Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q and our audited 2024 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC"), on March 25, 2025.

Forward Looking Statements

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are subject to risks and uncertainties. Forward-looking statements are often identified by the use of words such as, but not limited to, "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "may," "will," "plan," "project," "seek," "should," "target," "will," "would," and similar expressions or variations intended to identify forward-looking statements. All statements, other than statements of historical facts, regarding management's expectations, beliefs, goals, plans or CorMedix's prospects should be considered forward-looking statements. Readers are cautioned that actual results may differ materially from projections or estimates due to a variety of important factors, and readers are directed to the Risk Factors identified in CorMedix's filings with the SEC, including its most recent Annual Report on Form 10-K, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from CorMedix. CorMedix may not actually achieve the goals or plans described in its forward-looking statements, and such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Investors should not place undue reliance on these statements. CorMedix assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Actual outcomes or results may differ from anticipated results, sometimes materially. Factors that could cause actual results to differ include, but are not limited to: the ability of the combined company to achieve the identified synergies; the ability to integrate the Melinta business into CorMedix and realize the anticipated strategic benefits of the transaction within the expected time-frames or at all; that such integration may be more difficult, time-consuming or costly than expected; that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers or suppliers) may be greater than expected following the closing of the transaction; the retention of certain key employees of Melinta; the expected benefits and success of Melinta's products and product candidates; potential litigation relating to the transaction that could be instituted against CorMedix or its directors; rating agency actions and CorMedix's ability to access short- and long-term debt markets on a timely and affordable basis; general economic conditions that are less favorable than expected; geopolitical developments and additional changes in international trade policies and relations, including tariffs; and the ability of our products and product candidates to compete effectively against current and future competitors.

Overview

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.

Historically, our primary focus has been commercializing our lead product, DefenCath^® (taurolidine and heparin), in the U.S. The name DefenCath is the U.S. proprietary name approved by the U.S. Food and Drug Administration ("FDA") on November 15, 2023. CorMedix launched the product commercially in 2024 in both the hospital inpatient and outpatient hemodialysis settings of care.

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 of patients. CRBSIs can lead to treatment delays and increased costs to the healthcare system when they occur due to extended and often repeat hospitalizations, need for IV antibiotic treatment, long-term anticoagulation therapy, removal/replacement of the CVC, related treatment costs, as well as increased mortality. DefenCath is the first and only FDA-approved antimicrobial CLS in the U.S. and was shown to reduce the risk of CRBSI by up to 71% in a Phase 3 clinical study. The Company believes DefenCath can address a significant unmet medical need.

DefenCath is listed in the Orange Book as having new chemical entity ("NCE") exclusivity (5 years) expiring on November 15, 2028, and the Generating Antibiotic Incentives Now ("GAIN") exclusivity extension of the NCE exclusivity (an additional 5 years) expiring on November 15, 2033. The GAIN exclusivity extension of 5 years is the result of the January 2015 designation of DefenCath as a Qualified Infectious Disease Product ("QIDP").

On January 25, 2024, CMS determined that DefenCath should be classified as a renal dialysis service that is subject to the Medicare end-stage renal disease prospective payment system ("ESRD PPS"). The ESRD PPS provides bundled payment for renal dialysis services, but also affords a transitional drug add-on payment adjustment, or TDAPA, which provides temporary, additional payments for certain new drugs and biologicals. We submitted an application for TDAPA on January 26, 2024, and also submitted a Healthcare Common Procedure Coding System ("HCPCS") application for a J-code to CMS on December 8, 2023. CMS implemented HCPCS and TDAPA for DefenCath on July 1, 2024.

Following the submission of a duplicate New Technology Add-On Payment ("NTAP") application to Centers for Medicare and Medicaid Services ("CMS"), CMS issued the Inpatient Prospective Payment System ("IPPS") 2024 proposed rule that includes a NTAP per hospital stay for DefenCath. This NTAP represents reimbursement to inpatient facilities of 75% of the wholesaler acquisition cost ("WAC") price per 3 mL vial, and an average utilization of 19.5 vials per hospital stay. The final IPPS rule was amended as of October 1, 2024 to reflect the current WAC of $249.99 per 3ml vial resulting in a potential maximum NTAP of $3,656.10, which CMS has extended through November 15, 2026.

We announced on June 6, 2024 that the CMS has determined that DefenCath qualified for pass-through status under the hospital Out-Patient Prospective Payment System ("OPPS"). Pass-through status provides for separate payment under Medicare Part B for the utilization of DefenCath in the outpatient ambulatory setting for a period of at least two years, and up to a maximum of three years. While vascular access for hemodialysis can be initiated in an inpatient setting, ambulatory surgical centers or vascular access centers offer a less-invasive, outpatient-based alternative for patients. We estimate that up to 100,000 hemodialysis-central venous catheter ("HD-CVC") placements occur each year, and pass-through status offers providers a separate reimbursement mechanism in this setting of care administration of DefenCath.

