state fiscal year 2021, which the Company received net proceeds of approximately $ 586,000 during the year ended December 31, 2022. F- 16 Note 6 — Commitments and Contingencies: Contingency Matters In re CorMedix Inc. Securities Litigation, Case No. 2:21-cv-14020 (D.N.J.) On October 13, 2021, the United States District Court for the District of New Jersey consolidated into In re CorMedix Inc. Securities Litigation, Case No. 2:21-cv 14020-JXN-CLW, two putative class action lawsuits filed on or about July 22, 2021 and September 13, 2021, respectively, and appointed lead counsel and lead plaintiff, a purported stockholder of the Company. The lead plaintiff filed a consolidated amended class action complaint on December 14, 2021, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, along with Rule 10b-5 promulgated thereunder, and Sections 11 and 15 of the Securities Act of 1933, as amended, or the Securities Act. On October 10, 2022, the lead plaintiff filed a second amended consolidated complaint that superseded the original complaints in In re CorMedix Securities Litigation. In the second amended complaint, the lead plaintiff seeks to represent two classes of shareholders: (i) shareholders who purchased or otherwise acquired CorMedix securities between October 16, 2019 and August 8, 2022, inclusive; and (ii) shareholders who purchased CorMedix securities pursuant or traceable to the Company’s November 27, 2020 offering pursuant to CorMedix’s Form S-3 Registration Statement, its Prospectus Supplement, dated November 27, 2020, and its Prospectus Supplement, dated August 12, 2021. The second amended complaint names as defendants the Company and twelve (12) current and former directors and officers of CorMedix, namely Khoso Baluch, Robert Cook, Matthew David, Phoebe Mounts, John L. Armstrong, and Joseph Todisco (the “Officer Defendants” and collectively with CorMedix, the “CorMedix Defendants”) as well as Janet Dillione, Myron Kaplan, Alan W. Dunton, Steven Lefkowitz, Paulo F. Costa, Greg Duncan (the “Director Defendants”). The second amended complaint alleges that the CorMedix Defendants violated Section 10(b) of the Exchange Act (and Rule 10b-5), the Officer Defendants violated Section 20(a), the Director Defendants, CorMedix, Baluch, and David violated Section 11 of the Securities Act, and that the Director Defendants, Baluch, and David violated Section 15. In general, the purported bases for these claims are allegedly false and misleading statements and omissions related to the NDA submissions to the FDA for DefenCath, subsequent complete response letters, as well as communications from the FDA related and directed to the Company’s contract manufacturing organization and heparin supplier. The Company intends to vigorously contest such claims. The Company and the other Defendants filed their motion to dismiss the second amended complaint on November 23, 2022 and briefing was complete as of February 6, 2023. The motion to dismiss is currently pending. In re CorMedix Inc. Derivative Litigation, Case No. 2:21-cv-18493-JXN-LDW (D.N.J.) On or about October 13, 2021, a purported shareholder, derivatively and on behalf of the Company, filed a shareholder derivative complaint in the United States District Court for the District of New Jersey, in a case entitled Voter v. Baluch, et al., Case No. 2:21-cv-18493-JXN-LDW (the “Derivative Litigation”). The complaint names as defendants Khoso Baluch, Janet Dillione, Alan W. Dunton, Myron Kaplan, Steven Lefkowitz, Paulo F. Costa, Greg Duncan, Matthew David, and Phoebe Mounts along with the Company as Nominal Defendant. The complaint alleges breaches of fiduciary duties, abuse of control, and waste of corporate assets against the defendants and a claim for contribution for purported violations of Sections 10(b) and 21D of the Exchange Act against certain defendants. The individual defendants intend to vigorously contest such claims. On January 21, 2022, pursuant to a stipulation between the parties, the Court entered an order staying the case while the motion to dismiss the class action lawsuit described in the foregoing paragraph is pending. The stay may be terminated before the motion to dismiss is resolved according to certain circumstances described in the stipulation available on the Court’s public docket. On or about January 13, 2023, another purported shareholder, derivatively and on behalf of the Company, filed a shareholder derivative complaint in the United States District Court for the District of New Jersey, in a case entitled DeSalvo v. Costa, et al. , Case No. 2:23-cv-00150-JXN-CLW. Defendants Paulo F. Costa, Janet D. Dillione, Greg Duncan, Alan Dunton, Myron Kaplan, Steven Lefkowitz, Joseph Todisco, Khoso Baluch, Robert Cook, Matthew David, Phoebe Mounts, and John L. Armstrong along with the Company as Nominal Defendant. The complaint alleges breaches of fiduciary duty and unjust enrichment against the individual defendants. On or about January 25, 