CorMedix Inc. (CRMD) Risk Factors

Item 1A. Risk Factors

Risks Related to Our Financial Position

Although we achieved profitability in 2025,
we have a history of operating losses, may incur additional operating losses in the future, and may never achieve sustained profitability.

Our prospects must be considered in light of the uncertainties, risks,
expenses and difficulties frequently encountered by companies in the early stages of operation. We achieved net income of approximately
$163.1 million for the year ended December 31, 2025 and incurred a net loss of approximately $17.9 million for the year ended December
31, 2024. As of December 31, 2025, we had an accumulated deficit of approximately $176.6 million. We may not be able to sustain profitability
and could incur net operating losses in future periods as we expect to incur substantial additional operating expenses over the next several
years as our research, development, pre-clinical testing, clinical trials and commercialization activities increase as we commercialize
our Products and develop our other product lines. As a result, we may experience negative cash flow at times as we fund our operating
expenses and capital expenditures. Our ability to generate revenue and maintain profitability will depend on, among other things, the
following: continuing to successfully market and sell our Products in the U.S.; obtaining and/or maintaining reimbursement for our Products
in appropriate settings of care; obtaining necessary regulatory approvals for our other products from the FDA and, if sought, international
regulatory agencies; establishing additional manufacturing, sales, and marketing arrangements, either alone or with third parties; and
raising sufficient funds to finance our activities if revenues from the commercialization of our Products in the U.S. are insufficient.
We might not succeed at any of these undertakings. If we are unsuccessful at some or all of these undertakings, our business, prospects,
and results of operations may be materially adversely affected.

Risks Related to the Development and Commercialization
of DefenCath

We are highly dependent on the continued
successful commercialization of our lead product, DefenCath.

Our ability to generate operating
cash flow is dependent upon our continued successful commercialization of DefenCath. In the U.S. DefenCath was approved by FDA on November
15, 2023, and is indicated to reduce the incidence of CRBSIs in adult patients with kidney failure receiving chronic hemodialysis through
a CVC. This drug is indicated for use in a limited and specific population of patients. We launched DefenCath commercially in April 2024
in the inpatient setting and in July 2024 in the outpatient hemodialysis setting. The safety and effectiveness of DefenCath have not
been established for use in populations other than adult patients with kidney failure receiving chronic hemodialysis through a CVC.

Continued successful commercialization
of DefenCath is subject to many risks, including but not limited to:

There is no guarantee that
our continued commercialization efforts will be successful, or that we will be able to successfully launch and commercialize any other
product lines that receive regulatory approval.

The continued successful commercialization
of DefenCath will depend on maintaining coverage and reimbursement for use of DefenCath from third-party payors.

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.

17

Further, CMS, which administers
Medicare and works with states to administer Medicaid, has adopted and will continue to adopt and/or amend rules governing reimbursement
for specific treatments. We anticipate that insurers may increasingly demand that manufacturers demonstrate the cost effectiveness of
their products as part of the reimbursement review and approval process. Healthcare reform proposals and medical cost containment proposals
designed to target rising healthcare costs could be introduced in the U.S. Any measures affecting the reimbursement programs of governmental
and private insurance payors, including any uncertainty in the medical community regarding their nature and effect on reimbursement programs,
could have an adverse effect on purchasing decisions regarding DefenCath, as well as limit the price we may charge for DefenCath. The
failure to obtain or maintain reimbursement coverage for DefenCath could materially harm our operations.

In anticipation that payers
may increasingly demand that we demonstrate the cost effectiveness of DefenCath as part of the reimbursement review and approval process,
we have submitted posters and abstracts to support our health economic analysis and continue to commission and develop health economic
evaluations to support this review. We are pursuing opportunities to work with healthcare systems to demonstrate the clinical and economic
effectiveness of DefenCath; however, our studies might not be sufficient to support coverage or reimbursement at levels that allow providers
to use DefenCath.