Subsequent to the launch of DefenCath in April 2024, we announced U.S.-based multi-year commercial supply agreements consisting of a large and several mid-sized dialysis organizations. Each provider has customized an implementation plan to provide access to patients based on a variety of clinical and other factors. We believe the currently contracted customer base represents roughly 60% of the outpatient dialysis centers in the U.S., in terms of the total addressable patient market. During the second quarter of 2025, the Company's large dialysis organization customer commenced ordering and patient utilization at the large dialysis organization commenced in the third quarter of 2025.

Recent Developments

Acquisition of Melinta

On August 29, 2025 (the "Closing Date"), we completed the acquisition of Melinta Therapeutics, LLC, a Delaware limited liability company ("Melinta"), pursuant to that certain Agreement and Plan of Merger (the "Merger Agreement") 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.

The acquisition of Melinta expands our team and commercial platform and increases the commercial portfolio with six marketed, hospital- and clinic-focused infectious disease products, comprised of REZZAYO® (rezafungin for injection), MINOCIN® (minocycline) for Injection, VABOMERE® (meropenem and vaborbactam), KIMYRSA® (oritavancin), ORBACTIV® (oritavancin), BAXDELA® (delafloxacin), and an additional well-established cardiovascular product, TOPROL-XL® (metoprolol succinate) (together, the "Melinta Portfolio"). REZZAYO is currently approved for the treatment of candidemia and invasive candidiasis in adults, with an ongoing Phase III study for the prophylaxis of invasive fungal infections in adult patients undergoing allogeneic blood and marrow transplantation. The completion of the Phase III study for REZZAYO is expected in 2026.

The financial results of Melinta are included in our unaudited condensed consolidated financial statements from August 29, 2025 through September 30, 2025. Further information relating to the acquisition of Melinta, including the related financings transaction, is included in Note 3 to the unaudited condensed consolidated financial statement included herein.

Pursuant to the terms of the Merger Agreement, we acquired Melinta via a merger in which Merger Sub merged with and into Melinta (the "Merger"), with Melinta surviving as a wholly-owned subsidiary of the Company. In consideration for the Merger, we (i) paid to the former Melinta equity holders an aggregate of $260.0 million in cash, subject to adjustment for estimated Company Cash and estimated Working Capital as compared to the Working Capital Target (each as defined in the Merger Agreement), and (ii) issued to certain of the former Melinta equity holders an aggregate of $40.0 million worth of common shares, par value $0.001 per share, of the Company (the "Merger Shares"). In addition, in connection with the Merger, we paid $23.2 million to acquire the Toprol XL product rights, which Melinta had licensed from a third party. The total cash consideration was funded by a combination of the Company's existing cash on hand and net proceeds from the Company's $150.0 million Convertible Notes Offering (as described below).

Additionally, former Melinta equity holders are eligible to receive certain contingent payments pursuant to the terms of the Merger Agreement and the Contingent Payment Agreement, which provides for milestone and net sales-based payments. Upon the issuance of the 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 on or prior to June 30, 2029, we shall pay, in cash or common shares, par value $0.001 per share, of the Company at the Company's election, to the former Melinta equity holders the following payments:

(i)

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

(ii)

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

(iii)

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

Further, the Contingent Payment Agreement provides that we will pay to the former Melinta equity holders tiered royalties on REZZAYO U.S. net sales and low-single-digit royalties on MINOCIN® U.S. net sales.

Registration Rights Agreement

On the Closing Date, the Company and the Consenting Melinta Members entered into a registration rights agreement (the "Registration Rights Agreement"), pursuant to which, among other things, the Company agreed to register for resale, pursuant to Rule 415 under the Securities Act, the Merger Shares, pursuant to the Contingent Payment Agreement. The Merger Shares were subject to lock-up, the final tranche of which will expire on December 27, 2025.

Convertible Notes Offering

On August 6, 2025, the Company entered into subscription agreements (the "Subscription Agreements") with certain investors to provide for the issuance of $150.0 million aggregate principal amount of its convertible senior notes due 2030 (the "Notes") in a private placement, exempt from registration pursuant to Section 4(a)(2) of the Securities Act. Such offering is herein referred to as the "Convertible Notes Offering." Upon issuance, the Notes will be eligible for resale to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A of the Securities Act. The Notes were issued on August 12, 2025 (the "Notes Closing Date").

