v3.20.1
Accounting Policies, by Policy (Policies)
 3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Concentration Risk, Credit Risk, Policy [Policy Text Block]

Liquidity and Uncertainties


The financial statements have been prepared in conformity with GAAP which contemplate continuation of the Company as a going concern. To date, the Company’s commercial operations have not generated sufficient revenues to enable profitability. As of March 31, 2020, the Company had an accumulated deficit of $201.0 million, and incurred losses from operations of $5.6 million and $5.2 million for the three months ended March 31, 2020 and 2019, respectively. The Company currently estimates that as of March 31, 2020 it has sufficient cash, cash equivalents and short-term investments on hand to fund operations through the second quarter of 2021, after taking into consideration, the receipt of net proceeds from the sale of its net operating loss carryforwards, the refund of the advance payment of the NDA application fee, additional costs related to the submission of the NDA for Neutrolin and initial preparations for commercial launch. The Company currently anticipates that the FDA marketing approval for Neutrolin could be received in the second half of 2020.


In April 2020, the Company received approximately $5.2 million, net of expenses, from the sale of a portion of its unused New Jersey net operating losses (“NOL”). The NOL was sold through the State of New Jersey’s Economic Development Authority’s New Jersey Technology Business Tax Certificate Transfer program, which allowed the Company to sell approximately $5.5 million of its total $6.0 million in available NOL tax benefits for the state fiscal year 2019.


In April 2020, the Company received from the FDA the refund for the NDA application fee in the amount of $2.9 million. The Company met the conditions of the Federal Food, Drug, and Cosmetic Act for the small business waiver of the user fees and its request for a waiver of an application user fee was granted by the FDA.


The Company’s continued operations will depend on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic relationships, or out-licensing of its products, to commercially launch Neutrolin upon NDA approval, and until profitability is achieved, if ever. Management can provide no assurances that such financing or strategic relationships will be available on acceptable terms, or at all. At March 31, 2020, the Company had approximately $2.1 million available under its current ATM program and $30.3 million available under its current shelf registration statement for the issuance of equity, debt or equity-linked securities unrelated to the current ATM program.


The Company’s operations are subject to a number of other factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the ability to obtain regulatory approval to market the Company’s products; ability to manufacture successfully; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, Company products; the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products; the results of clinical testing and trial activities of the Company’s product candidates; and the Company’s ability to raise capital to support its operations.
Use of Estimates, Policy [Policy Text Block]

Use of Estimates


The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Consolidation, Policy [Policy Text Block]

Basis of Consolidation


The condensed consolidated financial statements include the accounts of the Company and CorMedix Europe GmbH, its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
Fair Value of Financial Instruments, Policy [Policy Text Block]

Financial Instruments


Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and short-term investments. The Company maintains its cash and cash equivalents in bank deposit and other interest-bearing accounts, the balances of which, at times, may exceed federally insured limits.


The following table is the reconciliation of the accounting standard that modifies certain aspects of the recognition, measurement, presentation and disclosure of financial instruments as shown on the Company’s consolidated statement of cash flows:


   March 31,
2020		   December 31,
2019		 
Cash and cash equivalents  $12,204,569   $16,350,237 
Restricted cash   171,593    174,950 
Total cash, cash equivalents and restricted cash  $12,376,162   $16,525,187 

The appropriate classification of marketable securities is determined at the time of purchase and reevaluated as of each balance sheet date. Investments in marketable debt classified as available-for-sale and equity securities are reported at fair value. Fair value is determined using quoted market prices in active markets for identical assets or liabilities or quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Changes in fair value that are considered temporary are reported in the condensed consolidated statement of operations. Realized gains and losses, amortization of premiums and discounts and interest and dividends earned are included in other income (expense). For declines in the fair value of equity securities that are considered other-than-temporary, impairment losses are charged to other income (expense), net. The Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. There were no deemed permanent impairments at March 31, 2020 or December 31, 2019.


The Company’s marketable securities are highly liquid and consist of U.S. government agency securities, high-grade corporate obligations and commercial paper with original maturities of more than 90 days. As of March 31, 2020 and December 31, 2019, all of the Company’s investments had contractual maturities of less than one year. As of March 31, 2020, no allowance for credit loss was recorded. The following table summarizes the amortized cost, unrealized gains and losses and the fair value at March 31, 2020 and December 31, 2019:


   Amortized Cost   Gross Unrealized Losses   Gross Unrealized Gains   Fair Value 
March 31, 2020:                
                 
