The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our 2020 Annual Report on Form
10-K, filed with the Securities and Exchange Commission, or the SEC, on March
30, 2021.



Forward Looking Statements



This Quarterly Report on Form 10-Q contains "forward-looking statements" that
involve risks and uncertainties, as well as assumptions that, if they never
materialize or prove incorrect, could cause our results to differ materially
from those expressed or implied by such forward-looking statements. The
statements contained in this Quarterly Report on Form 10-Q that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, referred to herein as the Exchange Act.
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. These statements are based on the beliefs
and assumptions of our management based on information currently available to
management. Such forward-looking statements are subject to risks, uncertainties
and other important factors that could cause actual results and the timing of
certain events to differ materially from future results expressed or implied by
such forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those identified below and those
discussed in the section titled "Risk Factors" included in our most recent
annual report on Form 10-K, as well as any amendments thereto, as filed with the
SEC and which are incorporated herein by reference. Furthermore, such
forward-looking statements speak only as of the date of this report. Except as
required by law, we undertake no obligation to update any forward-looking
statements to reflect events or circumstances after the date of such statements.



Overview



CorMedix Inc. and our wholly owned German subsidiaries, CorMedix Europe GmbH and
CorMedix Spain, S.L.U., (collectively referred to herein as "we," "us," "our"
and the "Company"), is a biopharmaceutical company focused on developing and
commercializing therapeutic products for the prevention and treatment of
infectious and inflammatory diseases.



Our primary focus is on the development of our lead product candidate,
DefenCath™, for potential commercialization in the United States, or U.S., and
other key markets as a catheter lock solution, or CLS. We have in-licensed the
worldwide rights to develop and commercialize DefenCath and Neutrolin®. The name
DefenCath is the U.S. proprietary name conditionally approved by the U.S. Food
and Drug Administration, or FDA, while the name Neutrolin® is currently used in
the European Union, or EU, and other territories where we received CE-Mark
approval for the commercial distribution of Neutrolin as a CLS regulated as a
medical device. DefenCath/Neutrolin is a novel anti-infective solution (a
formulation of taurolidine 1.35% and heparin 1000 u/ml) intended for the
reduction and prevention of catheter-related infections and thrombosis in
patients requiring central venous catheters in clinical settings such as
hemodialysis, total parenteral nutrition, and oncology. Infection and thrombosis
represent key complications among hemodialysis, total parenteral nutrition and
cancer patients with central venous catheters. These complications can lead to
treatment delays and increased costs to the healthcare system when they occur
due to hospitalizations, need for intravenous, or IV antibiotic treatment,
long-term anticoagulation therapy, removal/replacement of the central venous
catheter, related treatment costs and increased mortality. We believe DefenCath
addresses a significant unmet medical need and a potential large market
opportunity.



                                       22





In January 2015, the FDA designated DefenCath as a Qualified Infectious Disease
Product, or QIDP, for prevention of catheter-related blood stream infections in
patients with end stage renal disease receiving hemodialysis through a central
venous catheter. Catheter-related blood stream infections, or CRBSIs, and
clotting can be life-threatening. The QIDP designation provides five years of
market exclusivity in addition to the five years granted for a New Chemical
Entity, or NCE, upon approval of a New Drug Application, or NDA. In addition, in
January 2015, the FDA granted Fast Track designation to DefenCath Catheter Lock
Solution, a designation intended to facilitate development and expedite review
of drugs that treat serious and life-threatening conditions so that the approved
drug can reach the market expeditiously. The Fast Track designation of DefenCath
provides us with the opportunity to meet with the FDA on a more frequent basis
during the development process, and also ensures eligibility to request priority
review of the marketing application.



