As filed with the Securities and Exchange Commission on November 25, 2009

Registration No. 333-      

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 

FORM S-1

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

 

CORMEDIX INC.

(Exact Name of Registrant As Specified in Its Charter)

Delaware		2834		20-5894890
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

86 Summit Avenue, Suite 301
Summit, NJ 07901-3647
(908) 517-9500

(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)

 

John C. Houghton
President and Chief Executive Officer
CorMedix Inc.
86 Summit Avenue, Suite 301
Summit, NJ 07901-3647
(908) 517-9500

(Name, Address Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)

 

Copies to:

Yehuda Markovits, Esq. Olshan Grundman Frome Rosenzweig & Wolosky LLP Park Avenue Tower 65 East 55 th Street New York, New York 10022 Telephone: (212) 451-2300 Facsimile: (212) 451-2222		Mitchell S. Nussbaum, Esq. Angela M. Dowd, Esq. Loeb & Loeb LLP 345 Park Avenue New York, New York 10154 Telephone: (212) 407-4000 Facsimile: (212) 407-4990

 

Approximate Date of Commencement of Proposed Sale to the Public: As soon as practicable after the effective date of this registration statement .

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer o		Accelerated Filer o
Non-Accelerated Filer o (Do not check if a smaller reporting company)		Smaller Reporting Company x

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CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to Be Registered		Amount to Be Registered (1)				Proposed Maximum Offering Price per Unit (2)				Proposed Maximum Aggregate Offering Price (2)				Amount of Registration Fee
Units, each consisting of two shares of common stock, $0.001 par value per share, and a warrant			Units			$				$				$
Common stock included in the Units			shares				—				—				—	(3)
Warrants included in the Units			warrants				—				—				—	(3)
Shares of common stock underlying the warrants included in the Units			shares			$				$				$
Underwriters’ Unit purchase option			1 option			$				$					—	(3)
Units underlying Underwriters’ Unit purchase option (“Underwriters’ Units”)			Units			$				$				$
Common stock included in the Underwriters’ Units			shares				—				—				—	(3)
Warrants included in the Underwriters’ Units			warrants				—				—				—	(3)
Shares of common stock underlying the warrants included in the Underwriters’ Units			shares			$				$				$
Total										$	18,000,000			$	1,004.40

(1)

Includes       Units, consisting of       shares of common stock and       warrants, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.

(2)

Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(3)

No fee pursuant to Rule 457(g).

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS		SUBJECT TO COMPLETION, DATED NOVEMBER 25, 2009

      Units

 

This offering is the initial public offering of our securities. We are offering        units, each unit consisting of two shares of our common stock and a warrant to purchase one share of common stock.

Each warrant entitles the holder to purchase one share of our common stock at a price equal to 110% of the offering price of the common stock underlying the units, subject to adjustment as described herein. Each warrant will become exercisable upon the earlier to occur of the expiration of the underwriters’ over allotment option or its exercise in full, and will expire on       , or earlier upon redemption.

We expect the initial public offering price to be between $       and $       per unit. Currently, no public market exists for our units, common stock or warrants. We intend to apply for listing our units, as well as our common stock and warrants underlying the units, on NYSE Amex. The units will begin trading on or promptly after the date of this prospectus. Each of the common stock and warrants will trade separately within the first        trading days following the earlier to occur of the expiration of the underwriters’ over allotment option or its exercise in full.

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 6 of this prospectus for a discussion of information that should be considered in connection with an investment in our securities.

 

		Per Unit				Total
Public offering price		$				$
Underwriting discount and commissions (1)		$				$
Proceeds to us, before expenses		$				$

We granted the underwriters the right to purchase up to       additional units from us at the public offering price, less the underwriting discount, within 45 days from the date of this prospectus to cover over-allotments, if any. Following the closing of this offering, we will grant the underwriters an additional warrant to purchase such number of units equal to 8.0% of the units sold in this offering.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

We are offering the units for sale on a firm-commitment basis. The underwriters expect to deliver our securities to investors in this offering on or about       , 2010.

Maxim Group LLC

The date of this prospectus is       , 2010

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CORMEDIX INC.

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		Page
Prospectus Summary			1
Risk Factors			6
Special Note Regarding Forward-Looking Statements			20
Use of Proceeds			21
Dividend Policy			22
Capitalization			22
Dilution			24
Selected Financial Data			26
Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
Business			37
Management			61
Executive Compensation			65
Certain Relationships and Related Transactions			71
Principal Stockholders			73
Description of Capital Stock			76
Shares Eligible for Future Sale			83
Underwriting			85
Legal Matters			89
Experts			89
Where You Can Find More Information			89
Index to Consolidated Financial Statements			F-1

 

You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not, and the underwriters are not, making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

Through and including          , 2010 (the 25 ^th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This obligation is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

For Investors Outside the United States:   Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

We obtained statistical data, market data and other industry data and forecasts used throughout this prospectus from market research, publicly available information and industry publications. While we believe that the statistical data, industry data and forecasts and market research are reliable, we have not independently verified the data, and we do not make any representation as to the accuracy of the information.

