What changed in this filing

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Item 9A. Controls and Procedures

2026-03-05 compared with 2025-03-25 · 1633 added, 1001 removed, 669 unchanged (80% of the section changed)

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”).

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

There were no changes in

our internal control over financial reporting during our year ended December 31, 2024, 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.

Management’s Annual Report on Internal Controls Over Financial

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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.

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.

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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.

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,

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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, 2024, 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, 2024.

Changes in Internal Control Over Financial

were no changes in our internal control over financial reporting during our year ended December 31, 2025, 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.

Internal Controls Assessment

connection with the preparation of our annual consolidated financial statements for the year ended December 31, 2025, management identified

a deficiency in its internal control over financial reporting related to the operational effectiveness of an internal control to ensure

adequate and timely review of significant, non-routine transactions.

During the third quarter of

2025, the Company had recently completed a large acquisition and a convertible debt offering, and as a result, encountered numerous and

competing financial reporting demands with a limited number of finance resources and with heavy reliance on a third-party accounting

The capacity constraints of our team at this time contributed to the control deficiency, which resulted in an immaterial error

in the measurement of equity-based consideration and goodwill that were recorded on the Company’s consolidated balance sheet as

of September 30, 2025 in connection with the acquisition of Melinta.

The Company made appropriate corrections of this error during the

preparation of the Company’s consolidated financial statements for the year ended December 31, 2025.

the error did not result in a material misstatement or a restatement of the Company’s consolidated financial statements, management

concluded that there is a reasonable possibility that a material misstatement could have occurred without being prevented or detected

on a timely basis, and therefore, the control deficiency was deemed to be a material weakness.

Internal Controls Conclusions

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, 2025,

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 not effective as of December 31,

2025 due to the material weakness described above.

In addition, 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 material weakness described above, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure

controls and procedures were not 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.

The Company excluded Melinta

from our assessment of internal control over financial reporting as of December 31, 2025, because it was acquired by the Company in a

business combination during 2025.

Total assets and total revenues of Melinta, a wholly-owned subsidiary, represent 62 percent and 17 percent,

respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.

Remediation Efforts

Management has initiated remediation

measures designed to address the material weakness identified above.

These measures include the implementation of an enhanced review control

over the accounting for significant non-routine transactions, including the preparation of contemporaneous technical accounting memoranda

and enhanced management review and approval procedures.

In connection with remediation

efforts, management will evaluate its workforce capacity relative to resourcing needs to determine if additional resources, including

both internal and external to the Company, are necessary to facilitate timely analysis and review of significant non-routine transactions.

In addition, Management believes that the integration of the financial systems and streamlining the combined-company close process this

year will create additional capacity within the finance function to support the remediation efforts.

material weakness will be considered remediated once the applicable controls have been fully implemented, have operated for a sufficient

period of time, and have been tested for operating effectiveness .

Other Information

Rule 10b5-1 Plans

During the three months ended December 31, 2024,

During the quarter ended December

31, 2025, no director or officer of the Company (as defined in Rule 16a-1(f) under the Exchange Act) informed us of the adoption or termination of

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408 of SEC Regulation S-K.

2025 Annual Meeting of Shareholders

We currently plan to hold our 2025 Annual Meeting

of Shareholders (the “2025 Annual Meeting”) on June 24, 2025.

The time and location of the 2025 Annual Meeting, and the matters

to be considered, will be as set forth in our definitive proxy statement for the 2025 Annual Meeting to be filed with the SEC.

Because the scheduled date of

the 2025 Annual Meeting is more than 30 days from the anniversary of the Company’s 2024 Annual Meeting of Stockholders, prior disclosed

deadlines regarding the submission of stockholder proposals pursuant to Rule 14a-8 (“Rule 14a-8”) under the Securities Exchange

Act of 1934, as amended (the “Exchange Act”), for the 2025 Annual Meeting are no longer applicable.

The Company is hereby

providing notice of certain revised deadlines for the submission of stockholder proposals in connection with the 2025 Annual Meeting.

In order for a stockholder proposal, submitted pursuant to Rule 14a-8, to be considered timely for inclusion in the Company’s proxy

statement and form of proxy for the 2025 Annual Meeting, such proposal must be received by the Company by April 8, 2025, which the Company

determined to be a reasonable time before the Company plans to begin printing and mailing its proxy materials.

Therefore, in order for

a stockholder to submit a proposal for inclusion in the Company’s proxy materials for the 2025 Annual Meeting, the stockholder must

comply with the requirements set forth in Rule 14a-8, including with respect to the subject matter of the proposal, and must deliver the

proposal and all required documentation to the Company no later than April 8, 2025.

The public announcement of an adjournment or postponement

of the date of the 2025 Annual Meeting will not commence a new time period (or extend any time period) for submitting a proposal pursuant

to Rule 14a-8.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

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Executive Compensation

The information required

by this Item will be included in our Proxy Statement, which will be filed within 120 days after the close of the 2024 fiscal year, or

an amendment to this Annual Report, and is hereby incorporated by reference.

information required by this Item will be included in our Proxy Statement, which will be filed within 120 days after the close of the

2025 fiscal year, or an amendment to this Annual Report, and is hereby incorporated by reference.

Security Ownership of Certain Beneficial Owners and Management

and Related Stockholders Matters

The information required

by this Item will be included in our Proxy Statement, which will be filed within 120 days after the close of the 2024 fiscal year, or

an amendment to this Annual Report, and is hereby incorporated by reference.

information required by this Item will be included in our Proxy Statement, which will be filed within 120 days after the close of the

2025 fiscal year, or an amendment to this Annual Report, and is hereby incorporated by reference.

Certain Relationships and Related Transactions and Director

The information required

by this Item will be included in our Proxy Statement, which will be filed within 120 days after the close of the 2024 fiscal year, or

an amendment to this Annual Report, and is hereby incorporated by reference.

information required by this Item will be included in our Proxy Statement, which will be filed within 120 days after the close of the

2025 fiscal year, or an amendment to this Annual Report, and is hereby incorporated by reference.

Principal Accountant Fees and Services

The information required

by this Item will be included in our Proxy Statement, which will be filed within 120 days after the close of the 2024 fiscal year, or

an amendment to this Annual Report, and is hereby incorporated by reference.

information required by this Item will be included in our Proxy Statement, which will be filed within 120 days after the close of the

2025 fiscal year, or an amendment to this Annual Report, and is hereby incorporated by reference.

Exhibits, Financial Statement Schedules

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Report of Independent Registered Public Accounting Firm (PCAOB ID #

Consolidated Balance Sheets as of December 31, 2025 and 2024

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Description of Document

Registrant’s Form

Exhibit Number

Filed or Furnished Herewith

At-the-Market Issuance Sales Agreement, dated August 12, 2021, by and among CorMedix Inc., Truist Securities, Inc.

Filed or Furnished

At-the-Market

Issuance Sales Agreement, dated August 12, 2021, by and among CorMedix Inc., Truist Securities, Inc.

and JMP Securities LLC

Form of Amended and Restated Certificate of Incorporation

Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated February 24, 2010

Second Amended and Restated Bylaws as amended October 8, 2020

Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated December 3, 2012

Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated August 9, 2017

Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated March 25, 2019

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

Agreement and Plan of Merger, dated as of August 7, 2025, by and among CorMedix Inc., Melinta Therapeutics, LLC, Coriander BidCo LLC and Deerfield Private Design Fund IV, L.P., solely in its capacity as representative, agent and attorney-in-fact of the Company Members

of Amended and Restated Certificate of Incorporation

of Amendment to Amended and Restated Certificate of Incorporation, dated February 24, 2010

Amended and Restated Bylaws as amended October 8, 2020

of Amendment to Amended and Restated Certificate of Incorporation, dated December 3, 2012

of Amendment to Amended and Restated Certificate of Incorporation, dated August 9, 2017

of Amendment to Amended and Restated Certificate of Incorporation, dated March 25, 2019

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

Description of Document

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

Certificate of Designation of Series G Convertible Preferred Stock of CorMedix Inc., filed with the Delaware Secretary of State on September 5, 2019

Specimen of Common Stock Certificate

Form of Warrant issued on January 8, 2014.

Form of Series B Warrant to Purchase Common Stock of CorMedix Inc.

issued on May 3, 2017

Form of Underwriter’s Warrant to Purchase Common Stock of CorMedix Inc., issued May 3, 2017

Third Amended and Restated Certificate of Designation of the Series E Convertible Preferred Stock of CorMedix Inc., dated August 6, 2025.

of Common Stock Certificate

Description of Capital Stock of CorMedix Inc.

Form of Pre-Funded Warrant issued June 28, 2023

License and Assignment Agreement, dated as of January 30, 2008, between CorMedix Inc.

Form of Indenture, to be entered into by and between CorMedix Inc.

Bank Trust Company, National Association

Form of 4.00% Convertible Senior Notes due 2030 of CorMedix Inc.

(included in Exhibit 4.1)

and Assignment Agreement, dated as of January 30, 2008, between CorMedix Inc.

and ND Partners LLC

Form of Indemnification Agreement between CorMedix Inc.

of Indemnification Agreement between CorMedix Inc.

and each of its directors and executive officers

Executive Employment Agreement, dated and effective May 11, 2020, between CorMedix Inc.

and Matthew David

Letter Agreement, dated and effective October 26, 2021, between CorMedix Inc.

and Matthew David, M.D.

Form of Securities Purchase Agreement, dated November 17, 2017, between CorMedix Inc.

and the investors signatory thereto

Backstop Agreement, dated November 9, 2017, between CorMedix Inc.

Agreement, dated November 9, 2017, between CorMedix Inc.

and the investor named therein

Form of Registration Rights Agreement, dated November 9, 2017, by and between CorMedix Inc.

of Registration Rights Agreement, dated November 9, 2017, by and between CorMedix Inc.

and the investor named therein

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

Executive Employment Agreement, dated and effective March 10, 2021, between CorMedix Inc.

and Elizabeth Hurlburt

Securities Purchase Agreement, dated December 31, 2018, between CorMedix Inc.

the investor named therein

Purchase Agreement, dated December 31, 2018, between CorMedix Inc.

and the investor named therein

Securities Exchange Agreement, dated August 14, 2019, by and among CorMedix Inc.

and the Existing Security holders listed on the Schedule of Holders thereto

Description of Document

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.

Exchange Agreement, dated August 14, 2019, by and among CorMedix Inc.

and the Existing Security holders listed on the Schedule of

Holders thereto

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.

Amended and Restated 2019 Omnibus Stock Incentive Plan

2021 Executive Bonus Plan

Executive Employment Agreement, dated March 16, 2022, between CorMedix Inc.

and Joseph Todisco.

Executive Employment Agreement, dated December 12, 2023, between CorMedix Inc.

and Beth Zelnick Kaufman.

and Restated 2019 Omnibus Stock Incentive Plan

Amendment No.

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2019 Omnibus Stock Incentive Plan

Description of Document

Amendment No.

2 to the Amended and Restated CorMedix Inc.

2019 Omnibus Stock Incentive Plan.

Executive Bonus Plan

Contingent Payment Agreement, dated August 29, 2025, by and among Deerfield Private Design Fund IV, L.P., Deerfield Private Design Fund III, L.P., CorMedix Inc., a Delaware corporation, Melinta Therapeutics, LLC, and Deerfield Private Design Fund IV, L.P., a Delaware limited partnership, solely in its capacity as representative

Registration Rights Agreement, dated August 29, 2025, by and among CorMedix Inc., Deerfield Private Design Fund IV, L.P., Deerfield Private Design Fund III, L.P.

and each other Holder (as defined in the Registration Rights Agreement)

Executive Employment Agreement, dated December 12, 2023, between CorMedix Inc.

and Beth Zelnick Kaufman.

Employment Agreement by and between CorMedix, Inc.

and Susan Blum, dated August 28, 2025

Employment Agreement by and between CorMedix, Inc.

and Elizabeth Hurlburt, dated August 29, 2025

Agreement by and between CorMedix, Inc.

and Matthew David, dated August 31, 2025

Amended and Restated Employment Agreement by and between CorMedix, Inc.

and Joseph Todisco, dated January 5, 2026.

Insider Trading Policies and Procedures

List of Subsidiaries

Consent of Independent Registered Public Accounting Firm

Consent of Independent Registered

Public Accounting Firm (CBIZ CPAs P.C)

Consent of Independent Registered Public Accounting Firm (Marcum LLP)

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Board Policy on Recouping Incentive Compensation

Policy on Recouping Incentive Compensation

Inline XBRL Instance Document

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Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Confidential treatment

has been granted for portions of this document.

Cover Page Interactive Data File (formatted as Inline XBRL and contained

in Exhibit 101).

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

Indicates management contract

or compensation plan.

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.

Form 10-K Summary

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March 5, 2026

Joseph Todisco

/s/ Joseph Todisco

Joseph Todisco

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March 5, 2026

Matthew David

/s/ Susan Blum

Chief Financial Officer

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the capacities and on the dates indicated:

Chief Executive Officer

/s/ Joseph Todisco

Chief Executive Officer, Director and Chairman of the Board

March 5, 2026

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(Principal Executive Officer)

Matthew David

Vice President and Chief Financial Officer

Matthew David

(Principal Financial and

Accounting Officer)

Director and Chairman of

/s/ Susan Blum

Executive Vice President and Chief Financial Officer

March 5, 2026

(Principal Financial and Accounting Officer)

/s/ Myron Kaplan

Lead Independent Director

March 5, 2026

/s/ Janet Dillione

March 5, 2026

Janet Dillione

/s/ Gregory Duncan

March 5, 2026

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March 5, 2026

/s/ Steven Lefkowitz

March 5, 2026

Steven Lefkowitz

/s/ Robert Stewart

March 5, 2026

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Financial Statements Index

Report of Independent Registered Public Accounting Firm (PCAOB ID # 688 ) F-2

Report of Independent Registered Public Accounting Firm (PCAOB ID #

Consolidated Balance Sheets as of December 31, 2025 and 2024 F-5

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Notes to Consolidated Financial Statements F-9

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Shareholders and Board of Directors of

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of

CorMedix Inc.

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We have audited the accompanying consolidated

balance sheets of CorMedix Inc.

(the “Company”) and Subsidiaries as of December 31, 2024 and 2023, the related consolidated

statements of operations and comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the period

ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, based

on our audits, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024,

in conformity with accounting principles generally accepted in the United States of America.

balance sheet of CorMedix Inc.

(the “Company”) and Subsidiaries as of December 31, 2025, the related consolidated statements

of operations and comprehensive income (loss), stockholders’ equity and cash flows for the year ended December 31, 2025, and the

related notes (collectively referred to as the “financial statements”).

In our opinion, based on our audit, the financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of

its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in

the United States of America.

As discussed in Notes 2 and 8 to the financial

statements, the Company adopted ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU

We have also audited the adjustments to the 2024 financial statements to retrospectively adjust the disclosures for the

adoption of ASU 2023-09 in 2025.

In our opinion, such retrospective adjustments are appropriate and have been properly applied.

not engaged to audit, review, or apply any procedures to the 2024 financial statements of the Company other than with respect to these

retrospective adjustments, and accordingly, we do not express an opinion or any other form of assurance on the 2024 financial statements

taken as a whole.

Basis for Opinion

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of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are

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regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

We conducted our audit 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

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

statements are free of material misstatement, whether due to error or fraud.

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to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

As part of our audit 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

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess

Our audit 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

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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

Our audit 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.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is

a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the

audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion

on the critical audit matter or on the accounts or disclosures to which it relates.

The critical audit matters communicated below

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.

The communication of critical audit matters does not alter in any way our opinion

on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions

on the critical audit matters or on the accounts or disclosures to which they relate.

Variable Consideration:

Product Returns

Description of the

As discussed in Note

3 of the consolidated financial statements, the Company includes estimates of variable consideration in its transaction price at the

time control of the product transfers to the customer.

The variable consideration includes an estimate for future product returns.

Company permits returns for product that is within six months prior to or past the labeled expiration date.

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 the contractual terms.

