CorMedix Inc. (CRMD)

Item 2. 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 2025 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”), on March 5, 2026.

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,” “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 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. Our results of operations are driven by the commercialization of DefenCath® in the United States and, following the acquisition of Melinta in August 2025 (the "merger"), a diversified portfolio of hospital- and clinic-focused infectious disease products. The financial results of Melinta have been included in our consolidated financial statements since the acquisition date, and, as a result, comparisons to prior periods may not be meaningful.

There have been no material changes to our business, strategy or key drivers of our results of operations from those described in our Annual Report on Form 10-K for the year ended December 31, 2025. Accordingly, this discussion should be read in conjunction with the information presented in the Form 10-K, including Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Our operating results continue to be influenced by a number of factors, including product adoption and utilization trends, pricing and reimbursement dynamics, including those applicable to DefenCath, and the ongoing integration and performance of the Melinta portfolio. In addition, our results reflect the impact of our capital structure, including interest expense associated with our convertible senior notes, as well as investments in our commercial infrastructure and development activities.

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We continue to focus on executing our commercial strategy, supporting product adoption across our portfolio, and advancing initiatives designed to optimize our operating model, improve efficiency within the broader organization, and support long-term growth. While our strategy and key drivers remain unchanged, our results may continue to be affected by the timing and pace of product adoption, reimbursement dynamics, and the execution of cost optimization initiatives.

Recent Developments

REZZAYO is currently approved for the treatment of candidemia and invasive candidiasis in adults. On April 27, 2026, CorMedix announced positive Phase III topline results from the global ReSPECT clinical trial evaluating REZZAYO (rezafungin for injection) for prophylaxis of invasive fungal diseases in adult patients undergoing allogeneic hematopoietic stem cell transplantation, and if approved by the FDA, it is targeting commercialization of REZZAYO in this second indication beginning in 2027.

On April 2, 2026, the U.S. government issued an executive order imposing new tariffs on certain imported goods, including active pharmaceutical ingredients (“APIs”), excipients, and packaging materials commonly used in the pharmaceutical industry. The Company is currently assessing the impact of the tariffs, which may adversely affect our gross margins and operating results. We are currently in the process of onshoring the manufacture of a number of products into the U.S., which we believe will both drive lower manufacturing costs and mitigate certain incremental costs related to tariffs. However, there can be no assurance that we will be able to fully or substantially offset these incremental costs.

On June 8, 2026, the United States Court of Appeals for the Federal Circuit affirmed the judgment of the U.S. District Court for the Northern District of Illinois that the patents covering its product MINOCIN® for Injection are valid and infringed by the product developed by Nexus Pharmaceuticals, Inc.

Results of Operations

Our results of operations are primarily driven by product sales across our portfolio, including contributions from the Melinta acquisition and continued momentum of DefenCath. Operating expenses reflect investments in commercialization, integration activities and personnel to support the expanded business. In addition, our results are impacted by our capital structure, including interest expense associated with our convertible senior notes. Period-to-period comparisons are affected by the inclusion of Melinta's results of operations beginning on August 29, 2025, in connection with the merger.

On July 1, 2026, DefenCath’s TDAPA reimbursement transitioned 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 significantly declined, and as a result, CorMedix expects a corresponding reduction to its net pricing, resulting in lower net sales, for DefenCath in the second half of 2026 relative to historical periods. We currently estimate, based on the known CMS methodology for calculation of the post TDAPA Add-on, that the 2027 payment could increase meaningfully above the payment rate for the second half of 2026.

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Comparison of the Three and Six Months Ended June 30, 2026 and 2025.

The following is a tabular presentation of our unaudited condensed consolidated operating results for the three and six months ended June 30, 2026 and 2025 (in thousands):

Revenue and grant income for the three months ended June 30, 2026 was $101.9 million as compared to $39.7 million for the same period in 2025, an increase of $62.2 million or 157%. Revenue for the six months ended June 30, 2026 was $229.4 million as compared to $78.8 million for the same period in 2025, an increase of $150.5 million or 191%. The increase for both the three and six months ended June 30, 2026 is due to higher demand of DefenCath along with the inclusion of the Melinta portfolio in 2026.