In December 2015, we launched our Phase 3 Prospective, Multicenter,
Double-blind, Randomized, Active Control Study to Demonstrate Safety &
Effectiveness of DefenCath/Neutrolin in Preventing Catheter-related Bloodstream
Infection in Subjects on Hemodialysis for End Stage Renal Disease, or
LOCK-IT-100, in patients with hemodialysis catheters in the U.S. The clinical
trial was designed to demonstrate the safety and effectiveness of DefenCath
compared to the standard of care CLS, Heparin, in preventing CRBSIs. The primary
endpoint for the trial assessed the incidence of CRBSI and time to CRBSI for
each study subject. Secondary endpoints were catheter patency, which was defined
as required use of tPA, or removal of catheter due to dysfunction, and removal
of catheter for any reason.



As previously agreed with the FDA, an interim efficacy analysis was performed
when the first 28 potential CRBSI cases were identified in our LOCK-IT-100 study
that occurred through early December 2017. Based on these first 28 cases, there
was a highly statistically significant 72% reduction in CRBSI by DefenCath
relative to the active control of heparin (p=0.0034). Because the pre-specified
level of statistical significance was reached for the primary endpoint and
efficacy had been demonstrated with no safety concerns, the LOCK-IT-100 study
was terminated early. The study continued enrolling and treating subjects until
study termination, and the final analysis was based on a total of 795 subjects.
In a total of 41 cases, there was a 71% reduction in CRBSI by DefenCath relative
to heparin, which was highly statistically significant (p=0.0006), with a good
safety profile.




The FDA granted our request for a rolling submission and review of the NDA,
which is designed to expedite the approval process for products being developed
to address an unmet medical need. Although the FDA usually requires two pivotal
clinical trials to provide substantial evidence of safety and effectiveness for
approval of an NDA, the FDA will in some cases accept one adequate and
well-controlled trial, where it is a large multicenter trial with a broad range
of subjects and study sites that has demonstrated a clinically meaningful and
statistically very persuasive effect on a disease with potentially serious
outcome.



In March 2020, we began the modular submission process for the NDA for DefenCath
for the prevention of CRBSI in hemodialysis patients, and in August 2020, the
FDA accepted for filing the DefenCath NDA. The FDA also granted our request for
priority review, which provides for a six-month review period instead of the
standard ten-month review period. As we announced in March 2021, the FDA
informed in its Complete Response Letter ("CRL") to us that it cannot approve
the NDA for DefenCath in its present form. The FDA noted concerns at the
third-party manufacturing facility after a review of records requested by the
FDA and provided by the contract manufacturer ("CMO"). Additionally, the FDA is
requiring a manual extraction study to demonstrate that the labeled volume can
be consistently withdrawn from the vials despite an existing in-process control
to demonstrate fill volume within specifications.



In April 2021, we met with the FDA to discuss proposed resolutions for the
deficiencies identified in the CRL to us and the Post-Application Action Letter
received by the CMO from the FDA for the NDA for DefenCath. There is now an
agreed upon protocol for the manual extraction study identified in the CRL that
the FDA is requiring as confirmation of in-process controls to demonstrate that
the labeled volume can be consistently withdrawn from the vials. We have
successfully completed this study. Addressing the FDA's concerns regarding the
qualification of the filling operation may necessitate adjustments in the
process and generation of additional data on operating parameters for
manufacture of DefenCath. We and the CMO are currently evaluating available data
to determine if additional process qualification will be needed with subsequent
validation to address these issues. The FDA stated that the review timeline
would be determined when the NDA resubmission is received and that it expected
all corrections to facility deficiencies to be complete at the time of
resubmission so that all corrective actions may be verified during an onsite
evaluation in the next review cycle, if the FDA determines it will do an onsite
evaluation. We and the CMO continue to work closely to ensure that the
identified deficiencies are resolved prior to resubmission of the DefenCath

NDA.



                                       23





Satisfactory resolution of these issues is required for approval of the
DefenCath NDA by a pre-approval inspection and/or adequate CMO responses
addressing these concerns. If an onsite inspection is required, we may encounter
delays in obtaining FDA approval because the FDA is currently facing a backlog
due to the Covid-19 pandemic. The FDA recently issued a guidance document on its
plan to use voluntary remote interactive evaluations at facilities, including
for a pre-approval inspection to assess a marketing application. The FDA will
request the manufacturing facility to participate in a voluntary remote
interactive evaluation, if the FDA believes it is appropriate. A manufacturing
facility cannot request the remote interaction. The FDA expects the use of
remote interactive evaluations should help the FDA operate within normal
timeframes in spite of the Covid-19 pandemic.