At December 31, 2024, the

Company had $0.7 million in accrued returns allowance.

Auditing the allowance

for sales returns was complex due to the significant estimation required in determining product held by customers and in the distribution

channel, as well as product that may not be sold to, or consumed by, the end user prior to the dates eligible for return under the contractual

The allowance for sales returns is sensitive to the level of product and turnover at the customer and in the distribution channel,

which could exceed future end user demand and be subject to return.

How We Addressed the

Matter in Our Audit

We obtained an understanding

and evaluated the design of the Company's controls over the estimation for sales returns.

In order to test the estimated sales return

reserve, we performed audit procedures that included, among others, reviewing sell-through information of the Company’s major customers.

We analyzed the estimated remaining inventory with selected customers and their distribution channel as compared to product sold to that

customer and forecasted sales to, or usage by, the end users giving consideration to the remaining shelf life of the product.

for direct sales to outpatient dialysis centers, we reviewed the Company’s sales made to certain customers individual dialysis

center locations by month during both the reporting period and through the financial statement issuance date to evidence follow on orders

and utilization by those individual dialysis centers.

We also performed direct management inquiries with Company sales and supply chain

department personnel, and reviewed key customer contract terms and their alignment with such reserve assumptions.

Revenue Recognition

Critical Audit Matter Description

As discussed in Note 2 of the financial statements, the Company includes estimates of variable consideration in its transaction price at the time control of the product transfers to the customer.

The variable consideration includes an estimate for future product returns, chargebacks and Medicaid rebates in the same period as the related sale occurs.

At December 31, 2025, the Company had $35 million in accrued returns, chargebacks and Medicaid rebates.

Auditing the product returns, chargebacks and Medicaid rebates liabilities is challenging because of the subjectivity of certain assumptions required to estimate the liabilities.

In calculating the appropriate accrual amount, the Company considers historical returns and payments by product as a percentage of their historical sales as well as any significant changes in sales trends, the lag in payment timing, changes in rebate contracts, an evaluation of the current Medicaid laws and interpretations, the percentage of products that are sold via Medicaid, and product pricing.

Given variability in prescription drug costs and variability in prescription data, historical information may not be predictive for management to estimate the variable consideration and thus, management supplements its historical data analysis with qualitative adjustments based upon current expectations, particularly for select products which contribute the largest portion of the Company's revenue.

How We Addressed the Matter in Our Audit

We obtained an understanding and evaluated the procedures over management’s process for the estimation of sales returns, Medicaid rebates and chargebacks.

Our audit procedures included, among others, evaluating for reasonableness the significant assumptions used in the product profiles including the contractual terms of the chargeback rates, Medicaid pricing information and other regulatory factors.

Our testing involved assessing the historical accuracy of management’s estimates by comparing actual activity to previous estimates and performing analytical procedures, based on internal and external data sources, to evaluate the completeness of the reserves.

We estimated the reserves using internal information and historical data and compared the result to the Company’s estimated reserves.

Additionally, our procedures included reviewing a sample of contracts, testing a sample of product returns, chargebacks and Medicaid rebate payments and testing the underlying data used in management’s evaluation.

Auditing the Fair Value of Contingent Consideration

and Intangible Assets Acquired in a Business Combination

Critical Audit Matter Description

As described in Note 3 to the financial statements, the Company completed the acquisition of Melinta Therapeutics, LLC on August 29, 2025 for total consideration of $453.7 million and included fair value of contingent consideration of $95.9 million.

The Company accounted for this transaction as a business combination under the acquisition method of accounting whereby the fair value of the consideration transferred was allocated to the assets acquired, including intangible assets, excluding goodwill, of $391.1 million and assets and liabilities assumed based upon their acquisition date fair values.

Management estimated the fair value of the contingent consideration liability using the probability weighted outcome and discounting the estimated payments and the Monte Carlo simulation for the product royalties.

Management estimated the fair value of the intangible assets using the Multi-Period Excess Earnings Method valuation technique for all marketed products and in-process research and development whereby residual forecasted cash flows expected to be derived from the intangible asset over the economic life of the asset, adjusted for expected attrition, are discounted to present value.

We identified the valuation of the contingent consideration and intangible assets at the acquisition date as a critical audit matter because of the significant assumptions management used in estimating the fair values, including forecasted cash flows and the selection of a discount rates used.

Auditing management’s assumptions involved a high degree of auditor judgment and an increased audit effort, including the use of valuation specialists, due to the impact these assumptions could have on the accounting estimates.

How We Addressed the Matter in Our Audit

We obtained an understanding and evaluated the procedures over management’s technical accounting analysis and valuation process.

We inspected the governing agreements for the transaction and evaluated the application of the Company’s technical accounting analysis including evaluating the terms and management’s conclusion on the interpretation and application of the relevant accounting literature.

We tested the reasonableness of management’s forecasted cash flows used in the valuation of the intangible assets and contingent consideration.

This testing included analyzing historical revenue trends, margins, and capital expenditures and comparing them to the forecasted amounts.

With the assistance of our valuation specialists, we evaluated the reasonableness of the valuation methodology used, the reasonableness of the key inputs and assumptions to develop the fair value measurements, and verified the accuracy and completeness of the underlying data utilized.

/s/ CBIZ CPAs P.C.

CBIZ CPAs P.C .

We have served as the Company’s auditor

since 2014 (such date takes into account the acquisition of the attest business of Marcum LLP by CBIZ CPAs P.C.

effective November 1,

Morristown, New Jersey

March 5, 2026

Report of Independent Registered Public Accounting

To the Shareholders and Board of Directors of

CorMedix Inc.

Opinion on the Financial Statements

We have audited, before the effects of the retrospective

adjustments to the disclosures for the adoption of ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU

2023-09”) as discussed in Notes 2 and 8 to the consolidated financial statements, the accompanying consolidated balance sheet of

CorMedix Inc.

(the “Company”) and Subsidiaries as of December 31, 2024, the related consolidated statements of operations

and comprehensive income (loss), stockholders’ equity and cash flows for the year ended December 31, 2024, and the related notes

(collectively referred to as the “financial statements”) (the 2024 financial statements before the effects of the adjustments

discussed in Notes 2 and 8 to the financial statements are not presented herein).

In our opinion, based on our audit, the financial statements,

before the effects of the retrospective adjustments to the disclosures for the adoption of ASU 2023-09 as discussed in Notes 2 and 8 to

the financial statements, present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and

the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted

in the United States of America.

We were not engaged to audit, review, or apply

any procedures to the retrospective adjustments to the disclosures for the adoption of ASU 2023-09 as discussed in Notes 2 and 8 to the

financial statements and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are

appropriate and have been properly applied.

Those retrospective adjustments were audited by CBIZ CPAs P.C.

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 audit.

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 audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether 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 audit 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 audit 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 audit 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 audit provides a reasonable basis for our opinion.

/s/ Marcum LLP

We have served as the Company’s auditor

from 2014 to 2025.

Morristown, New Jersey

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CONSOLIDATED BALANCE SHEETS

December 31, 2024 and 2023

(In Thousands, Except Share Data)

Current assets

Cash and cash equivalents

Restricted cash

Short-term investments

Trade receivables, net

Prepaid research and development expenses

Other prepaid expenses and current assets

Account receivables, net

Prepaid expenses and other current assets (including restricted cash of $ 656 and $ 0 at December 31, 2025, and December 31, 2024)

Total current assets

Property and equipment, net

License intangible asset, net

Restricted cash, long term

Operating lease right-of-use assets

$ 118,845,673

Other long-term assets (including restricted cash of $ 332 and $ 105 at December 31, 2025, and December 31, 2024, net of current)

Intangible asset, net

Deferred tax assets

Operating lease right-of-use assets, net

Finance lease- right-of-use assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Accrued expenses

Contingent Consideration, short-term

Operating lease liabilities, short-term

Financing lease liability, short-term

Total current liabilities

Operating lease liabilities, net of current portion

Convertible senior notes, net of deferred financing costs

Contingent Consideration, net of current portion

Operating lease liabilities, net of current

Finance lease liabilities, net of current

TOTAL LIABILITIES

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Accumulated deficit

( 339,630,033 )

( 321,700,013 )

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 118,845,673

The accompanying notes are integral part of these

consolidated financial statements.

The accompanying notes are an integral part of

these consolidated financial statements.

and Subsidiaries

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INCOME (LOSS)

Years Ended December 31, 2024 and 2023

Cost of sales

( 3,190,534 )

(In Thousands, Except Per Share Data)

Product sales, net

Contract revenue

Total Revenues

Cost of sales (exclusive of amortization of intangibles)

Amortization of intangibles

Operating Expenses:

Research and development

( 3,942,270 )

( 13,155,125 )

Selling and marketing

( 28,736,605 )

( 18,115,313 )

General and administrative

( 29,959,150 )

( 17,687,350 )

Total operating expenses

( 62,638,025 )

( 48,957,788 )

Loss From Operations

( 22,356,389 )

( 48,957,788 )

Income (Loss) From Operations

Other Income (Expense):

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Foreign exchange transaction loss

Unrealized gain on marketable security

Change in contingent consideration

Interest expense

Total other income

Net Loss Before Income Taxes

( 19,324,790 )

( 46,339,227 )

( 17,930,020 )

( 46,339,227 )

Total other income (expense)

Net Income (Loss) Before Income Taxes

Income Tax (benefit)

Net Income (Loss)

Other Comprehensive Income (Loss):

Unrealized (loss) gain from investments

Foreign currency translation gain

Total other comprehensive gain (loss)

Comprehensive Loss

$ ( 17,933,482 )

$ ( 46,327,862 )

Net Loss Per Common Share – Basic and Diluted

Weighted Average Common Shares Outstanding – Basic and Diluted

The accompanying notes are integral part of these

consolidated financial statements.

Unrealized (loss) from investments

Foreign currency translation gain (loss)

Total other comprehensive (loss)

Comprehensive Income (Loss)

Net Income (Loss) Per Common Share – Basic

Net Income (Loss) Per Common Share – Diluted

Weighted Average Common Shares Outstanding – Basic

Weighted Average Common Shares Outstanding – Diluted

The accompanying notes are an integral part of

these consolidated financial statements.

CORMEDIX INC.

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

Years Ended December 31, 2024 and 2023

Series F and Series G

Comprehen-sive

(In Thousands)

Comprehensive

Stockholders’

Balance at December 31, 2023

$ 330,294,782

$ ( 275,360,786 )

Stock issued in connection with ATM sale of common stock, net

Stock and pre-funded warrants issued in connection with public offering, net

Stock issued in connection with the exercise of pre-funded warrants

Stock issued in connection with options exercised

Conversion of Series G preferred stock to common stock

Issuance of vested restricted stock, net of shares withheld for employee withholding taxes

Cancelation of shares held in escrow

Stock-based compensation

Other comprehensive gain

( 46,339,227 )

Other comprehensive loss

Balance at December 31, 2024

$ 391,693,214

$ ( 321,700,013 )

Stock issued in connection with ATM sale of common stock, net

Stock issued in connection with the exercise of pre-funded warrants

Stock issued in connection with options exercised

Stock issued in connection with public offering, net

Stocks issued in connection with Melinta acquisition

Conversion of Series G preferred stock to common stock

Issuance of vested restricted stock, net of shares withheld for employee withholding taxes

Cancelation of shares held in escrow

Stock-based compensation

Elimination of cumulative translation adjustment upon closing of wholly-owned subsidiary

Other comprehensive loss

( 17,930,020 )

Balance at December 31, 2025

$ 424,131,789

$ ( 339,630,033 )

The accompanying notes are integral part of these

consolidated financial statements.

The accompanying notes are an integral part of

these consolidated financial statements.

CORMEDIX INC.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, 2024 and 2023

(In Thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 17,930,020 )

$ ( 46,339,227 )

Net Income (loss)

Adjustments to reconcile net loss to net cash used in operating activities:

Provision for current expected credit losses

Stock-based compensation

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Amortization of intangible

Change in contingent consideration

Change in fair value of equity securities

Deferred income taxes

Amortization of debt finance costs

Provision for current expected credit losses

Gain on liquidation of foreign entity

Changes in operating assets and liabilities:

Increase in trade receivables

( 51,790,583 )

Increase in account receivables

Increase in inventory

( 5,493,190 )

( 2,106,345 )

Increase in prepaid expenses and other current assets

( 2,399,221 )

(Decrease) Increase in accounts payable

( 2,559,491 )

Increase in accrued expenses

Decrease in operating lease liabilities

Net cash used in operating activities

( 50,614,653 )

( 38,409,480 )

Payment of contingent liability

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisitions of businesses, net of cash acquired

Investment in equity securities

Purchase of short-term investments

( 26,769,749 )

( 77,084,385 )

Maturity of short-term investments

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Net cash provided by (used in) investing activities

( 17,061,685 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from sale of common stock from public offering, net

Proceeds from senior convertible notes

Proceeds from sale of common stock from at-the-market program, net

Proceeds from public offering of common stock and pre-funded warrants, net

Payment of employee withholding taxes on vested restricted stock units

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Proceeds from exercise of stock options

Payment of debt issuance costs associated with the convertible notes

Payment of contingent consideration liabilities

ROU financing lease fees

Net cash provided by financing activities

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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

( 3,067,054 )

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH – BEGINNING OF YEAR

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Cash paid for interest

Supplemental Disclosure of Non-Cash and Investing Activities:

Supplemental Disclosure of Non-Cash, Investing, and Financing Activities:

Liability related to license agreement

Unrealized (loss) gain from investments

The accompanying notes are integral part of these

consolidated financial statements.

Unpaid debt issuance costs associated with the convertible notes

Issuance of common stock for Melinta acquisition

Fair value of contingent payments

ROU assets and liabilities for finance lease

Fair value of assets acquired from Melinta

Liabilities assumed from Melinta

Goodwill recognized on Melinta

The accompanying notes are an integral part of

these consolidated financial statements.

CORMEDIX INC.

4 unchanged sentences

CorMedix Inc.

(collectively,

with our wholly owned subsidiaries, referred to herein as “we,” “us,” “our” or the “Company”)

is a biopharmaceutical 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.

DefenCath is an FDA approved

antimicrobial catheter lock solution (“CLS”) (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 through a central venous catheter (“CVC”).

It is indicated for use in a limited and specific population

CRBSIs 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 November 15, 2023, we announced that the FDA approved the new drug

application (“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.

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.

The Company’s current commercial and development expenses for DefenCath and its other operating requirements are expected to be

funded for at least twelve months from the issuance of these financial statements by the Company’s existing cash, cash equivalents

and short-term investments at December 31, 2024 as well as the additional expected liquidity from commercial operations.

The Company’s operations are subject to a number of other factors

that can affect its operating results and cash flow projections over the next twelve months from the issuance of these financial statements.

Such factors include, but are not limited to:

the ability to market DefenCath and generate necessary revenue in the time periods required;

ability to manufacture successfully;

competition from products manufactured and sold or being developed by other companies;

of, and demand for, Company products;

and the Company’s ability to negotiate favorable licensing or other manufacturing and marketing

agreements for its products.

As such, the Company may be required to raise additional capital through various potential sources, such

as equity and/or debt financing, 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, 2024,

approximately $ 30,216,000 of the Company’s common stock remains available for sale under the 2024 ATM program, with $ 100,000,000

of remaining capacity under the 2024 Shelf Registration Statement for the issuance of Company securities (see Note 8).

( “CorMedix” or the

“Company”) was incorporated in the State of Delaware on July 28, 2006 .

The Company is a biopharmaceutical company focused

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

The Company commercializes its lead

product, DefenCath ® (taurolidine and heparin) in the United States.

CorMedix launched the product commercially in

2024 in both the hospital inpatient and outpatient hemodialysis settings of care.

On August 7, 2025, the

Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire Melinta Therapeutics, LLC, a

Delaware limited liability company (“Melinta”), which transaction closed on August 29, 2025 (the “Merger”).

The acquisition of Melinta expanded the Company’s team and 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”, and, together with DefenCath, “our Products”).

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 the Company’s consolidated financial statements starting August 29, 2025.