The Notes are governed by an Indenture (the "Indenture"), by and between the Company and U.S. Bank Trust Company, National Association, as trustee (in such capacity, the "Trustee"). The Notes bear interest at a rate of 4.00% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2026. The Notes will mature on August 1, 2030 (the "Maturity Date") and are senior, unsecured obligations of the Company.

Following issuance of the Notes, the Company used the net proceeds from the Convertible Notes Offering to fund a portion of the purchase price payable in connection with the Merger, including related fees and expenses.

On or after August 4, 2028 and prior to the 26^th Scheduled Trading Day (as defined in the Indenture) immediately preceding the Maturity Date, the Company may redeem for cash all or any portion of the Notes, at its option, subject to certain conditions and requirements set forth in the Indenture, if the last reported sale price of the Company's Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which it provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes.

If the Company experiences a Fundamental Change (as defined in the Indenture) at any time prior to the Maturity Date, any holder of the Notes may require the Company to repurchase all of such holder's Notes, or any portion of the principal amount thereof equal to $1,000 or an integral multiple of $1,000, at a repurchase price equal to 100% of the principal amount of such Notes, respectively, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

Following issuance of the Notes, the Notes will be convertible at the option of the holders (i) during any calendar quarter commencing after the calendar quarter ending on September 30, 2025 (and only during such calendar quarter), if the closing price of the Common Stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is equal to or greater than 130% of the applicable conversion price per share, which is $1,000 divided by the then applicable conversion rate, on each applicable trading day, (ii) if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; (iii) upon the occurrence of specified corporate events; or (iv) during the five business day period after any five consecutive trading day period (the "Measurement Period") in which the trading price per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of the Common Stock and the applicable conversion rate in effect on each such trading day. On or after May 1, 2030 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

Upon conversion, the Company will satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of the Company's Common Stock or a combination of cash and shares of Common Stock, at the Company's election (provided that for so long as the Exchange Cap (as defined in the Indenture) applies, the Company may only elect Cash Settlement or Capped Combination Settlement (as such terms are defined in the Indenture)), in the manner and subject to the terms and conditions provided in the Indenture. Notwithstanding the foregoing, prior to receipt of approval from the Company's stockholder in accordance with Nasdaq rules, the Company will not issue any shares of Common Stock under the Indenture (including any shares issued pursuant to conversions of the Notes), together with any transactions aggregated with the foregoing (including any issuance of shares) (including Merger Warrant Shares) contemplated by the Merger Agreement and any issuance of shares (including Merger Warrant Shares) pursuant to the Contingent Payment Agreement), if the issuance of such shares of Common Stock would exceed 19.99% of the aggregate number of shares of Common Stock issued and outstanding as of August 6, 2025.

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. The initial conversion rate is subject to adjustment under certain circumstances in accordance with the Indenture. In connection with certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their Notes in connection with such corporate event or during the relevant redemption period, not to exceed 96.5269 shares of Common Stock per $1,000 principal amount of Notes.

Financial Operations Overview

Revenue from Product Sales

We generate product revenue from commercial sales of DefenCath to a limited number of direct customers as well as distributors, and from the Closing Date of the Merger, we generate revenue from sales of the Melinta Portfolio. Revenue from product sales is recognized when our direct customers obtain control of the product and is recorded at the transaction price, net of estimates for variable consideration consisting of chargebacks, discounts, returns, rebates, shelf-stock adjustments and data fees. Actual amounts of consideration ultimately received may differ from our estimates. If actual results vary materially from our estimates, we will adjust these estimates, which will affect revenue from product sales and earnings in the period such estimates are adjusted.

We continue to assess our estimates of variable consideration as we accumulate additional historical data and will adjust these estimates accordingly.

Contract Revenue

As a result of the Merger, we recognize revenue associated with Melinta's license and collaboration agreements for the research and development and/or commercialization of its therapeutic products in the form of licensing fees, milestone payments, royalties on sales in our partners' respective licensed territories, and sale of product inventory.

In addition, Melinta holds a partnership with Biomedical Advanced Research and Development Authority ("BARDA"), a government agency, to advance Baxdela and Vabomere for use in pediatrics and to partner on the development of Baxdela against certain biothreat pathogens. Research and development services under the contract are recognized as contract revenue over time, as the performance obligation is satisfied, in accordance with the BARDA agreement. Under this contract, BARDA has awarded a total of $47.5 million with the potential of additional funding of $97.1 million, amounting to total funding up to $144.6 million, if all options are exercised. If all contract options are exercised, the contract is expected to continue through 2034.