The FDA did not request additional clinical data and did not identify any
deficiencies related to the data submitted on the efficacy or safety of
DefenCath from LOCK-IT-100 in the CRL. In draft labeling discussed with the FDA,
the FDA added that the initial approval will be for the limited population of
patients with kidney failure receiving chronic hemodialysis through a central
venous catheter. This is consistent with our request for approval pursuant to
the Limited Population Pathway for Antibacterial and Antifungal Drugs, or LPAD.
LPAD, passed as part of the 21st Century Cures Act, is a new program intended to
expedite the development and approval of certain antibacterial and antifungal
drugs to treat serious or life-threatening infections in limited populations of
patients with unmet needs. LPAD provides for a streamlined clinical development
program involving smaller, shorter, or fewer clinical trials and is intended to
encourage the development of safe and effective products that address unmet
medical needs of patients with serious bacterial and fungal infections. We
believe that LPAD will provide additional flexibility for the FDA to approve
DefenCath to prevent CRBSIs in the limited population of patients with kidney
failure receiving hemodialysis through a central venous catheter.



We intend to pursue additional indications for DefenCath use as a CLS in
populations with an unmet medical need that also represent a significant market
opportunity. For example, we intend to pursue marketing authorization in the
U.S. for use as a CLS to reduce CRBSIs in oncology and total parenteral
nutrition patients using a central venous catheter.



In addition to DefenCath, we are sponsoring a pre-clinical research
collaboration for the use of taurolidine as a possible treatment for rare orphan
pediatric tumors. In February 2018, the FDA granted orphan drug designation to
taurolidine for the treatment of neuroblastoma in children. We may seek one or
more strategic partners or other sources of capital to help us develop and
commercialize taurolidine for the treatment of neuroblastoma in children. We are
also evaluating opportunities for the possible expansion of taurolidine as a
platform compound for use in certain medical devices. Patent applications have
been filed in several indications, including wound closure, surgical meshes, and
wound management. Based on initial feasibility work, we are advancing
pre-clinical studies for taurolidine-infused surgical meshes, suture materials
and hydrogels. We will seek to establish development/commercial partnerships as
these programs advance.



The FDA regards taurolidine as a new chemical entity and therefore an unapproved
new drug. Consequently, there is no appropriate predicate medical device
currently marketed in the U.S. on which a 510(k) approval process could be
based. As a result, we will be required to submit a premarket approval
application, or PMA, for marketing authorization for any medical device
indications that we may pursue. In the event that an NDA for DefenCath is
approved by the FDA, the regulatory pathway for these medical device product
candidates may be revisited with the FDA. Although there may be no appropriate
predicate, de novo Class II designation can be proposed, based on a risk
assessment and a reasonable assurance of safety and effectiveness.



                                       24





In the European Union, or EU, Neutrolin is regulated as a Class 3 medical
device. In July 2013, we received CE Mark approval for Neutrolin. In December
2013, we commercially launched Neutrolin in Germany for the prevention of CRBSI,
and maintenance of catheter patency in hemodialysis patients using a tunneled,
cuffed central venous catheter for vascular access. To date, Neutrolin is
registered and may be sold in certain European Union and Middle Eastern
countries for such treatment.



In September 2014, the TUV-SUD and The Medicines Evaluation Board of the
Netherlands, or MEB, granted a label expansion for Neutrolin to include use in
oncology patients receiving chemotherapy, intravenous, or IV, hydration and IV
medications via CVC for the EU. In December 2014, we received approval from the
Hessian District President in Germany to expand the label for these same
expanded indications. The expansion also adds patients receiving medication and
IV fluids via CVC in intensive or critical care units (cardiac care unit,
surgical care unit, neonatal critical care unit, and urgent care centers). An
indication for use in total parenteral nutrition was also approved.



