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Item 7. Management’s Discussion and Analysis

2026-03-05 compared with 2025-03-25 · 437 added, 295 removed, 102 unchanged (88% of the section changed)

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company focused on developing and commercializing therapeutic products for life-threatening diseases and conditions.

Our primary focus is commercializing

our lead product, DefenCath® (taurolidine and heparin), in the U.S.

The name DefenCath is the U.S.

proprietary name approved by the

Food and Drug Administration (“FDA”).

CorMedix launched the product commercially in April 2024 in the inpatient setting

and July 2024 in the outpatient hemodialysis setting.

is an FDA approved antimicrobial CLS (a formulation of taurolidine 13.5 mg/mL, and heparin 1000 USP Units/mL) indicated to reduce the

incidence of CRBSI in adult patients with kidney failure receiving chronic hemodialysis through a CVC.

It is indicated for use in a limited

and specific population of patients.

CRBSIs, a clinically confirmed subset of the epidemiological surveillance term, central line associated

bloodstream infection (“CLABSI”), can lead to treatment delays and increased costs to the healthcare system when they occur

due to extended and often repeat 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.

Following the submission of

a duplicate NTAP application to CMS, CMS issued the IPPS 2024 proposed rule that includes a NTAP per hospital stay for DefenCath.

NTAP represents reimbursement to inpatient facilities of 75% of the wholesaler acquisition cost (“WAC”) price per 3 mL vial,

and an average utilization of 19.5 vials per hospital stay.

The final IPPS rule amended as of October 1, 2024 to reflect the current WAC

of $249.99 per 3ml vial resulting in a potential maximum NTAP of $3,656.10.

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 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, CorMedix launched the product commercially in April

2024 in the inpatient setting and July 2024 in the outpatient hemodialysis setting.

DefenCath is listed in the

Orange Book as having NCE exclusivity (5 years) expiring on November 15, 2028, and the 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 QIDP.

On January 25, 2024, CMS determined

that DefenCath should be classified as a renal dialysis service that is subject to the Medicare 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 received confirmation

that our application was approved on April 18, 2024 for a July 1, 2024 implementation.

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.

The HCPCS J-code for DefenCath was

published by CMS on April 2, 2024.

Our primary focus has been

commercializing DefenCath® (taurolidine and heparin), in the U.S., which we launched in 2024 in the hemodialysis setting.

DefenCath is the U.S.

proprietary name approved by the U.S.

DefenCath is an FDA

approved antimicrobial CLS (a formulation of taurolidine 13.5 mg/mL, and heparin 1000 USP Units/mL) indicated to reduce the

incidence of CRBSI in adult patients with kidney failure receiving chronic hemodialysis through a CVC It is indicated for use in a

limited and specific population of patients.

CRBSIs can lead to treatment delays and increased costs to the healthcare system when

they occur due to extended and often repeat hospitalizations, need for IV antibiotic treatment, long-term anticoagulation therapy,

removal/replacement of the CVC, related treatment costs, as well as increased mortality.

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.

DefenCath is subject to Medicare

ESRD PPS, which provides bundled payment for renal dialysis services and affords a TDAPA, which provides temporary, additional payments

for certain new drugs and biologicals.

TDAPA reimbursement is calculated based on 100 percent ASP (or 100 percent of wholesale acquisition

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for DefenCath apply for five years (with such add-on payments applying to all ESRD PPS payments for years three through five).

CMS confirmed

a July 1, 2024 implementation date for HCPCS and TDAPA.

We announced on June 6, 2024

that the CMS has determined that DefenCath qualified for pass-through status under the hospital Out-Patient Prospective Payment System

Pass-through status provides for separate payment under Medicare Part B for the utilization of DefenCath in the

outpatient ambulatory setting for a period of at least two years, and up to a maximum of three years.

While vascular access for hemodialysis

can be initiated in an inpatient setting, ambulatory surgical centers or vascular access centers offer a less-invasive, outpatient-based

alternative for patients.

We estimate that up to 100,000 HD-CVC placements occur each year, and pass-through status offers providers

a separate reimbursement mechanism in this setting of care administration of DefenCath.

Subsequent to the launch

of DefenCath in April 2024, we announced U.S.-based multi-year commercial supply agreements consisting of a large and several mid-sized

dialysis organizations.

Each provider has customized an implementation plan to provide access to patients based on a variety of clinical

and other factors.

We believe the currently contracted customer base represents roughly 60% of the outpatient dialysis centers in the

TDAPA began on July 1, 2024.

Looking forward, on July 1,

2026, DefenCath’s TDAPA reimbursement transitions into a three-year, post-TDAPA Add-On Payment phase, the calculation of which is

determined and published by CMS and will be $2.37 for the third and fourth quarters of 2026.

As a result of the methodology utilized by

CMS, the level of reimbursement provided to institutions treating dialysis patients will significantly decline, and as a result, we expect

a corresponding reduction to net pricing for DefenCath in the third and fourth quarters of 2026.

If CMS utilizes the same methodology

to calculate the 2027 post-TDAPA Add-On Adjustment, which will be effective on January 1, 2027, we estimate the value of the Add-On Adjustment

will be three to five-times higher than that granted for the third and fourth quarters of 2026, which we expect may result in higher DefenCath

sales prices in 2027 relative to the second half 2026.

After January 1, 2027, the post-TDAPA Add-On Payment will be reassessed again and

be made effective on January 1, 2028 and January 1, 2029, covering the three-year period through June 30, 2029.

Acquisition of Melinta

On August 29, 2025 (the “Closing Date”),

we completed the acquisition of Melinta.

The acquisition of Melinta expanded our team, commercial platform and increased the commercial

portfolio with six marketed, hospital- and clinic-focused infectious disease products, comprised of REZZAYO® (rezafungin for injection),

MINOCIN® (minocycline) for Injection, VABOMERE® (meropenem and vaborbactam), KIMYRSA® (oritavancin), ORBACTIV® (oritavancin),

BAXDELA® (delafloxacin), and an additional well-established cardiovascular product, TOPROL-XL® (metoprolol succinate) (together,

the Melinta Portfolio.