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reduces risk by licensing product candidates that are currently marketed outside of the United States or have previously been tested in patients, providing an initial indication of the drug’s safety and biological activity in humans before committing capital to the drug’s development. We do not conduct any drug discovery activities and intend to limit our involvement with preclinical research activity.

Our current strategy is to develop CRMX003 and CRMX004 independently and, following the anticipated success of the biomarker proof of concept study for CRMX001, we will seek to raise additional funds or co-develop CRMX001 with a suitable partner to commercialization. The proceeds from this offering would allow us to make significant progress on those value creating projects.

Risks Associated With Our Business

In executing our business strategy, we face significant risks and uncertainties, as more fully described in the section entitled “Risk Factors.” These risks include, among others, the incurrence of substantial and increasing net losses for the foreseeable future because we have no products approved for commercial sale and we have not generated any product revenue to date, and a potential need to obtain substantial additional funding for product development. In addition, to receive regulatory approval for the commercial sale of CRMX003, CRMX001 or any other product candidates, we must conduct adequate and well-controlled clinical trials to demonstrate safety and efficacy in humans.

If the clinical trials of CRMX003 and CRMX001 discussed herein or the clinical trials of other product candidates do not produce results necessary to support regulatory approval, we will be unable to commercialize these products.

Company Information

We were organized as a Delaware corporation on July 28, 2006 under the name “Picton Holding Company, Inc.” and we changed our corporate name to “CorMedix Inc.” on January 18, 2007. Our principal executive offices are located at 86 Summit Avenue, Suite 301, Summit, NJ 07901-3647. Our telephone number is (908) 517-9500. Our website address is www.cormedix.com . The information on, or accessible through, our website is not part of this prospectus.

We have a license to use the following trademarks:

We have filed applications for the following trademarks:

This prospectus also contains trademarks and tradenames of other companies.

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SUMMARY FINANCIAL DATA

The following statement of operations data for 2007 and 2008, are derived from our audited financial statements, which are included elsewhere in this document. The statement of operations data for the nine months ended September 30, 2008 and 2009, along with the period from July 28, 2006 (Inception) to September 30, 2009, and the balance sheet data as of September 30, 2009, have been derived from our unaudited financial statements, which are also included elsewhere in this document. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the audited financial statements and include all adjustments necessary for the fair presentation of our financial position and results of operations for these periods. The following selected financial data should be read together with our financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus. The summary financial data in this section is not intended to replace our financial statements and the accompanying notes. Our historical results are not necessarily indicative of our future results.

Statement of Operations Data

		Year Ended December 31, 2007				Year Ended December 31, 2008				Nine Months Ended September 30, 2008				Nine Months Ended September 30, 2009				Period from July 28, 2006 (Inception) to September 30, 2009
										(Unaudited)				(Unaudited)				(Unaudited)
Operating expenses:
Research and development		$	3,820,429			$	3,083,002			$	2,508,358			$	994,195			$	8,650,106
General and administrative			1,667,056				1,732,602				1,286,567				1,090,386				4,699,733
Loss from operations			(5,487,485	)			(4,815,604	)			(3,794,925	)			(2,084,581	)			(13,349,839	)
Interest income			60,830				25,903				25,511				2,104				88,837
Interest expense, including amortization of deferred financing costs and debt discounts			(1,810,871	)			(4,207,044	)			(3,648,417	)			(1,498,510	)			(7,529,573	)
Net loss		$	(7,237,526	)		$	(8,996,745	)		$	(7,417,831	)		$	(3,580,987	)		$	(20,790,575	)
Basic and diluted net loss per common share		$	(1.51	)		$	(1.75	)		$	(1.45	)		$	(0.70	)
Weighted average common shares outstanding – basic and diluted			4,778,291				5,147,700				5,111,134				5,147,700

Balance Sheet Data

		September 30, 2009
		Actual				Pro Forma				Pro Forma As Adjusted
			(Unaudited)				(Unaudited)				(Unaudited)
Cash		$	24,093			$				$
Total Assets			123,922
Total Liabilities			15,643,728
Deficit Accumulated During the Development Stage			(20,790,575	)
Total Stockholders’ Equity (Deficiency)			(15,519,806	)