In September 2019, our registration with the Saudi Arabia Food and Drug
Administration, or the SFDA, expired. As a result, we cannot sell Neutrolin in
Saudi Arabia. We intend to complete the documentation required to renew our
registration with the SFDA, however, we cannot predict how long the renewal
process will take. There is no assurance that the registration will be renewed
by the SFDA.



The novel coronavirus has been declared a pandemic and has spread to multiple
global regions. The outbreak and government measures taken in response have also
had a significant impact, both direct and indirect, on businesses and commerce,
as worker shortages have occurred; supply chains have been disrupted; facilities
and production have been suspended; and demand for certain goods and services,
such as medical services and supplies, has spiked, while demand for other goods
and services, such as travel, has fallen. In response to the COVID-19 outbreak,
"shelter in place" orders and other public health guidance measures have been
implemented across much of the United States, Europe and Asia, including in the
locations of our offices, clinical trial sites, key vendors and partners. Our
program timelines may be negatively affected by COVID-19, which could materially
and adversely affect its business, financial conditions and results of
operations.



Since our inception, our operations have been primarily limited to conducting
clinical trials and establishing manufacturing for our product candidates,
licensing product candidates, business and financial planning, research and
development, seeking regulatory approval for our products, initial
commercialization activities for DefenCath in the U.S. and Neutrolin in the EU
and other foreign markets, and maintaining and improving our patent
portfolio. We have funded our operations primarily through debt and equity
financings. We have generated significant losses to date, and we expect to use
substantial amounts of cash for our operations as we prepare our pre-launch
commercial activities for DefenCath for the U.S. market and commercialize
Neutrolin in the EU and other foreign markets, pursue business development
activities, and incur additional legal costs to defend our intellectual
property. As of March 31, 2021, we had an accumulated deficit of approximately
$224.7 million. We are unable to predict the extent of any future losses or when
we will become profitable, if ever.

Financial Operations Overview





Revenue

We have not generated substantial revenue since our inception. Through March 31, 2021, we have funded our operations primarily through debt and equity financings.





                                       25

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, or CRO, 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; (vi) activities
relating to regulatory filings and the advancement of our product candidates
through preclinical studies and clinical trials; (vii) facilities and other
allocated expenses, which include direct and allocated expenses for rent,
facility maintenance, as well as laboratory and other supplies; and (viii) costs
related to the manufacturing of the product that could potentially be available
to support the commercial launch prior to marketing approval. All R&D is
expensed as incurred.



Conducting a significant amount of development is central to our business model.
Product candidates in later-stage clinical development generally have higher
development costs than those in earlier stages of development, primarily due to
the significantly increased size and duration of the clinical trials. We expect
to incur significant R&D expenses for the foreseeable future in order to
complete development of Neutrolin in the U.S., including the close out of our
LOCK-IT-100 clinical trial and the ongoing filing of an NDA for Neutrolin.



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 candidate and clinical trial may be affected by a
variety of factors, including, among others, the quality of the product
candidate's early clinical data, clinical trial enrollment, duration, conduct
and results, investment in the program, competition, manufacturing capabilities
and commercial viability of the product candidate. As a result of the
uncertainties associated with clinical trials in specific, and the risks
inherent in the development process in general, we are unable to determine the
duration and completion costs of current or future clinical stages of our
product candidates or when, or to what extent, we will generate revenues from
the commercialization and sale of any of our product candidates that may be
approved.



Development timelines, probability of success and development costs vary widely.
We are currently focused on securing the marketing approval for DefenCath in the
U.S. as well as on continuing sales in foreign markets where Neutrolin is
approved. In December 2015, we signed an agreement with a clinical research
organization, or CRO, to help us conduct our LOCK-IT-100 Phase 3 clinical trial
in hemodialysis patients with central venous catheters to demonstrate the
efficacy and safety of DefenCath in preventing catheter-related bloodstream
infections and blood clotting in subjects receiving hemodialysis therapy as
treatment for end stage renal disease. Our LOCK-IT-100 study was completed and
all costs related to the agreement with the CRO has been paid.