REZZAYO is currently approved for the treatment of candidemia and invasive candidiasis in adults, with an ongoing

Phase III study for the prophylaxis of invasive fungal infections in adult patients undergoing allogeneic blood and marrow transplantation.

The completion of the Phase III study for REZZAYO is expected in 2026.

The financial results of Melinta are included in

our consolidated financial statements starting on August 29, 2025.

Melinta’s financial results were not reflected in reported figures

in the periods preceding the Closing Date.

As a result, the reported results for 2025 and 2024 are not comparable.

To assist with the

discussion of 2025 and 2024 results on a comparable basis and provide more meaningful discussion, certain pro forma historical results

are included in Note 3 to the Consolidated Financial Statements included herein.

This information does not purport to reflect what our

financial and operational results would have been had the acquisition been consummated at the beginning of the periods presented.

further information relating to the acquisition of Melinta is included in Note 3 to the Consolidated Financial Statements included herein.

Pursuant to the terms of the

Merger Agreement, we acquired Melinta via a merger in which Merger Sub merged with and into Melinta, with Melinta surviving as a wholly-owned

subsidiary of the Company.

In consideration for the Merger, we (i) paid to the former Melinta equity holders an aggregate of $260.0 million

in cash, subject to adjustment for estimated Company Cash and estimated Working Capital as compared to the Working Capital Target (each

as defined in the Merger Agreement), and (ii) issued to certain of the former Melinta equity holders an aggregate of 3.3 million common

shares of the Company (the “Merger Shares”).

In addition, in connection with the Merger, we paid $23.2 million to acquire

the Toprol XL product rights, which Melinta had licensed from a third party.

The total cash consideration was funded by a combination

of the Company’s existing cash on hand and net proceeds from the Company’s $150.0 million aggregate principal amount of convertible

senior notes due 2030 (as described below).

Additionally, former Melinta

equity holders are eligible to receive certain contingent payments pursuant to the terms of the Merger Agreement and the Contingent Payment

Agreement, which provides for milestone and net sales-based payments.

Upon the issuance of the FDA marketing approval of REZZAYO (or any

product that contains the active ingredient rezafungin), for the prevention or prophylaxis of invasive fungal infections in adult patients

undergoing allogeneic stem cell blood and marrow transplant or the regulatory equivalent on or prior to June 30, 2029, we shall pay, in

cash or common shares, par value $0.001 per share, of the Company at the Company’s election, to the former Melinta equity holders

the following payments:

(i) if the FDA-approved labeling includes candida, $20 million;

(ii) if the FDA-approved labeling includes aspergillus, $2.5 million;

(iii) if the FDA-approved labeling includes pneumocystis, $2.5 million.

Further, the Contingent Payment Agreement provides

that we will pay to the former Melinta equity holders tiered royalties on REZZAYO U.S.

net sales and low-single-digit royalties on MINOCIN®

Additionally, on the Closing

Date, the Company and the consenting Melinta members entered into a registration rights agreement (the “Registration Rights Agreement”),

pursuant to which, among other things, the Company agreed to register for resale, pursuant to Rule 415 under the Securities Act, the Merger

Shares, pursuant to the Contingent Payment Agreement.

Convertible Notes Offering

On August 6, 2025, the Company entered into subscription

agreements with certain investors to provide for the issuance of $150.0 million aggregate principal amount of its convertible senior notes

due 2030 (the “Notes”) in a private placement, exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

The Notes were issued on August 12, 2025 and are eligible for resale to persons reasonably believed to be qualified institutional buyers

pursuant to Rule 144A of the Securities Act.

The Notes are governed by an Indenture, by and

between the Company and U.S.

Bank Trust Company, National Association, as trustee.

The Notes bear interest at a rate of 4.00% per annum,

payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2026.

The Notes will mature on August

1, 2030 and are senior, unsecured obligations of the Company.

The Company used the net proceeds of the issuance

of the Notes to fund a portion of the purchase price payable in connection with the Merger, including related fees and expenses.

7 to the Consolidated Financial Statements for further information regarding the Notes.

Follow-On Offering

In addition, on June 30, 2025, the Company completed

an underwritten public offering of common stock pursuant to the Company’s universal shelf registration statement on Form S-3, selling

an aggregate of 6,604,507 shares, at the price of $12.87 per share less an underwriting discount of $0.229 per share (the “Follow-On

The Company received aggregate net proceeds of approximately $82.4 million after deducting the underwriting discounts

and commissions and offering expenses payable by the Company.

See Note 10 to the Consolidated Financial Statements for further information

regarding the Follow-On Offering.

Financial Operations Overview

Our ability to continue to generate revenue and become profitable depends

on our ability to continue to successfully commercialize DefenCath and achieve gross profits from DefenCath sales that are greater than

our ongoing operating costs.

If we fail to continue to successfully commercialize DefenCath, or any other product lines we advance in

a timely manner or obtain regulatory approval for them, our ability to generate future revenue, and our results of operations and financial

position, could be adversely affected.

Prior to the commercial launch of DefenCath, we have funded our operations primarily through equity

Revenue from Product Sales

We generate product revenue

from commercial sales of DefenCath to a limited number of direct customers as well as distributors and, from the Closing Date, we generate

revenue from sales of the Melinta Portfolio.

We recognize revenue from the sale of our Products when our direct customers obtain control

of the product and is recorded at the transaction price, net of estimates for variable consideration consisting of chargebacks, discounts,

returns, rebates, shelf-stock adjustments and data fees.

Actual amounts of consideration ultimately received may differ from our estimates.

If actual results vary materially from our estimates, we will adjust these estimates, which will affect revenue from product sales and

earnings in the period such estimates are adjusted.

We continue to assess our

estimates of variable consideration as we accumulate additional historical data and will adjust these estimates accordingly.