We have significant DefenCath customer
concentration, with a limited number of customers accounting for a large portion of our revenues.

We derive a large portion of our revenues from a few major customers.
Sales to our top three customers accounted for 79% of our total revenue for the year ended December 31, 2025, and we had three customers
that accounted for 41%, 23% and 20% of our accounts receivable, respectively, for the year ended December 31, 2025. These customers have
no purchase commitments and may cancel, change or delay purchases with little or no notice or penalty. As a result of this customer concentration,
our revenue could fluctuate materially and could be materially and disproportionately impacted by product pricing and purchasing decisions
of these customers or any other significant customer. These customers may decide to purchase less DefenCath from us than management anticipates,
may alter purchasing patterns at any time with limited notice, or may decide not to continue to purchase DefenCath at all, any of which
could cause our revenue to decline materially and materially harm our business, financial condition and results of operations. If we are
unable to diversify and grow our customer base, we will continue to be susceptible to risks associated with customer concentration.

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.

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.

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.

18

Risks Related to the Development and Commercialization
of our other Products

Successful development and commercialization
of our Products and new product lines is uncertain.

The development and commercialization
of our Products, and future product lines, is subject to the risks of failure and delay inherent in the development of new pharmaceutical
products for the Company, our licensor and our partners, including but not limited to the following:

Additionally, healthcare
institutions, physicians and patients may not accept and use our Products. Acceptance and use of our Products will depend upon a number
of factors including the following:

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

19

If a significant portion of
our development efforts and those of our licensor and partners are not successfully completed, required regulatory approvals are not obtained
or any approved products are not commercialized successfully, our business, financial condition, and results of operations could be materially
harmed.

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

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.

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.

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.

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.

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.

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.

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.

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.

20

Risks Related to Regulatory and Legal Compliance
Matters

Our approved Products are, and our pipeline
product lines (if approved) will be, subject to extensive post-approval regulation.

Once a product is approved, numerous FDA-mandated post-approval requirements
apply in the United States. These include, among other things, requirements related to pharmacovigilance and adverse event and other reporting,
supply chain security requirements, suspect and illegitimate product investigations and notifications, limitations on product advertising
and promotion and on the distribution of product samples, required post-marketing studies, and ongoing adherence to cGMPs, as well as
the need to submit appropriate new or supplemental applications and obtain FDA approval for certain changes to the approved product, product
labeling, or manufacturing process. Establishing and maintaining systems and procedures for compliance with these requirements, and training
and monitoring personnel relative to their compliance, is expensive, time consuming, and an ongoing effort. Depending on the circumstances,
failure to meet post-approval requirements can result in criminal prosecution, fines, injunctions, recall or seizure of products, total
or partial suspension of production, denial or withdrawal of pre-marketing product approvals, or refusal to allow us to enter into supply
contracts, including government contracts. In addition, even if we comply with FDA, foreign and other requirements, new information regarding
the safety or effectiveness of a product could lead the FDA or other relevant regulatory body to modify or withdraw product approval. Failure
to complete a PREA post-marketing study can result in a PREA non-compliance letter, which is publicly posted on FDA’s website, and
could result in the product being considered misbranded and subject to additional enforcement actions.

Healthcare policy changes, including reimbursement
policies for drugs and medical devices, may have an adverse effect on our business, financial condition and results of operations.

In the U.S. there has been,
and we expect there will continue to be, a number of legislative and regulatory changes to the health care system that could affect our
ability to profit from our approved products. Our future revenues, profitability and access to capital will be affected by the continuing
efforts of governmental and private third-party payors to manage, contain or reduce the costs of health care through various means, such
as capping prices, limiting price increases, reducing reimbursement, or requiring rebates. Market acceptance and sales of our Products
or any other product lines that we develop, will depend on reimbursement policies and may be affected by health care reform measures in
the U.S. and abroad.

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.