For the three months ended June 30, 2026 and 2025, Product sales were $94.3 million and $39.7 million, respectively, representing an increase of

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Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations

You should read the following
discussion and analysis together with our audited consolidated financial statements and the accompanying notes contained elsewhere in
this report. This discussion contains forward-looking statements, within the meaning of Section 27A of Securities Act, Section 21E of
the Exchange Act, and the Private Securities Litigation Reform Act of 1995, including statements regarding our expected financial
condition, business and financing plans. These statements involve risks and uncertainties. Our actual results could differ materially
from the results described in or implied by these forward-looking statements as a result of various factors, including those discussed
below and elsewhere in this Annual Report on Form 10-K, particularly under the heading “Risk Factors.”

Overview

The Company is a biopharmaceutical
company focused on developing and commercializing therapeutic products for life-threatening diseases and conditions.

Our primary focus has been
commercializing DefenCath® (taurolidine and heparin), in the U.S., which we launched in 2024 in the hemodialysis setting. The name
DefenCath is the U.S. proprietary name approved by the U.S. FDA.

DefenCath is an FDA
approved antimicrobial CLS (a formulation of taurolidine 13.5 mg/mL, and heparin 1000 USP Units/mL) indicated to reduce the
incidence of CRBSI in adult patients with kidney failure receiving chronic hemodialysis through a CVC It is indicated for use in a
limited and specific population of patients. CRBSIs can lead to treatment delays and increased costs to the healthcare system when
they occur due to extended and often repeat hospitalizations, need for IV antibiotic treatment, long-term anticoagulation therapy,
removal/replacement of the CVC, related treatment costs, as well as increased mortality. DefenCath is the first and only
FDA-approved antimicrobial CLS in the U.S. and was shown to reduce the risk of CRBSI by up to 71% in a Phase 3 clinical study.

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DefenCath is subject to Medicare
ESRD PPS, which provides bundled payment for renal dialysis services and affords a TDAPA, which provides temporary, additional payments
for certain new drugs and biologicals. TDAPA reimbursement is calculated based on 100 percent ASP (or 100 percent of wholesale acquisition
price or manufacturers’ list price, respectively, if such data is unavailable). TDAPA and post-TDAPA add-on payment adjustments
for DefenCath apply for five years (with such add-on payments applying to all ESRD PPS payments for years three through five). DefenCath’s
TDAPA began on July 1, 2024.

Looking forward, on July 1,
2026, DefenCath’s TDAPA reimbursement transitions into a three-year, post-TDAPA Add-On Payment phase, the calculation of which is
determined and published by CMS and will be $2.37 for the third and fourth quarters of 2026. As a result of the methodology utilized by
CMS, the level of reimbursement provided to institutions treating dialysis patients will significantly decline, and as a result, we expect
a corresponding reduction to net pricing for DefenCath in the third and fourth quarters of 2026. If CMS utilizes the same methodology
to calculate the 2027 post-TDAPA Add-On Adjustment, which will be effective on January 1, 2027, we estimate the value of the Add-On Adjustment
will be three to five-times higher than that granted for the third and fourth quarters of 2026, which we expect may result in higher DefenCath
sales prices in 2027 relative to the second half 2026. After January 1, 2027, the post-TDAPA Add-On Payment will be reassessed again and
be made effective on January 1, 2028 and January 1, 2029, covering the three-year period through June 30, 2029.

Acquisition of Melinta

On August 29, 2025 (the “Closing Date”),
we completed the acquisition of Melinta. The acquisition of Melinta expanded our team, commercial platform and increased the commercial
portfolio with six marketed, hospital- and clinic-focused infectious disease products, comprised of REZZAYO® (rezafungin for injection),
MINOCIN® (minocycline) for Injection, VABOMERE® (meropenem and vaborbactam), KIMYRSA® (oritavancin), ORBACTIV® (oritavancin),
BAXDELA® (delafloxacin), and an additional well-established cardiovascular product, TOPROL-XL® (metoprolol succinate) (together,
the Melinta Portfolio. REZZAYO is currently approved for the treatment of candidemia and invasive candidiasis in adults, with an ongoing
Phase III study for the prophylaxis of invasive fungal infections in adult patients undergoing allogeneic blood and marrow transplantation.
The completion of the Phase III study for REZZAYO is expected in 2026.