The September 30, 2009 unaudited pro forma balance sheet data reflects (i) the automatic conversion of all of our outstanding convertible notes into an aggregate of      Units and          shares of common stock upon the completion of this offering, (ii) the automatic conversion of all of our outstanding shares of Non-Voting Common Stock into shares of common stock on a one-for-one basis upon the completion of this offering and (iii) our issuance of $2,619,973 aggregate principal amount of 8% Notes in October and November 2009. The September 30, 2009 unaudited pro forma as adjusted balance sheet data further reflects our sale of      Units in this offering at an assumed initial public offering price of $      per Unit (the mid-point of the price range set forth on the cover page of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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We may need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements. Any additional funds that we obtain may not be on terms favorable to us or our stockholders and may require us to relinquish valuable rights.

To date, we have no approved product on the market and have generated no product revenues. Unless and until we receive approval from the FDA and other regulatory authorities for our product candidates, we cannot sell our products and will not have product revenues. Therefore, for the foreseeable future, we will have to fund all of our operations and capital expenditures from the net proceeds of this offering, cash on hand, licensing fees and grants.

We believe that the net proceeds from this offering and existing cash will be sufficient to enable us to fund our projected operating requirements for at least two years. However, we may need to raise additional funds more quickly if one or more of our assumptions prove to be incorrect or if we choose to expand our product development efforts more rapidly than we presently anticipate, and we may decide to raise additional funds even before we need them if the conditions for raising capital are favorable.

We may seek to sell additional equity or debt securities, obtain a bank credit facility, or enter into a corporate collaboration or licensing arrangement. The sale of additional equity or debt securities, if convertible, could result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also result in covenants that would restrict our operations. Raising additional funds through collaboration or licensing arrangements with third parties may require us to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us or our stockholders.

Our independent registered public accounting firm has identified material weaknesses in our financial reporting process.

Our independent registered public accounting firm has identified material weaknesses in our financial reporting process with respect to lack of segregation of duties and lack of independent review over financial reporting. Our independent registered public accounting firm also identified numerous errors in the accounting for non-routine, complex transactions during their audit of our financial statements. Our failure to successfully implement our plans to remediate these material weaknesses could cause us to fail to meet our reporting obligations, to produce timely and reliable financial information, and to effectively prevent fraud. Additionally, such failure could cause investors to lose confidence in our reported financial information, which could have a negative impact on our financial condition and stock price.

Risks Related to the Development and Commercialization of Our Product Candidates

Our product candidates are still in development.

We are a biopharmaceutical company focused on the development of product candidates that are in various stages of development. Our product development methods may not lead to commercially viable products for any of several reasons. For example, our product candidates may fail to be proven safe and effective in clinical trials, or we may have inadequate financial or other resources to pursue development efforts for our product candidates. Our product candidates will require significant additional development, clinical trials, regulatory clearances and investment by us or our collaborators before they can be commercialized.

Successful development of our products is uncertain.

Our development of current and future product candidates is subject to the risks of failure and delay inherent in the development of new pharmaceutical products, including but not limited to the following:

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Because of these risks, our development efforts may not result in any commercially viable products. If a significant portion of these development efforts 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 may be materially harmed.

Clinical trials required for our product candidates are expensive and time-consuming, and their outcome is uncertain.

In order to obtain FDA approval to market a new drug product, we must demonstrate proof of safety and effectiveness in humans. To meet these requirements, we must 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 candidate, and often can be several years or more per trial. Delays associated with products for which we are directly conducting clinical trials 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:

The results from early clinical trials are not necessarily predictive of results to be obtained in later clinical trials. Accordingly, even if we obtain positive results from early clinical trials, we may not achieve the same success in later clinical trials.

Our clinical trials may be conducted in patients with serious or life-threatening diseases for whom conventional treatments have been unsuccessful or for whom no conventional treatment exists, and in some cases, our product is expected to be used in combination with approved therapies that themselves have significant adverse event profiles. During the course of treatment, these patients could suffer adverse medical events or die for reasons that may or may not be related to our products. We cannot ensure that safety issues will not arise with respect to our products in clinical development.

Clinical trials may not demonstrate statistically significant safety and effectiveness to obtain the requisite regulatory approvals for product candidates. The failure of clinical trials to demonstrate safety and effectiveness for the desired indications could harm the development of our product candidates. Such a failure could cause us to abandon a product candidate and could delay development of other product candidates. Any delay in, or termination of, our clinical trials would delay the filing of our New Drug Applications or Premarket Approvals with the FDA and, ultimately, our ability to commercialize our product candidates and generate product revenues. Any change in, or termination of, our clinical trials could materially harm our business, financial condition, and results of operations.