We were granted a deferral by the FDA under the Pediatric Research Equity Act
("PREA"), that requires sponsors to conduct pediatric studies for NDAs for a new
active ingredient, such as taurolidine in DefenCath, unless a waiver or deferral
is obtained from the FDA. A deferral acknowledges that a pediatric assessment is
required but permits the applicant to submit the pediatric assessment after the
submission of an NDA. We have made a commitment to conduct the pediatric study
after approval of the NDA for use in adult hemodialysis patients. Pediatric
studies for an approved product conducted under PREA may qualify for pediatric
exclusivity, which if granted would provide an additional six months of
marketing exclusivity. DefenCath would then have the potential to receive a
total marketing exclusivity period of 10.5 years, including exclusivity pursuant
to NCE and QIDP.



We are pursuing additional opportunities to generate value from taurolidine, an
active component of DefenCath. Based on initial feasibility work, we have
completed an initial round of pre-clinical studies for taurolidine-infused
surgical meshes, suture materials, and hydrogels, which require a PMA regulatory
pathway for approval. We are also involved in a pre-clinical research
collaboration for the use of taurolidine as a possible treatment for rare orphan
pediatric tumors. In February 2018, the FDA granted orphan drug designation to
taurolidine for the treatment of neuroblastoma in children. We may seek one or
more strategic partners or other sources of capital to help us develop and
commercialize taurolidine for the treatment of neuroblastoma in children.



                                       26

Selling, General and Administrative Expense





Selling, general and administrative, or SG&A, expense includes costs related to
commercial personnel, medical education professionals, marketing and
advertising, salaries and other related costs, including stock-based
compensation expense, for persons serving in our executive, sales, finance and
accounting functions. Other SG&A expense includes facility-related costs not
included in R&D expense, promotional expenses, costs associated with industry
and trade shows, and professional fees for legal services and accounting
services.

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 condensed consolidated statement of operations as a separate
line item within other income (expense). The intercompany loans outstanding
between our company based in New Jersey and our subsidiary based in Germany are
not expected to be repaid in the foreseeable future and the nature of the
funding advanced is 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).



Interest Income

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





Interest Expense

Interest expense consists of interest incurred on our convertible debt, amortization of debt discount and on financing of expenditures.





Results of Operations

Three months ended March 31, 2021 compared to three months ended March 31, 2020





The following is a tabular presentation of our consolidated operating results
(in thousands):



                                                       For the Three Months Ended         % of Change
                                                                March 31,                   Increase
                                                        2021                2020           (Decrease)
Revenue                                              $        88         $        74                 19 %
Cost of sales                                                (61 )               (49 )               24 %
Gross profit                                                  27                  25                  8 %
Operating Expenses:
Research and development                                  (2,636 )            (2,472 )                7 %

Selling, general and administrative                       (4,601 )            (3,165 )               45 %
Total operating expenses                                  (7,237 )         

  (5,637 )               28 %
Loss from operations                                      (7,210 )            (5,612 )               28 %
Interest income                                                3                  64                (95 )%

Foreign exchange transaction loss                             (5 )         

      (3 )               67 %
Interest expense                                              (5 )                (6 )              (17 )%
Net loss                                                  (7,217 )            (5,557 )               30 %

Other comprehensive loss                                      (3 )         

      (7 )              (57 )%
Comprehensive loss                                   $    (7,220 )       $    (5,564 )               30 %




                                       27

Revenue. Revenue for the three months ended March 31, 2021 was $88,000 as compared to $74,000 in the same period last year, an increase of $14,000. The increase was attributable to increased sales in the Middle East in 2021 as compared to the same period in 2020.