The U.S. government and other
governments have shown significant interest in pursuing healthcare reform. Any such government-adopted reform measures may adversely affect
the pricing of healthcare products and services in the U.S. and the amount of reimbursement available from governmental agencies or other
third-party payors. Any such reduction in reimbursement 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.

21

Changes in funding for the FDA and other
government agencies or future government shutdowns or disruptions could cause delays in the submission and regulatory review of our product
lines, which could negatively impact our business or prospects.

The ability of the FDA to
review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire
and retain key personnel, accept submission, applications, and the payment of user fees, and statutory, regulatory, and policy changes.
In addition, government funding of other government agencies that fund research and development activities is subject to the political
process, which is inherently fluid and unpredictable. The impact of global events, including terrorism, natural disasters and pandemics,
or other health emergencies, may also cause disruptions in the normal functioning of the FDA or other government agencies.

Risks relating to cybersecurity and data
privacy could create additional liabilities for us.

We rely on the proper functioning
of information technology systems, networks, and cloud services across our operations, and any failure, interruption, or other incident
affecting the confidentiality, integrity or availability such systems or the data stored thereon, including incidents which may result
from a cyber-attack (e.g., ransomware, malware, phishing, denial-of-service, or vendor compromise), could disrupt our business, result
in loss or corruption of data, theft or misuse of confidential or personal information, and require significant remediation costs. Failure
to comply with applicable privacy and data security laws and regulations could result in enforcement actions against us, including possible
fines, imprisonment of company officials and public censure, claims for damages by affected individuals or class of individuals, or damage
to our reputation and loss of goodwill, any of which could have a material adverse effect on our business, financial condition, results
of operations or prospects.

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.

The legislative and regulatory
landscape for privacy and data protection continues to evolve in jurisdictions worldwide. Certain laws may be more stringent or broader
in scope, or offer greater individual rights, with respect to personal information than federal, international or other state laws, and
such laws may differ from each other, which increases costs and complicates compliance efforts.

Clinical trials
required for our Products and any future product lines may be expensive, time consuming and their outcome is uncertain.

In order to obtain FDA approval
to market a new drug or device product, we must demonstrate proof of safety and effectiveness in humans. To meet FDA requirements, we
are obligated to conduct “adequate and well-controlled” clinical trials. Conducting clinical trials is a lengthy, time-consuming,
and expensive process. The length of time may vary substantially according to the type, complexity, novelty, and intended use of the product
line, and often can be several years or more per trial. Delays associated with the development plans for our product lines may cause us
to incur additional operating expenses. The commencement and rate of completion of clinical trials may be delayed by many factors, including,
for example:

22

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.

Moreover, comparisons of results
across different studies should be viewed with caution as such comparisons are limited by a number of factors, including differences in
study designs and populations. Such comparisons also will not provide a sufficient basis for any comparative claims following product
approval. Clinical results are frequently susceptible to varying interpretations that may delay, limit or prevent regulatory approvals
or commercialization. Negative or inconclusive results or adverse medical events during a clinical trial could cause a clinical trial
to be delayed, repeated or terminated, or a clinical program to be abandoned.

Clinical trials may not demonstrate
statistically significant safety and effectiveness to obtain the requisite regulatory approvals for product lines. The failure of clinical
trials to demonstrate safety and effectiveness for the desired indications could harm the development of our product lines. Such a failure
could cause us to abandon a product line and could delay development of other product lines. Any delay in, or termination of, our clinical
trials would delay the filing of any NDA, any PMA, or De Novo application, with the FDA and, ultimately, our ability to commercialize
our product lines and generate product revenues. Any change in, or termination of, our clinical trials could materially harm our business,
financial condition, and results of operations.

23

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.

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.

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.

Risks Related to Our Business and Industry

We may not successfully manage the growth
of our Products.

Our success may depend upon
the expansion of our operations to continue to commercialize our Products and the effective management of any growth, which could place
a significant strain on our management and our administrative, operational and financial resources. To manage this growth, we may need
to augment our operational, financial and management systems and hire and train additional qualified personnel. Additionally, if market
demand exceeds our third-party manufacturer’s ability to produce our Products, we may not be able to fulfill our customers’
orders in a timely manner or at all, which may have an adverse impact on our results of operations and reputation. If we are unable to
manage our growth effectively, our business may be materially harmed.

