CorMedix Inc.

Current report

Risks Related to Our Financial Position

Current report

Our revenue and profitability may be adversely affected by DefenCath’s transition from TDAPA to the post-TDAPA add-on adjustment and broader reimbursement dynamics that could have a material adverse impact on our results of operations and business.

Current report

While DefenCath has been approved for reimbursement in certain settings, we cannot be sure that reimbursement will continue to be available for DefenCath on favorable terms or will be covered by other payers. For example, on July 1, 2026, DefenCath’s TDAPA reimbursement will transition into a post-TDAPA add-on adjustment, the calculation of which is determined by CMS. As a result of the methodology utilized by CMS, the level of reimbursement provided to institutions treating dialysis patients will significantly decline, and as a result, we anticipate there will be a corresponding reduction to the net pricing for DefenCath for the third and fourth quarters of 2026. The 2027 post-TDAPA add-on adjustment will be effective on January 1, 2027. There can be no assurance that the level of reimbursement determined by CMS in the post-TDAPA add-on period will improve. Further changes in these reimbursement rates could lead to significant fluctuations in our operating income and could have a negative impact on our revenues, earnings and cash flows. Reimbursement uncertainty applies to all of our Products as well as other product lines that we develop. Also, we cannot be sure that the amount of reimbursement that is available will not reduce the demand for, or the price of, our Products. If reimbursement is not available by certain payors or is available only at limited levels, we may not be able to continue to successfully commercialize our Products or any other product lines that we develop.

Current report

Reimbursement levels are also subject to periodic CMS rulemaking, sequestration or other across-the-board Medicare payment reductions, audit and overpayment recovery activity, and evolving coverage policies, any of which could occur on short notice and may apply retroactively. If CMS changes the underlying methodologies, revises inputs or assumptions, or otherwise modifies TDAPA eligibility criteria or post-TDAPA add-on adjustments, our realized revenue, earnings and cash flows could fluctuate materially from period to period. Even if coverage remains in place, inadequate payment may limit provider adoption, restrict formulary placement, or result in purchasing constraints by dialysis organizations.

Current report

Infective pathogens might develop resistance to our Products or product candidates, which would decrease the efficacy and commercial viability of that product.

Current report

Infective pathogens, including fungi and bacteria, develop resistance over time due to genetic mutation. Many current and previous anti-infective therapies have suffered reduced efficacy over time due to the development of resistance to such drugs. It is probable that, over time, such pathogens will also develop resistance to our Products and our drug candidates. If resistance were to develop rapidly to our Products or our drug candidates, this would reduce the commercial potential for our business.

Current report

Clinical trials and regulatory approval for our product lines are expensive, time-consuming, and uncertain, and failure or delay in obtaining approval could materially harm our business.

Current report

To market a new drug or device product in the United States, we must demonstrate proof of safety and effectiveness in humans through “adequate and well-controlled” clinical trials and obtain FDA approval. The clinical trial and regulatory approval process is lengthy, expensive, and subject to numerous risks and uncertainties at every stage.

Current report

Clinical trials may be delayed or fail due to many factors, including: inability to manufacture sufficient quantities of qualified materials under cGMP requirements; slower than expected patient recruitment or insufficient enrollment; modifications to trial protocols or changes in regulatory requirements; lack of effectiveness or unforeseen safety issues; suspension or termination by institutional review boards or the FDA; and adverse medical events in patients, which may or may not be related to our products. Results from early trials are not necessarily indicative of later trial outcomes, and clinical results are frequently susceptible to varying interpretations that may delay, limit, or prevent regulatory approvals.

Current report

Even after clinical trials are completed, final FDA approval of an NDA, Premarket Approval Application (“PMA”), or De Novo application may be delayed, limited, or denied for numerous reasons, including: the FDA may not find pre-clinical and clinical data sufficient or may disagree with our interpretation of such data; the FDA may require additional studies or manufacturing information; the FDA may not agree with our intended indications, study design, or proposed labeling; or manufacturing processes and facilities may be deemed to have insufficient GMP controls. Regulatory approval policies may also change, and compliance with evolving requirements may consume substantial financial and management resources.