Cost of Revenues

Cost of revenues include direct and indirect costs related to the manufacturing and distribution of our products, including product cost, packaging services, freight, and an allocation of overhead costs that are primarily fixed such as salaries, benefits and insurance. In addition, cost of revenues includes the amortization of intangible assets primarily associated with the fair value of the products acquired in the Melinta Portfolio that were recorded as a result of the Merger.

The marketed product values will be amortized on a straight-line basis over their estimated useful lives, on a weighted-average basis, of 6.1 years. See Note 3 in the unaudited condensed consolidated financial statements included herein).

Research and Development Expense

Research and development, or R&D, expense consists of: (i) internal costs associated with our development activities; (ii) payments we make to third-party contract research organizations, contract manufacturers, investigative sites, and consultants; (iii) technology and intellectual property license costs; (iv) manufacturing development costs; (v) personnel related expenses, including salaries, stock-based compensation expense, benefits, travel and related costs for the personnel involved in drug development; and (vi) activities relating to regulatory filings and pre-clinical studies and clinical trials. All R&D is expensed as incurred.

The process of conducting pre-clinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. The probability of success for each product line and clinical trial may be affected by a variety of factors, including, among others, the quality of the product line's early clinical data, investment in the program, competition, manufacturing capabilities and commercial viability. As a result of the uncertainties associated with clinical trial enrollments and the risks inherent in the development process, we are unable to determine the duration and completion costs of future clinical stages of our product lines or when, or to what extent, we will generate revenues from the commercialization and sale of any of our future product lines.

Development timelines, probability of success and development costs vary widely. We are currently focused on the commercialization of our Products in the United States.

Selling and Marketing Expense

Selling and marketing, or S&M, expense includes the cost of salaries and related costs for personnel in sales and marketing including our contract sales force, brand building, advocacy, market research and consulting costs. Selling and marketing expenses are expensed as incurred.

General and Administrative Expense

General and administrative, or G&A, expenses consist principally of salaries and related costs for personnel in executive, finance and administrative functions including payroll taxes and health insurance, stock-based compensation and travel expenses. Other general and administrative expenses include merger-related costs, facility-related costs, insurance and professional fees for legal, patent review, consulting, and accounting services. General and administrative expenses are expensed as incurred.

Interest Income

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

Foreign Currency Exchange Transaction Gain (Loss)

Foreign currency exchange transaction gain (loss) is the result of re-measuring transactions denominated in a currency other than our functional currency and is reported in the consolidated statement of operations as a separate line item within other income (expense). The intercompany loans outstanding between our New Jersey-based company and our subsidiaries will not be repaid and the nature of the funding advanced was of a long-term investment nature. As such, unrealized foreign exchange movements related to long-term intercompany loans are recorded in other comprehensive income (loss).

Other Income

Other income primarily represents the gain on our marketable equity securities.

Change in contingent consideration.

Change in contingent consideration represents the change in fair market value of the contingent consideration liabilities in connection with the business combination.

Interest Expense

Interest expense consists of interest incurred primarily on the Notes.

Tax Expense / Benefit

The provision for income taxes during interim reporting periods is computed by applying an estimated annual effective tax rate to year-to-date income, adjusted for discrete items occurring within the quarter. The estimated annual effective tax rate is updated quarterly based on changes in the forecast of full-year income and tax expense.

Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

The following is a tabular presentation of our unaudited consolidated operating results for the three and nine months ended September 30, 2025 and 2024 (in thousands):

		For the Three Months Ended September 30,								% Increase				For the Nine Months Ended September 30,								% Increase
		2025				2024				(Decrease)				2025				2024				(Decrease)
Revenue		$	101,546			$	11,456				786	%		$	180,365			$	12,262				1,371	%
Contract Revenue			2,729				-				100	%			2,729				-				100	%
Total Revenue			104,275				11,456				810	%			183,094				12,262				1,393	%
Cost of sales			(7,565	)			(634	)			1,092	%			(10,922	)			(1,911	)			471	%
Intangible Amortization			(3,629	)			(52	)			6,885	%			(3,732	)			(104	)			3,492	%
Gross profit (loss)			93,081				10,770				764	%			168,440				10,247				1,544	%
Operating Expenses:
Research and development			(5,098	)			(727	)			601	%			(10,733	)			(2,216	)			384	%
Selling and marketing			(11,186	)			(6,749	)			66	%			(22,044	)			(20,473	)			8	%
General and administrative			(25,451	)			(6,581	)			287	%			(44,648	)			(22,850	)			95	%
Total operating expenses			(41,735	)			(14,057	)			197	%			(77,425	)			(45,539	)			70	%
Income (loss) from operations			51,346				(3,287	)			(1,662	)%			91,015				(35,292	)			(358	)%
Interest income			1,560				553				182	%			2,956				2,068				43	%
Foreign exchange transaction loss			(73	)			(33	)			118	%			(127	)			(39	)			228	%
Other Income			3,091				-				100	%			3,091				500				518	%
Change in contingent consideration			(2,400	)			-				(100	)%			(2,400	)			-				(100	)%
Interest expense			(948	)			(10	)			9,376	%			(965	)			(26	)			3,555	%
Total other income			1,230				510				141	%			2,555				2,503				2	%
Income (loss) before income taxes			52,576				(2,777	)			(1,993	)%			93,570				(32,789	)			(385	)%
Tax (expense) benefit			55,987				-				100	%			55,465				1,395				(3,876	)%
Net income (loss)			108,563				(2,777	)			(4,009	)%			149,035				(31,394	)			(575	)%
Other comprehensive (loss) income			8				4				105	%			(3	)			(5	)			(40	)%
Comprehensive income (loss)		$	108,571			$	(2,773	)			(4,015	)%		$	149,032			$	(31,399	)			(575	)%