The financial results of Melinta are included in
our consolidated financial statements starting on August 29, 2025. Melinta’s financial results were not reflected in reported figures
in the periods preceding the Closing Date. As a result, the reported results for 2025 and 2024 are not comparable. To assist with the
discussion of 2025 and 2024 results on a comparable basis and provide more meaningful discussion, certain pro forma historical results
are included in Note 3 to the Consolidated Financial Statements included herein. This information does not purport to reflect what our
financial and operational results would have been had the acquisition been consummated at the beginning of the periods presented. In addition,
further information relating to the acquisition of Melinta is included in Note 3 to the Consolidated Financial Statements included herein.

Pursuant to the terms of the
Merger Agreement, we acquired Melinta via a merger in which Merger Sub merged with and into Melinta, with Melinta surviving as a wholly-owned
subsidiary of the Company. In consideration for the Merger, we (i) paid to the former Melinta equity holders an aggregate of $260.0 million
in cash, subject to adjustment for estimated Company Cash and estimated Working Capital as compared to the Working Capital Target (each
as defined in the Merger Agreement), and (ii) issued to certain of the former Melinta equity holders an aggregate of 3.3 million common
shares of the Company (the “Merger Shares”). In addition, in connection with the Merger, we paid $23.2 million to acquire
the Toprol XL product rights, which Melinta had licensed from a third party. The total cash consideration was funded by a combination
of the Company’s existing cash on hand and net proceeds from the Company’s $150.0 million aggregate principal amount of convertible
senior notes due 2030 (as described below).

Additionally, former Melinta
equity holders are eligible to receive certain contingent payments pursuant to the terms of the Merger Agreement and the Contingent Payment
Agreement, which provides for milestone and net sales-based payments. Upon the issuance of the FDA marketing approval of REZZAYO (or any
product that contains the active ingredient rezafungin), for the prevention or prophylaxis of invasive fungal infections in adult patients
undergoing allogeneic stem cell blood and marrow transplant or the regulatory equivalent on or prior to June 30, 2029, we shall pay, in
cash or common shares, par value $0.001 per share, of the Company at the Company’s election, to the former Melinta equity holders
the following payments:

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.

Additionally, on the Closing
Date, the Company and the consenting Melinta members entered into a registration rights agreement (the “Registration Rights Agreement”),
pursuant to which, among other things, the Company agreed to register for resale, pursuant to Rule 415 under the Securities Act, the Merger
Shares, pursuant to the Contingent Payment Agreement.

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Convertible Notes Offering

On August 6, 2025, the Company entered into subscription
agreements with certain investors to provide for the issuance of $150.0 million aggregate principal amount of its convertible senior notes
due 2030 (the “Notes”) in a private placement, exempt from registration pursuant to Section 4(a)(2) of the Securities Act.
The Notes were issued on August 12, 2025 and are eligible for resale to persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A of the Securities Act.

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

The Company used the net proceeds of the issuance
of the Notes to fund a portion of the purchase price payable in connection with the Merger, including related fees and expenses. See Note
7 to the Consolidated Financial Statements for further information regarding the Notes.

Follow-On Offering

In addition, on June 30, 2025, the Company completed
an underwritten public offering of common stock pursuant to the Company’s universal shelf registration statement on Form S-3, selling
an aggregate of 6,604,507 shares, at the price of $12.87 per share less an underwriting discount of $0.229 per share (the “Follow-On
Offering”). The Company received aggregate net proceeds of approximately $82.4 million after deducting the underwriting discounts
and commissions and offering expenses payable by the Company. See Note 10 to the Consolidated Financial Statements for further information
regarding the Follow-On Offering.

Financial Operations Overview

Revenue from Product Sales

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

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

Contract Revenue

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

In addition, Melinta holds
a partnership with BARDA, a government agency, to advance BAXDELA and VABOMERE for use in pediatrics and to partner on the development
of BAXDELA against certain biothreat pathogens. Research and development services under the contract are recognized as contract revenue
over time, as the performance obligation is satisfied, in accordance with the BARDA agreement. Under this contract, BARDA has awarded
a total of $47.5 million with the potential of additional funding of $97.1 million, amounting to tota

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