Further information relating to the acquisition of

Melinta, including the related financing transaction, is included in Note 3.

Note 2 - Summary of Significant Accounting Policies:

Basis of Consolidation

The consolidated financial

statements include the accounts of the Company and its wholly owned subsidiaries, including the Company’s wholly owned subsidiary

CorMedix Europe GmbH which was dissolved during the year ended December 31, 2025.

All significant intercompany accounts and transactions

have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S.

requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

The Company bases its estimates and judgments on historical experience and various other assumptions that it believes are reasonable under

the circumstances.

The amounts of assets and liabilities and disclosure of contingent assets and liabilities in the Company’s consolidated

balance sheets and the reported amounts of revenue and expenses reported for each of the periods presented are affected by estimates and

The more significant areas in which estimates and the exercise of judgment relate include;

variable consideration for product

returns, realization of receivables, valuation of inventory, share-based payment grant date valuation, deferred tax asset valuation changes

The preparation of financial

statements in conformity with U.S.

Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates

and assumptions that affect the amounts reported in the financial statements and accompanying notes.

The Company bases its estimates

and judgments on historical experience and various other assumptions that it believes are reasonable under the circumstances.

of assets and liabilities and disclosure of contingent assets and liabilities in the Company’s consolidated balance sheets and

the reported The more significant areas in which estimates and the exercise of judgment include:

variable consideration for product returns

and Medicaid utilization rates;

realization of receivables, valuation of inventory;

valuation and measurement of contingent consideration,

in-process research and development (“IPR&D”), amortizable intangibles, and goodwill in connection with business combinations;

share-based payment grant date valuation;

deferred tax asset valuation changes;

and contingent liability recognition and disclosures.

Estimates are based on historical experience and other assumptions that are considered

appropriate in the circumstances.

They are continuously reviewed but may vary from the actual values.

Estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances.

They are continuously

reviewed but may vary from the actual values.

Reclassifications

1 unchanged sentence

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

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.

Trade Accounts Receivable and Allowances

Business Combinations

The Company accounts for business combinations in accordance with FASB

Accounting Standard Codification Topic No.

805, Business Combinations (“ASC 805”), which requires that all business combinations

be accounted for using the acquisition method of accounting.

Under this method, the identifiable assets acquired, the liabilities assumed,

and any noncontrolling interest in the acquiree are recognized at their fair values as of the acquisition date.

The excess of the total

purchase consideration over the fair value of the identifiable net assets acquired is recorded as goodwill.

In evaluating whether a transaction represents the acquisition of a

business, the Company applies the guidance in ASC 805, considering whether substantially all of the fair value of the gross assets acquired

is concentrated in a single identifiable asset or group of similar identifiable assets.

If not, the Company evaluates whether the acquired

set includes an input and a substantive process that together significantly contribute to the ability to create outputs.

that meet these criteria are accounted for as business combinations;

otherwise, they are accounted for as asset acquisitions under ASC

For the acquisition of a business, the purchase price is allocated

to the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date.

The Company conducts a valuation

analysis to determine the fair value of significant tangible and intangible assets acquired, including marketed product values, trademarks,

Management determines the fair values of working capital accounts, property and equipment, and certain other assets and

liabilities based on available information and market data.

During the measurement period,

which may be up to one year from the acquisition date, the Company may record adjustments to the fair

value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill.

uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination

as of the acquisition date.

Upon the conclusion of the measurement period or final determination of the fair value of assets

acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated

statements of operations.

Accounts Receivable and Allowances

The Company recognizes an

2 unchanged sentences

determined on the basis of current information, forecasts of future economic conditions, industry knowledge and to some extent our historical

The Company determines its allowance methodology by pooling receivable balances at the customer level.

The Company considers

various factors, including individual credit risk associated with each customer, the current and future condition of the general economy

and industry knowledge.

The Company determines its allowance methodology by pooling receivable balances.

The Company considers various factors, including

individual credit risk associated with each customer, the current and future condition of the general economy and industry knowledge.

These credit risk factors are monitored on a quarterly basis and updated as necessary.

To the extent any individual

debtor is identified whose credit quality has deteriorated, the Company establishes allowances based on the individual risk characteristics

of such customer.

The Company makes concerted efforts to collect all outstanding balances due, however account balances are charged off

against the allowance when management believes it is probable the receivable will not be recovered.

The Company does not have any off-balance

sheet credit exposure related to its customers.

Allowances recorded for credit losses as of December 31, 2024 were approximately $ 0.1

million, there were no write-offs or recoveries during the year ended December, 31, 2024.

Also, to the extent any individual debtor is identified

whose credit quality has deteriorated, the Company establishes allowances based on the individual risk characteristics of such customer.

The Company makes concerted efforts to collect all outstanding balances due, however account balances are charged off against the allowance

when management believes it is probable the receivable will not be recovered.

The Company does not have any off-balance sheet credit exposure

related to its customers.

A roll forward of allowance

for credit losses for the years ended December 31, 2025 and December 31, 2024 is as follows:

Beginning Balance

Melinta portfolio beginning balance

Provision for expected credit losses

Write-offs or recoveries

Ending Balance

Concentrations

The major customers of the

Company are defined as those constituting greater than 10% of its total revenue.

For the year ended December 31, 2024, the Company had

sales to one customer that accounted for 86 % of its total revenue of $ 43,472,000 .

For the year ended December 31, 2024, the Company had

two customers that accounted for 87 % and 12 % of the accounts receivable, respectively.

The Company currently has

one FDA approved source for each of our two key active pharmaceutical ingredients (“APIs”) for DefenCath, taurolidine and

heparin sodium, respectively.

With regards to taurolidine, the Company has a drug master file (“DMF”) filed with the FDA.

There is a master commercial supply agreement between a third-party manufacturer which has been in place since August 2018.

the Company is working with its existing manufacture to source sufficient quantities of taurolidine API to cover at least 24 months of

potential future demand.

With respect to heparin sodium API, the Company has identified an alternate third-party supplier and may qualify

such supplier under the DefenCath NDA over the next twelve months.

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

The following table summarizes

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

For DefenCath, the Company

currently has one FDA-approved source (contract manufacturing organization, or “CMO”) for each of its two key active pharmaceutical

ingredients (“APIs”), taurolidine and heparin sodium, respectively.

With regards to taurolidine, the Company has a drug master

file (“DMF”) filed with the FDA.

There is a master commercial supply agreement between a third-party manufacturer that has

been in place since August 2018.

With respect to heparin sodium API, the Company has identified an alternate third-party supplier and

may qualify such supplier under the DefenCath NDA over the next twelve months.

The Company received FDA

approval of DefenCath with finished dosage production from its European based contract manufacturing organization (“CMO”)

Rovi Pharma Industrial Services.

The Company believes this CMO has adequate capacity to produce the volumes needed to meet near-term

projected demand for the commercial launch of DefenCath.

The Company also qualified Siegfried Hameln as an alternate finished dosage

manufacturing site.

approval of DefenCath with finished dosage production from its European based CMO, Rovi Pharma Industrial Services.

The Company believes

this CMO has adequate capacity to produce the volumes needed to meet near-term projected demand for DefenCath.

In addition, the Company

also qualified Siegfried Hameln as an alternate finished dosage manufacturing site and is in the process of scaling up production at

the facility.

Each of the products in the

Melinta Portfolio has one FDA-approved contract manufacturing organization, primarily in Europe or in the United States.

has ongoing technology transfers intended to reduce costs of goods sold as well as to onshore the manufacture of several of its products,

which it expects to complete over the next two to three years.

Financial Instruments

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The Company maintains its cash and cash equivalents in bank deposit and other interest-bearing accounts, the

balances of which, , may exceed federally insured limits.

The following table is the

reconciliation of the accounting standard that modifies certain aspects of the recognition, measurement, presentation and disclosure

of financial instruments as shown on the Company’s consolidated statement of cash flows:

balances of which often exceed federally insured limits.

The following table is the reconciliation of the accounting standard

that modifies certain aspects of the recognition, measurement, presentation and disclosure of financial instruments as shown on the Company’s

consolidated statement of cash flows:

Cash and cash equivalents

Restricted cash, short-term and long-term

Restricted cash, (included in prepaid expenses and other current assets)

Restricted cash, (included in other long-term assets)

Total cash, cash equivalents and restricted cash

18 unchanged sentences

with original maturities of more than 90 days.

As of December 31, 2024 and 2023, 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, 2024 and 2023:

In addition, the Company holds marketable equity securities in Talphera, Inc., (“Talphera”)

a publicly-traded biotechnology company and has elected the fair value option for accounting for this investment.

The related unrealized

gain pertaining to Talphera is recorded in Other income.

During the fourth quarter of 2025, the Company’s CEO was appointed to

the Board of Directors of Talphera, and as such, Talphera is considered a related party for any subsequent transactions.

has no related party transactions with Talphera to date.

As of December 31, 2025 and

2024, all of the Company’s investments had contractual maturities of less than one year.

The following table summarizes the amortized

cost, unrealized gains and losses and the fair value at December 31, 2025 and 2024 (in thousands).

December 31, 2025:

Money Market Funds and Cash Equivalents

Government Agency Securities

Total December 31, 2024

Money Market Funds included in Cash Equivalents

Commercial Paper

Total December 31, 2025 short-term assets

December 31, 2024:

Money Market Funds and Cash Equivalents

Money Market Funds included in Cash Equivalents

Government Agency Securities

Commercial Paper

Total December 31, 2023

Total December 31, 2024 short-term assets

Fair Value Measurements

4 unchanged sentences

financial instruments recorded in the consolidated balance sheets include cash and cash equivalents, accounts receivable, investment

securities and accounts payable.

The carrying value of certain financial instruments, primarily cash and cash equivalents, accounts

receivable and accounts payable approximate their estimated fair values based upon the short-term nature of their maturity dates.

securities, accounts payable and accrued expenses.

The carrying value of certain financial instruments, primarily cash and cash equivalents,

accounts receivable, accounts payable, and accrued expenses approximate their estimated fair values based upon the short-term nature

of their maturity dates.

The Company categorizes its

5 unchanged sentences

assets recorded at fair value on the Company’s consolidated balance sheets are categorized as follows:

inputs—Observable

inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

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—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.

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, 2024 and 2023:

the carrying value and fair value of the Company’s financial assets measured at fair value on a reoccurring basis as of December

31, 2025 and 2024 (in thousands):

December 31, 2025:

Money Market Funds and Cash Equivalents

Government Agency Securities

Total December 31, 2024

Commercial Paper

Total December 31, 2025, short-term assets

Marketable Equity Securities

Contingent Consideration liability

December 31, 2024:

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Government Agency Securities

Commercial Paper

Total December 31, 2023

Total December 31, 2024 short-term assets

Foreign Currency Translation and Transactions

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USD at end-of-period exchange rates.

Foreign currency income and expenses are translated at average exchange rates in effect during the

Translation gains and losses are included in other comprehensive income (loss).

The Company had a foreign currency translation

gain of $ 1,368 and $ 1,682 for the years ended December 31, 2024 and 2023, respectively.

The Company dissolved its only foreign subsidiary during the fourth quarter of 2025.

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 loss of $ 0.1 million in the year ended December 31,

2025 and a gain of $ 0.0 million for the year ended December 31, 2024.

Foreign currency exchange

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Restricted Cash

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.

As of December 31, 2023, the Company had restricted cash in connection with the patent

and utility model infringement proceedings against TauroPharm in the amount of approximately $ 77,000 , which was refunded to the Company

during the year ended December 31, 2024.

As of December 31, 2024 and

2023, the Company had $ 105,000 and $ 103,000 , respectively in long-term restricted cash for a lease security deposit.

Prepaid Research and Development and Other

Prepaid Expenses

The restricted cash as of December 31, 2025 was comprised of $ 0.7 million

in VAT refunds and $ 0.3 million in lease security deposits associated with the ROU operating lease.

The VAT refunds are reported in prepaid

expenses and other current assets while the lease security deposits are reported in other long-term assets.

The VAT was related to bank

guarantees issued to the Italian Tax Authority (“ITA”) for VAT refunds authorized and received in 2022 and 2023.

guarantees will remain in place until the expiry of statute of limitations imposed by the ITA, which is typically 3 years after the refund

was received.

The Company’s restricted cash of $ 0.1 million

as of December 31, 2024 related solely to a lease security deposit.

Prepaid expenses and other current assets

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.

of payments made in advance to vendors relating primarily to service contracts for clinical trial development, manufacturing, pre-clinical

development and insurance policies.

These advanced payments are amortized to expense as services are performed over the relevant service

Debt Issuance Costs

Debt issuance costs represent

legal and other direct costs incurred in connection with the issuance of the Company’s convertible senior notes due 2030.

costs are recorded as contra-notes payable on our balance sheet and amortized as a non-cash component of interest expense using the effective

interest method over the term of the loan agreement (see Note 7 – Convertible Senior Notes).

The Company engages third

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

related to the manufacturing of DefenCath incurred prior to FDA approval to support the preparation for commercial launch of its product

were expensed as research and development expenses (R&D) as incurred.

Upon FDA approval, costs related to the manufacturing of inventory

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

Inventory is valued utilizing

the standard cost method, which approximates costs determined on the first-in first-out basis.

The Company regularly reviews inventory

quantities on hand and writes down to its net realizable value any inventory that it believes to be impaired.

Management considers forecast

demand in relation to the inventory on hand, competitiveness of product offering and sales volume assumptions, market conditions and

product life cycle and expiration dating when determining net realizable value adjustments.

Once inventory is written down and a new

cost basis is established, it is not written back up if demand increases.

The Company has not experienced any write-downs for any items

listed above during 2023 or 2024.

related to the manufacturing of our Products prior to FDA approval to support the preparation for commercial launch are expensed as research

and development expenses (“R&D”) as incurred.

Upon FDA approval, costs related to the manufacturing of inventory are

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

Inventory is stated at the

lower of cost or estimated net realizable value.

Inventory is valued on a first-in, first-out basis and consists primarily of material

costs, third-party manufacturing costs, overhead—principally the cost of managing the company’s manufacturers—and related

transportation costs.

The Company regularly reviews inventory quantities on hand and writes down to its net realizable value any inventory

that it believes to be impaired.

Management considers forecasted demand in relation to the inventory on hand, competitiveness of product

offering and sales volume assumptions, market conditions and product life cycle and expiration dating when determining net realizable

value adjustments.

Once inventory is written down and a new cost basis is established, it is not written back up if demand increases.

The Company has not experienced any write-downs for any items listed above as of December 31, 2025 or 2024 respectively.

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:

materials (including labeling and packaging), work-in-process, and finished goods.

Inventories consist of the following (in thousands):

Raw materials

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Finished goods

The pre-commercial inventory previously

expensed as R&D prior to FDA approval, consists of certain raw materials and inventory at various stages of completion with a value

approximating $ 5,318,000 as of December 31, 2024.

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.

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, 2024 and 2023 were approximately $ 1,828,000 and $ 1,866,000 , respectively, net of accumulated

depreciation of approximately $ 674,000 and $ 521,000 , respectively.

Depreciation and amortization of property and equipment is included

in cost of goods sold and general and administrative expenses.

Description Estimated

Useful Life Income

Classification

Office equipment and furniture 5 years G&A

Leasehold improvements 7 years or

remaining term

of the lease G&A

Computer equipment 3 years G&A

Computer software 3 years G&A

Packaging equipment 5 years COGS

The Company determines if

an arrangement is a lease at inception.

Operating leases are included in operating lease right-of-use (“ROU”) assets, current

portion of operating lease liabilities and operating lease liabilities, net of current portion, on the consolidated balance sheet (see

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.

expense for minimum lease payments is recognized on a straight-line basis over the lease term.

The Company has elected,

as an accounting policy, not to apply the recognition requirements in ASC 842, Accounting for Leases , to short-term leases.

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.

The pre-commercial inventory

previously expensed as R&D prior to FDA approval, which has a book value of $ 0 , consists of certain raw materials and inventory at

various stages of completion with a fair value approximating $ 3.8 million and $ 5.3 million as of December 31, 2025 and 2024, respectively.