Money Market Funds included in Cash Equivalents  $1,567,300   $-   $-   $1,567,300 
U.S. Government Agency Securities   1,697,380    -    8,249    1,705,629 
Corporate Securities   7,348,280    (15,384)   710    7,333,606 
Commercial Paper   1,942,894    (65)   1,126    1,943,955 
Subtotal   10,988,554    (15,449)   10,085    10,983,190 
Total March 31, 2020  $12,555,854   $(15,449)  $10,085   $12,550,490 
                     
December 31, 2019:                    
                     
Money Market Funds included in Cash Equivalents  $3,472,043   $-   $51   $3,472,094 
U.S. Government Agency Securities   2,691,091    (42)   869    2,691,918 
Corporate Securities   6,058,265    (1,438)   440    6,057,267 
Commercial Paper   3,234,583    (16)   405    3,234,972 
Subtotal   11,983,939    (1,496)   1,714    11,984,157 
Total December 31, 2019  $15,455,982   $(1,496)  $1,765   $15,456,251 
Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements


The Company’s financial instruments recorded in the condensed consolidated balance sheets include cash and cash equivalents, accounts receivable, investment securities, accounts payable and accrued expenses. The carrying value of certain financial instruments, primarily cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their estimated fair values based upon the short-term nature of their maturity dates. 


The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial assets recorded at fair value on the Company’s condensed consolidated balance sheets are categorized as follows:


● Level 1 inputs—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 inputs— Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs).

● Level 3 inputs—Unobservable inputs for the asset or liability, which are supported by little or no market activity and are valued based on management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The following table provides the carrying value and fair value of the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019:


   Carrying Value   Level 1   Level 2   Level 3 
March 31, 2020:                
                 
Money Market Funds and Cash Equivalents  $1,567,300   $1,567,300   $-   $- 
U.S. Government Agency Securities   1,705,629    1,705,629    -    - 
Corporate Securities   7,333,606    -    7,333,606    - 
Commercial Paper   1,943,955    -    1,943,955    - 
Subtotal   10,983,190    1,705,629    9,277,561   $- 
Total March 31, 2020  $12,550,490   $3,272,929   $9,277,561   $- 
                     
December 31, 2019:                    
                     
Money Market Funds and Cash Equivalents  $3,472,094   $3,472,094   $-   $- 
U.S. Government Agency Securities   2,691,918    2,691,918    -    - 
Corporate Securities   6,057,267    -    6,057,267    - 
Commercial Paper   3,234,972    -    3,234,972    - 
Subtotal   11,984,157    2,691,918    9,292,239    - 
Total December 31, 2019  $15,456,251   $6,164,012   $9,292,239   $- 
Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation and Transactions


The condensed consolidated financial statements are presented in U.S. Dollars (“USD”), the reporting currency of the Company. For the financial statements of the Company’s foreign subsidiary, whose functional currency is the EURO, foreign currency asset and liability amounts, are translated into USD at end-of-period exchange rates. Foreign currency income and expenses are translated at average exchange rates in effect during the period in which the income and expenses were recognized. Translation gains and losses are included in other comprehensive income (loss).


The Company has intercompany loans between the parent company based in New Jersey and its German subsidiary. The intercompany loans outstanding are not expected to be repaid in the foreseeable future and unrealized foreign exchange movements related to long-term intercompany loans are recognized in other comprehensive income (loss).


Foreign currency exchange transaction gain (loss) is the result of re-measuring transactions denominated in a currency other than the functional currency of the entity recording the transaction.
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash


As of March 31, 2020, and December 31, 2019, the Company has restricted cash in connection with the patent and utility model infringement proceedings against TauroPharm (see Note 4). The Company was required by the District Courts of Mannheim to provide security deposit of an aggregate of approximately €110,000 to cover legal fees in the event TauroPharm is entitled to reimbursement of these costs. The company furthermore had to provide a deposit in the amount of €36,000 and €10,000 for the first and second instances, respectively, in connection with the unfair competition proceedings in Cologne.
Prepaid Research and Development and Other Prepaid Expenses

Prepaid Research and Development and Other Prepaid Expenses


Prepaid expenses consist of payments made in advance to vendors relating to service contracts for clinical trial development, manufacturing, preclinical development and insurance policies. These advanced payments are amortized to expense either as services are performed or over the relevant service period using the straight-line method.