Cost of Sales. Cost of sales was $61,000 for the three months ended March 31,
2021 compared to $49,000 in the same period last year, an increase of $12,000.
The increase was primarily attributable to the increase in cost of materials as
a result of increased sales in the Middle East.



Research and Development Expense. R&D expense was $2,636,000 for the three
months ended March 30, 2021, an increase of $164,000, or 7%, from $2,472,000 for
the same period in 2020. The increase was primarily attributable to an increases
in personnel expenses and non-cash charges for stock-based compensation of
$401,000 and $354,000, respectively, offset by a decrease in in costs related to
the manufacturing of DefenCath of $337,000 and clinical trial expenses of
$254,000, mainly due to the closing of our LOCK-IT-100 clinical trial.



Selling, General and Administrative Expense. SG&A expense was $4,601,000 for the
three months ended March 31, 2021, an increase of $1,436,000, or 45%, from
$3,165,000 for the same period in 2020. The increase was primarily attributable
to an increase in non-cash charges for stock-based compensation of $701,000,
increase in costs related to marketing research studies in preparation for the
potential marketing approval of DefenCath of $491,000 and an increase in
personnel expenses of $460,000, as a result of additional hires during 2020.
These increases were offset by a decrease in recruitment fees of $140,000 that
incurred in 2020 in search for additional personnel and a decrease in legal

fees
of $129,000.



Foreign Exchange Transaction Gain (Loss). A foreign exchange transaction loss of
$5,000 was recorded for the three months ended March 31, 2021 compared to a loss
of $3,000 for the same period last year. These losses occur due to the
re-measuring of transactions denominated in a currency other than our functional
currency.



Interest Income. Interest income was $3,000 for the three months ended March 31,
2021 compared to $64,000 for the same period last year, a decrease of $61,000.
The decrease was attributable to lower average of interest-bearing cash
equivalents and short-term investments during the first quarter of 2021 as
compared to the same period in 2020.

Interest Expense. Interest expense was $5,000 for the three months ended March 31, 2021 as compared to $6,000 for the three months ended March 31, 2020, a decrease of $1,000.

Other Comprehensive Income (Loss). 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 resulted in losses of $3,000 and $7,000 for the three months ended March 31, 2021 and 2020, respectively.

Liquidity and Capital Resources





Sources of Liquidity




As a result of our cost of sales, R&D and SG&A expenditures and the lack of
substantial product sales revenue, our ongoing operations have not been
profitable since our inception. During the three months ended March 31, 2021, we
received net proceeds of $41,456,000 from the issuance of 3,737,862 shares of
common stock under our at-the-market-issuance sales agreement as compared to
$2,470,000 net proceeds for the same period in 2020 from the issuance of 368,144
shares of common stock. Additionally, we also received $125,000 and $412,000
from the exercise of warrants during the quarter ended March 31, 2021 and 2020,
respectively. We will continue to be reliant on external sources of cash for the
foreseeable future until we are able to generate revenue.



                                       28

Net Cash Used in Operating Activities


Net cash used in operating activities for the three months ended March 31, 2021
was $6,691,000 as compared to $7,967,000 for the same period in 2020, a decrease
in net cash use of $1,276,000. The decrease was mainly attributable to higher
non-cash stock-based compensation of $1,732,000 compared to $677,000 for the
same period last year, offset by an increase in net loss of $1,659,000,
primarily driven by an increase in selling, general and administrative expenses,
higher decrease in accrued expenses of $1,485,000 compared to $328,000 for the
same period last year, and lower increase in prepaid expenses and other current
assets of $131,000 as compared to $3,122,000 for the same period in 2020.

Net Cash Provided by (Used in) Investing Activities


Cash used in investing activities for the three months ended March 31, 2021 was
$526,000 as compared to $985,000 provided by in the same period in 2020. The net
cash used during the three months ended March 31, 2021 was mainly driven by
lower amount invested in short-term investments as compared to the same period
in 2020.