Contract Revenue

As a result of the Merger,

we recognize revenue associated with Melinta’s license and collaboration agreements for the research and development and/or commercialization

of its therapeutic products in the form of licensing fees, milestone payments, royalties on sales in our partners’ respective licensed

territories, and sale of product inventory.

In addition, Melinta holds

a partnership with BARDA, a government agency, to advance BAXDELA and VABOMERE for use in pediatrics and to partner on the development

of BAXDELA against certain biothreat pathogens.

Research and development services under the contract are recognized as contract revenue

over time, as the performance obligation is satisfied, in accordance with the BARDA agreement.

Under this contract, BARDA has awarded

a total of $47.5 million with the potential of additional funding of $97.1 million, amounting to total funding up to $144.6 million, if

all options are exercised.

If all contract options are exercised, the contract is expected to continue through 2034.

Cost of Revenues

Cost of revenues include

direct and indirect costs related to the manufacturing and distribution of DefenCath, including product cost, packaging services, freight,

amortization of the license intangible asset and an allocation of overhead costs that are primarily fixed such as salaries, benefits

and insurance.

direct and indirect costs related to the manufacturing and distribution of our Products, including product cost, packaging services,

freight, and an allocation of overhead costs that are primarily fixed such as salaries, benefits and insurance.

In addition, cost of

revenues includes the amortization of intangible assets primarily associated with the fair value of the products acquired in the Melinta

Portfolio that were recorded as a result of the Merger (see Note 3 to the Consolidated Financial Statements included herein).

Research and Development Expense

Research and development,

or R&D, expense consists of:

Research and development (“R&D”)

expense consists of:

(i) internal costs associated with our development activities;

(ii) payments we make to third-party

contract research organizations, contract manufacturers, investigative sites, and consultants;

(iii) technology and intellectual property

license costs;

(ii) payments we make to third-party contract research

organizations, contract manufacturers, investigative sites, and consultants;

(iii) technology and intellectual property license costs;

(iv) manufacturing development costs;

(v) personnel related expenses, including salaries, stock–based compensation

expense, benefits, travel and related costs for the personnel involved in drug development;

(vi) activities relating to regulatory filings

and pre-clinical studies and clinical trials;

and (vii) manufacturing-related costs, including previously expensed pre-NDA approval inventory

amounting to approximately $6,400,000, through November 15, 2023.

(v) personnel related expenses, including salaries, stock–based compensation expense, benefits,

travel and related costs for the personnel involved in drug development;

and (vi) activities relating to regulatory filings and pre-clinical

studies and clinical trials.

All R&D is expensed as incurred.

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of success and development costs vary widely.

We are currently focused on the commercialization of DefenCath in the U.S.

We are currently focused on the commercialization of our Products in the United States.

Selling and Marketing Expense

Selling and marketing, or

S&M, expense includes the cost of salaries and related costs for personnel in sales and marketing, brand building, advocacy, market

research and consulting costs.

Selling and marketing (“S&M”)

expense includes the cost of salaries and related costs for personnel in sales and marketing including our contract sales force, brand

building, advocacy, market research and consulting costs.

Selling and marketing expenses are expensed as incurred.

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General and administrative

or G&A, expenses consist principally of salaries and related costs for personnel in executive, finance and administrative functions

including payroll taxes and health insurance, stock-based compensation and travel expenses.

Other general and administrative expenses

include facility-related costs, insurance and professional fees for legal, patent review, consulting, and accounting services.

and administrative expenses are expensed as incurred.

(“G&A”) expenses consist principally of salaries and related costs for personnel in executive, finance and administrative

functions including payroll taxes and health insurance, stock-based compensation and travel expenses.

Other general and administrative

expenses include merger-related costs, facility-related costs, insurance and professional fees for legal, patent review, consulting, and

accounting services.

General and administrative expenses are expensed as incurred.

Interest Income

Interest income consists of

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

Foreign Currency Exchange Transaction Gain

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

The intercompany loans outstanding

between our New Jersey-based company and our subsidiaries will not be repaid and the nature of the funding advanced was of a long-term

investment nature.

As such, unrealized foreign exchange movements related to long-term intercompany loans are recorded in other comprehensive

income (loss).

Interest Income

Interest income consists

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

Unrealized Gains on Marketable Security

Unrealized gains on marketable

security represents the change in fair market value of our marketable equity securities.

Change in Contingent Consideration

Change in contingent consideration

represents the change in fair market value of the contingent consideration liabilities in connection with the Merger.

Contingent consideration

in connection with the business combination is initially measured at fair value at the acquisition date and classified as a liability

and subsequently remeasured at fair value at each reporting date using a probability-weighted discounted cash flow model, or Monte Carlo

simulation, based on significant inputs.

Changes in fair value are recognized as change in contingent

consideration within other expenses in the consolidated statement of operations.

Interest Expense

Interest expense consists

of interest incurred on financing of expenditures.

primarily of interest incurred on the Notes.

Tax Expense / Benefit

Income taxes are accounted

for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences

attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax

bases and operating loss and tax credit carryforwards.

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 operating results in the period that includes the enactment date.

Management assesses the realizability of deferred tax assets and records a valuation allowance if it is more likely than not that all

or a portion of the deferred tax assets will not be realized.

Results of Operations

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The following is a tabular

presentation of our consolidated operating results for the years ended December 31, 2024 and 2023 (in thousands) :

Cost of revenue

presentation of our audited consolidated operating results for the years ended December 31, 2025 and 2024 (in thousands) :

for 2025 are inclusive of Melinta’s operations from the acquisition date of August 29, 2025 through December 31, 2025, while the

prior period does not include combined results.

The below discussion of changes to our revenue and expenses compared to the prior year

largely focus on material factors independent of the acquisition.

