CorMedix(CRMD) - 2025 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION The company achieved significant profitability and strengthened its financial position in Q2 2025, driven by DefenCath and financing Unaudited Condensed Consolidated Financial Statements The company achieved significant profitability and substantial asset growth in Q2 2025, driven by product sales and financing activities Condensed Consolidated Balance Sheets Total assets increased to $252.6 million, driven by cash, while equity surged to $220.6 million by June 30, 2025 Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $159,309 | $40,651 | | Total current assets | $248,057 | $114,575 | | Total Assets | $252,599 | $118,846 | | Liabilities & Equity | | | | Total current liabilities | $31,711 | $33,840 | | Total Liabilities | $31,969 | $34,189 | | Total Stockholders' Equity | $220,630 | $84,657 | Condensed Consolidated Statements of Operations The company achieved $19.8 million net income for Q2 2025 and $40.5 million for six months, reversing prior-year losses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $39,737 | $806 | $78,818 | $806 | | Gross profit (loss) | $37,874 | $296 | $75,359 | ($522) | | Income (loss) From Operations | $19,544 | ($15,301) | $39,669 | ($32,005) | | Net Income (Loss) | $19,828 | ($14,151) | $40,472 | ($28,618) | | Net Income (Loss) Per Share – Basic | $0.29 | ($0.25) | $0.60 | ($0.50) | | Net Income (Loss) Per Share - Diluted | $0.28 | ($0.25) | $0.58 | ($0.50) | Condensed Consolidated Statements of Cash Flows Operating activities generated $49.7 million cash for H1 2025, resulting in a $118.7 million net increase in cash Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $49,728 | ($31,350) | | Net cash (used in) provided by investing activities | ($20,407) | $15,214 | | Net cash provided by financing activities | $89,335 | $959 | | Net Increase (Decrease) in Cash | $118,658 | ($15,178) | | Cash, Cash Equivalents and Restricted Cash - End of Period | $159,414 | $28,645 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail Melinta acquisition, $150 million convertible notes, improved liquidity, and a $2.0 million impact from Medicaid rebate changes - On August 7, 2025, the Company entered into an agreement to acquire Melinta Therapeutics for $260 million in cash and $40 million in common shares, with additional contingent payments possible[24][25][26] - To partially fund the Melinta acquisition, the company entered into agreements on August 6, 2025, to issue $150 million in convertible senior notes due 2030 with a 4.00% interest rate[27][28] - The company's revenue is highly concentrated, with one customer (Customer A) accounting for 59% of revenue in Q2 2025 and 68% for the first six months of 2025[37] - A change in estimate for Medicaid utilization rates negatively impacted net income by $2.0 million for the three months ended June 30, 2025, reducing basic and diluted EPS by $0.03 and $0.02, respectively[69] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes profitability to DefenCath's launch, with a planned Melinta acquisition and strengthened liquidity Results of Operations Revenue surged to $78.8 million for H1 2025, driving a 241% increase in net income and reversing prior-year losses Comparison of Operating Results (in thousands) | Metric | 6 Months 2025 | 6 Months 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $78,818 | $806 | 9,678% | | Gross profit (loss) | $75,359 | ($522) | 14,530% | | Research and development | ($5,635) | ($1,489) | 279% | | Selling and marketing | ($10,858) | ($13,724) | (21)% | | General and administrative | ($19,197) | ($16,270) | 18% | | Income (loss) from operations | $39,669 | ($32,005) | 224% | | Net income (loss) | $40,472 | ($28,618) | 241% | - Revenue for the six months ended June 30, 2025, increased by $78.0 million, or 9,678%, due to the commercial launch of DefenCath in April 2024 (inpatient) and July 2024 (outpatient)[194] - Selling & Marketing expenses decreased by 21% for the six-month period, primarily due to higher pre-launch and launch costs for DefenCath incurred in 2024[197] Liquidity and Capital Resources Liquidity improved to $190.7 million cash and investments, supported by $49.7 million operating cash flow and an $82.4 million public offering - On June 30, 2025, the company completed a public offering of common stock, receiving net proceeds of approximately $82.4 million[204] - Net cash provided by operating activities was $49.7 million for the first six months of 2025, a stark contrast to the $31.4 million used in the same period of 2024, primarily due to achieving net income[207] - As of June 30, 2025, the company estimates it has sufficient cash to fund operations for at least the next twelve months[213] Critical Accounting Estimates Key estimates include variable consideration, litigation contingencies, and a $2.0 million negative impact from Medicaid rebate changes - A change in estimate for Medicaid and commercial rebates negatively impacted net income by $2,029,000 for the three months ended June 30, 2025, due to new information on utilization rates[219] - The company maintains a full valuation allowance against its deferred tax assets as of June 30, 2025, despite generating taxable income, due to uncertainty regarding the full year's profitability compared to historical losses[219] - Estimating variable consideration for product returns is a critical estimate due to a lack of significant historical trends, with an accrued returns allowance of $2.2 million as of June 30, 2025[220] Quantitative and Qualitative Disclosure About Market Risk As a Smaller Reporting Company, the company is not required to provide quantitative and qualitative disclosures about market risk - As a Smaller Reporting Company, CorMedix is not required to provide quantitative and qualitative disclosures about market risk[222] Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[223] - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[224] PART II OTHER INFORMATION This section details legal proceedings, new risk factors from the Melinta acquisition and international trade, and other corporate information Legal Proceedings The company is involved in ongoing legal proceedings, including a securities class action lawsuit and shareholder derivative litigation - For information regarding legal proceedings, the report refers to Note 5, Commitments and Contingencies, in the financial statements[227] Risk Factors New risks relate to the Melinta acquisition, including integration challenges, and potential impacts from international trade policies and tariffs - The proposed acquisition of Melinta is subject to significant risks, including the potential for the merger not to be completed, which could adversely affect the company's stock price and business[228] - The company may be unable to successfully integrate Melinta's business, which could prevent the realization of anticipated synergies and benefits[234] - The company's business may be adversely affected by tariffs and trade restrictions, as it relies on third-party manufacturers in Europe for DefenCath, with a new 15% EU tariff announced on certain products[240][242] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the reporting period - There were no unregistered sales of equity securities during the period[247] Other Information On August 6, 2025, the company filed a Third Amended and Restated Certificate of Designation for its Series E Convertible Preferred Stock - On August 6, 2025, the Company filed a Third Amended and Restated Certificate of Designation for the Series E Convertible Preferred Stock[250] Exhibits Key exhibits include the Melinta Merger Agreement, Convertible Notes forms, and Sarbanes-Oxley certifications - Key exhibits filed with the report include the Merger Agreement with Melinta, forms for the Convertible Notes offering, and Sarbanes-Oxley certifications[253]