2023, another purported shareholder, derivatively and on behalf of the Company, filed a shareholder derivative complaint in the United States District Court for the District of New Jersey, in a case entitled Scullion v. Baluch, et al. , Case No. 2:23-cv-00406-ES-ESK. Defendants Khoso Baluch, Janet Dillione, Alan W. Dunton, Myron Kaplan, Steven Lefkowitz, Paulo F. Costa, Gregory Duncan, Matthew David, and Phoebe Mounts, along with the Company as Nominal Defendant. The complaint alleges breaches of fiduciary duties. On or about April 18, 2023, the Court entered an order consolidating the above-mentioned shareholder derivative complaints for all purposes, including pretrial proceedings, trial and appeal. The consolidated derivative action is entitled, In re CorMedix Inc. Derivative Litigation , C.A. No. 2:21-cv-18493-JXN-LDW. The provisions of the Order to Stay entered in the Voter Action on January 21, 2022, apply to the consolidated derivative action. The consolidated derivative action was then administratively terminated and removed from the Court’s docket until the motion to dismiss the class action is resolved. The individual defendants intend to vigorously contest the claims set forth in the consolidated derivative action when the case moves forward. F- 17 Demand Letter On or about June 23, 2022, the Company’s Board received a letter demanding it investigate and pursue causes of action, purportedly on behalf of Company, against certain current and former directors, officers, and/or other employees of the Company (the “Letter”), which the Board believes are duplicative of the claims already asserted in the Derivative Litigation. As set forth in the Board’s response to the Letter, the Board will consider the Letter at an appropriate time, as circumstances warrant, as it continues to monitor the progress of the Derivative Litigation. Commitments In-Licensing In 2008, the Company entered into the ND License Agreement with NDP. Pursuant to the ND License Agreement, NDP granted the Company exclusive, worldwide licenses for certain antimicrobial catheter lock solutions, processes for treating and inhibiting infections, a biocidal lock system and a taurolidine delivery apparatus, and the corresponding United States and foreign patents and applications(the “NDP Technology”). As consideration in part for the rights to the NDP Technology, 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 cash payments to NDP upon the achievement of certain milestones. In 2014, a certain milestone was achieved resulting in the release of 7,277 shares held in escrow. The maximum aggregate amount of cash payments due upon achievement of milestones is $ 3,000,000 , with the balance being $ 2,000,000 as of December 31, 2023 and 2022. Events that trigger milestone payments include achieving certain worldwide net sales amounts. There were no milestones achieved during the years ended December 31, 2023 and 2022. The ND License Agreement will expire on a country-by-country basis upon the earlier of (i) the expiration of the last patent claim under the ND License Agreement in a given country, or (ii) the payment of all milestone payments. Upon the expiration of the ND License Agreement in each country, we will have an irrevocable, perpetual, fully paid-up, royalty-free exclusive license to the NDP Technology in such country. The ND License Agreement also may be terminated by NDP if we materially breach or default under the ND License Agreement and that breach is not cured within 60 days following the delivery of written notice to us, or by us on a country-by-country basis upon 60 days prior written notice. If the ND License Agreement is terminated by either party, our rights to the NDP Technology will revert back to NDP. Other The Company entered into a seven-year operating lease agreement in March 2020 for an office space at 300 Connell Drive, Berkeley Heights, New Jersey 07922. The lease agreement, with a monthly average cost of approximately $ 17,000 , commenced on September 16, 2020. Note 7 — Stockholders’ Equity: Common Stock: In November 2020, the Company filed a shelf registration statement, (the “2020 Shelf Registration”), under which the Company could issue and sell up to an aggregate of $ 100,000,000 of shares of its common stock, $ 0.001 par value per share. In November 2020, the Company allocated to its at-the-market program (“ATM program”), an aggregate of $ 50,000,000 out of the $ 100,000,000 total under the 2020 Shelf Registration, which has been fully sold. In August 2021, the Company entered into an at-the-market issuance sales agreement with Truist Securities, Inc. and JMP Securities LLC, as sales agents, pursuant to which the Company may sell, from time to time, an aggregate of up to $ 50,000,000 , which was the remaining balance under the 2020 Shelf Registration, of its common stock through the sales agents under its ATM program, subject to limitations imposed by the Company and subject to the sales agents’ acceptance, such