Current report

Any failure or significant delay in clinical trials or regulatory approval for our products would delay our ability to commercialize our product lines and generate product revenues, and could cause us to abandon a product line entirely. Such outcomes could materially harm our business, financial condition, and results of operations.

Current report

Off-label marketing or use of our Products or future product candidates may expose us to significant fines, penalties, sanctions, or product liability claims, and our reputation could be harmed.

Current report

The FDA, United States Department of Justice (the “DOJ”), and comparable foreign authorities strictly regulate the marketing and promotional claims that are made about pharmaceutical products following approval. In particular, a product may not be promoted for uses or indications that are not approved by the FDA or comparable foreign authorities as reflected in the product’s approved labeling and Summary of Product Characteristics. However, physicians can prescribe drugs to their patients in a manner that is inconsistent with the approved label based on the physician’s independent medical judgement. The FDA and other governmental authorities, have also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed in order to resolve enforcement actions. If we become the target of such an investigation or prosecution based on our marketing and promotional practices, we could face large civil and criminal fines and be subject to prohibitions and restrictions, which would materially harm our business. In addition, management’s attention could be diverted from our business operations, significant legal expenses could be incurred, and our reputation could be damaged.

Current report

Federal and state governments in the U.S. have been, and may in the future consider legislative and regulatory proposals to change the U.S. healthcare system in ways that could affect our ability to commercialize our Products and future marketed products profitably. In addition, the U.S. government, state legislatures, and foreign governments have shown significant interest in implementing cost containment programs as it relates to prescription drugs, including price-controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs to limit the growth of government paid health care costs. For example, the current administration has pursued and is pursuing policies to reduce regulations and expenditures across government, including at the FDA, CMS, Health and Human Services (“HHS”) and related agencies. Recent actions include (i) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by establishing Most-Favored-Nation pricing for pharmaceutical products; (ii) imposing tariffs on imported pharmaceutical products; and (iii) as part of the MAHA Commission’s recent Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. These actions and policies may significantly reduce U.S. drug prices, potentially impacting pricing strategies and profitability, while increasing operational costs and compliance risks.

Current report

We also depend on third-party service providers (including cloud, SaaS, Contract Research Organizations, CMOs, logistics and analytics vendors), and incidents at these third parties—or their subcontractors—can compromise our data or disrupt operations even if our own systems are not implicated. We maintain processes to assess, identify, and manage material cybersecurity risks, which are integrated into our broader enterprise risk management program, including with respect to incident response planning and employee training, and involve oversight of third-party risks. However, no controls can eliminate all threats, and our board and management oversee, but cannot guarantee the effectiveness of, these efforts. For more information, please see “Item 1C (Cybersecurity).” A significant cyber incident—or a series of smaller incidents—could also interrupt manufacturing and supply coordination with third parties, impair quality or safety reporting, delay clinical or commercial activities, increase insurance and cybersecurity costs, and negatively affect our results of operations and reputation.

Current report

From time to time, we may publicly disclose interim, topline, or preliminary data from clinical trials involving our Products, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial as well as the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. Preliminary or topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, the interim, topline, or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data has been received and fully evaluated. Further, others, including regulatory authorities, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability, or commercialization of the particular product candidate or product and our company in general. If the interim, topline, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain regulatory approval for, and commercialize, our product candidates and any future product candidates may be harmed, which could harm our business, operating results, prospects, or financial condition.

Current report

Our BARDA development contract requires ongoing funding decisions by the U.S. Government. Any reduction or discontinuation of funding of this contract could cause our business, financial condition, operating results and cash flows to suffer materially.

Current report

In July 2023, Melinta signed a development contract with BARDA to advance two antibiotics currently FDA-approved for adults, BAXDELA® (delafloxacin) and VABOMERE® (meropenem and vaborbactam), for use in pediatrics and to advance BAXDELA for use in biodefense indications. The performance period for our BARDA contract, including all optional funding, is estimated to be 12 years. Under this contract, BARDA has committed funding of $47.5 million to date, with the potential of additional funding of $97.1 million, amounting to total funding up to $144.6 million if all options are exercised.