Net Cash Provided by Financing Activities


Net cash provided by financing activities for the three months ended March 31,
2021 was $41,581,000 as compared to $2,835,000 for the same period in 2020, an
increase of $38,746,000. During the three months ended March 31, 2021, we
generated net proceeds of $41,456,000 from the sale of our common stock in our
at-the-market, or ATM program, and $125,000 from the exercise of warrants. In
comparison to the same period in 2020, we generated net proceeds of $2,470,000
from the sale of our common stock in our ATM program and $412,000 from the
exercise of warrants.

Funding Requirements and Liquidity


Our total cash on hand and short-term investments as of March 31, 2021 was $81.2
million, excluding restricted cash of $0.2 million, compared with $46.3 million
at December 31, 2020. As of March 31, 2021, we have approximately $50.0 million
available under our current shelf registration for the issuance of equity, debt
or equity-linked securities and no available balance under our ATM program.



Because our business has not generated positive operating cash flow, additional
capital will likely be required in order to fund pre-commercial launch
activities for DefenCath, as well as other taurolidine-based research and
development activities and our operations generally. Our continued operations
will depend on our ability to raise sufficient funds through various potential
sources, such as equity, debt financings, and/or strategic relationships. We can
provide no assurances that financing or strategic relationships will be
available on acceptable terms, or at all.



We expect to continue to fund operations from cash on hand and through capital
raising sources as previously described, which may be dilutive to existing
stockholders, through revenues from the licensing of our products, or through
strategic alliances. We may seek to sell additional equity or debt securities
through one or more discrete transactions, or enter into a strategic alliance
arrangement, but can provide no assurances that any such financing or strategic
alliance arrangement 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. Raising additional
funds through strategic alliance arrangements with third parties may require
significant time to complete and could force us to relinquish valuable rights to
our technologies, future revenue streams, research programs or product
candidates, or to grant licenses on terms that may not be favorable to us or our
stockholders. Our actual cash requirements may vary materially from those now
planned due to a number of factors, any change in 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.



                                       29





Sales of Neutrolin outside the U.S. are not expected to generate significant
product revenues for the foreseeable future, and we expect to grow product sales
for DefenCath in the U.S., should we receive FDA approval. In the absence of
significant revenue, we are likely to continue generating operating cash flow
deficits. We will continue to use cash as we increase other activities leading
to the commercialization of DefenCath upon approval, pursue business development
activities, and incur additional legal costs to defend our intellectual
property.



We currently estimate that as of March 31, 2021, we have sufficient cash on hand
to fund operations at least into the second half of 2022, after taking into
consideration the costs for the initial preparations for the commercial launch
for DefenCath. Additional financing may be required to build out our commercial
infrastructure and to continue our operations should we decide to market and
sell Defencath in the U.S. on our own. If we are unable to raise additional
funds when needed, we may be forced to slow or discontinue our preparations for
the commercial launch of DefenCath. We may also be required to delay, scale back
or eliminate some or all of our research and development programs. Each of these
alternatives would likely have a material adverse effect on our business.



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. Our sublease on our previous premises at 400 Connell Drive,
Berkeley Heights, New Jersey 07922 terminated on November 30, 2020.



Critical Accounting Policies



Our management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States,
or GAAP. The preparation of these condensed consolidated financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities and expenses. On an ongoing basis, we evaluate these
estimates and judgments, including those described below. We base our estimates
on our historical experience and on various other assumptions that we believe to
be reasonable under the circumstances. These estimates and assumptions form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results and experiences
may differ materially from these estimates.

For the three-month period ended March 31, 2021, there were no significant changes to our critical accounting policies as identified in our Annual Report on Form 10-K for the year ended December 31, 2020.





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Recently Adopted Accounting Pronouncements





In December 2019, the FASB issued new guidance which removes certain exceptions
to the general principles of the accounting for income taxes and also improves
consistent application of and simplification of other areas when accounting for
income taxes. The guidance was effective for us beginning in the first quarter
of fiscal year 2021. Early adoption was permitted. This adoption on January 1,
2021 did not have a material impact on our condensed consolidated financial
statements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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