Contract Revenue

Total Revenue

Cost of sales

Intangible Amortization

Gross profit (loss)

Operating Expenses:

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Total operating expenses

Loss from operations

Income (loss) from operations

Interest income

Foreign exchange transaction loss

Unrealized gain on marketable security

Change in contingent consideration

Interest expense

Total other income

Loss before income taxes

Total other income (expenses)

Income (loss) before income taxes

Tax (benefit)

Net income (loss)

Other comprehensive (loss) income

Comprehensive loss

the year ended December 31, 2024 was $43.5 million as compared to $0 for the same period in 2023.

Revenue consists of sales of DefenCath,

which was approved by the FDA in November 2023 and launched in the U.S in April 2024 (inpatient setting) and July 2024 (outpatient setting)

and reflects the shipment of DefenCath to direct customers and specialty distributors, net of estimates for applicable variable consideration,

which consists primarily of distribution service fees, prompt pay and other discounts, product returns, chargebacks, rebates and volume

incentive rebates.

Comprehensive income (loss)

the year ended December 31, 2025 was $311.7 million as compared to $43.5 million for the same period in 2024, an increase of $268.2 million,

For the years ended December

31, 2025 and 2024, product sales were $304.3 million and $43.5 million, respectively, representing an increase of $260.8 million, or 600%.

Product sales during fiscal year 2024 and 2025 consist primarily of sales of DefenCath, which was approved by the FDA in November 2023

and launched in the U.S in April 2024 (inpatient setting) and July 2024 (outpatient setting) and reflects the shipment of DefenCath to

direct customers and specialty distributors, net of estimates for applicable variable consideration.

Revenue from the Melinta Portfolio

represents $45.5 million of product sales, net of applicable variable consideration, for the post-acquisition period, starting August

In 2024, we entered into multi-year

commercial supply agreements with a large and several mid-sized dialysis organizations.

Each dialysis provider customized its implementation

plan to provide access to patients based on a variety of clinical and other factors.

We believe the currently contracted customer base

represents roughly 60% of the outpatient dialysis centers in the U.S.

in terms of the total addressable patient market.

second quarter of 2025, the Company’s largest volume customer commenced ordering, patient utilization commenced in the third quarter

of 2025, driving significant sales growth in the second half of 2025 relative to the first half.

Contract revenue for 2025

is related solely to the acquired operations of Melinta after the Closing Date of August 29, 2025 and reflects $4.2 million earned under

the BARDA agreement and $3.2 million related to milestone, royalty, and inventory revenue under Melinta’s licensing agreements.

The following is a summary

of our Total Revenue between the DefenCath sales and the contribution from the Melinta Portfolio from the Closing Date of August 29, 2025

through the end of 2025.

The table below represents consolidated revenue for the year ended December 31, 2025 and 2024 (in thousands) :

Product Sales:

Melinta Portfolio

Total product sales

Contract Revenue

Total Revenue

Cost of Revenue.

of revenue for the year ended December 31, 2024 was $3.2 million as compared to $0 for the same period in 2023.

Cost of revenues include

direct and indirect costs related to the manufacturing and distribution of DefenCath, including product cost, packaging services, freight,

amortization of the license intangible asset and an allocation of overhead costs that are primarily fixed such as salaries, benefits

and insurance.

Direct costs of product sales during the year ended December 31, 2024 were minimal as DefenCath sold to date represented

validation lot units previously expensed as R&D.

This only marginally benefited the total gross margin in 2024 and the majority of

validation batch product has been sold as of December 31, 2024.

Indirect costs of approximately $3.0 million for the year ended December

31, 2024, represent the proportion of supply chain and quality personnel, benefits and insurance expenses representing excess capacity

in the production of sellable product.

As unit sales increase, a greater proportion of these costs will be capitalized as a component

of inventory and expensed at the point-of-sale.

of revenue for the year ended December 31, 2025 was $22.1 million as compared to $3.0 million for the same period in 2024, an increase

of $19.1 million, or 628%.

Cost of revenues include direct and indirect costs related to the manufacturing and distribution of DefenCath

and the Melinta Portfolio, including product cost, packaging services, freight, and an allocation of overhead costs that are primarily

fixed such as salaries, benefits and insurance.

The increase from 2024 to 2025 is primarily driven by higher product sales and to a lesser

extent, costs associated with the sales of the Melinta Portfolio.

Intangible Asset Amortization .

Amortization of intangible assets was $13.9 million and $0.2 million for the year ended December 31, 2025 and 2024, respectively.

increase was primarily due to the intangible assets acquired in connection with the Merger.

Research and Development

R&D expense for the year ended December 31, 2024 was $3.9 million, a decrease of $9.2 million, or 70%, from $13.2 million

for the same period in 2023.

The decrease was driven by the approval of DefenCath.

As a result of the transition to commercial operations,

costs related to medical affairs and certain other personnel that supported R&D efforts prior to the FDA approval of DefenCath of

approximately $6.9 million began supporting non research and development operations and have been recognized in cost of revenue or general

and administrative expense during the year ended December 31, 2024 Also, in 2023, prior to FDA approval, there were $1.5 million of costs

recognized in R&D related to the manufacturing of DefenCath validation batches.

These types of costs are now capitalized in inventory

as DefenCath is a commercialized product.

R&D expense for the year ended December 31, 2025 was $19.3 million, an increase of $15.4 million, or 390%, from $3.9

million for the same period in 2024.

The increase was due primarily to the increases in personnel and clinical trial services in support

of the ongoing clinical studies initiated in the fourth quarter of 2024 as well as severance costs and the incremental cost of Melinta’s

operations starting on August 29, 2025.

Selling and Marketing Expense .

S&M expense was $28.7 million for the year ended December 31, 2024, an increase of $10.6 million, or 59%, from $18.1 million for

the same period in 2023.

The increase was due primarily to increased marketing efforts and new personnel hired in late 2023 or throughout

2024, inclusive of our sales force and support for the commercial launch of DefenCath during 2024.

Subsequent to December 31, 2024, we

severed our internal sales force, future costs associated with the Syneos sales force are expected to be similar to those recognized internally

S&M expense was $38.1 million for the year ended December 31, 2025, an increase of $9.4 million, or 32%, from $28.7 million for the

same period in 2024.