Revenue Recognition

The Company recognizes revenue

from the sale of its product, DefenCath, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC

from the sale of its Products in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).

The provisions of ASC 606 require the following steps to determine revenue recognition:

(1) identify the contract(s) with

(1) identify the contract(s) with a customer;

(2) identify the performance obligations in the contract;

(3) determine the transaction price;

(4) allocate the transaction

price to the performance obligations in the contract;

(4) allocate the transaction price to

the performance obligations in the contract;

and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

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Volume incentive rebates;

Shelf-stock adjustments;

Administrative and data fees.

The Company assesses whether

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Prompt pay and other discounts

– The Company provides customers with prompt pay discounts.

– The Company provides certain customers with prompt pay discounts.

The specific prompt pay terms vary by customer and are contractually

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Prompt pay discount estimates are recorded as contra accounts receivable on the balance

Product returns –

Customers have the right to return product that is within six months or less of the labeled expiration date or that is past the expiration

date by no more than six months.

The Company determines its estimate for product returns based on:

(i) data provided to the Company by

its distributors (including weekly reporting of distributors’ sales and inventory held by distributors that provided the Company

with visibility into the distribution channel in order to determine what quantities were sold to both inpatient and outpatient facilities),

and (ii) the estimated remaining shelf life of DefenCath held by the wholesale distributors and outpatient service providers.

returns primarily consist of expired and short dated products that will not be resold, the Company does not record a return asset for

the right to recover the goods returned by the customer at the time of the initial sale (when recognition of revenue is deferred due

to the anticipated return).

Estimated product returns are recorded as accrued expenses on the balance sheet.

Product returns- Customers

have the right to return product that is within six months or less of the labeled expiration date or that is past the expiration date

by no more than six months (12 months for the legacy Melinta Portfolio).

The Company determines its estimate for product returns based

(i) data provided to the Company by its distributors (including weekly reporting of distributors’ sales and inventory held

by distributors that provided the Company with visibility into the distribution channel in order to determine what quantities were sold

to both inpatient and outpatient facilities), and (ii) the estimated remaining shelf life of the Company’s Products held by the

wholesale distributors and outpatient service providers.

Since the returns primarily consist of expired and short dated products that

will not be resold, the Company does not record a return asset for the right to recover the goods returned by the customer at the time

of the initial sale (when recognition of revenue is deferred due to the anticipated return).

Estimated product returns are recorded as

accrued expenses on the balance sheet.

Chargebacks –

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on the balance sheet.

Rebates – The

Company is or may become subject to negotiated discount obligations to different GPO, direct purchasers, other commercial organizations

or government programs.

The rebate amounts for these programs are determined by statutory requirements or contractual arrangements.

are owed after the product has been dispensed to an end user and the Company has been invoiced.

Rebates are typically invoiced in arrears.

The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid

or for which an invoice has not yet been received, estimates of claims for the current quarter based on expected product utilization,

and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel

at the end of each reporting period.

Medicaid and Commercial Rebates –

The Company is or may become subject to negotiated discount obligations to different GPO, direct purchasers, other commercial organizations

or government programs, including Medicaid.

The rebate amounts for these programs are determined by statutory requirements or contractual

arrangements.

Rebates are owed after the product has been dispensed to an end user and the Company has been invoiced.

Rebates are typically

invoiced in arrears.

The Company’s liability for these rebates consists of invoices received for claims from prior quarters that

have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter based on expected product

utilization, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution

channel at the end of each reporting period.

Rebate estimates are recorded as accrued expenses on the balance sheet.

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Volume incentive rebates are recorded as accrued expenses on the balance sheet.

Shelf-stock adjustments –

The Company is subject to quarterly shelf-stock adjustments with certain direct customers to account for contract price changes as related

to quarterly decreases to our published Average Selling Price (“ASP”).

Inventory levels subject to shelf-stock adjustment

are determined based on current customer utilization rates and current inventory levels at the customer.

Shelf-stock adjustments are

recorded as accrued expenses on the balance sheet.

Administrative and data fees – The Company is subject to negotiated

administrative fees and data fees with certain direct and indirect customers.

Provisions for the revenue

reserves described above totaled $ 24,128,000 for the year ended December 31, 2024.

As of December 31, 2024, total accrued reserves and

allowances to accounts receivable on the balance sheet associated with variable consideration were $ 23,161,000 .

A roll forward of the major categories of variable consideration deductions

for the years ended December 31, 2024 and 2023 is as follows:

variable consideration described above totaled $ 355.8 million and $ 24.1 million for the year ended December 31, 2025 and 2024 respectively.

As of December 31, 2025 and December 31, 2024, total accrued reserves and allowances to accounts receivable on the balance sheet associated

with variable consideration were $ 132.4 million and $ 23.2 million, respectively.

A roll forward of the significant

categories of variable consideration deductions for the years ended December 31, 2025 and 2024, respectively is as follows:

Balance at December 31, 2023

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Balance at December 31, 2024

Melinta portfolio beginning balances

Provisions related to sales recorded in the period

Credits/payments issued during the period

Effect of change in estimate

Balance at December 31, 2025

During the year ended December 31, 2025, a change in estimate was recorded

for variable consideration pertaining to Medicaid rebates.

During the three months ended June 30, 2025, new information was obtained by

the Company surrounding Medicaid utilization rates for certain states that reimburse service providers using DefenCath.

The resulting

change in accounting estimate negatively impacted net sales, income from continuing operations and net income for the year ended December

During 2025, net income was impacted by $ 1.7 million, basic and diluted earnings per share were negatively impacted 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.

License Agreement

The Company’s rights

under the License and Assignment Agreement with ND Partners, LLP are capitalized and stated at cost.

The Company amortizes the intangible

asset utilizing the straight-line method over the estimated economic life of the intangible asset based on the Company’s assessment

of various factors impacting estimated useful lives and cash flows of the acquired rights.

Such factors include the launch date of DefenCath,

the strength of the intellectual property protection of DefenCath and associated technology and various other competitive, developmental

and regulatory considerations, and contractual terms.

See Note 7 – Commitments and Contingencies for further discussion.

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.

Diluted net 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

In connection with the Merger,

the Company acquired Melinta’s license and collaboration agreements for the R&D and/or commercialization of its therapeutic

The terms of these agreements may include nonrefundable licensing fees, funding for research and development and manufacturing,

milestone payments and royalties on any product sales derived from the collaborations in exchange for the delivery of licenses and rights

to sell Melinta’s products within specified territories outside the United States.

Because the partners in these agreements are

deemed to be customers under ASC 606, the consideration associated with any performance obligations is accounted for as revenue under

Such revenue is classified as Contract Revenue in the Consolidated Statement of Operations.

In addition, in connection

with these license and collaboration agreements, the Company recognizes revenue from the sale of bulk raw materials and work-in-process

inventory to its partners when it transfers title of the product to such partners.

Contract revenue and sales of inventory to partners

are classified as Contract Revenue in the Consolidated Statement of Operations.

Government Contract Revenue

In connection with the Melinta

Portfolio, the Company now holds contracts in partnership with BARDA, a government agency, to advance research and development of certain

of our Products.

All aspects of the BARDA contract represent a transaction with a customer to obtain services that are an output of the

Company’s ordinary activities in exchange for consideration, and therefore, the arrangement is accounted for in accordance with

The Company recognizes government

contract revenue as services are performed under in accordance with ASC 606.

Revenue and related reimbursable expenses are presented

on a gross basis in the Company’s Consolidated Statements of Operations.

The related reimbursable expenses are expensed as incurred

as research and development expenses.

See Note 11 – BARDA Agreement for details of the agreement.

Intangible Assets and Goodwill

Intangible assets represent

the fair value of identifiable intangible assets primarily in connection with the Merger (see Note 3).

The Company also holds rights under

the License and Assignment Agreement with ND Partners, LLP, which were recorded at cost (see Note 9 – Commitments and Contingencies

for further discussion).

The Company amortizes the cost of intangible assets on a straight-line basis over the estimated economic life

of each asset, generally the patent lives of each associated product (remaining amortization periods are between 5 and 9 years).

As of December 31, 2025,

gross product right intangible assets and the related accumulated amortization were as follows:

Amount Accumulated

Amortization Net Carrying

Value Weighted-Average Remaining Amortization Period (years)

December 31, 2025

Product licensing rights $ 250,100 $ ( 14,028 ) $ 236,072 5.9

Indefinite-lived asset 143,000 -

Intangible asset- net $ 393,100 ( 14,028 ) 379,072

December 31, 2024

Product licensing rights 2,000 ( 156 ) 1,844 8.9

Intangible asset- net 2,000 ( 156 ) 1,844

The amortization expense

of acquired intangible assets for each of the following periods are expected to be as follows:

Year ending December 31,

2031 and thereafter

Amortization of product rights

intangible assets, which is included in cost of goods sold, was $ 13.9 million and $ 0.2 million for year ended December 31, 2025

and 2024 respectively.

Indefinite-lived assets and

goodwill are not amortized but are subject to an impairment review annually and more frequently when indicators of impairment exist.

The Company operates as one reporting unit/one segment, thus the goodwill is deemed to be enterprise goodwill.

Goodwill represents the excess

of the purchase price over the fair value of identifiable net assets acquired in the business combination completed on August 29, 2025.

Goodwill and indefinite lived intangible assets are not amortized and are evaluated for impairment at least annually and more frequently

if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its

carrying amount.

The Company has elected October

1 as its annual goodwill and indefinite lived impairment testing date.

Since goodwill was recognized on August 29, 2025, and the Company’s

annual testing date is October 1 st .

Management performed a qualitative assessment of events and circumstances for the period

between the acquisition date and October 1, 2025 and determined that no triggering events or indicators of impairment occurred.

no impairment loss was recognized.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment, and

intangible assets with definite lives.

The Company records impairment losses on long-lived assets used in operations when events and circumstances

indicate that the carrying amount of an asset or group of assets may not be fully recoverable at the lowest level of identifiable cash

If impairment indicators are present, the Company assesses whether the future estimated undiscounted cash flows attributable to

the assets in question are greater than their carrying amounts.

If these future estimated cash flows are less than carrying value, it

then measures an impairment loss for the amount that carrying value exceeds fair value of the assets.

For the year ended December 31,

2025 and 2024, the Company recorded no impairment of long-lived assets.

The Company accounts for

leases in accordance with ASC 842, Leases .

At the inception of a contract, the Company determines whether the arrangement contains

a lease by assessing whether there is an identified asset and whether the Company has the right to control the use of that asset during

the term of the arrangement.

The Company recognizes a

right-of-use (“ROU”) asset and a corresponding lease liability for all leases with a term greater than 12 months.

and lease liabilities are measured at the present value of future lease payments at the lease commencement date, discounted using the

rate implicit in the lease, or, if that rate is not readily determinable, the Company’s incremental borrowing rate.

Leases are classified as

operating or finance leases at commencement.

For operating leases, lease expense is recognized on a straight-line basis over the lease

term within operating expenses.

The related ROU assets and lease liabilities are presented separately on the balance sheet.

leases, interest expense on the lease liability and amortization of the ROU asset are recognized separately within interest expense and

depreciation and amortization expense, respectively.

Lease liabilities are remeasured if there are changes to the lease term, payments,

or other relevant assumptions.

Income (Loss) Per Common Share

Income (loss) per common

share requires consideration of the two-class method when an entity has participating securities.

The Company’s outstanding shares

of Series E preferred stock entitle the holders to receive dividends on a basis equivalent to the dividends paid to holders of common

stock, participating pro-rata in the earnings of the Company as if the Series E preferred stock was converted into common shares of the

As a result, the Series E preferred stock meets the definition of a participating security, and the Company is required to apply

the two-class method.

Under the two-class method, earnings available to common shareholders, including both distributed and undistributed

earnings, are allocated to each class of common stock and participating securities according to dividends declared and participating

rights in undistributed earnings, 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, potentially dilutive securities are excluded from the calculation of diluted net loss per share because their effect

would be anti-dilutive, and therefore basic and diluted loss per share are the same for all periods presented.

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

The Company’s convertible debt is a contingently participating security.

The dividends are contingent and

only paid to holders of the convertible debt if dividends declared are equal or greater than the share price.

If this occurs, the Company

may be required to apply the two-class method.

Under the two-class method, earnings available to common shareholders, including both

distributed and undistributed earnings, are allocated to each class of common stock and participating securities according to dividends

declared and participating rights in undistributed earnings.

Since the Series E preferred stock and convertible debt do not have contractual

obligations that require participation in the Company’s losses, the two-class method is not required for periods in which Company

has a net loss.

Basic income (loss) per common share excludes dilution and is computed

by dividing net income (loss) by the weighted average number of common shares, including applicable participating securities, outstanding

during the period.

For the year ended December 31, 2025, basic income per common share is calculated assuming the Series E preferred stock

was converted into common shares and participates in the earnings of the Company on a pro-rata basis.

The Company’s convertible

debt is excluded from the weighted average shares outstanding for purposes for determining income (loss) per common share as there have

been no conversion for the year ended December 31, 2025.

The Company’s convertible debt was not included in the basic income (loss)

per common share under the two-class method because no contingent dividends were declared.

As a result, net income for the year ended

December 31, 2025 is allocated pro-rata between the Company’s weighted average outstanding common shares and Series E preferred

stock (on an as-if converted basis).

On an as-if converted basis, the Series E preferred stock weighted average shares is equal to 439,010

common shares of the Company and would be allocated $ 1.0 million of the Company’s earnings for the year ended December 31, 2025.

For periods of net income,

diluted net income per share is computed using the more dilutive of the treasury method or two-class method.

Because the Company’s

Series E preferred stock does not contain non-forfeitable rights to dividends, the “two-class method” results in the same

diluted net income per share as the “treasury method.” Diluted net income (loss) per common share reflects the potential

dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted

in the issuance of common stock that then shared in the earnings of the Company.

The Company calculates dilutive potential common shares

using the treasury stock method for stock options and restricted units, which assumes the Company will use the proceeds from the exercise

of stock options and vesting of restricted stock units to repurchase shares of common stock to hold in its treasury stock reserves.

Company calculates dilutive potential common shares using the if-converted method for preferred stock and convertible debt, which assumes

they are converted at the beginning of the period (or at time of issuance, if later).

For the year ended December

31, 2024, the two-class method was not required since the Company was in a net loss position and the participating securities do not

have contractual obligations that require participation in the Company’s losses.

A reconciliation of the Company’s

basic and diluted income (loss) per common share is as follows (in thousands):

Year Ended December 31,

Net income (loss)

Allocation of undistributed income of Series E securities

Undistributed income (loss) available to common stockholders

Basic weighted average common shares outstanding

Effect of Series E dilutive securities

Effect of stock Options and restricted stock dilutive securities

Effect of Convertible Senior Notes dilutive securities

Diluted weighted average common shares outstanding

The following potentially

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

(in thousands):

(Number of Shares of

Common Stock Issuable)

Series C-3 non-voting preferred stock

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Shares underlying outstanding stock options

Restricted stock units

Shares underlying restricted stock units

Total potentially dilutive shares

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Stock-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.

is measured at grant date, based on the estimated fair value of the award using the Black-Scholes option pricing model for options with

service conditions.

Restricted stock unit (“RSU”) compensation is based upon the fair value of the Company’s common

stock on the date of the grant for RSU’s that vest upon service conditions.

Performance stock units (“PSU’s”)

which vest upon market and service conditions, utilize a Monte-Carlo simulation model.

Stock-based compensation is recognized as expense

over the requisite service period on a straight-line basis.

Research and Development

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as incurred and considered a component of research and development expense.

Other income relates to a

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

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

Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized.

Recent Authoritative Pronouncements,

not yet adopted

From time to time, new accounting

pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the

Company adopts as of the specified effective date.

Unless otherwise discussed below, the Company does not believe the adoption of recently

issued standards have or may have a material impact on its consolidated financial statements or disclosures.

In December 2023, the FASB

issued Accounting Standards Update (ASU) No.