Revenue. Total Revenue for the three months ended September 30, 2025 was $104.3 million as compared to $11.5 million for the same period in 2024, an increase of $92.8 million, or 810%. Revenue for the nine months ended September 30, 2025 was $183.1 million as compared to $12.3 million for the same period in 2024, an increase of $170.8 million, or 1,393%.

For the three and nine months ended September 30, 2025, Product Sales were $101.6 million and $180.4 million, respectively. Product Sales during the periods consist primarily of sales of DefenCath, which was approved by the FDA in November 2023 and launched in the U.S in April 2024 (inpatient setting) and July 2024 (outpatient setting) and reflects the shipment of DefenCath to direct customers and specialty distributors, net of estimates for applicable variable consideration, which consists primarily of distribution service fees, prompt pay and other discounts, product returns, chargebacks, rebates and volume incentive rebates, shelf-stock adjustments and data fees. Revenue from the Melinta Portfolio represents $12.8 million of product sales for the period post-acquisition, or from August 29, 2025 through September 30, 2025.

Contract Revenue reflects $1.4 million earned under the BARDA agreement and $1.3 million related to milestone payments and royalties under Melinta's licensing agreements for the period from August 29, 2025 through September 30, 2025.

The following is a summary of our Total Revenue between the DefenCath sales and the contribution from the Melinta Portfolio (in thousands):

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Product Sales:
DefenCath		$	88,765			$	11,456			$	167,584			$	12,262
Melinta Portfolio			12,781				-				12,781				-
Total product sales			101,546				11,456				180,365				12,262
Contract Revenue			2,729				-				2,729				-
Total Revenue		$	104,275			$	11,456			$	183,094			$	12,262

Cost of Revenue. Cost of revenue for the three months ended September 30, 2025 was $7.6 million as compared to $0.6 million for the same period in 2024, an increase of $6.8 million, or 1,092%. Cost of revenue for the nine months ended September 30, 2025 was $10.9 million as compared to $1.9 million for the same period in 2024, an increase of $9.0 million, or 471%. Cost of revenues include direct and indirect costs related to the manufacturing and distribution of DefenCath and Melinta Portfolio, including product cost, packaging services, freight, and an allocation of overhead costs that are primarily fixed such as salaries, benefits and insurance. Product costs during the three and nine month periods ended September 30, 2024 were minimal. The increase from 2024 to 2025 is primarily driven by higher product sales.

Intangible Asset Amortization. Amortization of intangible assets was $3.6 million and $3.7 million for the three and nine months ended September 30, 2025. This was primarily due to the intangible assets acquired as part of the merger.

Research and Development Expense. R&D expense for the three months ended September 30, 2025 was $5.1 million, an increase of $4.4 million, or 601%, from $0.7 million for the same period in 2024. R&D expense for the nine months ended September 30, 2025 was $10.7 million, an increase of $8.5 million, or 384%, from $2.2 million for the same period in 2024. These increases were due primarily to the increases in personnel and clinical trial services in support of the ongoing clinical studies initiated in the fourth quarter of 2024 as well as severance costs and the incremental cost of Melinta's operations from August 29, 2025 through September 30, 2025.

Selling and Marketing Expense. S&M expense was $11.2 million for the three months ended September 30, 2025, an increase of $4.5 million, or 66%, from $6.7 million for the same period in 2024. S&M expense was $22.0 million for the nine months ended September 30, 2025, an increase of $1.5 million, or 8%, from $20.5 million for the same period in 2024. These increases were primarily due to severance costs and the incremental cost of Melinta's operations from August 29, 2025 through September 30, 2025, offset by additional marketing costs related to the pre-launch and launch of DefenCath in 2024.