Other prepaid expenses consist of the following:


   March 31,
2020		   December 31,
2019		 
Refundable regulatory fee  $2,942,965   $- 
Insurance expense   246,464    244,828 
Subscription fees   183,734    97,983 
Software costs   104,597    10,081 
Other   84,212    93,523 
Total  $3,561,972   $446,415 

The Company met the conditions of the Federal Food, Drug, and Cosmetic Act for the small business waiver of the user fees and its request for a waiver of an application user fee was granted by the FDA. On April 29, 2020, the refund in the amount of $2,942,965 was received from the FDA.
Inventory, Policy [Policy Text Block]

Inventories, net


Inventories are valued at the lower of cost or net realizable value on a first in, first out basis. Inventories consist of raw materials (including labeling and packaging), work-in-process, and finished goods, if any, for the Neutrolin product. Inventories consist of the following:


   March 31,
2020		   December 31,
2019		 
Raw materials  $6,893   $6,893 
Finished goods   418,178    461,735 
Inventory reserve   (130,163)   (130,163)
Total  $294,908   $338,465 
Lessee, Leases [Policy Text Block]

Leases


The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities, and operating lease liabilities, net of current portion, on the condensed consolidated balance sheet.


Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.


The Company has elected, as an accounting policy, not to apply the recognition requirements in ASC 842 to short-term leases. Short-term leases are leases that have a term of 12 months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes the lease payments for short-term leases on a straight-line basis over the lease term.


The Company has also elected, as a practical expedient, by underlying class of asset, not to separate lease components from non-lease components and, instead, account for them as a single component.
Accrued Expenses [Policy Text Block]

Accrued Expenses


Accrued expenses consist of the following:


   March 31,
2020		   December 31,
2019		 
Professional and consulting fees  $287,560   $214,777 
Accrued payroll and payroll taxes   660,243    1,287,047 
Clinical trial related   2,455,141    2,435,953 
Manufacturing development related   1,000,904    806,032 
Other   67,047    56,677 
Total  $4,470,895   $4,800,486 

In December 2015, the Company contracted a clinical research organization (“CRO”) to help the Company conduct its LOCK-IT-100 Phase 3 multicenter, double-blind, randomized active control study to demonstrate the safety and effectiveness of Neutrolin in preventing catheter-related bloodstream infections and blood clotting in subjects receiving hemodialysis therapy as treatment for end stage renal disease.


Through March 31, 2020, approximately $30.0 million of clinical trial expense has been recorded, of which approximately $27.4 million has been paid. During the quarters ended March 31, 2020 and 2019, the Company recognized $22,000 and $517,000, respectively, in research and development expense related to this agreement. At March 31, 2020, the Company had accrued approximately $2.5 million in accounts payable and accrued expenses.
Revenue [Policy Text Block]

Revenue Recognition


The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers.” ASC 606 prescribes a five-step model for recognizing revenue which includes (i) identifying contracts with customers; (ii) identifying performance obligations; (iii) determining the transaction price; (iv) allocating the transaction price; and (v) recognizing revenue.


The Company recognizes net sales upon shipment of product and upon meeting the five-step model prescribed by ASC 606 outlined above.
Earnings Per Share, Policy [Policy Text Block]

Loss Per Common Share


Basic loss per common share excludes any potential dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. However, since their effect is anti-dilutive, the Company has excluded potentially dilutive shares. The following potentially dilutive shares have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive.


   Three Months Ended
March 31,		 
   2020   2019 
   (Number of Shares of Common Stock Issuable) 
Series C non-voting preferred stock   104,000    408,000 
Series D non-voting preferred stock   -    295,848 
Series E non-voting preferred stock   391,953    391,953 
Series F non-voting preferred stock   -    2,469,137 
Series G non-voting preferred stock   5,560,137    - 
Shares issuable upon conversion of convertible debt   -    1,000,000 
Restricted stock units   417    19,917 
Shares issuable for payment of deferred board compensation   35,303    29,427 
Shares underlying outstanding warrants   183,148    3,199,788 
Shares underlying outstanding stock options   1,720,937    1,212,974 
Total potentially dilutive shares   7,995,895    9,027,044 
Share-based Payment Arrangement [Policy Text Block]

Stock-Based Compensation


Share-based compensation cost for stock options granted to employees is measured at grant date using the Black-Scholes stock option pricing model in accordance with ASC No. 718, “Compensation-Stock Compensation”, based on the estimated fair value of the award for options with service or performance-based conditions and is recognized as expense over the requisite service period on a straight-line basis. For stock options with performance-based vesting provisions, share-based compensation cost is recorded when the achievement of the performance condition is probable.
Research and Development Expense, Policy [Policy Text Block]

Research and Development


Research and development costs are charged to expense as incurred. Research and development include fees associated with operational consultants, contract clinical research organizations, contract manufacturing organizations, clinical site fees, contract laboratory research organizations, contract central testing laboratories, licensing activities, and allocated executive, human resources, facilities expenses and costs related to the manufacturing of the product that could potentially be available to support the commercial launch prior to marketing approval. The Company accrues for costs incurred as the services are being provided by monitoring the status of the activities and the invoices received from its external service providers. Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development expense.