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.

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.

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.

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.

24

Competition and technological change may
make our Products, product lines or indications, less attractive or obsolete.

We compete with established
pharmaceutical and medical device companies that are pursuing other forms of prevention or treatment for the same or similar indications
we are pursuing, and that have greater financial and other resources. Other companies may succeed in developing products earlier than
we do, may develop products that are more effective than our product lines. Research and development by others may render our technology
or product lines obsolete or noncompetitive, or result in processes, treatments or cures superior to any therapy we develop. We face competition
from companies that develop competing technology internally, or acquire competing technology through acquisitions of other companies,
or from universities and other research institutions. As these competitors develop their technologies, they may develop competitive positions
that may prevent, make futile, or limit our product commercialization efforts, which would result in a decrease in the revenue we would
be able to derive from the sale of our Products or our product lines if any of such other product lines receive marketing approval.

If we lose key management, cannot recruit
qualified employees, directors, officers, or other personnel or experience increases in compensation costs, our business may materially
suffer.

We are highly dependent on
the principal members of our management. Our future success will depend in part on our ability to identify, hire, and retain current and
additional personnel. We experience intense competition for qualified personnel and may be unable to attract and retain the personnel
necessary for the development of our business. Because of this competition, our compensation costs may increase significantly. In addition,
we have only limited ability to prevent former employees from competing with us.

We face the risk of product liability claims
and the amount of insurance coverage we hold now or in the future may not be adequate to cover all liabilities we might incur.

Our business exposes us to
the risk of product liability claims that are inherent in the development of drugs. If the use of one or more of our or our collaborators’
drugs or devices harms people, we may be subject to costly and damaging product liability claims brought against us by clinical trial
participants, consumers, health care providers, pharmaceutical companies or others selling or utilizing our Products.

We currently carry product
liability insurance. We cannot predict all of the possible harms or side effects that may result and, therefore, the amount of insurance
coverage we hold may not be adequate to cover all liabilities we might incur. Our insurance covers bodily injury and property damage arising
from our clinical trials, subject to industry-standard terms, conditions and exclusions. Our coverage also includes the sale of commercial
products.

If we are unable to protect
against potential product liability claims, we may be exposed to significant liabilities, which may materially and adversely affect our
business and financial position. If we are sued for any injury allegedly caused by our or our collaborators’ products and do not
have sufficient insurance coverage, our liability could exceed our total assets and our ability to pay the liability. A successful product
liability claim or series of claims brought against us would decrease our cash and could cause the value of our capital stock to decrease.

Risks Related to Our Intellectual Property

If we and our licensors do not obtain protection
for and successfully defend our respective intellectual property rights, competitors may be able to take advantage of our research and
development efforts to develop competing products.

Our commercial success will
depend in part on obtaining further patent protection for our Products, product lines and other technologies and successfully defending
any patents that we currently have or will obtain against third-party challenges.

We may seek further patent
protection for our compounds and methods of treating diseases. However, the patent process is subject to numerous risks and uncertainties,
and there can be no assurance that we will be successful in protecting our Products by obtaining and defending patents. These risks and
uncertainties include the following:

25

In addition, the USPTO and
patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical and biotechnology-related
inventions be limited or narrowed substantially to cover only the specific innovations exemplified in the patent application, thereby
limiting the scope of protection against competitive challenges. Thus, even if we or our licensors are able to obtain patents, the patents
may be substantially narrower than anticipated. Additionally, the breadth of claims allowed in biotechnology and pharmaceutical patents
or their enforceability cannot be predicted. We cannot be sure that, should any patents be issued, we will be provided with adequate protection
against potentially competitive products. Furthermore, we cannot be sure that should patents issue, they will be of commercial value to
us, or that private parties, including competitors, will not successfully challenge our patents or circumvent our patent position in the
U.S. or abroad.