Current report

The primary source of funds for these development programs is provided by the U.S. government and is subject to Congressional appropriations, which are generally made on a fiscal year basis, even for programs designed to continue for several years. These appropriations can be subject to a number of uncertainties, including political considerations, changes in priorities due to global pandemics, the results of elections and stringent budgetary constraints. If levels of government expenditures and authorizations for public health countermeasure preparedness decrease or shift to programs in areas where we do not offer products or are not developing product candidates, or if the federal government otherwise declines to exercise its options under this contract or our other existing contracts, there could be a material adverse impact to our results of operations, financial condition, and our business.

Current report

We have pursued and may continue to pursue acquisitions. Acquisitions could be difficult to integrate, divert the attention of key personnel, disrupt our business, dilute stockholder value and impair our financial results.

Current report

As part of our business strategy, we have pursued and may continue to pursue acquisitions of complementary businesses, products, services, technologies or strategic transactions that we believe could accelerate our ability to compete in our existing markets or allow us to enter new markets. Any of these transactions could be material to our financial condition and results of operations. The failure to successfully evaluate, execute and integrate acquisitions or otherwise adequately address these risks, we may not achieve the anticipated benefits of any such acquisition, we may incur costs in excess of what we anticipate, which could have a material adverse impact on our business and financial results.

Current report

Any potential acquisition or strategic collaboration may entail numerous risks, including but not limited to: assimilation of operations, intellectual property and drugs of an acquired company, including challenges associated with integrating new personnel; the diversion of our management’s attention; retention of key employees and uncertainties in our ability to maintain key business relationships; risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or drug candidates and regulatory approvals; and our inability to generate revenue from acquired technology and drugs sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.

Current report

If we fail to properly evaluate acquisitions or investments, we may not achieve the anticipated benefits of any such acquisitions, and we may incur costs in excess of what we anticipate. The failure to successfully evaluate, execute and integrate acquisitions or investments or otherwise adequately address these risks could materially harm our business and financial results.

Current report

For example, generic manufacturers have sought, and may continue to seek, FDA approval to market generic versions of our Products through an abbreviated new drug application (“ANDA”). ANDA litigation and related settlement and license agreements, in some cases, may result in a loss of exclusivity for our patents prior to their expiration. The entry of generic versions of our Products may lead to market share and price erosion, which could have a material adverse impact on our results of operations and revenue. As discussed below, we are currently party to patent litigation for Minocin (minocycline) for Injection against Nexus Pharmaceuticals and Gland Pharma in which an adverse outcome could allow generic entry, which could materially harm our business, results of operations and stock price. Introduction of a generic minocycline for injection product, or a generic of any of our commercialized products, could result in increased competition, decreased sales and could have a material adverse impact on our revenue and results of operations. Please refer to “Note 9, Commitments and Contingencies” for a discussion of our ongoing litigation.

Current report

Our business, financial condition, and results of operations could be materially and adversely affected by an adverse outcome in the ongoing litigation.

Current report

We are regularly involved in pending and threatened litigation, investigations, and other legal proceedings, including intellectual property, commercial, employment, securities, regulatory, and product-related claims. Litigation is inherently uncertain, can be costly and time-consuming, may divert management attention, and could result in injunctions, damages, settlements, fines, penalties, or other remedies. Insurance coverage may be unavailable or insufficient to cover losses. Any of these outcomes, or the announcement of allegations alone, could adversely affect our reputation, cash flows, financial condition, and results of operations. Please refer to “Note 9, Commitments and Contingencies” for a discussion of our ongoing litigation.

Current report

Our ability to pursue the development and commercialization of certain of our Products depends upon the continuation of certain licenses and actions taken by our licensors.

Current report

We rely on certain licenses to certain patent rights and proprietary technology from third parties that are important or necessary to the development of our technology and Products. We have an exclusive license to develop and sell REZZAYO in the United States. Our license agreement also grants us nonexclusive rights to manufacture REZZAYO anywhere in the world. We are required to make payments upon reaching specified regulatory and sales milestones and to pay royalties based on net sales of products containing REZZAYO or the other compounds in a valid patent licensed under the license agreement. We are obligated to use commercially reasonable efforts to maintain regulatory approval for REZZAYO in the United States and to commercialize REZZAYO in the United States within the timeframes required by the license agreement. If we do not use commercially reasonable efforts to achieve the development and commercialization milestones for REZZAYO within the timeframes, or if we are unable to make any of the required payments, the licensor may terminate the license agreement if not cured within 60 days (or 30 days with respect to any payment breach). If our license agreement is terminated, we would lose our rights to develop and commercialize REZZAYO. Loss of our license agreement would materially and adversely affect our business, results of operations and future prospects.