General and Administrative Expense. G&A expense for the three ended September 30, 2025 was $25.5 million, an increase of $18.9 million, or 287%, from $6.6 million for the same period in 2024. G&A expense for the nine months ended September 30, 2025 was $44.6 million, an increase of $21.7 million, or 95%, from $22.9 million for the same period in 2024. These increases were primarily driven by the Merger-related transaction costs, severance costs and the incremental cost of Melinta's operations from August 29, 2025 through September 30, 2025, non-cash charges for stock-based compensation and an increase in costs related to business development.

Interest Income. Interest income was $1.6 million for the three months ended September 30, 2025 compared to $0.6 million for the same period last year, an increase of $1.0 million, or 182%, primarily driven by higher average cash balances. Interest income was $3.0 million for the nine months ended September 30, 2025 compared to $2.1 million for the same period last year, an increase of $0.9 million, or 43%, driven by higher average cash balances.

Foreign Exchange Transaction Income (Loss). Foreign exchange transaction income (loss) for the three and nine months ended September 30, 2025 and 2024 were due to the re-measuring of transactions denominated in a currency other than our functional currency. Balances and changes were immaterial for all periods presented.

Other Income. Other income represents the change in fair value for its marketable equity securities in Talphera, a publicly-traded biotechnology company, from the date that the stock was acquired to September 30, 2025. Fair value is determined based on the closing stock price of Talphera on the balance sheet date. For the three and nine months ended September 30, 2025, we recognized other income of $3.1 million related to the increase in fair value of the Talphera stock.

Change in contingent consideration. Contingent consideration in connection with business combinations are measured at fair value at the acquisition date and classified as liabilities. Contingent consideration liabilities are subsequently remeasured to fair value at each reporting date using a probability-weighted discounted cash flow model or Monte Carlo simulation based on significant inputs. Changes in fair value are recognized in change in contingent consideration within other expenses. For the three and nine months ended September 30, 2025, we recognized change in contingent consideration of $2.4 million related to the increase in fair value of the Contingent consideration liabilities.

Interest Expense. Interest expense was $0.9 million for the three months ended September 30, 2025 compared to $0.0 million for the same period last year, an increase of $0.9 million. Interest expense was $1.0 million for the nine months ended September 30, 2025 compared to $0.0 million for the same period last year, an increase of $1.0 million. These increases were primarily driven by the interest expense and accretion related to the Notes.

Tax (Expense) Benefit. In the quarter ended September 30, 2025, we released approximately $280 million of valuation allowance previously recorded against our U.S. federal net operating loss ("NOL") carryforwards NOLs, recognizing an income tax benefit of $59.7 million. We recorded this benefit because we concluded that it is more-likely-than-not that we will realize the benefit of certain NOLs within the applicable carryforward periods prescribed by the IRS. This was partially offset by $3.7 million tax provision for the quarter. (For further details, see Note 13 to the unaudited condensed consolidated financial statements included herein.)

In addition to the income tax benefit, the Company recorded an income tax expense of $0.5 million for the three and nine months ended September 30, 2025, primarily related to state jurisdictions. For the nine months ended September 30, 2024, the company recorded a tax benefit of $1.4 million due to the sale of its unused NJ State net operating losses for fiscal year 2023.

Other Comprehensive (Loss) Income. Unrealized foreign exchange movements related to long-term intercompany loans, the translation of the foreign affiliate financial statements to U.S. dollars and unrealized movements related to short-term investment are recorded in other comprehensive (loss) income. Other comprehensive income (loss) is considered immaterial for all periods presented.

Liquidity and Capital Resources

Sources of Liquidity

We achieved profitability for the three and nine months ended September 30, 2025, driven primarily by product sales of DefenCath. In addition, during the nine months ended September 30, 2025, we received net proceeds of $6.8 million from the issuance of 620,444 shares of common stock under our at-the-market-issuance sales agreement, or ATM program, and we raised net proceeds of $144.4 million from the Convertible Notes Offering in August 2025 and $82.4 million from the Follow-On Offering in June 2025. We may continue to utilize external sources of cash to further fund operations.

Net Cash Provided by (Used in) Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2025 was $80.6 million as compared to net cash used in operating activities of $45.0 million for the same period in 2024. Net cash provided by operating activities was primarily attributable to the net income of $149.0 million for the nine months ended September 30, 2025 compared to a net loss of $31.4 million in the comparison period in 2024.