To support our patent strategy,
we have engaged in a review of patentability and certain freedom to operate issues, including performing certain searches. However, patentability
and certain freedom to operate issues are inherently complex, and we cannot provide assurances that a relevant patent office or court
would agree with our conclusions regarding patentability issues or with our conclusions regarding freedom to operate issues, which can
involve subtle issues of claim interpretation and claim liability. Furthermore, we may not be aware of all patents, published applications
or published literature that may affect our business either by blocking our ability to commercialize our product lines, preventing the
patentability of our product lines to us or our licensors, or covering the same or similar technologies that may invalidate our patents,
limit the scope of our future patent claims or adversely affect our ability to market our product lines. Additionally, it is also
possible that prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim, may, nonetheless,
ultimately be found by a court of law or an administration panel to affect the validity or enforceability of a claim. If a third-party
were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection
on the applicable product lines. Such loss of patent protection could have a material adverse impact on our business. Additionally,
since patent applications in the United States are maintained in secrecy until published or issued and as publication of discoveries in
the scientific or patent literature often lag behind the actual discoveries, we cannot be certain that we were the first to make the inventions
covered by the pending patent applications or issued patents or that we were the first to file patent applications for such inventions.

In addition to patents, we
also rely on trade secrets and proprietary know-how. Although we take measures to protect this information by entering into confidentiality
and inventions agreements with our employees, and some but not all of our scientific advisors, consultants, and collaborators, we cannot
provide any assurances that these agreements will not be breached, that we will be able to protect ourselves from the harmful effects
of disclosure or dispute ownership if they are breached, or that our trade secrets will not otherwise become known or be independently
discovered by competitors. We may also be unsuccessful in executing such an agreement with each party who in fact develops intellectual
property that we regard as our own, which may result in claims by or against us related to the ownership of such intellectual property.
If any of these events occurs, or we otherwise lose protection for our trade secrets or proprietary know-how, the value of our intellectual
property may be greatly reduced. Even if we are successful in prosecuting or defending against such claims, litigation could result
in substantial costs and be a distraction to our senior management and scientific personnel.

26

Intellectual property disputes require us
to spend time and money to address such disputes could limit our intellectual property rights and if generic entrants of our Products
are approved, it could have a material adverse impact on our results of operations and financial condition.

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.

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.

In addition, litigation may
be necessary to enforce our issued patents, to protect our trade secrets and know-how, or to determine the enforceability, scope, and
validity of the proprietary rights of others. If we are required to defend patent infringement actions brought by third parties, or if
we sue to protect our own patent rights, we may be required to pay substantial litigation costs and managerial attention may be diverted
from business operations even if the outcome is not adverse to us. In addition, any legal action that seeks damages or an injunction to
stop us from carrying on our commercial activities relating to the affected technologies could subject us to monetary liability and require
us or any third-party licensors to obtain a license to continue to use the affected technologies. We cannot predict whether we would prevail
in any of these types of actions or that any required license would be made available on commercially acceptable terms or at all. Furthermore,
to the extent that we or our consultants or research collaborators use intellectual property owned by others in work performed for us,
disputes may also arise as to the rights in such intellectual property or in resulting know-how and inventions. An adverse claim could
subject us to significant liabilities to such other parties and/or require disputed rights to be licensed from such other parties. See
“Note 9, Commitments and Contingencies” for additional detail on the Company’s legal proceedings.

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

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.

Risks Related to Dependence on Third Parties

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.

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.

27

If disputes over intellectual
property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may
be unable to successfully develop and commercialize the affected product candidates.

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.

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.

We depend on third-party
suppliers and contract manufacturers for the supply and manufacture of our product lines, as well as our APIs, which subjects us to potential
cost increases and manufacturing delays that are not within our control.

