UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 001-34673

CORMEDIX INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		20-5894890
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

300 Connell Drive, Suite 4200, Berkeley Heights, NJ		07922
(Address of Principal Executive Offices)		(Zip Code)

(908) 517-9500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, $0.001 par value		CRMD		Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the issuer’s common stock, as of August 4, 2023 was 54,805,376.

CORMEDIX INC.^TM AND SUBSIDIARIES

INDEX

			Page
PART I FINANCIAL INFORMATION			1
	Item 1.	Unaudited Condensed Consolidated Financial Statements	1
		Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	1
		Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2023 and 2022	2
		Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022	3
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	5
		Notes to Unaudited Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
	Item 3.	Quantitative and Qualitative Disclosure About Market Risk	30
	Item 4.	Controls and Procedures	30
PART II OTHER INFORMATION			31
	Item 1.	Legal Proceedings	31
	Item 1A.	Risk Factors	31
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
	Item 3.	Defaults Upon Senior Securities	31
	Item 4.	Mine Safety Disclosure	31
	Item 5.	Other Information	31
	Item 6.	Exhibits	31
SIGNATURES			32

PART I
FINANCIAL INFORMATION

Item 1.

Unaudited Condensed Consolidated Financial Statements.

CorMedix Inc. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2023			December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	19,699,565		$	43,148,323
Restricted cash		87,037			124,102
Short-term investments		32,701,210			15,644,062
Prepaid research and development expenses		1,255,105			11,016
Other prepaid expenses and current assets		881,797			623,672
Total current assets		54,624,714			59,551,175
Property and equipment, net		1,596,511			1,609,679
Restricted cash, long-term		102,370			102,320
Operating lease right-of-use assets		709,185			775,085
TOTAL ASSETS	$	57,032,780		$	62,038,259

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	2,900,547		$	2,202,149
Accrued expenses		4,344,269			3,973,941
Current portion of operating lease liabilities		142,533			134,801
Total current liabilities		7,387,349			6,310,891
Operating lease liabilities, net of current portion		594,322			667,632
TOTAL LIABILITIES		7,981,671			6,978,523

COMMITMENTS AND CONTINGENCIES (Note 4)

STOCKHOLDERS’ EQUITY
Preferred stock - $0.001 par value: 2,000,000 shares authorized; 181,622 shares issued and outstanding at June 30, 2023 and December 31, 2022		182			182
Common stock - $0.001 par value: 160,000,000 shares authorized; 45,805,283 and 42,815,196 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		45,806			42,815
Accumulated other comprehensive gain		90,697			82,743
Additional paid-in capital		346,116,054			330,294,782
Accumulated deficit		(297,201,630	)		(275,360,786	)
TOTAL STOCKHOLDERS’ EQUITY		49,051,109			55,059,736
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	57,032,780		$	62,038,259

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CorMedix Inc. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Revenue:
Net sales	$	-		$	21,253		$	-		$	28,889
Cost of sales		-			(332	)		-			(1,859	)
Gross profit		-			20,921			-			27,030
Operating Expenses:
Research and development		(4,794,758	)		(3,209,471	)		(8,202,260	)		(5,497,058	)
Selling, general and administrative		(7,009,824	)		(5,051,895	)		(14,619,501	)		(9,802,778	)
Total Operating Expenses		(11,804,582	)		(8,261,366	)		(22,821,761	)		(15,299,836	)
Loss From Operations		(11,804,582	)		(8,240,445	)		(22,821,761	)		(15,272,806	)
Other Income (Expense):
Interest income		550,183			35,342			996,567			49,094
Foreign exchange transaction (loss) gain		(13,368	)		18,232			(1,023	)		8,026
Interest expense		(5,851	)		(3,585	)		(14,627	)		(8,964	)
Total Other Income		530,964			49,989			980,917			48,156
Loss before income taxes		(11,273,618	)		(8,190,456	)		(21,840,844	)		(15,224,650	)
Tax benefit		-			585,617			-			585,617
Net Loss		(11,273,618	)		(7,604,839	)		(21,840,844	)		(14,639,033	)
Other Comprehensive Income (Loss):
Unrealized (loss) income from investments		(10,732	)		(1,316	)		5,661			(35,488	)
Foreign currency translation gain (loss)		197			(9,086	)		2,293			(12,123	)
Total Other Comprehensive Income (Loss)		(10,535	)		(10,402	)		7,954			(47,611	)
Comprehensive Loss	$	(11,284,153	)	$	(7,615,241	)	$	(21,832,890	)	$	(14,686,644	)
Net Loss Per Common Share – Basic and Diluted	$	(0.25	)	$	(0.19	)	$	(0.49	)	$	(0.38	)
Weighted Average Common Shares Outstanding – Basic and Diluted		45,365,635			39,761,754			44,731,838			39,008,590