Current report

Licenses or similar arrangements involving our research programs or any product candidates currently pose, and will continue to pose, numerous risks to us, such as our third party partners (i) have significant discretion in determining the efforts and resources that they will apply to these arrangements; (ii) may delay programs, preclinical studies or clinical trials, provide insufficient funding for programs, preclinical studies or clinical trials, stop a preclinical study or clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; and (iii) may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in such third party’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities.

Current report

In addition, the agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligation under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Current report

We are subject to the risks associated with technology transfers, which are often required when moving manufacturing processes to new facilities or contract manufacturers. These include the potential for delays, loss of process knowledge, difficulties in replicating processes at a new site, and challenges in meeting regulatory requirements, all of which could disrupt supply or impact product quality.

Current report

The timing of the milestone and royalty payments we are required to make to third parties is uncertain and could adversely affect our cash flows and results of operations.

Current report

We are party to various agreements pursuant to which we are obligated to make milestone payments or pay royalties in connection with the development and commercialization of our product candidates or sales of our marketed products. The timing of our achievement of these milestones and the corresponding milestone payments, or the amount of our royalty payments, is subject to factors which are difficult to predict and of which many are beyond our control. We may become obligated to make a milestone or other payment at a time when we do not have sufficient funds to make such payment, or at a time that would otherwise require us to use funds needed to continue to operate our business, which could delay our clinical trials, curtail our operations, necessitate a scaling back of our sales and marketing efforts or cause us to seek funds to meet these obligations on terms unfavorable to us. If we are unable to make any payment when due or if we fail to use commercially reasonable efforts to achieve certain development and commercialization milestones within the timeframes required by certain of these agreements, the other party may have the right to terminate the agreement and all of our rights to develop and commercialize product candidates using the applicable technology.

Current report

General Risk Factors

Current report

Our business may be adversely affected by tariffs, trade sanctions or similar government actions.

Current report

The imposition and ongoing discussions regarding certain trade restrictions, sanctions and tariffs on goods exported from the U.S. or imported into the U.S., as well as retaliatory measures enacted in response to such actions and related market volatility, could have a material adverse impact on our business, financial condition, results of operations and cash flows. In light of these events, there continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. Any of these factors could depress economic activity, lower product demand and restrict our access to potential partners, suppliers or other third parties we seek to do business with and, in turn, have a material adverse effect on the business and financial condition of such third parties, which in turn would negatively impact us.

Current report

We have identified a material weakness in our internal control over financial reporting, which could, if not effectively remediated, result in material misstatements in our financial statements, and a failure to meet our reporting and financial obligations.

Current report

Effective internal control over financial reporting is necessary for us to provide reliable financial reports, prevent fraud and errors in our financial statements and operate successfully as a public company. As discussed in “Item 9A. Controls and Procedures,” our management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2025. We are actively engaged in remediating the underlying material weakness as promptly as possible. However, we cannot be certain that the current material weakness in internal control will be remediated and our internal control over financial reporting will be considered effective going forward. Because of its inherent limitations, our system of internal control over financial reporting may not prevent or detect every misstatement.

Current report

If we are unable to remediate the existing material weakness in our internal controls over financial reporting and achieve effective internal control, or if we identify additional material weaknesses in our internal control over financial reporting, we may be unable to accurately report our financial results, or report them within the timeframes required by the SEC. If this occurs, we also could become subject to sanctions or investigations by the SEC or other regulatory authorities. In addition, if we are unable to conclude that we have effective internal control over financial reporting, or if our independent registered public accounting firm is unable to provide us with an unqualified report regarding the effectiveness of our internal control over financial reporting for the year ending December 31, 2026 or annual periods thereafter, investors could lose confidence in the reliability of our consolidated financial statements. This could result in a decrease in the value of our common stock.