We
do not manufacture our product lines or any of their raw materials or components ourselves, and we rely on third parties for our drug
supplies both for clinical trials and for commercial quantities. All of our manufacturing processes currently are, and we expect them
to continue to be, outsourced to third parties, some of which are single-source suppliers. We have made the strategic decision not to
manufacture APIs for our product lines, as these can be more economically supplied by third parties with particular expertise in this
area. We have engaged contract facilities that are registered with the FDA, have a track record of large-scale API manufacture, and have
already invested in capital and equipment.

We
have no direct control over the manufacturing of our product lines. If the contract manufacturers are unable to produce sufficient quantities
of our Products, as a result of a lack of available materials, supply chain delays or otherwise, then we would need to identify and contract
with additional or replacement third-party manufacturers. Additionally, if the manufacturers are not able to quickly scale production
to align with rapid changes in demand, our results of operations may be negatively impacted. If we are unable to identify suitable additional
or replacement third-party manufacturers on favorable terms or at all, our ability to commercialize our Products, our profitability and
results of operations may be adversely affected. Our reliance on foreign suppliers poses risks due to possible shipping delays, import
restrictions, trade policies and tariffs as well as foreign regulatory regimes.

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.

28

In
addition, we have no direct control over manufacturing costs of our product lines. If the cost of manufacturing increases, or if the cost
of the materials used increases, these costs will be passed on to us, making the cost of clinical trials and commercializing our product
lines more expensive. Increases in manufacturing costs could adversely affect our future profitability if we are unable to pass all of
the increased costs along to our customers.

Our
continuing reliance on third parties for manufacturing entails a number of additional risks, including reliance on third parties for legal
and regulatory compliance and quality assurance, the possible breach of the manufacturing or supply agreement by such third parties, and
the possible termination or nonrenewal of the agreement by such third parties at a time that is costly or inconvenient for the Company.
Further, we, along with our contract manufacturers, are required to comply with FDA requirements for cGMPs, related to product testing,
quality assurance, manufacturing and documentation. Our contract manufacturers may fail to comply with the applicable FDA regulatory requirements,
which could result in delays to our product development programs, result in adverse regulatory actions against them or us, and prevent
us from ultimately receiving product marketing approval. They also generally must pass an FDA preapproval inspection for conformity with
cGMPs before we can obtain approval to manufacture our product lines and will be subject to ongoing, periodic, unannounced inspection
by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other applicable government regulations and corresponding
foreign standards. Not complying with FDA requirements could result in a product recall or prevent commercialization of our product lines
and delay our business development activities. In addition, such failure could be the basis for the FDA to issue a warning or untitled
letter or take other regulatory or legal enforcement action, including recall or seizure, total or partial suspension of production, suspension
of ongoing clinical trials, refusal to approve pending applications or supplemental applications, and potentially civil and criminal penalties,
depending on the matter. Similarly, we, along with our contract manufacturers, are required to comply with all applicable healthcare laws
and regulations, such as, without limitation, the federal Anti-Kickback Statute, the civil
False Claims Act, and civil monetary penalty laws, as well as similar state laws. Violation of any such laws by a contract manufacturer
could materially impact our operations.

We rely on third parties to conduct our
clinical trials and pre-clinical studies. If those parties do not successfully carry out their contractual duties or meet expected deadlines,
our product lines may not advance in a timely manner or at all.