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CorMedix Inc. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY

(Unaudited)

For the three months ended June 30, 2023

	Common Stock				Preferred Stock – Series C-3, Series E and Series G				Accumulated Other Comprehensive			Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Income (Loss)			Capital			Deficit			Equity
Balance at March 31, 2023		44,499,788	$	44,500		181,622	$	182	$	101,232		$	339,709,852		$	(285,928,012	)	$	53,927,754
Stock issued in connection with ATM sale of common stock, net		1,181,829		1,182		-		-		-			5,313,621			-			5,314,803
Stock issued in connection with options exercised		57,375		57		-		-		-			233,799			-			233,856
Issuance of vested restricted stock, net of shares withheld for employee withholding taxes		66,291		67		-		-		-			(198,509	)		-			(198,442	)
Stock-based compensation		-		-		-		-		-			1,057,291			-			1,057,291
Other comprehensive loss		-		-		-		-		(10,535	)		-			-			(10,535	)
Net loss		-		-		-		-		-			-			(11,273,618	)		(11,273,618	)
Balance at June 30, 2023		45,805,283	$	45,806		181,622	$	182	$	90,697		$	346,116,054		$	(297,201,630	)	$	49,051,109

For the six months ended June 30, 2023

	Common Stock				Preferred Stock – Series C-3, Series E and Series G				Accumulated Other Comprehensive		Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Income (Loss)		Capital			Deficit			Equity
Balance at December 31, 2022		42,815,196	$	42,815		181,622	$	182	$	82,743	$	330,294,782		$	(275,360,786	)	$	55,059,736
Stock issued in connection with ATM sale of common stock, net		2,866,421		2,867		-		-		-		12,512,342			-			12,515,209
Stock issued in connection with options exercised		57,375		57		-		-		-		233,799			-			233,856
Issuance of vested restricted stock, net of shares withheld for employee withholding taxes		66,291		67		-		-		-		(198,509	)		-			(198,442	)
Stock-based compensation		-		-		-		-		-		3,273,640			-			3,273,640
Other comprehensive gain		-		-		-		-		7,954		-			-			7,954
Net loss		-		-		-		-		-		-			(21,840,844	)		(21,840,844	)
Balance at June 30, 2023		45,805,283	$	45,806		181,622	$	182	$	90,697	$	346,116,054		$	(297,201,630	)	$	49,051,109

CorMedix Inc. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY

(Unaudited)

For the three months ended June 30, 2022

	Common Stock				Preferred Stock – Series C-3, Series E and Series G				Accumulated Other Comprehensive			Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Income (Loss)			Capital		Deficit			Equity
Balance at March 31, 2022		38,727,979	$	38,728		181,622	$	182	$	49,921		$	312,473,623	$	(252,693,275	)	$	59,869,179
Stock issued in connection with ATM sale of common stock, net		2,378,798		2,379		-		-		-			8,408,777		-			8,411,156
Stock-based compensation		-		-		-		-		-			1,073,646		-			1,073,646
Other comprehensive loss		-		-		-		-		(10,402	)		-		-			(10,402	)
Net loss		-		-		-		-		-			-		(7,604,839	)		(7,604,839	)
Balance at June 30, 2022		41,106,777	$	41,107		181,622	$	182	$	39,519		$	321,956,046	$	(260,298,114	)	$	61,738,740