Estimated deferred taxes are

determined based on the difference between the financial statement and tax basis of assets and liabilities, using enacted tax rates, as

well as any net operating loss or tax credit carry forwards expected to reduce taxes payable in future years.

A valuation allowance is

provided when it is more likely than not that all or some portion of the estimated deferred tax assets will not be realized.

Company considers future taxable income in assessing the need for the valuation allowance, in the event that the Company anticipates that

it will be able to realize the estimated deferred tax assets in the future in excess of its net recorded amount, an adjustment to the

provision for deferred tax assets would increase income in the period such determination was made.

Similarly, in the event that the Company

anticipates that it will not be able to realize the estimated deferred tax assets in the future considering future taxable income, an

adjustment to the provision for deferred tax assets would decrease income in the period such determination was made.

Changes in the valuation

allowance from period to period are included in the Company’s tax provision in the period of change.

The Company accounts for income taxes regarding uncertain tax positions

and recognizes interest and penalties related to uncertain tax positions in income tax expense in the consolidated statements of operations

and comprehensive income.

Recently Issued and Adopted Accounting Pronouncements

In December 2023, the

FASB issued Accounting Standards Update (ASU) No.

2023-09, Income Taxes - Improvements to Income Tax Disclosures (Topic 740).

The standard requires disaggregation of the effective rate reconciliation into standard categories, enhances disclosure of income taxes

standard requires disaggregation of the effective rate reconciliation into standard categories, enhances disclosure of income taxes

paid, and modifies other income tax-related disclosures.

The standard will be effective for CorMedix beginning in annual reporting period

ending December 31, 2025, with early adoption permitted.

CorMedix is currently assessing the impact of adopting this guidance on its

consolidated financial statements.

CorMedix adopted this guidance retrospectively in annual reporting period

ending December 31, 2025.

The adoption impacted the CorMedix’s income tax disclosures (see Note 8 – Income Taxes).

Recent Authoritative Pronouncements, not

From time to time, new accounting pronouncements

are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts

as of the specified effective date.

Unless otherwise discussed below, the Company does not believe the adoption of recently issued standards

have or may have a material impact on its consolidated financial statements or disclosures.

In November 2025, the FASB

issued ASU 2024-03, ASC 220- Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures , which

requires entities, in the notes to financial statements, with specified information about certain costs and expenses.

The guidance is

effective for CorMedix’s annual reporting period ending December 31, 2027, with interim periods beginning with CorMedix’s

interim period ended March 31, 2027.

issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements , which clarifies interim disclosure requirements.

The guidance is effective for CorMedix’s interim reporting periods within annual reporting periods beginning after December 15,

Early adoption is permitted.

CorMedix is assessing the impact of adopting this guidance on its consolidated

financial statements.

Recently Adopted Authoritative Pronouncements:

CorMedix is assessing the impact of adopting this guidance on its consolidated financial statements.

In November 2024, the FASB

issued ASU No.

2023-07 Segment Reporting - Improving Reportable Segment Disclosures (Topic 280).

The standard requires disclosures

to include significant segment expenses that are regularly provided to the chief operating decision maker (CODM), a description of other

segment items by reportable segment, and any additional measures of a segment’s profit or loss used by the CODM when deciding how

to allocate resources.

The ASU also requires all annual disclosures currently required by Topic 280 to be included in interim periods.

CorMedix adopted this guidance as of December 31, 2024.

See Note 10 for the disclosure related to the adoption of ASU No.

issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40),

which requires public business entities to provide additional disaggregated disclosures of certain expense categories included in income

statement captions.

The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years

beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively.

is currently evaluating the impact of adopting this guidance on its consolidated financial statement disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit

Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient

for estimating expected credit losses on current trade receivables and contract assets arising from revenue transactions.

is effective for CorMedix’s annual reporting period beginning after December 15, 2025, with early adoption permitted, and must be

applied prospectively.

CorMedix is evaluating the impact of this guidance on its consolidated financial statements.

Note 3 - Acquisition of Melinta:

On August 29, 2025 (the “Closing

Date”), the Company completed the acquisition of Melinta, pursuant to that certain Agreement and Plan of Merger with Melinta, Coriander

BidCo LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Merger Sub”), and Deerfield

Private Design Fund IV, L.P., a Delaware limited partnership, solely in its capacity as representative, agent and attorney-in-fact of

the Melinta equity holders.

Pursuant to the terms of the Merger Agreement, the Company 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,

the Company (i) paid to the former Melinta equity holders an aggregate of $ 260 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 the to certain of the former Melinta equity holders an aggregate of 3.3 million of common shares of the Company.

In addition, in connection

with the Merger, the Company paid $ 23.2 million to acquire the Toprol XL product, which Melinta had licensed from a third party.

cash consideration in connection with the Merger Agreement was funded by a combination of the Company’s existing cash on hand and

net proceeds from the Company’s $ 150 million Convertible Notes Offering (see Note 7 for details on the Convertible Notes Offering).

Additionally, the 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 U.S.

Food and Drug Administration

(“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;

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

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

Further, the Contingent Payment

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

net sales and low-single-digit

royalties on MINOCIN U.S.

net sales (each the “REZZAYO Royalties” and “MINOCIN Royalties”).

The Merger is accounted for using the acquisition method of accounting

for business combinations under ASC 805, Business Combination , with CorMedix representing the accounting acquirer under this guidance.

The estimates relating to the allocation of the purchase price are preliminary through the conclusion of the measurement period, which

will be no longer than one year from the Closing Date.

Summary of Consideration Transferred

The following tables summarizes

the total consideration for the acquisition of Melinta under the Merger Agreement, net of cash, cash equivalents and restricted cash

acquired of $ 44.9 million

Cash Consideration paid to Melinta equity holders

Cash Consideration paid to acquire Toprol XL

Fair value of common shares of CorMedix

Fair value of contingent payments

Total consideration transferred

The fair value of the contingent

payments of $ 95.9 million includes the REZZAYO Milestone and the REZZAYO and MINOCIN Royalties (together, the “Royalties”).

The Company estimated the fair value of the REZZAYO Milestone by probability-weighting each outcome and discounting the estimated payment

back to the Closing Date.

Key assumptions used in the valuation included probability of milestone achievement, the estimated timing of

approval, an estimated weighted-average cost of capital, and the estimated timing of the REZZAYO Milestone payment occurring in 2027.

In the fourth quarter of 2025,

the Company revised the fair value of common stock issued in connection with the Merger to properly reflect the stock price on the Closing

This revision resulted in an increase to equity and goodwill of approximately $ 9.3 million.

The Company estimated the fair value of the REZZAYO Royalties using

a Monte Carlo simulation framework.

Specifically, the Company simulated future net sales assuming a Geometric Brownian Motion framework,

and these simulated metrics were used to determine the applicable percentage of REZZAYO Royalties.

The fair value of the MINOCIN Royalties

is linear with no thresholds, caps, tiers, or carry forwards, and was estimated using the Scenario Based Method.

For each method, the

Royalties were calculated based on the contractual terms and then discounted from each payment date back to Closing Date.

Key assumptions

used in the valuation included projected net sales, the estimated duration of the related cash flows, and an estimated weighted-average

cost of capital.

Royalties payments are expected to occur until the expiration of patent or regulatory exclusivity in the late 2030’s.

During the year ended, the

Company recognized transaction costs related to the Merger of $ 10.2 million.

These costs were primarily associated with financial

advisory, legal and other professional services related to the Acquisition and are reflected within general and administrative expenses

in our consolidated statements of operations.

The preliminary allocation

of the purchase price to acquired assets and liabilities assumed based on their estimated fair values as of Closing Date is reflected

in the table below.

Goodwill represents the expected synergies resulting from acquiring the remaining interests in the acquirees that

do not qualify for separate recognition as intangible assets.

The goodwill is not deductible for tax purposes as it was a stock acquisition.

Acquired assets and (liabilities) assumed

Cash, cash equivalents and restricted cash

Accounts Receivable

Prepaid expenses and current assets

Property and equipment, net

Intangible assets

Other long-term assets

Accounts payable

Accrued expenses

Other current liabilities

Deferred tax liability

Other long term liabilities

Net assets acquired

Purchase price consideration

In the preliminary purchase

price allocation, the Company identified intangible assets associated with marketed product values and in-process research and development,

the fair value of which were $ 248.1 million, and $ 143.0 million, respectively.

In determining the fair value of these intangible assets,

the Company considered many factors, including financial forecasts associated with each of the products, the estimated duration of the

related cash flows, and an estimated weighted-average cost of capital.

The estimated net cash flow attributed to each marketable and

licensed product is discounted back to Closing Date using a discount rate of approximately 15 %.

The marketed product values will be amortized

on a straight-line basis over their estimated useful lives, on a weighted-average basis, of 6.2 years.

The in-process research and development

relates to the future cash flows associated with the REZZAYO Second Indication if and when approved by the FDA, the fair value of which

was determined using probability-weighted, discounted cash flows using a discount rate of 17 %.

The amount of revenue attributable

to the Melinta business included in consolidated statements of operations for the year ended December 31, 2025 is $ 52.9 million.

Fair value measurement of contingent consideration

Consideration paid in a business

combination may include potential future payments that are contingent upon the acquired business achieving certain levels of earnings

in the future (“contingent consideration”).

Contingent consideration liabilities are measured at their estimated fair value

as of the date of acquisition, with subsequent changes in fair value recorded as Other income in the consolidated statements of operations.

Fair value as of the date of acquisition is estimated based on projections of expected future cash flows of the acquired business.

Company estimates the contingent consideration liability using the Probability-Weighted Discounted Cash Flows, Monte Carlo simulation

framework, and Scenario Based Method approach for REZZAYO Milestone payments, REZZAYO Royalties, and MINOCIN Royalties, respectively.

These approaches require the Company to make estimates and assumptions regarding the future cash flows and profits.

Changes in these

estimates and assumptions could have a significant impact on the amounts recognized.

The following table summarizes

the change in fair value, as determined by Level 3 inputs, for the contingent consideration liability using unobservable Level 3 inputs

for the year ended December 31, 2025:

Consideration

Balance as of August 29, 2025

Payments against contingent consideration

Change in fair value of contingent consideration liability

Balance as of December 31, 2025

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 of August

The following table summarizes key assumptions and inputs used in the fair value simulation as of the valuation dates:

Valuation Dates

December 31, 2025

Risk-free rate over simulated period

Net sales of REZZAYO product volatility

Net sales REZZAYO product discount rate (continuous)

Net sales Minocin product discount rate (continuous)

Earnout payment discount rate (continuous)

REZZAYO Milestone payment discount rate

Unaudited Pro Forma Financial Information

The following unaudited pro

forma financial information presents the combined results of operations of CorMedix and Melinta as if the Merger occurred at the beginning

of the years presented.

The unaudited pro forma financial information includes impact of certain adjustment related to changes from the

purchase of Toprol XL product which was previously licensed to Melinta, amortization of intangibles, transaction related cost incurred,

stock compensation expenses, interest expense on related borrowings, and related income tax effects.

The unaudited pro forma financial

information presented does not include any impact of transaction synergies.

The unaudited pro forma financial information is presented

for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had

taken place on the date indicated or of results that may occur in the future.

Total Revenue

Net Income Per Common Share – Basic

Net Income Per Common Share – Diluted

The unaudited pro forma financial

information presented above includes the following adjustments:

Year ended December 31, 2025:

● Elimination of $ 1.7 million of licensing fees and profit sharing costs associated with the Toprol XL brand

● Elimination of $ 10.5 million of acquisition related expenses

● Elimination of historical stock compensation expense of $ 18.9 million

● Inclusion of intangible asset amortization of $ 25.9 million

● Net impact of new convertible notes payable of $ 0.4 million

● $ 1.6 million tax effect on proforma adjustments

Year ended December 31, 2024:

● Elimination of $ 2.9 million of licensing fees and profit sharing costs associated with the Toprol XL brand

● Inclusion of $ 10.5 million of acquisition related expenses

● Elimination of historical stock compensation expense of $ 0.6 million

● Inclusion of intangible asset amortization of $ 38.9 million

● Net impact of new convertible notes payable of $ 0.5 million

● $ 12.7 million tax benefit on proforma adjustments

Post-Employment Benefit Costs

In connection with the Merger, the Company eliminated certain positions

across both CorMedix and Melinta personnel and incurred associated severance costs under its benefit plans.

The Company incurred an associated

$ 4.1 million of severance expenses during the year ended December 31, 2025.

The Company had $ 3.6 million of related severance on its balance

sheet and is included in Accrued Expenses at December 31, 2025.

The Company expects to pay all severance associated with the Merger by

December 31, 2026.

Note 4 - Other Prepaid Expenses and

3 unchanged sentences

current assets consist of the following:

Prepaid API (short-term)

FDA filing fee

Medical affairs

Subscriptions

Restricted Cash

Subscriptions and Other

Note 5 - Other Long term Assets

Other Long Term Assets

Other long term consist of

the following:

Restricted Cash (long-term)

Prepaid API (long-term)

Marketable Equity Securities

Note 6 - Accrued Expenses:

Accrued Expenses

Accrued expenses consist

of the following:

Accrued expenses consist of the following:

Accrued gross-to-net-deductions

Accrued payroll and payroll taxes

Payroll related liabilities (including severance)

License agreement payable

Professional and consulting fees

Income tax payable

Manufacturing related

Accrued interest

Note 7 - Convertible Senior Notes

Convertible Senior Notes

On August 12, 2025, the Company

completed a private placement offering of $ 150 million aggregate principal amount of its 4.00 % Convertible Senior Notes due 2030 (the

The Notes were issued at par and mature on August 1, 2030 .

The Company incurred $ 5.7 million in financing costs

related to the issuance, resulting in net proceeds of $ 144.3 million.

The financing costs will be amortized over the term of the Notes

up to the face value of $ 150 million.

The Notes bear interest at

a rate of 4.00 % per annum, payable semi-annually in arrears on February 1 and August 1, commencing on February 1, 2026 through August

The Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s

future senior unsecured indebtedness.

The Company may, at its option,

redeem all or any portion of the Notes for cash at 100 % of the principal amount of such Notes, plus accrued and unpaid interest, at any

time on or after August 4, 2028, provided that the last reported sale price of the Company’s common stock is at least 130 % of the

conversion price on each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and

including, the trading day immediately prior to the date the redemption notice is given, as well as on the trading day immediately preceding

Holders may convert their

Notes into shares of the Company’s common stock at their option for any reason on or after May 1, 2030 and prior to the close of

business on the second scheduled trading day immediately preceding the maturity date, or prior to the close of business on the business

day immediately preceding May 1, 2030 under the following circumstances:

● Stock Price Condition:

During any calendar quarter commencing after the quarter ending September 30, 2025, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter.

● Trading Price Condition:

During the five consecutive business days immediately following any five consecutive trading day period (the “Measurement Period”), if the trading price per $ 1,000 principal amount of Notes for each trading day of the Measurement Period is less than 98 % of the product of the last reported sale price per share of common stock and the conversion rate on such trading day.

● Distribution of Rights or Assets:

If the Company distributes to all or substantially all holders of its common stock (i) rights, options, or warrants to subscribe for or purchase shares of common stock at a price per share less than the average sale price for the ten consecutive trading days preceding the announcement, or (ii) assets or securities of the Company (other than pursuant to a stockholder rights plan prior to separation), where the value of such distribution exceeds 10 % of the last reported sale price per share of common stock on the trading day immediately before the announcement.

Fundamental Change or Share Exchange Event:

Upon the occurrence of

a Fundamental Change, Make-Whole Fundamental Change (prior to May 1, 2030), or Share Exchange Event as defined in the Indenture governing

the Notes (other than a merger or business combination solely to change the Company’s jurisdiction of incorporation that does

not constitute a Fundamental Change or Make-Whole Fundamental Change).

If the Company calls any Note for redemption, the holder

may convert such Note.

The initial conversion rate

for the Notes was set at the time of closing and is equal to 74.2515 shares of common stock per $ 1,000 principal amount of Notes.

initial conversion price is subject to adjustment as described in the Indenture governing the Notes, not to exceed 96.5269 shares of common

stock per $ 1,000 principal amount of Notes.