These increases were primarily due to severance costs and the incremental cost of Melinta’s operations starting

on August 29, 2025 and the termination cost associated with the Syneos contract, offset by additional marketing costs related to the pre-launch

and launch of DefenCath in 2024.

General and Administrative

G&A expense for the year ended December 31, 2024 was $30.0 million, an increase of $12.3 million, or 69%, from $17.7

million for the same period in 2023.

The increase was driven by the approval of DefenCath.

As a result of the transition to commercial

operations, certain medical affairs, other personnel and consulting expenses of approximately $6.0 million previously classified in R&D

are included in G&A expense during the year ended December 31, 2024.

Additional G&A personnel were also hired throughout 2024

in anticipation of and to support commercial operations, representing an increases of $2.8 million as well as increases in legal and

compliance of $1.7 million and consulting fees of $0.9 million.

G&A expense for year ended December 31, 2025 was $68.2 million, an increase of $38.2 million, or 128%, from $30.0 million

for the same period in 2024.

These increases were primarily driven by the Merger-related transaction costs, severance costs, the incremental

cost of Melinta’s operations starting on August 29, 2025 including higher headcount with the combined company, non-cash charges

for stock-based compensation and an increase in costs related to business development.

Interest Income .

income for the year ended December 31, 2024 was $2.6 million, a decrease of $0.1 million, or 4%, from $2.7 million for the same period

in 2023, due to lower short-term investments during this period as compared to the same period last year.

Foreign Exchange Transaction

Income (Loss) .

Foreign exchange transaction income (losses) for the years ended December 31, 2024 and 2023 were due to the re-measuring

of transactions denominated in a currency other than our functional currency.

Balances and changes were immaterial for all periods presented.

Other Income.

income relates to a settlement with a previously utilized vendor, occurring during the year ended December 31, 2024.

Interest Expense .

Interest expense pertains to certain liabilities we chose to finance.

Balances and changes were immaterial for all periods presented.

for the year ended December 31, 2024 was $1.4 million, due to the sale of our unused NJ State net operating losses for fiscal year 2023,

which were sold in fiscal year 2024, through the NJEDA Program.

There was no tax benefit from the sale of unused net operating losses

for fiscal year 2023.

Other Comprehensive (Loss)

Unrealized foreign exchange movements related to long-term intercompany loans, the translation of the foreign affiliate financial

statements to U.S.

dollars and unrealized movements related to short-term investment are recorded in other comprehensive (loss) income.

Other comprehensive income (loss) is considered immaterial for all periods presented.

Quarterly Results of Operations (Unaudited):

The following table is the

summary of the Company’s unaudited quarterly condensed consolidated results of operations for the year ended December 31, 2024

(amounts in thousands, except for per share amounts):

Gross profit (loss)

Income (loss) from operations

Net income (loss) per common shares – basic*

Weighted average common shares outstanding – basic*

* Diluted earnings per share are not presented in this table

income was $3.8 million for the year ended December 31, 2025 compared to $2.6 million for the same period last year, an increase of $1.2

million, or 49%, driven by higher average cash balances.

Unrealized Gains on Marketable

Unrealized gain on marketable security represents the change in fair value for our marketable equity securities in Talphera,

a publicly-traded biotechnology company, from the date that the stock was acquired to December 31, 2025.

Fair value is determined based

on the closing stock price of Talphera on the balance sheet date.

For the year ended December 31, 2025, we recognized an unrealized gain

on marketable security of $5.4 million related to the increase in fair value of our Talphera stock.

Change in Contingent Consideration.

For the year ended December 31, 2025, we recognized a $6.5 million change in contingent consideration, primarily driven by the changes

in the present value of expected payments resulting from discount accretion and updates to the risk-free rate used in the initial Closing

Date valuation.

As the Merger closed in 2025, there was no comparative amount in 2024.

Interest expense was $2.8 million for the year ended December 31, 2025 compared to $0.0 million for the same period last

year, an increase of $2.8 million.

This was primarily driven by the interest expense and accretion related to the Notes.

The tax benefit for year ended December 31, 2025 was $13.0 million,

an increase of $11.6 million, or 835% from $1.4 million for the same period in 2024.

As of December 31, 2025, the Company partially released

a valuation allowance primarily related to US Federal net operating losses (“NOLs”).

The release of valuation allowance was

mainly attributed to the expected utilization of historical CorMedix federal NOLs.

The Company will continue to evaluate the realizability

of its remaining deferred tax assets each reporting period and adjust the valuation allowance as appropriate based on changes in cumulative

results, forecasts of future taxable income, or other objective evidence as required by ASC 740-10-35.

The tax benefit from the release

of the valuation allowance was partially offset by state taxes.

Comprehensive (Loss) Income .

Unrealized foreign exchange movements related to long-term intercompany loans, the translation

of the foreign affiliate financial statements to U.S.

dollars and unrealized movements related to short-term investment are recorded

in other comprehensive (loss) income.

The foreign entity was dissolved in 2025.

Liquidity and Capital Resources

Sources of Liquidity

As a result of our R&D,

S&M and G&A expenditures and the lack of substantial product sales revenue, our ongoing operations have not been profitable on

an annual basis since our inception.

We achieved profitability in the fourth quarter of 2024, driven by product sales of DefenCath.

the year ended December 31, 2024, we received net proceeds of $18.9 million from the issuance of 3,049,878 shares of common stock under

our at-the-market-issuance sales agreement, or ATM program, as compared to $12.9 million net proceeds in 2023 from the issuance of 2,977,637

shares of common stock.

Also, in 2023, we received net proceeds of $42.9 million from the issuance of 9,000,093 shares of common stock

and pre-funded warrants to purchase 2,500,625 shares of common stock in connection with a public offering.

We may continue to be reliant

on external sources of cash until we are able to generate sufficient operating cash flow to fund operations.