as the number or dollar amount of shares registered under the 2020 Shelf Registration to which the offering relates. The sales agents are 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, 2023 and 2022, the Company sold 2,977,637 and 4,704,259 shares of its common stock under the ATM program, respectively, and realized net proceeds of $ 12,900,000 and $ 17,800,000 , respectively. The remaining balance of approximately $ 18,300,000 under the ATM program related to the 2020 Shelf Registration expired in November 2023. Also, in August 2021, the Company filed a new shelf registration statement (the “2021 Shelf Registration”) for the issuance of up to $ 150,000,000 of shares of its common stock of which $ 104,400,000 is currently available for the issuance of equity, debt or equity-linked securities. On June 28, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with RBC Capital Markets, LLC and Truist Securities, Inc., as representatives of the several underwriters named therein, relating to the issuance and sale of an aggregate of 7,500,000 shares of the Company’s common stock, and, in lieu of common stock to certain investors, pre-funded warrants to purchase 2,500,625 shares of common stock to the underwriters. Pursuant to the Underwriting Agreement, the Company also granted the underwriters a 30-day option to purchase up to 1,500,093 additional shares of common stock. F- 18 The offering, pursuant to the 2021 Shelf Registration, closed on July 3, 2023. Upon closing, the Company issued and sold an aggregate of 7,500,000 shares of its common stock at a public offering price of $ 4.00 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to an aggregate of 2,500,625 shares of its commons stock at a price of $ 3.999 per pre-funded warrant (see Pre-Funded Warrants below). The Company realized net proceeds of approximately $ 37,300,000 from the sale of its common stock and the pre-funded warrants. On July 26, 2023, the underwriters’ representatives fully exercised the option to purchase additional shares of the Company’s common stock, and on July 28, 2023, the Company issued and sold an aggregate of 1,500,093 shares of its common stock at the public offering price of $ 4.00 per share, less underwriting discounts and commissions, and the Company realized net proceeds of approximately $ 5,600,000 . During the year ended December 31, 2023, the Company issued an aggregate of 79,041 shares of its common stock upon exercise of stock options, resulting in net proceeds to the Company of approximately $ 288,000 . During the year ended December 31, 2022, the Company issued an aggregate of 24,500 shares of its common stock, upon cash exercise of warrants, resulting in net proceeds to the Company of approximately $ 129,000 . Restricted Stock Units In May 2022, the Company granted 207,469 restricted stock units (“RSUs”) to its Chief Executive Officer under its Amended and Restated 2019 Omnibus Stock Incentive Plan with a weighted average grant date fair value of $ 3.38 per share. The fair market value of the RSUs was estimated to be the closing price of the Company’s common stock on the date of grant. These RSUs vest as to 50 % on the first anniversary of the grant date, as to 30 % on the second anniversary of the grant date, and as to 20 % on the third anniversary of the grant date, subject to continued service as an employee or consultant through the applicable vesting date. In May 2023, 103,734 RSUs vested pursuant to a grant made to its Chief Executive Officer, of which 66,291 shares of common stock were issued by the Company and 37,443 shares were withheld in lieu of withholding taxes. In December 2023, the Company granted 50,000 RSUs to its Chief Legal Officer under its Amended and Restated 2019 Omnibus Stock Incentive Plan with a weighted average grant date fair value of $ 3.30 per share. The fair market value of the RSUs was estimated to be the closing price of the Company’s common stock on the date of grant. These RSUs vest over four years in four equal installments on the first four anniversaries of the applicable grant date, subject to continued service as an employee or consultant through the applicable vesting date. During the year ended December 31, 2023 and 2022, compensation expense recorded for the RSUs was $ 262,000 and $ 226,000 , respectively. Unrecognized compensation expense for these RSUs amounted to $ 378,000 . The expected weighted average period for the expense to be recognized is 1.6 years. As of December 31, 2023, the Company had 153,735 outstanding RSUs. Preferred Stock The Company is authorized to issue up to 2,000,000 shares of preferred stock in one or more series without stockholder approval. The Company’s board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. Of the 2,000,000 shares of preferred stock authorized, the Company’s board of directors has designated (all with par value of $ 0.001 per share) the following: As of December 31, 2023 and 2022 Preferred Shares Outstanding Liquidation Preference (Per Share) Total Liquidation Preference Series C-3 2,000 $ 10.00 $ 20,000 Series E 89,623 $ 49.20 $ 4,409,452 Series G 89,999 $ 187.36 $ 16,862,213 Total 181,622 $ 21,291,665 F- 19 The following rights, privileges, terms and condition apply to the outstanding preferred stock at December 31, 2023: Series C-3 Non-Voting Preferred Stock Rank. 