Upon conversion, the Company will settle its conversion obligation in cash, shares of common

stock, or a combination thereof, at the Company’s election.

Convertible senior notes payable are comprised

of the following as of December 31, 2025:

Convertible senior note payable

Less debt discounts

Convertible senior note payable, net

As of December 31, 2025 accrued

interest on Notes was $ 2.3 million.

During the year ended December 31, 2025, the Company amortized debt discount of $ 0.4 million to interest

Note 8 - Income Taxes:

1 unchanged sentence

and foreign loss before

income taxes are set forth below:

income taxes are set forth below (in thousands):

United States

$ ( 19,065,449 )

$ ( 45,946,020 )

$ ( 19,324,790 )

$ ( 46,339,227 )

There were no current or

deferred income tax provision for the years ended December 31, 2024 and 2023 because the Company has incurred operating losses since

The income tax (benefit)/expense

consisted of the following

Current tax expense:

Total current

Deferred tax expense

Total deferred

Total income tax (benefit)

The Company’s deferred tax assets consist

of the following:

of the following (are tax effected):

Deferred tax assets

Net operating loss carryforwards – Federal

2 unchanged sentences

Capitalized licensing fees

Interest expense

Stock-based compensation

1 unchanged sentence

Section 174 capitalization

Inventory reserve

Total gross deferred tax assets

Less valuation allowance

( 69,168,000 )

( 70,777,000 )

Deferred tax assets

Total Deferred tax assets net of valuation allowance

Deferred tax liabilities

In Process R&D

Intangible asset

Total gross deferred tax liabilities

Net deferred tax assets

A valuation allowance is provided when it is more likely than not that

1 unchanged sentence

The net change in the total valuation allowance for the year ended

December 31, 2024 was $ 1,609,000 .

December 31, 2025 was ($ 44.2 ) million as a result of the acquisition of Melinta and its NOLs.

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 of $ 61.5 million primarily related to US Federal net operating losses.

The release of valuation allowance was mainly attributed to the expected utilization of historical CorMedix federal NOLs.

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 Company has not completed a formal study to

determine whether ownership changes, as defined under Section 382 of the Internal Revenue Code, have occurred that could limit the utilization

of its net operating loss carryforwards and other tax attributes.

Until such a study is completed, the Company cannot determine the extent

to which its tax attributes may be subject to annual limitations.

The Company does not expect the results of study to have material effects

of the financial statements for the year ended December 31, 2025.

As a result of the Merger,

Melinta experienced a Section 382 ownership change on August 29, 2025.

This ownership change limits our ability to utilize federal net

operating loss carryforwards and certain other tax attributes that accrued prior to the ownership change and may continue to limit our

ability to utilize such attributes in the future.

The Company recognizes income

tax benefits associated with uncertain tax positions, when, in our judgment, it is more likely than not that the position will be sustained

upon examination by a taxing authority.

For a tax position that meets the more likely than not recognition threshold, the Company initially

and subsequently measures the tax benefit as the largest amount that judged to have a greater than 50% likelihood of being realized upon

ultimate settlement with the taxing authority.

The Company accrues interest and penalties related to uncertain tax positions in income

The Company has concluded that there are no uncertain tax positions requiring recognition in its financial statements as

of December 31, 2025.

The Company files its federal and state income tax returns with the

Internal Revenue Service and the relevant state taxing authorities.

The Company is no longer subject to U.S.

federal income tax examinations

for tax years prior to 2022 and is no longer subject to state income tax examinations for tax years prior to 2021.

As of December 31,

2025, there are no ongoing federal or state income tax audits

The Company had the following potentially utilizable

net operating loss tax carryforwards:

$ 265,610,000

$ 255,306,000

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 2043 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

Our federal and state operating loss carryforwards include windfall tax deductions from stock option exercises.

Approximately $ 91.5 million of net operating losses generated will expire in 2026 through 2037 for Federal purposes whereas the operating losses for state purposes will start to expire in 2025.

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.

Our federal and state operating loss carry forwards include windfall tax deductions from stock option exercises.

The Company’s foreign

earnings, if any, are derived from its German and Spanish subsidiaries.

The Company does not expect any foreign earnings to be repatriated

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, 2024.

earnings, if any, are derived from its foreign subsidiaries which were dissolved in the year ended December 31, 2025 and there was no

income during the year.

The following table summarizes

the Company’s effective tax rate for the periods indicated:

Profit (Loss) before income taxes $ 150,016 $ ( 19,325 )

Provision (Benefit) for income taxes $ ( 13,039 ) $ ( 1,395 )

Effective tax rate ( 8.7 )% $ 7.2 %

The Company’s effective tax rate varied

from the statutory rate as follows:

Statutory federal tax rate

State income tax rate (net of federal)

Change in foreign NOL

Stock compensation prior year true-up

federal statutory tax rate

State and local income tax (net of federal) (a)

Foreign tax effects

Effects of changes in tax laws or rates enacted in the current period

Changes in valuation allowances:

Non-taxable or non-deductible items

Stock compensation

Sale of NJ NOL

Deferred only adjustment

Other permanent differences

Effect of valuation allowance

Transaction Cost

Officer’s Compensation

Change in Fair Value of Contingent Liability

Other non-taxable or non-deductible items

Other adjustments:

Stock compensation prior year true-up

Effective tax rate

In assessing the realizability

of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will

not 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, 2024 and 2023, 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:

(Credited) to

December 31, 2024

$ ( 1,574,000 )

December 31, 2023

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, 2024 and 2023.

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.

and state returns.

The Company’s foreign subsidiary also files a local tax return in their local jurisdiction.

state and local perspective the years that remain open to examination are consistent with each jurisdiction’s statute of limitations.

During the year ended December

31, 2024, the Company received approximately $ 1,395,000 , net of expenses, from the sale of its unused New Jersey net operating losses

(NOL), that was 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 its available NOL tax benefits

for the state fiscal year 2023 in the amount of approximately $ 1,500,000 .

During the year ended December 31, 2023 the Company did not

sell any of its unused NOL.

(a) State taxes in Tennessee, Kentucky and California made up the

majority (greater than 50 percent) of the tax effect in this category in 2025.

State taxes in New Jersey made up the majority (greater

than 50 percent) of the tax effect in this category in 2024.

Individual jurisdictions equaling 5% or more of the total income taxes

paid (net of refunds) for the year ended December 31, 2025 include Tennessee at $ 28 thousand, Texas at $ 18 thousand, South Carolina at

$ 5 thousand and Massachusetts at $ 4 thousand.

Income taxes paid:

State and Local

Total Taxes paid

Note 9 - Commitments and Contingencies:

5 unchanged sentences

United States District Court for the District of New Jersey consolidated into In re CorMedix Inc.

Securities Litigation, Case No.

14020-JXN-CLW, two putative class action lawsuits filed on or about July 22, 2021 and September 13, 2021, respectively, and appointed

lead counsel and lead plaintiff, a purported stockholder of the Company.

The lead plaintiff filed a consolidated amended class action

complaint on December 14, 2021, alleging violations of Sections 10(b) and 20(a) of the Exchange Act, along with Rule 10b-5 promulgated

Securities Litigation , Case

2:21-cv 14020-JXN-CLW, two putative class action lawsuits filed on or about July 22, 2021 and September 13, 2021, respectively, and

appointed lead counsel and lead plaintiff, a purported stockholder of the Company.

The lead plaintiff filed a consolidated amended class

action complaint on December 14, 2021, alleging violations of Sections 10(b) and 20(a) of the Exchange Act, along with Rule 10b-5 promulgated

thereunder, and Sections 11 and 15 of the Securities Act of 1933.

On October 10, 2022, the lead plaintiff filed a second amended consolidated

complaint that superseded the original complaints in In re CorMedix Securities Litigation.

On March 21, 2024, the court denied Defendant’s

motion to dismiss without prejudice and granted lead plaintiff leave to amend the complaint.

On April 22, 2024, lead plaintiff filed

a third amended consolidated complaint that superseded the second amended consolidated complaint.

In the third amended complaint, the

lead plaintiff seeks to represent a class of shareholders who purchased or otherwise acquired CorMedix securities between October 16,

2019 and August 8, 2022, inclusive.

The third amended complaint names as defendants the Company and six (6) current and former officers

of CorMedix, namely Khoso Baluch, Robert Cook, Matthew David, Phoebe Mounts, John L.

On October 10, 2022, the lead

plaintiff filed a second amended consolidated complaint that superseded the original complaints in In re CorMedix Securities Litigation .

On March 21, 2024, the Court denied Defendants’ motion to dismiss without prejudice and granted Lead Plaintiff leave to amend the

On April 22, 2024, the Lead

Plaintiff filed a third amended consolidated complaint that superseded the second amended consolidated complaint.

In the third amended

complaint, the Lead Plaintiff seeks to represent a class of shareholders who purchased or otherwise acquired CorMedix securities between

October 16, 2019 and August 8, 2022, inclusive.

The third amended complaint names as defendants the Company and six (6) current and former

officers of CorMedix, namely Khoso Baluch, Robert Cook, Matthew David, Phoebe Mounts, John L.

Armstrong, and Joseph Todisco (the “Officer

5 unchanged sentences

contract manufacturing organization and heparin supplier.

The Company intends to vigorously contest such claims.

The Company filed its

motion to dismiss the third amended complaint on June 6, 2024, and received from Plaintiffs their opposition to the Company’s motion

to dismiss on July 22, 2024.

The Company filed its response on August 21, 2024.

The Company filed its motion to dismiss the third amended complaint on June

The motion to dismiss was fully briefed on August 21, 2024.

On August 19, 2025, the Court

issued a revised opinion and order, denying the CorMedix Defendants’ motion to dismiss the third amended complaint.

the case has proceeded to discovery.

On August 26, 2025, the parties

proposed a revised Pretrial Scheduling Order, which the Court so-ordered on August 27, 2025.

Among other things, the Scheduling Order

provides for the (i) substantial completion of document production by January 27, 2026;

(ii) completion of fact discovery by June 25,

and (iii) completion of expert discovery by December 28, 2026.

The parties participated in a mediation before

Michelle Yoshida, Esq.

of Phillips ADR on November 18, 2025, which did not result in a settlement.

On December 1, 2025, in response to, among other

things, the death of an Officer Defendant, Lead Plaintiff filed an Unopposed Motion for Leave to Amend the complaint, which the Court

granted on December 17, 2025.

The CorMedix Defendants filed their answer to the Fourth Amended Consolidated Class Action Complaint on

January 2, 2026.

In re CorMedix Inc.

4 unchanged sentences

Court for the District of New Jersey, in a case entitled Voter v.

Baluch, et al., Case No.

Baluch, et al.

2:21-cv-18493-JXN-LDW (the “Derivative

4 unchanged sentences

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

breaches of fiduciary duty, abuse of control, and waste of corporate assets against the individual defendants, and a claim for contribution

for purported violations of Sections 10(b) and 21D of the Exchange Act against certain defendants.

On January 21, 2022, pursuant to a

stipulation between the parties, the Court entered an order staying the case while the motion to dismiss the class action lawsuit was

On or about January 13, 2023,

3 unchanged sentences

2:23-cv-00150-JXN-CLW.

complaint names as 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.

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.

The complaint

alleges breaches of fiduciary duty and unjust enrichment against the individual defendants.

On or about January 25, 2023,

3 unchanged sentences

2:23-cv-00406-ES-ESK.

Khoso Baluch, Janet Dillione, Alan W.

complaint names as 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.

Costa, Gregory Duncan,

Matthew David, and Phoebe Mounts, along with the Company as Nominal Defendant.

The complaint alleges breaches of fiduciary duty.

On or about April 18, 2023,

4 unchanged sentences

2:21-cv-18493-JXN-LDW.

The individual defendants intend to vigorously contest the claims set forth in the consolidated derivative action.

The provisions of

the Order to Stay entered in the Voter Action on January 21, 2022, apply to the consolidated derivative action.

On April 20, 2023,

the consolidated derivative action was administratively terminated and removed from the Court’s docket until the motion to dismiss

the class action is resolved and the Private Securities Litigation Reform Act, or PSLRA, stay is lifted.

On April 22, 2024, the lead

plaintiff in the class action filed a third amended complaint.

The class action remains stayed under the PSLRA.

Demand Letter

On or about June 23, 2022,

the Company’s Board received a letter demanding it investigate and pursue causes of action, purportedly on behalf of the Company,

against certain current and former directors, officers, and/or other employees of the Company (the “Letter”), which the Board

believes are duplicative of the claims already asserted in the Derivative Litigation.

As set forth in the Board’s response to the

Letter, the Board will consider the Letter at an appropriate time, as circumstances warrant, as it continues to monitor the progress

of the Derivative Litigation.

The provisions of the Order to Stay that was previously entered in the Voter litigation on January 21, 2022 applied to the consolidated

derivative action.

On August 19, 2025, the Court

issued a revised opinion and order denying the CorMedix Defendants’ motion to dismiss the third amended complaint in the securities

On November 10, 2025, the derivative plaintiffs filed a verified consolidated shareholder derivative complaint (the “Consolidated

Complaint”), which alleges that during the relevant period (October 16, 2019 – August 8, 2022), the Individual Defendants,

made or caused to be made materially false and misleading statements regarding CorMedix’s business and operations, specifically

relating to purported manufacturing deficiencies during the Relevant Period that the Individual Defendants knew or should have known would

impact the FDA approval of the developmental drug “DefenCath” prior to its ultimate approval by the FDA.

The Consolidated Complaint asserts claims for

breach of fiduciary duty and unjust enrichment.

On this basis, the Consolidated Complaint seeks unspecified damages and corporate

governance reforms.

On November 18, 2025, the parties participated

in a mediation before Michelle Yoshida, Esq.

of Phillips ADR.

On December 20, 2025, the parties signed a binding settlement term

On January 19, 2026, the parties executed a binding stipulation of settlement, which, if approved, would resolve the case.

The plaintiffs in a new and

separate action––the Jhoe action (discussed below)––filed a motion to intervene and stay this case on December

On January 6, 2026, the plaintiffs filed their opposition to the motion to intervene and stay.

The Jhoe plaintiff

filed his reply on January 13, 2026.

That motion remains pending and will be decided on the papers.

On January 19, 2026, the plaintiffs

filed their Unopposed Motion for Preliminary Approval of Settlement (“Preliminary Approval Motion”).

Following an exchange

of letters, on February 3, 2026, the Jhoe plaintiff filed his purported opposition to the Preliminary Approval Motion raising,

among other things, various objections to the proposed settlement.

On February 10, 2026, the plaintiffs filed their reply in further support

of preliminary approval of the proposed settlement, in which Defendants joined and advanced additional arguments in favor of preliminary

The Preliminary Approval Motion remains pending and will be decided on the papers.

Baluch, Case No.

UNN-L-003721-25

On or about September 26,

2025, a purported shareholder, derivatively and on behalf of CorMedix, filed a shareholder derivative complaint in the Law Division of

the Union County Superior Court of New Jersey, in a case entitled, Raval v.

Baluch, et al.

UNN-L-003721-25 (N.J.

Law Div.) (the “State Derivative Litigation”).

The complaint names as defendants Khoso Baluch, Janet Dillione, Alan W.

Dunton, Myron Kaplan, Steven Lefkowitz, Paulo F.

Costa, Gregory Duncan, Matthew David, and Phoebe Mounts, along with CorMedix as Nominal

The complaint alleges breaches of fiduciary duty, waste of corporate assets, and abuse of control against the defendants and

contains similar allegations to the previously-filed consolidated derivative complaint pending in federal court.

The Raval complaint

seeks unspecified money damages, governance reforms, and costs and expenses.

On October 22, 2025, the parties filed a proposed Stipulation

and Consent Order, which the Court entered on the same day.

The Stipulation and Consent Order provided that Plaintiff would have until

December 4, 2025 to file an amended complaint or designate the complaint as operative.

On December 4, 2025, Plaintiff filed a notice

with the Court designating its September 26, 2025 complaint as the operative complaint.