Current report

We also face risks associated with the cost of establishing effective internal control over financial reporting, insofar as we expect to continue to incur increased costs related to our internal control over financial reporting to remediate the above-described material weaknesses and improve further our internal control environment.

Previous report

We may need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements. Any additional funds that we obtain may not be on terms favorable to us or our stockholders, may dilute our stockholders, and may require us to relinquish valuable rights.

Previous report

To date, our commercial operations have not generated sufficient revenues to enable profitability on an annual basis. We estimate that we have sufficient cash to fund (i) operations for at least twelve months from the date of issuance of this Annual Report on Form 10-K and (ii) the ongoing commercial marketing, sale and promotion of DefenCath. These estimates are based upon the base case assumptions for market penetration, average selling price, research and development (“R&D”) expense and commercial infrastructure cost.

Previous report

We may need additional financing to the extent we are unable to generate sufficient revenue from the commercialization of DefenCath in the U.S. We can provide no assurances that any financing or strategic relationships will be available to us on acceptable terms, or at all. We expect to continue to use significant cash to fund our operations as we commercialize DefenCath in the U.S, pursue development of our other product lines and other business development activities, and potentially incur additional legal costs to defend our intellectual property.

Previous report

To raise needed capital, we may sell additional equity or debt securities, obtain a bank credit facility, or enter into a corporate collaboration or licensing arrangement. The sale of additional debt securities, if convertible, could result in dilution to our stockholders. The incurrence of indebtedness would result in fixed obligations and could also result in covenants that would restrict our operations. Raising additional funds through collaboration or licensing arrangements with third parties may require us to relinquish valuable rights to our technologies, future revenue streams, research programs or product lines, or to grant licenses on terms that may not be favorable to us or our stockholders.

Previous report

To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may, as we have in the past, sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be further diluted by subsequent sales. New investors could gain rights superior to existing stockholders.

Previous report

Final approval by regulatory authorities of our product lines for commercial use may be delayed, limited or denied, any of which could adversely affect our ability to generate operating revenues.

Previous report

The clinical development, manufacturing, labeling, packaging, storage, recordkeeping, export, marketing, promotion and distribution, and other possible activities relating to our product lines are subject to extensive regulation by the FDA and other regulatory agencies. Failure to comply with applicable regulatory requirements may, either before or after product approval, subject us to administrative or judicially imposed sanctions that may negatively impact the approval of one or more of our product lines or otherwise negatively impact our business. Compliance with such regulations may consume substantial financial and management resources and expose us and our collaborators to the potential for other adverse circumstances which could delay or prevent us from generating revenue from the commercialization of these drugs and cause us to incur significant additional costs.

Previous report

We are not permitted to market a product line in the United States until the particular product line is approved for marketing by the FDA. Specific pre-clinical data, chemistry, manufacturing and controls data, a proposed clinical trial protocol and other information must be submitted to the FDA as part of an investigational new drug (“IND”) application, and clinical trials may commence only after the IND application becomes effective. To market a new drug in the United States, we must submit to the FDA and obtain FDA approval of an NDA. An NDA must be supported by extensive clinical and pre-clinical data, as well as extensive information regarding chemistry, manufacturing and controls, to demonstrate the safety and effectiveness of the product line, and the FDA will also assess whether the manufacturing processes and facilities are suitable to support the application. Approval of an NDA may be delayed due to delays in FDA’s review of the manufacturing facility, which may require an onsite inspection.

Previous report

Obtaining approval of an NDA can be a lengthy, expensive and uncertain process. Review time can be impacted by the quality of the information included in the application, FDA’s internal resources such as the availability of reviewers, or requests from the FDA for additional information. Regulatory approval of an NDA is not guaranteed. The number and types of pre-clinical studies and clinical trials that will be required for FDA approval varies depending on the product line, the disease or condition that the product line is designed to target and the regulations applicable to any particular product line. Despite the time and expense exerted in pre-clinical and clinical studies, failure can occur at any stage, and we could encounter problems that delay our product line development or that cause us to abandon clinical trials or to repeat or perform additional pre-clinical studies and clinical trials. The FDA can delay, limit or deny approval of a product line for many reasons, and product line development programs may be delayed or may not be successful for many reasons including but not limited to, the following:

Previous report

Our pre-clinical and clinical data, other information and procedures relating to a product line may not be sufficient to support approval by the FDA or any other U.S. or foreign regulatory authority, or regulatory interpretation of these data and procedures may be unfavorable. Failure to conduct required post-approval studies, or confirm a clinical benefit, will allow the FDA to withdraw the drug from the market on an expedited basis. Our business and reputation may be harmed by any failure or significant delay in receiving regulatory approval for the sale of any drugs resulting from our product lines. As a result, we cannot predict when or whether regulatory approval will be obtained for any drug we develop.

Previous report

Additionally, other factors may serve to delay, limit or prevent the final approval by regulatory authorities of our product lines for commercial use, including, but not limited to:

Previous report

The successful development of any product lines is uncertain and, accordingly, we may never commercialize any of these product lines or generate significant revenue.

Previous report

Current healthcare laws and regulations in the U.S. and future legislative or regulatory reforms to the U.S. healthcare system may affect our ability to commercialize DefenCath and future marketed products profitably.

Previous report

Federal and state governments in the U.S. are considering legislative and regulatory proposals to change the U.S. healthcare system in ways that could affect our ability to commercialize DefenCath and future marketed products profitably. Similarly, among payors and other third-parties, there is significant interest in promoting such changes through legislation and regulation (in additional to through restrictions introduced via contracting and other methods). The life sciences industry and specifically the market for the sale, insurance coverage and distribution of pharmaceuticals has been a particular focus of these efforts and would likely be significantly affected by any major legislative or regulatory initiatives. In addition, there have been, and may in the future be, initiatives at both the federal and state level that could significantly modify the terms and scope of government-provided health insurance coverage, ranging from changes to some or all of the provisions of existing law, to establishing a single-payer, national health insurance system, to more limited “buy-in” options to existing public health insurance programs, any of which could have a significant impact on the healthcare industry. It is possible that additional legislative, executive and judicial activities in the future could have a material adverse impact on our business, financial condition and results of operations.

Previous report

In recent years, the U.S. Congress has sought to repeal and has significantly amended the Affordable Care Act. We expect that there will continue to be proposals by legislators at both the federal and state levels, regulators and third-party payors to keep healthcare costs down while expanding individual healthcare benefits. Certain of these changes could impose limitations on the prices we will be able to charge for any products that are approved or the amounts of reimbursement available for these products from governmental agencies or other third-party payors or may increase the tax requirements for life sciences companies such as ours. Any such changes could have an adverse effect on our business, financial condition and results of operations.

Previous report

There has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which have resulted in several recent congressional inquiries and proposed and enacted bills by Congress and the states designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. In addition, the U.S. government, state legislatures, and foreign governments have shown significant interest in implementing cost containment programs, including price-controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs to limit the growth of government paid health care costs. For example, the U.S. government has passed legislation requiring pharmaceutical manufacturers to provide rebates and discounts to certain entities and governmental payors to participate in federal healthcare programs. The U.S. government enacted the Inflation Reduction Act of 2022 (Inflation Reduction Act or IRA). The IRA brought sweeping changes to Medicare coverage and reimbursement for prescription drugs that could negatively impact us and other pharmaceutical manufacturers. Of note, beginning January 1, 2025, the eliminates the Medicare Part D coverage gap, and reduces a beneficiary’s out-of-pocket maximum to $2,000. The existing coverage gap discount program for pharmaceutical manufacturers will be replaced by a new manufacturer discount program effective in 2025. Under the new program, manufacturers will provide a 10 percent discount off the negotiated price for applicable drugs (branded drugs and biologics manufactured by companies that have Part D discount agreements) after the deductible is satisfied through the catastrophic phase of the benefit. In the catastrophic phase, manufacturers will provide a 20 percent discount off negotiated price.