For the six months ended June 30, 2022

	Common Stock				Preferred Stock – Series C-3, Series E and Series G				Accumulated Other Comprehensive			Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Income (Loss)			Capital		Deficit			Equity
Balance at December 31, 2021		38,086,437	$	38,086		181,622	$	182	$	87,130		$	308,331,750	$	(245,659,081	)	$	62,798,067
Stock issued in connection with ATM sale of common stock, net		3,020,340		3,021		-		-		-			11,412,351		-			11,415,372
Stock-based compensation		-		-		-		-		-			2,211,945		-			2,211,945
Other comprehensive loss		-		-		-		-		(47,611	)		-		-			(47,611	)
Net loss		-		-		-		-		-			-		(14,639,033	)		(14,639,033	)
Balance at June 30, 2022		41,106,777	$	41,107		181,622	$	182	$	39,519		$	321,956,046	$	(260,298,114	)	$	61,738,740

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CorMedix Inc. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the Six Months Ended June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(21,840,844	)	$	(14,639,033	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		3,273,640			2,211,945
Change in right-of-use assets		65,901			61,383
Depreciation		34,292			40,819
Changes in operating assets and liabilities:
Decrease in trade receivables		-			43,738
Decrease in inventory		-			1,288
(Increase) Decrease in prepaid expenses and other current assets		(1,502,179	)		208,535
Increase in accounts payable		698,353			287,011
Increase (Decrease) in accrued expenses		370,099			(362,604	)
Decrease in operating lease liabilities		(65,578	)		(59,539	)
Net cash used in operating activities		(18,966,316	)		(12,206,457	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments		(42,901,487	)		(14,279,033	)
Maturity of short-term investments		25,850,000			10,700,000
Purchase of equipment		(21,124	)		(14,187	)
Net cash used in investing activities		(17,072,611	)		(3,593,220	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock from at-the-market program, net		12,515,209			11,415,372
Payment of employee withholding taxes on vested restricted stock units		(198,442	)		-
Proceeds from exercise of stock options		233,856			-
Net cash provided by financing activities		12,550,623			11,415,372
Foreign exchange effect on cash		2,531			(13,555	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(23,485,773	)		(4,397,860	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – BEGINNING OF PERIOD		43,374,745			53,551,277
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – END OF PERIOD	$	19,888,972		$	49,153,417
Cash paid for interest	$	14,627		$	8,964
Supplemental Disclosure of Non-Cash Investing Activities:
Unrealized income (loss) from investments	$	5,661		$	(35,488	)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CorMedix Inc. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Organization, Business and Basis of Presentation:

Organization and Business

CorMedix Inc. (“CorMedix” or the “Company”) is a biopharmaceutical company focused on developing and commercializing therapeutic products for the prevention and treatment of life-threatening diseases and conditions. The Company was incorporated in the State of Delaware on July 28, 2006 and its principal executive office is located in Berkeley Heights, New Jersey. In 2013, the Company formed a wholly-owned subsidiary, CorMedix Europe GmbH and in 2020, the Company formed a wholly-owned Spanish subsidiary, CorMedix Spain, S.L.U.

The Company’s primary focus is the development of its lead product candidate, DefenCath™, for potential commercialization in the United States, or U.S., and other key markets. The Company has in-licensed the worldwide rights to develop and commercialize DefenCath and Neutrolin^®. The name DefenCath is the U.S. proprietary name conditionally approved by the U.S. Food and Drug Administration, or FDA, while the name Neutrolin was used in the European Union, or EU, and other territories where the Company received CE-Mark approval for the commercial distribution of Neutrolin as a catheter lock solution, or CLS, regulated as a medical device.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and with the instructions for Quarterly Reports on Form 10-Q and Article 8 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary to fairly state the interim results. Interim operating results are not necessarily indicative of results that may be expected for the full year ending December 31, 2023 or for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 30, 2023. The accompanying consolidated balance sheet as of December 31, 2022 has been derived from the audited financial statements included in such Annual Report on Form 10-K.

Note 2 — Summary of Significant Accounting Policies:

Liquidity and Uncertainties

The condensed consolidated financial statements have been prepared in conformity with GAAP 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. Based on the Company’s current development plans and potential commercial launch plans for DefenCath in the U.S. and its other operating requirements, the Company’s existing cash and cash equivalents, short-term investments and available resources at June 30, 2023, including the net proceeds received from the public offering and exercise of underwriters’ option in July 2023, are expected to fund its operations for at least twelve months from the filing date of this Quarterly Report on Form 10-Q (see Note 7 for additional information regarding the public offering in July 2023).