Net Cash (Used in) Provided by Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2025 was $311.7 million as compared to $21.5 million of net cash provided by investing activities for the same period in 2024. The net cash used during the nine months ended September 30, 2025, was mainly driven by the acquisition of Melinta.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2025 was $239.9 million was attributable to the Convertible Notes Offering in August 2025, the Follow-On Offering in June 2025, and from our ATM program. Net cash provided by financing activities for the nine months ended September 30, 2024 was $15.0 million attributable to the net proceeds received from the sale of our common stock in our ATM program and stock option exercises.

Funding Requirements and Liquidity

Our total cash, cash equivalents and short-term investments as of September 30, 2025, was $55.7 million, excluding restricted cash of $1.0 million, compared with $51.7 million as of December 31, 2024, excluding restricted cash of $0.1 million. As of September 30, 2025, $23.2 million of the Company's common stock remains available for potential sale under the ATM program. Additionally, we have $15.0 million of remaining capacity available under our 2024 Shelf Registration Statement for the issuance of Company securities, after taking effect of the $85.0 million public offering that closed on June 30, 2025.

We expect to continue to fund operations from cash collections of accounts receivable, our cash on hand, cash equivalents and short-term investments, and through potential capital raising sources, which may be dilutive to existing stockholders. We may seek to sell additional equity or debt securities through one or more discrete transactions, but can provide no assurances that any such financing will be available on acceptable terms, or at all. Moreover, the incurrence of indebtedness would result in increased fixed obligations and could contain covenants that would restrict our operations.

Our actual cash requirements may vary materially from those now planned due to a number of factors, including any material change in commercial operations pertaining to our Products or the focus and direction of our research and development programs, any acquisition or pursuit of development of new product candidates, competitive and technical advances, the costs of commercializing any of our product candidates, and costs of filing, prosecuting, defending and enforcing any patent claims and any other intellectual property rights.

We currently estimate that as of September 30, 2025, we have sufficient cash, cash equivalents and short-term investments to fund operations for at least twelve months from the issuance of these financial statements.

Contractual Obligations

We entered into a seven-year operating lease agreement in March 2020 for an office space at 300 Connell Drive, Berkeley Heights, New Jersey 07922. The lease agreement, with a monthly average cost of approximately $17,000, commenced on September 16, 2020 and has a term through October 2027.

In December 2024, we entered into a three-year agreement with Syneos Health Commercial Services, LLC ("Syneos") under which Syneos will provide a dedicated inpatient field sales force that will exclusively promote DefenCath to hospitals and health systems. The Company has paid an up-front implementation fee and is obligated to pay a fixed monthly fee. The Company signed a termination agreement, effective October 1, 2025 whereas the related services to the Company will be completed on December 31, 2025. As of October 1, 2025, the minimum amount committed under this agreement, net of prepayments totaled $4.6 million.

In connection with the Merger, the Company now holds operating leases for two additional offices; in December 2021, Melinta executed a lease agreement for its Corporate Headquarters at 389 Interpace Parkway, Parsippany, New Jersey, which expires in March 2030, and in January 2024, Melinta executed a sublease agreement for an office facility in Lake Forest, Illinois, which expires in September 2031. The total monthly expense associated with these leases is approximately $60,000.

In addition, Melinta had entered into finance leases for numerous vehicles that are used by certain field-based employees The lease term for each vehicle is between 48 to 60 months with an approximate monthly expense of $70,000.

In connection with the purchase of the active pharmaceutical ingredient (API) for VABOMERE, Melinta has committed to API deliveries from the CMO in the fourth quarters of 2025 and 2026 with a total cost of €6.5 million, subject to inflation adjustments.

Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis. We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors. In addition, there are other items within our financial statements that require estimation, but are not deemed critical as defined above. Changes in estimates used in these and other items could have a material impact on our financial statements.

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Litigation contingencies are assessed and judgments are made to determine if an unfavorable outcome is considered probable or reasonably possible, and when considered reasonably possible but not probable, the contingency is disclosed along with an estimate of the possible loss or range of loss. If a liability is possible or probable, but no reasonable estimation of loss can be made, we will disclose the nature of the contingency and state that such an estimate cannot be made. Such estimates and judgements are based on information obtained through the discovery process, court filings and follow on filings by the plaintiffs as well as the stage of litigation.

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We account for product revenue from the sale of our Products in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606") which entails our estimates and judgments primarily in determining the transaction price and more specifically as it relates to variable consideration associated with the contracts. Our customers are located in the United States and consist primarily of outpatient service providers and to a lesser extent specialty wholesale distributors. Variable consideration pertaining to an allowance for product returns of short-dated or expired product requires estimation as our customers may have differing utilization, storage and distribution methods and we do not yet have significant historical trends. The Company's product accrual takes into consideration estimates of product held by its customers, the distribution channel, the shelf life of the product held by customers, as well as when the product is eligible for return based on our returns good policy. We have established the estimate for returns based on specific customer circumstances, industry best practices and management experiences which will continuously be refined as new information is received. At September 30, 2025, we had $16.0 million in accrued returns allowance, including the balance recorded for the Melinta Portfolio.