Previous report

The legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide. There are numerous U.S. federal and state laws and regulations related to the privacy, data protection and security of personal information. At the federal level, regulations promulgated pursuant to HIPAA establish privacy and security standards for “covered entities” (group health plans and most healthcare providers) that limit the use and disclosure of individually identifiable health information those entities and their service providers receive or create (“protected health information”). Although we generally are not subject to the HIPAA privacy or security regulations, we do business with various entities (including clinical trial investigators) that are subject those regulations, and we have to expend resources to understand their obligations, adjust contractual terms in light of those obligations, or otherwise modify our business practices. Any amendments to HIPAA or other legislation amending or broadening the scope of HIPAA might require us to make substantial expenditures and would likely create additional liability risks.

Previous report

The Federal Trade Commission (“FTC”) has used its authority under Section 5 of the FTC Act, which prohibits unfair and deceptive practices affecting consumers, to bring numerous cases against companies for failing to protect the privacy or security of personal information in a manner that is reasonable and fully consistent with stated privacy policies, notices, or other representations. The FTC has considered codifying its requirements in regulations, but has not done so; as a result, the optimal means to mitigate the risk of such an action are uncertain.

Previous report

New legislation may be enacted in other states. The effects on our business of this growing body of privacy and data protection laws are potentially significant, and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

Previous report

If we or our third-party service providers are unable to properly protect the privacy and security of personal information, or other confidential data we process in our business, we could be found to have breached our contracts. Further, if we fail to comply with applicable privacy laws, we could face civil and criminal penalties. Enforcement activity by regulatory authorities in relation to privacy and cybersecurity matters can result in financial liability and reputational harm, and responses to such enforcement activity can consume significant internal resources. The threat of class action lawsuits based on data security breaches or alleged unfair practices further increases the risk to our business. We cannot be sure how these privacy laws and regulations will be interpreted, enforced or applied to our operations. In addition to the risks associated with enforcement activities and potential contractual liabilities, our ongoing efforts to comply with evolving laws and regulations at the federal and state level may be costly and require ongoing modifications to our policies, procedures and systems.

Previous report

Our clinical trials may be conducted in patients with serious or life-threatening diseases for whom conventional treatments have been unsuccessful or for whom no conventional treatment exists, and in some cases, our product is expected to be used in combination with approved therapies that themselves have significant adverse event profiles. During the course of treatment, these patients could suffer adverse medical events or die for reasons that may or may not be related to our products. We cannot ensure that safety issues will not arise with respect to our products in clinical development.

Previous report

Because we expect sales of DefenCath to generate substantially all of our product revenues for the foreseeable future, the failure of DefenCath to find market acceptance would harm our business and would require us to seek additional financing.

Previous report

If we are unable to effectively recruit, train, retain and equip our sales force, our ability to continue successfully commercialize DefenCath will be harmed.

Previous report

None of the newly hired members of our sales force has promoted DefenCath before, and we are required to, and will continue to be required to, expend significant time and effort to train the sales force to be credible, persuasive, and compliant with applicable laws in marketing DefenCath for its approved indication. We must train the sales force to ensure that a consistent and appropriate message about DefenCath is being delivered to our customers. If we are unable to successfully train the sales force and provide them with appropriate materials, including medical and sales literature to help them educate and inform customers about the benefits and risks of DefenCath our efforts to continue to successfully commercialize DefenCath may be challenged.

Previous report

We may be exposed to liability claims associated with the use of hazardous materials and chemicals.

Previous report

Our research, development and manufacturing activities and/or those of our third-party contractors may involve the controlled use of hazardous materials and chemicals. Although we believe that our safety procedures for using, storing, handling and disposing of these materials comply with federal, state and local, as well as foreign, laws and regulations, we cannot completely eliminate the risk of accidental injury or contamination from these materials. In the event of such an accident, we and the third-party could be held liable for any resulting damages and any liability could materially adversely affect our business, financial condition and results of operations. In addition, the federal, state and local, as well as foreign, laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous or radioactive materials and waste products may require us to incur substantial compliance costs that could materially adversely affect our business, financial condition and results of operations.

Previous report

We currently have one FDA approved source for each of our two key APIs for DefenCath, taurolidine and heparin sodium, respectively. With regards to taurolidine, we have a DMF filed with the FDA. There is a master commercial supply agreement between a third-party manufacturer and the Company in place from August 2018. In addition, we are working with our 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, we have identified an alternate third-party supplier and may qualify such supplier under the DefenCath NDA over the next twelve months.