The parties attended a mediation

before Michelle Yoshida, Esq.

of Phillips ADR on November 18, 2025.

On December 20, 2025, the parties signed a binding settlement

On January 5, 2026, the parties filed a Stipulation and Consent Order Staying Action staying the case pending approval

of the settlement in the federal derivative action, which the court entered on the same day.

On January 19, 2026, the parties signed

a stipulation of settlement.

This action will be dismissed in the event that the proposed settlement is approved by the court in the

federal derivative action.

Todisco, et al ., C.A.

2025-1367-PAF (Del.

On November 24, 2025, an action was initiated

under seal by Robert Jhoe, a purported shareholder of the Company, asserting claims derivatively and on behalf of CorMedix.

version of the complaint was filed on December 1, 2025.

The complaint names as defendants Khoso Baluch, Janet D.

Dillione, Alan

Dunton, Robert Cook, Myron Kaplan, Steven Lefkowitz, Paulo F.

Costa, Greg Duncan, Matthew David, Phoebe Mounts, John L.

and Joseph Todisco, along with the Company as Nominal Defendant.

complaint asserts claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, and waste.

Jhoe made a books-and-records demand on CorMedix pursuant to Section 220 of the Delaware General Corporation Law prior to initiating

this action, and the complaint purports to quote and cite board-level materials in support of Mr.

Jhoe’s claims.

unspecified damages and costs along with certain governance reforms.

On December 29, 2025, the defendants moved to

stay or dismiss this action, pending approval of the settlement in the federal derivative action.

On January 15, 2026, the parties

filed a Stipulation and Proposed Order Governing the Briefing Schedule for the Motion to Dismiss or Stay, which the court so-ordered

the following day.

Per the Stipulation, Defendants filed their Opening Brief on February 16, 2026.

Further, Plaintiff’s Opposition

Brief is due on March 18, 2026 and Defendants’ Reply is due on April 2, 2026.

On February 27, 2026, the

parties filed a stipulation and proposed order to stay this case––including the Motion to Dismiss or Stay––pending

decisions by the court in the New Jersey derivative case on two motions:

Jhoe’s Motion to Intervene and (ii) the plaintiffs’

Motion for Preliminary Approval of Settlement, which Mr.

Jhoe opposes.

The stipulation, which the court so-ordered on March 2, 2026, further

provides that following the New Jersey court’s decisions on these motions, the parties in the Jhoe case will confer regarding appropriate

next steps and update the court accordingly.

Melinta Legal Proceedings

Melinta markets MINOCIN,

which is indicated for the treatment of certain bacterial infections.

Melinta holds Orange Book listed patents for MINOCIN, including

two formulation patents (patents 11,944,634 and 12,161,656) issued in 2024.

In 2020, Nexus Pharmaceuticals

(“Nexus”) filed an Abbreviated New Drug Application (“ANDA”) with Paragraph IV (“PIV”) certification

against the only Orange Book listed patents at the time, specifically patents ‘802 and ‘105 (“Minocin Treatment Patents”),

on the alleged basis that the Minocin Treatment Patents were invalid and, in the alternative, that its ANDA did not infringe.

Melinta filed suit against

Nexus in the US District Court for the Northern District of Illinois (the “Court”), asserting that the Minocin Treatment Patents

were valid and accordingly, Nexus’s ANDA for its generic version of MINOCIN infringed these patents.

In November 2024, the

Court found that the Minocin Treatment Patents are valid, enforceable and infringed and issued a permanent injunction against the Nexus

ANDA as part of that decision.

Nexus subsequently filed an appeal with the U.S.

Court of Appeals for the Federal Circuit.

The appeal is

Additionally, in February

2025, Melinta received a PIV certification for all four Orange Book listed patents from Gland Pharma (“Gland”) on the alleged

basis that the patents were invalid, and in the alternative that its ANDA did not infringe these patents.

Melinta filed a suit against

Gland in the same Court in April 2025.

The case is ongoing.

License and Assignment Agreement

6 unchanged sentences

As consideration in part for the rights to the NDP Technology, upon execution of the ND License Agreement,

the Company paid NDP an initial licensing fee of $ 325,000 and granted NDP a 5 % equity interest in the Company, consisting of 7,996 shares

of the Company’s common stock.

the Company paid NDP an initial licensing fee of $ 0.3 million and granted NDP a 5 % equity interest in the Company, consisting of 7,996

shares of the Company’s common stock.

Under the ND License Agreement,

the Company is required to make cash and equity payments to NDP upon the achievement of certain milestones.

In 2014, a certain milestone

was achieved resulting in the release of 7,277 shares held in escrow.

As of December 31, 2022, the shares remaining in escrow were cancelled

in accordance with the terms of the escrow agreement.

Under the ND License Agreement, the maximum aggregate amount of cash payments due

upon achievement of applicable milestones was $ 2,500,000 , with the balance being $ 2,000,000 as of December 31, 2024 and 2023.

licensing fee of $ 325,000 , the fair value of the 5 % equity interest ( 7,996 shares of the Company’s common stock) and an additional

$ 500,000 , as a result of the achievement of one milestone, were recognized on the Company’s statement of operations in R&D

in prior periods, as the related milestones were achieved by the Company prior to the FDA approval.

During the year ended December 31,

2024, the Company determined it was probable that the net sales milestones would be achieved in future periods and, as a result, the

Company recorded a license intangible asset of $ 2,000,000 and a license agreement liability of $ 2,000,000 , which is included within accrued

expenses in the Company’s consolidated balance sheet as of December 31, 2024.

These sales milestones were met during the year ended

December 31, 2024.

The Company anticipates payment will be due in accordance with the agreement terms at the end of the twelve month

period post attainment.

Beginning in the second quarter

of 2024, the license intangible asset is amortized as cost of goods sold over its estimated economic life of approximately 10 years.

The amortization start period correlates with the product launch of DefenCath and the first period in which revenue will be recognized.

Amortization expense of approximately $ 156,000 was recorded during the year ended December 31, 2024.

Under the ND License Agreement,

the maximum aggregate amount of cash payments due upon achievement of applicable milestones was $ 2.5 million, with the balance being

$ 2 million as of March 31, 2025.

The initial licensing fee of $ 0.3 million, the fair value of the 5 % equity interest ( 7,996 shares of

the Company’s common stock) and an additional $ 0.5 million, as a result of the achievement of one milestone, were recognized on

the Company’s statement of operations in R&D in prior periods, as the related milestones were achieved by the Company prior

to the FDA approval.

During the year ended December 31, 2024, the Company determined it was probable that the net sales milestones would

be achieved in future periods and, as a result, the Company recorded a license intangible asset of $ 2 million and a license agreement

liability of $ 2 million, which was included within accrued expenses in the Company’s consolidated balance sheet as of December

In May 2025, the Company paid the final milestone liability in the aggregate amount of $ 2 million.

The ND License Agreement

1 unchanged sentence

in a given country, or (ii) the payment of all milestone payments.

Upon the expiration of the ND License Agreement in each country, we

will have an irrevocable, perpetual, fully paid-up, royalty-free exclusive license to the NDP Technology in such country.

The ND License

Agreement also may be terminated by NDP if the Company materially breaches or defaults under the ND License Agreement and that breach

is not cured within 60 days following the delivery of written notice to the Company, or by the Company on a country-by-country basis

upon 60 days prior written notice in the event the Company’s Board determines not to proceed with the development of the NDP Technology.

If the ND License Agreement is terminated by either party, the Company’s rights to the NDP Technology will revert back to NDP.

Upon the expiration of the ND License Agreement in each country, the

Company will have an irrevocable, perpetual, fully paid-up, royalty-free exclusive license to the NDP Technology in such country.

Melinta Commitments

Melinta is party to several

license agreements, under which it will be required to make payments based on the achievement of agreed-upon milestones or circumstances.

As of December 31, 2025, Melinta was not obligated to make any of the future payments discussed below.

Wakunaga Pharmaceutical

In May 2006, Wakunaga and Melinta executed a license agreement under which Melinta acquired rights to certain patents, patent

applications, and other intellectual property related to BAXDELA.

Melinta is obligated to pay royalties to Wakunaga on sales of BAXDELA.

Under the license, Melinta has the right to grant sublicenses, although Wakunaga is entitled to a substantial portion of non-royalty income

received from a sublicense of the Wakunaga technology.

Wakunaga has certain termination rights, should Melinta fail to perform its obligations

under the agreement, it becomes subject to bankruptcy or similar events, or Melinta’s business is transferred or sold and the successor

requires us to terminate a substantial part of its development activities under the agreement.

Melinta has the right to terminate the

license for cause upon six months’ written notice to Wakunaga.

Unless earlier terminated, the license agreement will continue in

effect on a country-by-country and product-by-product basis until Melinta is no longer required to pay any royalties, which is the later

of the date the manufacture, use or sale of a licensed product in a country is no longer covered by a valid patent claim, or a specified

number of years following the first commercial sale in such country.

CyDex Pharmaceuticals,

In November 2010, Melinta entered into a license and supply agreement with CyDex Pharmaceuticals, Inc.

(now a wholly-owned subsidiary

of Ligand Pharmaceuticals Incorporated, both hereafter referred to as Ligand) under which Melinta obtained an exclusive right, under certain

patents and patent applications, to use Ligand’s beta sulfobutyl cyclodextrin, Captisol, in the development and commercialization

of a BAXDELA product.

In addition, under the terms of the license agreement, Melinta obtained a nonexclusive license to Ligand’s

Captisol data package.

Melinta is obligated to pay royalties to them based on our sales of BAXDELA.

Melinta is obligated to certain diligence

requirements and have the right to grant sublicenses to third parties.

The license agreement provides for future payments to Ligand upon

the achievement of a future commercial milestone, and obligations to make percentage royalty payments in the single digits based on net

sales, if any, of the licensed product.

Additionally, Melinta has agreed to purchase our requirements of Captisol from Ligand for use

in a BAXDELA product, with pricing established pursuant to a tiered pricing schedule.

Ligand has certain rights to terminate the agreement

following a cure period, should Melinta fail to perform our obligations under the agreement.

In addition, Ligand may terminate the agreement

immediately if Melinta fails to pay milestones or royalties due under the agreement or if Melinta becomes subject to bankruptcy or similar

Melinta has the right to terminate the license upon 90 days’ written notice to Ligand.

Unless earlier terminated, the agreement

will continue in effect until the expiration of our obligation to pay royalties.

Such obligation expires, on a country-by-country basis,

over a specified number of years following the expiration date of the last valid claim of a licensed product in the country of sale;

there has never been a valid claim of a licensed product in the country of sale, then such number of years after the first sale of the

licensed product in such country.

AstraZeneca AB (“AZ”).

In connection with the acquisition of Toprol XL, the seller assigned its rights, title, interests and obligations for the Toprol product

under the supply and license agreements with AZ to Melinta, as a wholly-owned subsidiary of the Company.

AZ is obligated

to supply the Toprol product to Melinta in accordance with the supply agreement, and Melinta is obligated to pay royalties based on net

sales of the Toprol product.

2022, Melinta entered into a license agreement with Cidara Therapeutics (“REZZAYO License Agreement”) (who in April 2024

sold all of its rights in REZZAYO to Napp Pharmaceutical Group Limited (“Napp”), a member of Mundipharma independent associated

companies) to acquire an exclusive license to develop and sell REZZAYO in the U.S.

Napp acquired of all assets and rights related to

rezafungin globally, including ongoing development and distribution, while commercialization rights to rezafungin in the United States

remain licensed to Melinta.

As of December 31, 2025, the commitments under the REZZAYO License

Agreement include a regulatory milestone of between $ 30 million and $ 40 million upon receipt of the marketing approval for the prophylaxis

indication, a number of commercial milestones upon exceeding certain net sales targets, and net sales-based royalties.

The 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, Napp shall assign and transfer to Melinta all rights, title and interest in and to all product filings for the current product

Following the first anniversary of the contract effective date, Melinta may terminate this agreement, in its sole discretion,

upon 90 days prior written notice;

otherwise, this agreement shall expire on the expiration of Melinta’s obligation to pay royalties

to Napp when there is no valid claim of the licensed patent rights in the United States.

In connection with the purchase

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

cost of € 5.9 million, subject to inflation adjustments.

Other Commitments

In December 2024, the Company

entered into a project agreement with Syneos Health Commercial Services, LLC (“Syneos”) where Syneos will provide a field

force of sales representatives to provide certain sales operations services, compliance services and training services with respect to

DefenCath to us in exchange for an up-front implementation fee and a fixed monthly fee.

The term of the agreement is 3 years and is cancelable

provided 60 days written notice, upon the twelve-month anniversary of the deployment date, which has yet to be determined as of the filing

of this Form 10-K.

As of December 31, 2024, the minimum amount committed totals $ 9.6 million.

The Company entered into

a seven-year operating lease agreement in March 2020 for an office space at 300 Connell Drive, Berkeley Heights, New Jersey 07922.

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

Note 8 — Stockholders’

Common Stock:

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.

The offering pursuant to the 2021 Shelf Registration Statement 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 warrants.

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 .

In October 2024, the pre-funded warrants were exercised resulting

in the issuance of 2,500,625 shares of common stock by the Company.

Due to the pricing of the pre-funded warrants, net proceeds related

to this transaction are de minimis.

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 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

Q4 2025, which will be partially offset by a security deposit of $ 0.6 million.

We expect complete settlement to occur in Q1 2026.

Note 10 - Stockholders’ Equity

On May 9, 2024, the Company

filed a shelf registration statement (the “2024 Shelf Registration Statement”) for the issuance of up to $ 150,000,000 of

filed a shelf registration statement (the “2024 Shelf Registration Statement”) for the issuance of up to $ 150 million of

Company securities.

Also on May 9, 2024, the Company entered into an At-The-Market Issuance Sales Agreement with Leerink Partners LLC,

as sales agent, pursuant to which the Company may sell, from time to time, an aggregate of up to $ 50,000,000 of its common stock through

as sales agent, pursuant to which the Company may sell, from time to time, an aggregate of up to $ 50 million of its common stock through

the sales agents under the 2024 Shelf Registration Statement, subject to limitations imposed by the Company and subject to the sales

2 unchanged sentences

from the sale of common stock sold under the 2024 ATM program.

As of December 31, 2024, the Company sold an aggregate of 3,049,878 shares

of its common stock under the 2024 ATM program and realized an aggregate net proceeds of approximately $ 18,900,000 .

Approximately $ 30,216,000

of the Company’s common stock remains available for sale under its 2024 ATM program, with $ 100,000,000 of capacity remaining under

its 2024 Shelf Registration Statement for the issuance of Company securities.

During the year ended December

31, 2023, the Company sold an aggregate 2,977,637 shares of its common stock under the Company’s previous at-the-market program,

realizing net proceeds of approximately $ 12,900,000 .

During the year ended

December 31, 2024 and 2023, the Company issued an aggregate of 1,357,802 and 79,041 shares of its common stock upon exercise of stock

options, resulting in net proceeds to the Company of approximately $ 7,724,000 and $ 288,000 , respectively.

In December 2024, 44,999 shares of Series G preferred stock were converted

to 2,502,005 shares of common stock.

Restricted Stock Units

During the year ended December

31, 2024 and 2023, the Company granted 283,333 and 50,000 restricted stock units (RSUs), respectively, to its executive officers under

its Amended and Restated 2019 Omnibus Stock Incentive Plan with a weighted average grant date fair value of $ 3.47 and $ 3.30 per share,

respectively.

The fair market value of the RSUs was estimated to be the closing price of the Company’s common stock on the date

The RSUs issued during the year ended December 31, 2024 vest 25 % on the grant date and 25 % each on the first, second and third

anniversaries of the grant date, subject to continued service as an employee or consultant through the applicable vesting date.

the year ended December 31, 2024, the Company issued 42,844 shares upon the vesting of 25 % of these RSUs on the grant date and 27,989

shares were withheld in lieu of withholding taxes.

The RSUs issued during the year ended December 31, 2023 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.

In December 2024, 12,500 of these RSUs vested which resulted in the issuance of 6,456 shares of

common stock and 6,044 shares were withheld in lieu of withholding taxes.