In March 2024, we received

$1.4 million, net of expenses, from the sale of our unused New Jersey net operating losses (“NOL”), that were 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 us to sell our available fiscal 2023 NJ state NOL tax benefits in the

amount of approximately $1.5 million.

Net Cash Used in Operating Activities

Net cash used in operating

activities for the year ended December 31, 2024 was $50.6 million as compared to $38.4 million in 2023, an increase in net cash use of

$12.2 million.

The increase in cash use is primarily driven by an increase in trade receivables of $51.8 million and inventories of $3.4

million offset by a net increase in the change of accrued expenses and accounts payable of $15.4 million, primarily attributable to the

gross-to-net-deductions accruals and decreased net loss of $28.4 million.

Net Cash Provided by (Used in) Investing

Net cash provided by investing

activities for the year ended December 31, 2024, was $21.2 million as compared to $17.1 million of net cash used in investing activities

We achieved profitability

for the year ended December 31, 2025, driven primarily by product sales of DefenCath.

In addition, we received net proceeds of $7.8 million

from the issuance of 715,051 shares of common stock under our at-the-market-issuance sales agreement (“ATM program”), we raised

net proceeds of $144.3 million from the Notes offering in August 2025 and $82.4 million from the Follow-On Offering in June 2025.

continue to utilize external sources of cash to further fund operations.

See Notes 7 and 10, respectively, to the Consolidated Financial

Statements for further details on the Notes, Follow-On Offering, and ATM program.

Net Cash Provided by (Used in) Operating

Net cash provided by operating

activities for the year ended December 31, 2025 was $175.0 million as compared to net cash used in operating activities of $50.6 million

for the same period in 2024.

The net cash provided during the year ended December 31, 2024, was mainly driven by maturing short-term

investments used to help fund operations, and lower purchases of short-term investments in 2024.

Net cash provided by operating activities was primarily attributable to the net income of $163.1 million

for the year ended December 31, 2025 compared to a net loss of $17.9 million in the comparison period in 2024.

Net Cash (Used in) Provided by Investing

Net cash used in investing

activities for year ended December 31, 2025 was $308.4 million as compared to $21.2 million of net cash provided by investing activities

for the same period in 2024.

The net cash used during the year ended December 31, 2025, was mainly driven by the acquisition of Melinta.

Net Cash Provided by Financing Activities

Net cash provided by financing

activities for the year ended December 31, 2024, was $26.3 million as compared to $55.9 million for the same period in 2023, a decrease

of $29.6 million.

The decrease was mainly attributable to the net proceeds of $42.9 million from a public offering completed during the

year ended December 31, 2023, offset by increases in proceeds from the exercise of stock options of $7.4 million, and increased ATM net

proceeds of $6.0 million during the year ended December 31, 2024.

activities for the year ended December 31, 2025 of $238.5 million was attributable to the Notes Offering in August 2025, the Follow-On

Offering in June 2025, and from our ATM program.

Net cash provided by financing activities for the year ended December 31, 2024 was $26.3

million attributable to the net proceeds received from the sale of our common stock in our ATM program and stock option exercises.

Funding Requirements and Liquidity

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and short-term investments as of December 31, 2025, was $148.5 million, excluding restricted cash of $1.0 million, compared with $51.7

million for the year ended December 31, 2023, excluding restricted cash of $0.2 million.

As of December 31, 2024, $30.2 million of the

Company’s common stock remains available for potential sale under the ATM program.

Additionally, we have $100.0 million of remaining

capacity available under our 2024 Shelf Registration Statement for the issuance of Company securities.

We expect to continue to

fund operations from cash collections from accounts receivable, plus cash, cash equivalents and short-term investments and through capital

raising sources, which may be dilutive to existing stockholders.

In May 2024, we implemented an ATM program, which may be utilized to

support our ongoing funding requirements.

We may seek to sell additional equity or debt securities through one or more discrete transactions,

or enter into a strategic alliance arrangement, but can provide no assurances that any such financing or strategic alliance arrangement

will be available on acceptable terms, or at all.

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

and could contain covenants that would restrict our operations.

Raising additional funds through strategic alliance arrangements with

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

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

million as of December 31, 2024, excluding restricted cash of $0.1 million.

As of December 31, 2025, $22.1 million of the Company’s

common stock remains available for potential sale under the ATM program.

Additionally, we have $15.0 million of remaining capacity available

under our 2024 Shelf Registration Statement for the issuance of Company securities.

We expect to continue to fund

operations from cash collections of accounts receivable, our cash on hand, cash equivalents and short-term investments, and through potential

capital raising sources, which may be dilutive to existing stockholders.

We may seek to sell additional equity or debt securities through

one or more discrete transactions, but can provide no assurances that any such financing will be available on acceptable terms, or at

Moreover, the incurrence of indebtedness would result in increased fixed obligations and could contain covenants that would restrict

our operations.

Our actual cash requirements

may vary materially from those now planned due to a number of factors, including any material change in commercial operations pertaining

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

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

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

Because our business has not generated consistent

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

activities, as well as to fund operations generally and we can provide no assurances that financing or strategic relationships will be

available on acceptable terms, or at all, if additional funds are needed.

If we are unable to raise additional funds when needed, we

may be forced to slow or discontinue our commercial operations pertaining to DefenCath.

We may also be required to delay, scale back

or eliminate some or all of our anticipated research and development programs.

Each of these alternatives would likely have a material

adverse effect on our business.

to our Products or the focus and direction of our research and development programs, any acquisition or pursuit of development of new

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

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

We currently estimate that

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The lease agreement,

with a monthly average cost of approximately $17,000, commenced on September 16, 2020.

In December 2024, we entered

into a three-year agreement with Syneos Health Commercial Services, LLC (“Syneos”) where Syneos will provide a dedicated

inpatient field sales force of sales that will exclusively promote DefenCath to hospitals and health systems.

We are obligated to an

up-front implementation and a fixed monthly fee.

Upon the twelve-month anniversary of the deployment date, expected to be in the

second quarter of 2025, the agreement is cancelable provided 60 days written notice.