Previous report

We received FDA approval of DefenCath with finished dosage production from our European based CMO Rovi Pharma Industrial Services. We believe this CMO has adequate capacity to produce the volumes needed to meet near-term projected demand for the commercial launch of DefenCath. We have also received FDA approval for finished dosage manufacturing of DefenCath from Siegfried Hameln.

Previous report

Our executive officers and directors may exercise stock options and sell shares of their stock, and these events could adversely affect our stock price.

Previous report

Sales of our common stock and exercise of stock options by our executive officers and directors, or the perception that such events may occur, could adversely affect the market price of our common stock. Our executive officers and directors may sell stock in the future, either as part, or outside, of trading plans under Rule 10b5-1 under the Exchange Act.

Previous report

A significant number of additional shares of our common stock may be issued at a later date, and their sale could depress the market price of our common stock.

Previous report

As of December 31, 2024, we had outstanding the following securities that are convertible into or exercisable for shares of our common stock:

Previous report

Additionally, there are 4,756,909 shares of common stock available for grants under the Amended and Restated 2019 Omnibus Stock Plan (adopted on October 13, 2022 and amended on November 21, 2024).

Previous report

The possibility of the issuance of these shares, as well as the actual sale of such shares, could substantially reduce the market price for our common stock and impede our ability to obtain future financing.

Previous report

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Failure on our part to have effective internal financial and accounting controls would cause our financial reporting to be unreliable, could have a material adverse effect on our business, operating results, and financial condition, and could cause the trading price of our common stock to fall dramatically.

Previous report

We are a “smaller reporting company” and we cannot be certain if the reduced reporting requirements applicable to such companies could make our common stock less attractive to investors.

Previous report

We are a “smaller reporting company”, as defined in the Exchange Act. For as long as we continue to be a smaller reporting company, we may take advantage of exemptions from various reporting requirements, including exemption from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), only being required to provide two years of audited financial statements in annual reports and reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements.

Current report — wording carried from elsewhere

Sales of pharmaceutical products largely depend on the reimbursement of patients’ medical expenses by government health care programs, such as Medicare, Medicaid and/or private health insurers. Further, significant uncertainty exists as to the reimbursement status of newly approved health care products. We currently sell DefenCath directly to hospitals and outpatient dialysis center operators, and are undergoing clinical studies to pursue an expanded use in total parenteral nutrition patients requiring catheters. For any new indication of use, all new potential customers are healthcare providers who depend upon reimbursement by government and commercial insurance payors. Depending on the treatment setting of any new indication for use, we believe that DefenCath would be eligible for coverage under various reimbursement programs, such as the IPPS, including certain temporary payment adjustments (e.g., NTAP); however, payment under these payment systems could later be modified or decreased by future regulations.

Current report — wording carried from elsewhere

Because of these risks, our development efforts and those of our licensor and our partners may not result in any future commercially viable products.

Current report — wording carried from elsewhere

The biotechnology and pharmaceutical industries have been characterized by extensive litigation regarding patents and other intellectual property rights, and companies have employed intellectual property litigation to gain a competitive advantage. In addition to our pending litigation discussed below, we may initiate or become subject to infringement claims or litigation arising out of our patents and pending applications and those of our competitors, or we may become subject to proceedings initiated by our competitors or other third parties or the PTO or applicable foreign bodies to reexamine the patentability of our licensed or owned patents.

Previous report — wording carried elsewhere

Any reduction in reimbursement rates under Medicare, Medicaid, or private insurers could negatively affect the pricing of our products. If we are not able to charge a sufficient amount for our products, then our margins and our profitability will be adversely affected.

Previous report — wording carried elsewhere

Healthcare institutions, physicians and patients may not accept and use our products.

Previous report — wording carried elsewhere

From December 31, 2023, through December 31, 2024, the high and low sales prices for our common stock were $13.85 and $2.89, respectively.

Previous report — wording carried elsewhere

For these reasons and others, an investment in our securities is risky and you should invest only if you can withstand wide fluctuations in and a significant or complete loss of the value of your investment.