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. Conversion. 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. 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 stock. 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. Voting Rights. 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. Dividends. 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. Redemption. 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. Listing. 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 Rank. 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 stock; 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. Conversion. 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. F- 20 Liquidation Preference. 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. 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 . Dividends. 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. Redemption. 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. Listing. 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. 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. 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: 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. 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 Rank . 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. F- 21 Conversion . 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 . 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 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 . Dividends . 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. Redemption . 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. Listing . 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 . 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. 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: 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. F- 22 Stock Options: On October 13, 2022, the Company’s shareholders approved the CorMedix Inc. Amended and Restated 2019 Omnibus Stock Incentive Plan (the “2022 Plan”), pursuant to which the Company may issue as additional 4,800,000 shares of its common stock, plus any shares that remain available for grant under its existing plan as of the effective date, 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 2022 Plan amends and restates the 2019 Stock Incentive Plan. The 2013 Stock Incentive Plan and the Amended and Restated 2006 Stock Incentive Plan are referred to collectively as the “Prior Plans”. No further awards will be granted under the Prior Plans. Awards outstanding under the Prior Plans will remain outstanding in accordance with their terms and the Prior Plans. During the years ended December 31, 2023 and 2022, the Company granted ten-year qualified and non-qualified stock options to its officers, directors, employees and consultants covering an aggregate of 2,536,200 and 1,627,850 shares of the Company’s common stock under the 2019 Plan, respectively. The weighted average exercise price of these options is $ 4.18 and $ 3.83 per share, respectively. During the year ended December 31, 2023, the Company issued 79,041 shares of common stock as a result of the exercise of stock options. The Company realized net proceeds of $ 288,000 from the exercise of stock options with a weighted average exercise price of $ 3.64 per share. During the years ended December 31, 2023 and 2022, total compensation expense for stock options issued to employees, directors, officers and consultants was $ 5,232,000 and $ 3,843,000 , respectively. As of December 31, 2023, there was $ 6,145,000 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 1.6 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. 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: Year Ended December 31, 2023 2022 Risk-free interest rate 3.45 % - 4.81 % 1.76 % - 4.31 % Expected volatility 92.2 % - 105.7 % 89.68 % - 107.2 % Expected term (years) 5 years 2.75 – 5 years Expected dividend yield 0.0 % 0.0 % Weighted-average grant date fair value of options granted during the period $ 3.24 $ 2.90 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 of the Company’s common stock. 