CorMedix Inc. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued

The Company’s continued operations may depend on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic relationships, potential strategic transactions or out-licensing of its products in order to commercially launch DefenCath upon New Drug Application, or NDA, approval and until profitability is achieved, if ever. Management can provide no assurances that such financing or strategic relationships will be available on acceptable terms, or at all. As of August 8, 2023, the Company has $18,700,000 available under its At-the-Market Issuance Sales Agreement (the “ATM program”) and has $104,000,000 available under its current shelf registration for the issuance of equity, debt or equity-linked securities, after taking into consideration the $43,200,000 total net proceeds from the public offering and exercise of underwriters’ option in July 2023 (see Note 7).

The Company’s operations are subject to a number of other factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s product candidates; the ability to obtain regulatory approval to market the Company’s products; ability to manufacture successfully; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, Company products; the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products; and the Company’s ability to raise capital to support its operations.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Basis of Consolidation

The condensed consolidated financial statements include the accounts of the Company, CorMedix Europe GmbH and CorMedix Spain, S.L.U., its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Financial Instruments

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and short-term investments. The Company maintains its cash and cash equivalents in bank deposit and other interest-bearing accounts, the balances of which 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 condensed consolidated statement of cash flows:

	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	19,699,565	$	43,148,323
Restricted cash		189,407		226,422
Total cash, cash equivalents and restricted cash	$	19,888,972	$	43,374,745

The appropriate classification of marketable securities is determined at the time of purchase and reevaluated as of each balance sheet date. Investments in marketable debt classified as available-for-sale and equity securities are reported at fair value. Fair value is determined using quoted market prices in active markets for identical assets or liabilities or quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Changes in fair value that are considered temporary are reported in the condensed consolidated statement of operations. Realized gains and losses, amortization of premiums and discounts and interest and dividends earned are included in other income (expense). For declines in the fair value of equity securities that are considered other-than-temporary, impairment losses are charged to other income (expense), net. The Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. There were no deemed permanent impairments at June 30, 2023 or December 31, 2022.

CorMedix Inc. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued

The Company’s marketable securities are highly liquid and consist of U.S. government agency securities, high-grade corporate obligations and commercial paper with original maturities of more than 90 days. As of June 30, 2023 and December 31, 2022, all of the Company’s investments had contractual maturities of less than one year. As of June 30, 2023, no allowance for credit loss was recorded. The following table summarizes the amortized cost, unrealized gains and losses and the fair value at June 30, 2023 and December 31, 2022:

	Amortized Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
June 30, 2023:
Money Market Funds included in Cash Equivalents	$	6,124,632	$	-		$	-	$	6,124,632
U.S. Government Agency Securities		29,140,824		(245	)		7,582		29,148,161
Corporate Securities		894,706		(164	)		-		894,542
Commercial Paper		2,660,621		(2,114	)		-		2,658,507
Subtotal		32,696,151		(2,523	)		7,582		32,701,210
Total June 30, 2023	$	38,820,783	$	(2,523	)	$	7,582	$	38,825,842
December 31, 2022:
Money Market Funds included in Cash Equivalents	$	7,311,327	$	-		$	572	$	7,311,899
U.S. Government Agency Securities		12,072,127		(3,184	)		2,056		12,070,999
Corporate Securities		2,684,235		(183	)		909		2,684,961
Commercial Paper		888,875		(773	)		-		888,102
Subtotal		15,645,237		(4,140	)		2,965		15,644,062
Total December 31, 2022	$	22,956,564	$	(4,140	)	$	3,537	$	22,955,961

Fair Value Measurements

The Company’s financial instruments recorded in the condensed consolidated balance sheets include cash and cash equivalents, accounts receivable, investment securities, accounts payable and accrued expenses. The carrying value of certain financial instruments, primarily cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their estimated fair values based upon the short-term nature of their maturity dates.

CorMedix Inc. AND SUBSIDIARIES

NOTES

SEC Form 10-Q filed by CorMedix Inc.