Variable consideration pertaining to accrued Medicaid rebates requires estimation as our customers may have differing utilizations rates of Medicaid coverage, different utilization within States which may be in either the primary or secondary positions, together with as well as general fluctuations in patient populations over time. Based on the relatively short time since product launch and the inherent lag time in State Medicaid processing, the utilization information the Company has received is limited and, as such, there is a lack of significant historical trends for Medicaid utilization. The Company's accrual does take into consideration its customers' recent actual Medicaid utilization rates as well as anticipated Medicaid utilization rates. At September 30, 2025, the Company had $7.5 million in accrued Medicaid rebates, including the balance recorded for the Melinta Portfolio.

During the nine months ended September 30, 2025, a change in estimate was recorded for variable consideration pertaining to Medicaid and commercial 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 nine months ended September 30, 2025. The resulting change in estimate negatively impacts year to date revenue, continuing operations and net income in the amount of $1,695,000. Basic and diluted earnings per share were negatively impacted by $0.03 and $0.02 per share, respectively. This would have caused earnings per share and diluted earnings per share to be $2.15 and $1.99, respectively. Excluding the impact of the change in accounting estimate, net income would have been $150.7 million.

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As of September 30, 2025, the Company had achieved cumulative pre-tax income over the most recent three-year period, and therefore, in accordance with ASC 740, Income Taxes, management evaluated both positive and negative evidence in assessing the realizability of its deferred tax assets. In addition to the historical earnings, the Company considered factors such as the sustainability of current revenue sources, excluding potential future revenue from additional indications of our Products currently under development, and future net income projections. Based on this evidence, the Company concluded that is more-likely-than-not (as defined in ASC 740-10-30-5(e)) that it will realize the benefit of certain deferred tax assets, related primarily to utilization of its U.S. federal NOL carryforwards, within the applicable carryforward periods provided under Internal Revenue Code ("IRC") Section 172.

As a result of this conclusion, the Company released approximately $280.0 million of valuation allowance previously recorded against its deferred tax assets, recognizing an income tax benefit of $59.7 million in the three and nine months ended September 30, 2025. The release of valuation allowance was mainly attributed to the expected utilization of historical CorMedix federal NOLs. The Company will continue to evaluate the realizability of its remaining deferred tax assets each reporting period and adjust the valuation allowance as appropriate based on changes in cumulative results, forecasts of future taxable income, or other objective evidence as required by ASC 740-10-35.

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We account for acquired businesses using the acquisition method of accounting under Business Combinations (Topic 805). With respect to business combinations, we determine the purchase price, including contingent consideration, and allocate the purchase price of acquired businesses to the tangible and intangible assets acquired and liabilities assumed, based on estimated fair values. The excess of the purchase price over the identifiable assets acquired and liabilities assumed is recorded as goodwill.

We engage a third-party professional service provider to assist us in determining the fair values of the purchase consideration, assets acquired, and liabilities assumed. Such valuations require management to make significant estimates and assumptions, especially with respect to contingent liabilities associated with the purchase price and intangible assets, such as developed product rights and in-process research and development programs. Critical estimates that we have used in valuing these elements include, but are not limited to, future expected cash flows using valuation techniques (i.e., Monte Carlo simulation models) and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable.

		We record the different elements of contingent consideration resulting from a business combination at their respective fair values on the acquisition date. The purchase price of Melinta included contingent consideration related to certain tiered royalty payments based on future net sales, as well as to regulatory milestones associated with the acquired products. Over time, increases in fair value from the passage of time are accreted and recorded as non-cash interest expense in the consolidated statements of operation.
		Changes to contingent consideration obligations, other than the passage of time, may result from adjustments related, but not limited, to changes in discount rates and the number of remaining periods to which the discount rate is applied, updates in the assumed achievement or timing of any regulatory milestone or changes in the probability of certain clinical events, changes in our forecasted sales of products acquired, and changes in the assumed probability associated with regulatory approval. At the end of each reporting period, we evaluate the need to remeasure the contingent consideration and, if appropriate, we revalue these obligations and record increases or decreases in their fair value in selling, general and administrative expenses within the accompanying consolidated statements of operations.
		Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, any change in the assumptions described above, could have a material impact on the amount we may be obligated to pay as well as the results of our consolidated results of operations in any given reporting period.