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. F- 23 The following table summarizes the Company’s stock options activity and related information for the year ended December 31, 2023: Shares Underlying Stock Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2022 4,454,369 $ 6.21 6.6 $ 1,113,050 Granted 2,536,200 $ 4.18 - $ 231,850 Exercised ( 79,041 ) $ 3.64 - $ 27,583 Expired/Canceled ( 287,900 ) $ 6.40 - $ 3,820 Forfeited ( 412,120 ) $ 5.74 - $ 35,592 Outstanding at December 31, 2023 6,211,508 $ 5.44 6.4 $ 700,241 Vested at December 31, 2023 3,645,020 $ 6.41 4.7 $ 281,080 Expected to vest in the future 2,566,488 $ 4.06 9.0 $ 419,161 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. Warrants During the year ended December 31, 2022, the Company issued an aggregate of 24,500 shares of its common stock upon cash exercise of warrants, resulting in net proceeds to the Company of $ 129,000 . Except for the pre-funded warrants described below, there were no outstanding warrants at December 31, 2023 and 2022. Pre-Funded Warrants On July 3, 2023, pursuant to the Underwriting Agreement, the Company’s issued pre-funded warrants to purchase 2,500,625 shares of its common stock to certain investors. The pre-funded warrants to purchase up to an aggregate of 2,500,625 shares of the Company’s commons stock had a price of $ 3.999 per pre-funded warrant, which represents the per share public offering price for the common stock less the $ 0.001 per share exercise price for each such pre-funded warrant pursuant to the Underwriting Agreement. The Company realized net proceeds of approximately $ 9,400,000 from the sale of the pre-funded warrants. Stock-based Deferred Compensation Plan for Non-Employee Directors 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 718. During the years ended December 31, 2023 and 2022 no compensation was deferred under this plan. Note 8 — Leases: The Company entered into a seven-year operating lease agreement in March 2020 for an office space at 300 Connell Drive, Berkeley Heights, New Jersey 07922. The lease agreement, with a monthly average cost of approximately $ 17,000 commenced on September 16, 2020. 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. The Company also has an operating lease for office equipment. F- 24 Operating lease expense in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2023 and 2022 was approximately $ 207,000 and $ 208,000 , respectively, which includes costs associated with leases for which ROU assets have been recognized as well as short-term leases. At December 31, 2023, the Company has a total operating lease liability of $ 668,000 , of which approximately $ 151 ,000 and $ 517 ,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, 2022, the Company’s total operating lease liability was $ 803,000 , of which $ 135 ,000 was classified as operating lease liabilities, short-term and $ 668 ,000 was classified as operating lease liabilities, net of current portion, on the condensed consolidated balance sheet. Operating ROU assets as of December 31, 2023 and 2022 are $ 640 ,000 and $ 775 ,000, respectively. For the year ended December 31, 2023 and 2022, cash paid for amounts included in the measurement of lease liabilities in operating cash flows from operating leases was $ 201,000 and $ 199,000 , respectively. As of December 31, 2023 and 2022, the weighted average remaining lease term were 3.8 years and 4.8 years, respectively and the weighted average discount rate of 9 % and 9 % at December 31, 2023 and 2022, respectively. As of December 31, 2023, maturities of lease liabilities were as follows: 2024 $ 205,000 2025 208,000 2026 211,000 2027 and thereafter 169,000 Total future minimum lease payments 793,000 Less imputed interest ( 125,000 ) Total $ 668,000 Note 9 — Subsequent Events: TDAPA . On January 25, 2024 CMS notified the Company that the agency has determined DefenCath will be eligible for reimbursement in accordance with the ESRD PPS, allowing the Company to submit a TDAPA application, which currently allows for two years of additional payment for certain products to outpatient renal dialysis providers, and CMS recently adopted a three-year post-TDAPA add-on payment adjustment. The Company submitted its TDAPA application on January 26, 2024 after receiving the CMS notification. As a result of CMS’ determination that DefenCath is within the scope of the ESRD PPS and eligible for TDAPA, the Company established a WAC of $ 249.99 per 3ml vial, to account for the market dynamics and functionality of the TDAPA framework. In addition, as discussed above, the Company previously applied for and received conditional NTAP from CMS for inpatient reimbursement of DefenCath for the FY 2024 IPPS. As a result of the Company having established a WAC price for commercialization, the NTAP reimbursement payment to inpatient facilities may also be adjusted. NTAP was conditioned upon the DefenCath NDA obtaining final FDA approval prior to July 1, 2024. The Company intends to work closely with CMS on obtaining TDAPA and the TDAPA implementation process. NOLs . On March 6, 2024, the Company received net proceeds of approximately $ 1,395,000 from the sale of its remaining unused New Jersey state NOL that was eligible for sale under the NJEDA Program for the state fiscal year 2023. The NJEDA Program allowed the Company to sell approximately $ 1,529,000 of its total $ 1,529,000 in available NOL tax benefits for state fiscal year 2023. F-25