As of December 31, 2024, the minimum amount

committed under this agreement totals $9.6 million.

In 2008, the Company entered

into a License and Assignment Agreement (the ND License Agreement) with ND Partners, LLP (NDP).

Pursuant to the ND License Agreement,

NDP granted the Company exclusive, worldwide licenses for certain antimicrobial catheter lock solutions, processes for treating and inhibiting

infections, a biocidal lock system and a taurolidine delivery apparatus, and the corresponding United States and foreign patents and

applications (the NDP Technology).

During the year ended December 31, 2024, net sales milestones in the amount of $2 million were achieved

and are accrued in our consolidated balance sheet.

The Company anticipates payment will be due in 2025 in accordance with the agreement

terms at the end of the twelve-month period post attainment.

with a monthly average cost of approximately $17,000, commenced on September 16, 2020 and has a term through October 2027.

Following the Merger, the

Company now has operating leases for two additional offices;

a lease agreement for our corporate headquarters at 389 Interpace Parkway,

Parsippany, New Jersey, which expires in March 2030, and a sublease agreement for an office facility in Lake Forest, Illinois, which expires

in September 2031.

The total monthly expense associated with these leases is approximately $60,000.

In addition, following the

Merger, we have finance leases for numerous vehicles that are used by certain field-based employees The lease term for each vehicle is

between 48 to 60 months with an aggregate approximate monthly expense of $70,000.

In connection with the Merger,

we are required to make certain contingent payments to the former Melinta equity holders.

Upon the issuance of the FDA marketing approval

of REZZAYO (or any product that contains the active ingredient rezafungin), for the prevention or prophylaxis of invasive fungal infections

in adult patients undergoing allogeneic stem cell blood and marrow transplant or the regulatory equivalent (the “REZZAYO Second

Indication”) on or prior to June 30, 2029, the Company shall pay, in cash or common shares, par value $0.001 per share, of the Company

at the Company’s election, to the former Melinta equity holders the following payments (the “REZZAYO Milestone”):

(i) if the FDA-approved labeling includes candida, $20 million;

(ii) if the FDA-approved labeling includes aspergillus, $2.5 million;

(iii) if the FDA-approved labeling includes pneumocystis, $2.5 million.

Further, we are obligated

to pay to the former Melinta equity holders tiered royalties on REZZAYO U.S.

net sales and low-single-digit royalties on MINOCIN U.S.

In addition, in connection

with the Merger, we assumed certain commitments under the REZZAYO License Agreement that Melinta held with its licensor Mundipharma, including

a regulatory milestone of between $30 million and $40 million upon receipt of FDA approval for the REZZAYO Second Indication, a number

of commercial milestones upon exceeding certain net sales targets, and tiered net sales-based royalties.

The REZZAYO License Agreement

additionally stipulates that upon the earlier of thirty-days following the receipt of the marketing approval for the prophylaxis indication

or on June 30, 2028, we will assume all rights, title and interest in and to all product filings for the current product in the U.S.

In connection with the purchase

of the active pharmaceutical ingredient (API) for VABOMERE, we have committed to API deliveries from the CMO in 2026 with a total cost

of €5.9 million, subject to inflation adjustments.

In December 2024, the Company

entered into a three-year agreement with Syneos Health Commercial Services, LLC (“Syneos”) under which Syneos agreed to provide

a dedicated inpatient field sales force to exclusively promote DefenCath to hospitals and health systems.

The Company paid an up-front

implementation fee and was obligated to pay a fixed monthly fee.

The Company signed a termination agreement, effective October 1,

2025 whereas the related services to CorMedix were completed on December 31, 2025.

As of December 31, 2025, the Company has a total

net obligation of $2.3 million, consisting of $1.3 million of accrued termination fees and $1.6 million of unpaid expenses incurred through

December 31, 2025, which will be partially offset by a security deposit of $0.6 million.

We expect complete settlement to occur during

the first quarter of 2026.

Critical Accounting Estimates

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Changes in estimates used in these and other items could have a material impact on our financial statements.

● Litigation contingencies are assessed and judgments are made

to determine if an unfavorable outcome is considered probable or reasonably possible, and when considered reasonably possible but not

probable, the contingency is disclosed along with an estimate of the possible loss or range of loss.

If a liability is possible or probable,

but no reasonable estimation of loss can be made, we will disclose the nature of the contingency and state that such an estimate cannot

Such estimates and judgements are based on information obtained through the discovery process, court filings and follow on filings

by the plaintiffs as well as the stage of litigation.

There have been no changes in management’s estimates in 2024.

● We account for product

revenue from the sale of our product, DefenCath, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”)

which entails our estimates and judgments primarily in determining the transaction price and more specifically as it relates to variable

consideration associated with the contracts.

Our customers are located in the United States and consist primarily of outpatient service

providers and to a lesser extent specialty wholesale distributors.

Variable consideration pertaining to an allowance for product returns

of short-dated or expired product requires estimation as our customers may have differing utilization, storage and distribution methods

and we do not yet have significant historical trends.

The Company’s product accrual takes into consideration estimates of product

held by its customers, the distribution channel, the shelf life of the product held by customers, as well as when the product is eligible

for return based on our returns good policy.

At December 31, 2024, the Company had $0.7 million in accrued returns allowance.

established the estimate for returns based on specific customer circumstances, industry best practices and management experiences.

return windows open and we experience actual returns we will further refine our estimate methods.

Quantitative and Qualitative Disclosures About Market

Litigation contingencies are assessed and judgments are made to determine if an unfavorable outcome is considered probable or reasonably possible, and when considered reasonably possible but not probable, the contingency is disclosed along with an estimate of the possible loss or range of loss.

If a liability is possible or probable, but no reasonable estimation of loss can be made, we will disclose the nature of the contingency and state that such an estimate cannot be made.

Such estimates and judgements are based on information obtained through the discovery process, court filings and follow on filings by the plaintiffs as well as the stage of litigation.