In the course of our pre-clinical
and clinical trials, we may rely on third parties, including contract research organizations, laboratories, investigators, and manufacturers,
to perform critical services for us, many of which are required to be conducted consistent with regulations on Good Laboratory Practice
(“GLP”). Study sites are responsible for many aspects of the trials, including finding and enrolling subjects for testing
and administering the trials. Although we may rely on these third parties to conduct our pre-clinical and clinical trials, we are responsible
for ensuring that each of our trials is conducted in accordance with its investigational plan and protocol and that the integrity of the
studies and resulting data is protected. Moreover, the FDA and foreign regulatory authorities require us to comply with regulations and
standards, commonly referred to as Good Clinical Practices (“GCPs”), for conducting, monitoring, recording, and reporting
the results of clinical trials to ensure that the data and results are scientifically credible and accurate, and that the trial subjects
are adequately informed of the potential risks of participating in such trials. Our reliance on third parties does not relieve us of these
responsibilities and requirements. These third parties may not be available when we need them or, if they are available, may not comply
with all regulatory and contractual requirements or may not otherwise perform their services in a timely or acceptable manner, and we
may need to enter into new arrangements with alternative third parties and our clinical trials may be extended, delayed or terminated.
These independent third parties may also have relationships with other commercial entities, some of which may compete with us. In addition,
if such third parties fail to perform their obligations in compliance with our protocols or the applicable regulatory requirements, our
trials may not meet regulatory requirements or may need to be repeated, we may not receive marketing approvals, or we or such third parties
may face regulatory enforcement. As a result of our dependence on third parties, we may face delays, failures or cost increases outside
of our direct control. These risks also apply to the development activities of collaborators, and we do not control their research and
development, clinical trial or regulatory activities.

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.

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.

29

Risks Related to our Common Stock

Our common stock price has fluctuated considerably
and is likely to remain volatile, in part due to the limited market for our common stock and you could lose all or a part of your investment.

From December 31, 2024, through
December 31, 2025, the high and low sales prices for our common stock were $17.43 and $5.60, respectively. The market price of our
common stock has fluctuated considerably and may continue to fluctuate significantly in response to a number of factors, some of which
are beyond our control.

In addition, the stock markets
in general, and the stock of pharmaceutical and medical device companies in particular, have experienced extreme price and volume fluctuations
that have often been unrelated or disproportionate to the operating performance of these companies. In addition, changes in economic conditions
in the U.S., the European Union or globally, particularly in the context of current global events, could impact upon our ability to grow
profitably. Adverse economic changes are outside our control and may result in material adverse impacts on our business and our results
of operations. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual
operating performance. In the past, following periods of volatility in the market price of a company’s securities, securities class-action
litigation has often been instituted against that company. We have been, and currently are subject to securities class-actions. Such litigation,
has caused, and if instituted against us in the future could cause, us to incur substantial costs and divert management’s attention
and resources. 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.

General Risk Factors

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

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.

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.

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.

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.

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.

30

Our internal control over financial reporting
and our disclosure controls and procedures may not prevent all possible errors that could occur.

Failure on our part to have
effective internal financial and accounting controls could cause our financial reporting to be unreliable, could have a material adverse
effect on our business, operating results, and financial condition, and could have a material adverse impact on the trading price of our
common stock. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the
control system’s objectives will be satisfied. Internal control over financial reporting and disclosure controls and procedures
are designed to give a reasonable assurance that they are effective to achieve their objectives. We cannot provide absolute assurance
that all of our possible future control issues will be detected. These inherent limitations include the possibility that judgments in
our decision making can be faulty, and that isolated breakdowns can occur because of simple human error or mistake. The design of our
system of controls is based in part upon assumptions about the likelihood of future events, and there can be no assurance that any design
will succeed absolutely in achieving our stated goals under all potential future or unforeseeable conditions. Because of the inherent
limitations in a cost-effective control system, misstatements due to error could occur and not be detected. This and any future failures
could cause investors to lose confidence in our reported financial information, which could have a negative impact on our financial condition
and stock price.

In future periods, if any
material weaknesses or significant deficiencies are identified, the correction could require remedial measures, which could be costly
and time-consuming. In addition, we may be unable to produce accurate financial statements on a timely basis. Any associated accounting
restatement could create a significant strain on our internal resources and cause delays in our release of quarterly or annual financial
results and the filing of related reports, increase our costs and cause management distraction. Any of the foregoing could cause investors
to lose confidence in the reliability of our financial statements, which could cause the trading price of our common stock to decline
and make it more difficult for us to finance our operations and growth.