During the year ended December

31, 2024 and 2023, 62,241 and 103,734 RSUs vested, respectively, pursuant to a grant made to the Company’s chief executive officer

in May 2022, of which 35,259 and 66,291 shares of common stock were issued by the Company, respectively, and 26,982 and 37,443 shares,

respectively, were withheld in lieu of withholding taxes.

The Company recorded $ 690,000

and $ 262,000 compensation expense for the year ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, unrecognized

compensation expense for RSUs amounted to $ 671,000 and the expected weighted average period for the expense to be recognized is 1.5 years.

As of December 31, 2024, the Company had 291,494 outstanding RSUs.

During the year ended December 31, 2025, the Company sold an aggregate

of 715,051 shares of its common stock under the 2024 ATM program and realized aggregate net proceeds of approximately $ 7.8 million.

of December 31, 2025, approximately $ 22.1 million of the Company’s common stock remains available for sale under its 2024 ATM program,

with $ 15 million of capacity remaining under its 2024 Shelf Registration Statement for the issuance of Company securities.

On June 30, 2025, the Company

completed a Follow on Offering of common stock pursuant to the Company’s universal shelf registration statement on Form S-3, selling

an aggregate of 6,604,507 shares, at the price of $ 12.87 per share less an underwriting discount of $ 0.229 per share.

The Company received

aggregate net proceeds of approximately $ 82.4 million after deducting the underwriting discounts and commissions and offering expenses

payable by the Company.

The Company intends to use the proceeds for general corporate purposes, which may include working capital, expenses

related to research and the development of product candidates, and potential strategic transactions, including acquisitions, joint ventures

or collaborations, involving companies, products or assets that complement our business.

No payments were made by the Company to directors,

officers or persons owning 10 % or more of the Company’s common stock or to their associates, or to the Company’s affiliates.

In addition, the Company granted the underwriter a 30-day option to purchase an additional 15 % of the shares of its common stock offered

in the offering, which expired unexercised.

On August 29, 2025, the Company

issued 3,323,833 shares of common stock in connection with the Merger and has registered an additional 3,000,000 shares of common stock

that may be issuable, at the Company’s election, upon the achievement of the REZZAYO Milestone in connection with the Merger (see

During the years ended December

31, 2025 and 2024, 45,000 and 44,999 shares of Series G preferred stock were converted to 2,502,062 and 2,502,005 shares

of common stock, respectively.

Preferred Stock

6 unchanged sentences

authorized, the Company’s board of directors has designated (all with par value of $ 0.001 per share) the following:

As of December 31, 2024

As of December 31, 2023

The following rights, privileges,

terms and conditions apply to the outstanding preferred stock at December 31, 2024:

As of December 31, 2025 As of December 31, 2024

Outstanding Liquidation

(Per Share) Total

Preference Preferred

Outstanding Liquidation

(Per Share) Total

Series C-3 2,000 $ 10.00 20,000 2,000 $ 10.00 $ 20,000

Series E 89,623 $ 62.76 5,624,739 89,623 $ 49.20 $ 4,409,452

Series G - $ - - 45,000 $ 187.36 $ 8,431,200

Total 91,623 5,644,739 136,623 $ 12,860,652

In July 2025, the stated value of the Series E

Convertible Preferred Stock was amended from $ 49.20 to $ 62.76 per share.

The following rights,

privileges, terms and conditions apply to the outstanding preferred stock at December 31, 2025:

Series C-3 Non-Voting Preferred Stock

The Series C-3

non-voting preferred stock will rank senior to our common stock;

senior to any class or series of capital stock created after

the issuance of the Series C-3 non-voting preferred stock;

and junior to the Series E voting convertible preferred stock in each case,

as to dividends or distributions of assets upon our liquidation, dissolution or winding up whether voluntarily or involuntarily.

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.

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.

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

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

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are paid on shares of the common stock.

not obligated to redeem or repurchase any shares of Series C-3 preferred stock.

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.

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.

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,

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,

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Series E Voting Convertible Preferred Stock

voting preferred stock will rank senior to our common stock;

E voting preferred stock will rank senior to our common stock;

senior to any class or series of capital stock created after the issuance

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or winding up whether voluntarily or involuntarily.

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.

share of Series E preferred stock is convertible into 5.5787 shares of our common stock (subject to adjustment as provided

in the certificates of designation for the Series E preferred stock) at a per share price of $ 3.75 at any time at the option of

the holder, except that a holder will be prohibited from converting shares of Series E preferred stock into shares of common stock if,

as a result of such conversion, such holder, together with its affiliates, would beneficially own more than 4.99 % of the total number

of shares of our common stock then issued and outstanding.

Liquidation Preference.

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.

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.

the event of our liquidation, dissolution or winding up, holders of Series E preferred stock will receive a payment equal to $ 62.76 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.

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are paid on shares of the common stock.

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.

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.

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.

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.

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.

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.

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securities as if the Series E preferred stock had been converted to common stock.

Series G Voting Convertible Preferred Stock

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.

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 .

of Series G preferred stock are entitled to vote on an as-converted basis, based upon an assumed conversion price of $ 7.93 .

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.

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.

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 .

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 .

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.

Restricted and Performance Stock Units

The Company has granted restricted

stock units (“RSUs”) to certain employees and non-employee directors and performance stock units (“PSUs”) to

certain executive employees as compensation for services.

The grant date fair value of the RSUs is based upon the fair value of the Company’s

common stock on the date of the grant for RSUs that vest upon service or performance conditions.

For RSUs that vest upon market conditions,

the grant date fair value of RSUs is based upon a Monte-Carlo simulation model.

During the year ended December

31, 2025 and 2024 the Company granted 1,747,308 and 283,333 RSUs to its employees and non-employee directors with service based vesting

conditions and a weighted average grant date fair value of $ 11.10 and $ 3.47 per share respectively.

Compensation expense related to these

RSUs is recognized on a straight-line basis over the vesting period.

As of the year ended, December 31, 2015, and 2024, the Company had

1,550,883 and 291,494 shares unvested with a weighted average fair value of $ 10.50 and $ 3.44 , respectively.

During the year ended December

31, 2025 and 2024, 371,166 and 145,574 RSUs vested, respectively, of which 193,032 and 84,559 shares of common stock were issued by the

Company, respectively, and 178,134 and 61,015 shares, respectively, were withheld in lieu of withholding taxes.

In addition to the RSUs noted

above, during the year ended December 31, 2025, the Company granted 487,500 PSUs to its executive officers with market performance and

service based vesting conditions and, as such, the grant date fair value of $ 11.79 was calculated using a Monte-Carlo simulation model.

Of the total PSUs granted, 62,500 of these PSUs were forfeited in August 2025 due to the resignation of an employee.

During the year ended

December 31, 2025, 33,220 additional shares were the result of the end of the Period 1 measurement period.

As of December 31, 2025,

458,220 PSUs are outstanding, which have a weighted average fair value of 11.79 .

The following key assumptions were used to determine

the fair value of the PSUs granted during the period:

Equity volatility

Remaining term at time of valuation (years)

Dividend yield

Risk-free rate

Compensation expense related

to these PSUs is recognized on a straight-line basis over the requisite service period, regardless of whether the market condition is

ultimately satisfied.

As of December 31, 2025,

the Company had 2,009,103 outstanding RSUs and PSUs.

As of December 31, 2025, unrecognized compensation expense related to unvested RSUs

and PSUs was $ 14.3 million, which will be recognized over a weighted average remaining period of 1.7 years as of December 31, 2025.

Stock Options

22 unchanged sentences

Prior Plans will remain outstanding in accordance with their terms and the Prior Plans.

During the years ended December

31, 2024 and 2023, the Company granted ten-year qualified and non-qualified stock options to its officers, directors, employees and consultants

covering an aggregate of 2,196,167 and 2,536,200 shares of the Company’s common stock under the 2019 Plan, respectively.

average exercise price of these options is $ 3.80 and $ 4.18 per share, respectively.

During the year ended December

31, 2024, the Company granted ten-year qualified and non-qualified stock options to its officers, directors, employees and consultants

in the aggregate of 2,196,167 shares of the Company’s common stock under the 2019 Plan.

The weighted average exercise price of

these options was $ 3.80 .

The Company did not grant any stock options during the year ended December 31, 2025.

During the years ended December

31, 2025 and 2024, the Company issued 1,510,887 and 1,357,802 shares of common stock, respectively, as a result of the exercise of stock

The Company realized net proceeds of $ 7,724,000 and $ 288,000 , respectively, from the exercise of stock options with a weighted

average exercise price of $ 5.69 and $ 3.64 per share, respectively.

During the years ended December

31, 2024 and 2023, total compensation expense for stock options issued to employees, directors, officers and consultants was $ 5,439,000

and $ 5,232,000 , respectively.

As of December 31, 2024, there was $ 6,363,000 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 1.4 years.

The Company realized net proceeds of $ 6.4 million and $ 7.7 million, respectively, from the exercise of stock options with a

weighted average exercise price of $ 4.22 and $ 5.69 per share, respectively.

During the year ended December

31, 2025 no stock options were issued.

As of December 31, 2025, there was approximately $ 2.3 million in total unrecognized compensation

expense related to stock options granted, which will be recognized over an expected remaining weighted average period of 1.0 years.

share-based awards are recognized on a straight-line method, assuming all awards granted will vest.

4 unchanged sentences

pricing model with the following assumptions:

Year Ended December 31,

Risk-free interest rate

3.60 % - 4.65 %

3.45 % - 4.81 %

Expected volatility

93.2 % - 100.5 %

92.2 % - 105.7 %

Average Expected term (years)

Expected dividend yield

Weighted-average grant date fair value of options granted during the period

Expected dividend

Weighted-average grant date

fair value of options granted during the period

The Company estimated the

9 unchanged sentences

with the expected term of the Company’s awards.

The following table summarizes

the Company’s stock options activity and related information for the year ended December 31, 2024:

The following table summarizes the Company’s stock options activity

and related information for the year ended December 31, 2025 and 2024 (in thousands except share data):

Options Weighted-

4 unchanged sentences

Exercised ( 1,357,802 ) $ 5.69 - $ 3,750

Expired/Canceled ( 418,932 ) $ 12.27 -

Expired/Cancelled ( 418,932 ) $ 12.27 - -

Forfeited ( 348,548 ) $ 3.68 - -

Outstanding at December 31, 2024 6,282,393 $ 4.46 7.8 $ 23,568

Exercised ( 1,510,887 ) $ 4.22 - $ 11,149

Expired/Cancelled ( 28,741 ) $ 19.16 - -

Forfeited ( 220,944 ) $ 4.13 - -

Outstanding at December 31, 2025 4,521,821 $ 4.46 7.7 $ 32,532

Vested at December 31, 2025 3,208,698 $ 4.72 6.5 $ 22,321

3 unchanged sentences

of the Company at the end of the reporting period for those options that have an exercise price below the quoted closing price.

Stock-Based Compensation

Total stock-based compensation

expense recognized in the consolidated statements of operations is as follows:

Stock options

The following table represents the allocation

of stock-based compensation expense by financial statement line item:

Financial statement line item

Cost of sales

Research and development

Selling and marketing

General and administrative

During the year ended December

31, 2025, $ 0.9 million of expense related to stock option and RSUs pertained to equity modifications for employees who were provided

notice of Merger-related terminations.

Stock-based Deferred Compensation Plan for Non-Employee Directors

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The Company accounts for this plan as stock-based compensation under ASC 718.

During the years ended December 31, 2024

and 2023 no compensation was deferred under this plan.

Note 9 — 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.

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 operating lease was terminated in June 2024.

Operating lease expense in

the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023 was approximately

$ 204,000 and $ 207,000 , respectively, which includes costs associated with leases for which ROU assets have been recognized as well as

short-term leases.

At December 31, 2024, the

Company has a total operating lease liability of $ 517,000 , of which approximately $ 168 ,000 and $ 349 ,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, 2023, the Company’s total operating lease liability was $ 668 ,000, of which $ 151 ,000 was classified as operating

lease liabilities, short-term and $ 517 ,000 was classified as operating lease liabilities, net of current portion, on the consolidated

balance sheet.

Operating ROU assets as of December 31, 2024 and 2023 are $ 493 ,000 and $ 640 ,000, respectively.

For the years ended December

31, 2024 and 2023, cash paid for amounts included in the measurement of lease liabilities in operating cash flows from operating leases

was $ 205,000 and $ 201,000 , respectively.

As of December 31, 2024 and

2023, the weighted average remaining lease term were 2.8 years and 3.8 years, respectively, and the weighted average discount rate of

9 % at December 31, 2024 and 2023.

As of December 31, 2024, maturities of lease liabilities

were as follows:

Total future minimum lease payments

Less imputed interest

During the years ended December 31, 2025 and 2024,

no compensation was deferred under this plan.

On September 17, 2025, the

Board approved the termination and liquidation of the plan in accordance with IRC Section 409A.

As of the termination date, one director

participated in the plan.

All accrued benefits under the plan will be distributed on the date that is one business day following the twelve-month

anniversary of the termination date.

Note 11 - BARDA Agreement

In July 2023, Melinta entered

into partnership with BARDA to advance BAXDELA and VABOMERE for use in pediatrics and to partner on the development of BAXDELA against

certain biothreat pathogens (BARDA-Supported Studies).

Under this contract, BARDA reimburses Melinta certain percentages of costs incurred,

as defined in the agreement, in connection with the BARDA-Supported Studies.

BARDA has awarded a total of $ 47.5 million of funding with

the potential of additional funding of $ 97.1 million, amounting to total funding up to $ 144.6 million, if all options are exercised.

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

Through December 2025, Melinta has recognized BARDA

reimbursement totaling $ 19.4 million.

There are two performance

obligations under the BARDA contract, which are research and development services performed for (a) BAXDELA and VABOMERE pediatric studies

and (b) BAXDELA biodefense studies.

These research and development services were performance obligations because they are distinct within

the context of the contract;

that is, the services are separately identifiable from other obligations within the arrangement.

the transaction prices included within the BARDA contract were equivalent to the standalone selling price of the research and development

services and would be allocated.

Therefore, research and development services are recognized as contract revenue over time, as the performance

obligation is satisfied, in accordance with the BARDA agreement.

The Company recognized $ 4.2 million of contract revenue under the BARDA

agreement for the year-ended December 31, 2025.

Note 12 - Segment Reporting

As noted above, the Company’s primary focus

is the commercialization of our lead product, DefenCath indicated to reduce the incidence of catheter-related bloodstream infections

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

The Company has determined that it currently operates

in a single segment - Drug Product, located in a single geographic location – the United States.

The accounting policies of the

segment are the same as those described in the summary of significant accounting policies.

Since the Company operates in a single segment,

the measure of segment total assets and loss from operations is the same as that reported on the accompanying balance sheets as total

assets, and the accompanying statement of operations as loss from operations, respectively.

The Company’s Chief Executive Officer is the Chief Operating

Decision Maker (“CODM”).

The CODM manages the Company’s business activities as a single operating and reportable segment.

The CODM uses consolidated profit and loss to evaluate and measure performance against progress in its commercialization efforts and clinical

The Company has determined

that it has one reportable segment- Drug Product primarily sold in the United States with contract revenue consisting of BARDA in the

US and product, royalty and milestone revenues outside of the US.

The Company’s Chief

Executive Officer is the Chief Operating Decision Maker (“CODM”).

The CODM manages the Company’s business activities

as a single reportable segment.

The CODM uses consolidated profit and loss to evaluate and measure performance against progress in its

commercialization efforts and clinical trials.

The following table sets forth significant segment expenses.

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Selling and marketing

Employee expense

Employee and contracted employee expense

Other selling and marketing

5 unchanged sentences

Total operating expenses

The CODM also reviews DefenCath

sales separately from sales from the Melinta Portfolio;

the following table sets forth the breakdown of sales:

Product Sales:

Melinta Portfolio

Total product sales

Contract Revenue

Total Revenues

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

What changed 10-K

Item 9A. Controls and Procedures