We account for product revenue from the sale of our Products in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), which entails our estimates and judgments primarily in determining the transaction price and more specifically as it relates to variable consideration associated with the contracts.

Our customers are primarily located in the United States and consist primarily of outpatient service providers and to a lesser extent specialty wholesale distributors.

Variable consideration pertaining to an allowance for product returns of short-dated or expired product requires estimation as our customers may have differing utilization, storage and distribution methods and we do not yet have significant historical trends specific to DefenCath.

The Company’s product return accrual takes into consideration estimates of product held by its customers, the distribution channel, the shelf life of the product held by customers, as well as when the product is eligible for return based on our returns good policy.

We have established the estimate for returns based on specific customer circumstances, industry best practices and management experiences, which will continuously be refined as new information is received.

At December 31, 2025, we had $18.3 million in accrued returns allowance, including the balance recorded for the Melinta Portfolio.

Variable consideration pertaining to

accrued Medicaid rebates requires estimation as our customers may have differing utilizations rates of Medicaid coverage, different utilization

within States which may be in either the primary or secondary positions, together with as well as general fluctuations in patient populations

Based on the relatively short time since product launch of DefenCath and the inherent lag time in states’ Medicaid processing,

the utilization of information the Company has received is limited and, as such, there is a lack of significant historical trends for

Medicaid utilization.

The Company’s accrual does take into consideration its customers’ recent actual Medicaid utilization

rates as well as anticipated Medicaid utilization rates.

At December 31, 2025, the Company had $12.4 million in accrued Medicaid rebates,

including the balance recorded for the Melinta Portfolio.

During the year ended December 31,

2025, a change in estimate was recorded for variable consideration pertaining to Medicaid rebates, specific to DefenCath.

During the three

months ended June 30, 2025, new information was obtained by the Company surrounding Medicaid utilization rates for certain states that

reimburse service providers using DefenCath.

The resulting change in accounting estimate negatively impacted net sales, income from continuing

operations and net income for the year ended December 31, 2025.

The resulting change in estimate negatively impacts full year 2025 revenue,

continuing operations and net income in the amount of $1.7 million.

This impacted basic and diluted earnings per share by $0.02 and $0.02

per share, which would have caused earnings per share and diluted earnings per share to be $2.27 and $2.06 respectively.

, with a corresponding net income of $164.7 million.

As of September 30, 2025, the Company had achieved cumulative pre-tax income over the most recent three-year period, and therefore, in accordance with ASC 740, Income Taxes, management evaluated both positive and negative evidence in assessing the realizability of its deferred tax assets.

In addition to the historical earnings, the Company considered factors such as the sustainability of current revenue sources, excluding potential future revenue from additional indications of our Products currently under development, and future net income projections.

Based on this evidence, the Company concluded that is more-likely-than-not (as defined in ASC 740-10-30-5(e)) that it will realize the benefit of certain deferred tax assets, related primarily to utilization of its U.S.

federal NOL carryforwards, within the applicable carryforward periods provided under Internal Revenue Code (“IRC”) Section 172.

As a result of this conclusion,

the Company partially released its valuation allowance previously recorded against its deferred tax assets, recognizing an income

tax benefit of $61.5 million for the year ended, December 31, 2025.

The release of valuation allowance was mainly attributed to the

expected utilization of historical CorMedix federal NOLs.

The Company will continue to evaluate the realizability of its remaining

deferred tax assets each reporting period and adjust the valuation allowance as appropriate based on changes in cumulative results,

forecasts of future taxable income, or other objective evidence as required by ASC 740-10-35.

We account for acquired businesses using the acquisition method of accounting under Business Combinations (Topic 805).

With respect to business combinations, we determine the purchase price, including contingent consideration, and allocate the purchase price of acquired businesses to the tangible and intangible assets acquired and liabilities assumed, based on estimated fair values.

The excess of the purchase price over the identifiable assets acquired and liabilities assumed is recorded as goodwill.

We engaged a third-party professional

service provider to assist us in determining the fair values of the purchase consideration, assets acquired, and liabilities assumed.

Such valuations require management to make significant estimates and assumptions, especially with respect to contingent liabilities associated

with the purchase price and intangible assets, such as developed product rights and in-process research and development programs.

estimates that we have used in valuing these elements include, but are not limited to, future expected cash flows using valuation techniques

(i.e., Monte Carlo simulation models) and discount rates.

Management’s estimates of fair value are based upon assumptions believed

to be reasonable, but which are inherently uncertain and unpredictable.

We record the different elements of contingent consideration resulting from a business combination at their respective fair values on the acquisition date.

The purchase price of Melinta included contingent consideration related to certain tiered royalty payments based on future net sales, as well as to regulatory milestones associated with the acquired products.

Over time, increases in fair value from the passage of time are accreted and recorded as non-cash interest expense in the consolidated statements of operation.

Changes to contingent consideration obligations, other than the passage of time, may result from adjustments related, but not limited, to changes in discount rates and the number of remaining periods to which the discount rate is applied, updates in the assumed achievement or timing of any regulatory milestone or changes in the probability of certain clinical events, changes in our forecasted sales of products acquired, and changes in the assumed probability associated with regulatory approval.

At the end of each reporting period, we evaluate the need to remeasure the contingent consideration and, if appropriate, we revalue these obligations and record increases or decreases in their fair value in selling, general and administrative expenses within the accompanying consolidated statements of operations.

Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period.

Accordingly, any change in the assumptions described above, could have a material impact on the amount we may be obligated to pay as well as the results of our consolidated results of operations in any given reporting period.

Quantitative and Qualitative Disclosures

About Market Risk

Financial Statements and Supplementary Data

The information required

by this Item 8 is included in Part IV, Item 15, and is incorporated by reference.

The information required by

this Item 8 is included in Part IV, Item 15, and is incorporated by reference.

Changes in and Disagreements with Accountants on Accounting

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

What changed 10-K

Item 7. Management’s Discussion and Analysis