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We do not have, and may never obtain, the regulatory approvals we need to market our product candidates.

To date, we have not applied for or received the regulatory approvals required for the commercial sale of any of our products in the United States or in any foreign jurisdiction. None of our product candidates has been determined to be safe and effective, and we have not submitted a New Drug Application or Premarket Approval to the FDA or an equivalent application to any foreign regulatory authorities for any of our product candidates.

It is possible that none of our product candidates will be approved for marketing. Failure to obtain regulatory approvals, or delays in obtaining regulatory approvals, may adversely affect the successful commercialization of any drugs or biologics that we or our partners develop, impose additional costs on us or our collaborators, diminish any competitive advantages that we or our partners may attain, and/or adversely affect our receipt of revenues or royalties.

Even if approved, our products will be subject to extensive post-approval regulation.

Once a product is approved, numerous post-approval requirements apply. Depending on the circumstances, failure to meet these 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 and other requirements, new information regarding the safety or effectiveness of a product could lead the FDA to modify or withdraw product approval.

The successful commercialization of our products will depend on obtaining coverage and reimbursement for use of these products from third-party payors.

Sales of pharmaceutical products largely depend on the reimbursement of patients’ medical expenses by government health care programs and private health insurers. Without the financial support of the government or third-party payors, the market for our products will be limited. These third-party payors are increasingly challenging the price and examining the cost effectiveness of medical products and services. Recent proposals to change the health care system in the United States have included measures that would limit or eliminate payments for medical products and services or subject the pricing of medical treatment products to government control. Significant uncertainty exists as to the reimbursement status of newly approved health care products. Third-party payors may not reimburse sales of our products or enable our collaborators to sell them at profitable prices.

Physicians and patients may not accept and use our products.

Even if the FDA approves one or more of our product candidates, physicians and patients may not accept and use it. Acceptance and use of our products will depend upon a number of factors including the following:

Because we expect sales of our current product candidates, if approved, to generate substantially all of our product revenues for the foreseeable future, the failure of these products to find market acceptance would harm our business and could require us to seek additional financing.

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Risks Related to Our Business and Industry

Competition and technological change may make our product candidates and technologies less attractive or obsolete.

We compete with established pharmaceutical and biotechnology companies that are pursuing other forms of treatment for the same indications we are pursuing and that have greater financial and other resources. Other companies may succeed in developing products earlier than we do, obtaining FDA approval for products more rapidly, or developing products that are more effective than our product candidates. Research and development by others may render our technology or product candidates obsolete or noncompetitive, or result in treatments or cures superior to any therapy we develop. We face competition from companies that internally develop competing technology or acquire competing technology from universities and other research institutions. As these companies 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 any products.

There can be no assurance that any of our product candidates will be accepted by the marketplace as readily as these or other competing treatments. Furthermore, if our competitors’ products are approved before ours, it could be more difficult for us to obtain approval from the FDA. Even if our products are successfully developed and approved for use by all governing regulatory bodies, there can be no assurance that physicians and patients will accept our product(s) as a treatment of choice.

Furthermore, the pharmaceutical industry is diverse, complex, and rapidly changing. By its nature, the business risks associated therewith are numerous and significant. The effects of competition, intellectual property disputes, market acceptance, and FDA regulations preclude us from forecasting revenues or income with certainty or even confidence.

In certain cases, we may rely on a single supplier for a particular manufacturing material, and any interruption in or termination of service by such supplier could negatively affect our operations.

We expect to rely on third-party suppliers for the materials used in the manufacturing of our product candidates. Some of these materials may be available from only one supplier or vendor. Any interruption in or termination of service by such sole source suppliers could result in a delay or interruption in manufacturing until we locate an alternative source of supply. Any delay or interruption in manufacturing operations (or failure to locate a suitable replacement for such suppliers) could materially adversely affect our business, prospects, or results of operations.

We face the risk of product liability claims and may not be able to obtain insurance.

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 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 our products. Our inability to obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with collaborators.

We currently do not carry clinical trial insurance or product liability insurance. We intend to obtain such insurance in the future. 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. We intend to expand our insurance coverage to include the sale of commercial products if we obtain marketing approval for our product candidates in development, but we may be unable to obtain commercially reasonable product liability insurance for any products approved for marketing. If we are unable to obtain insurance at an acceptable cost or otherwise 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 product liability claim or series of claims brought against us would decrease our cash and could reduce our value or marketability.

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We may be exposed to liability claims associated with the use of hazardous materials and chemicals.

Our research, development and manufacturing activities and/or those of our third party contractors may involve the controlled use of hazardous materials and chemicals. Although we believe that our safety procedures for using, storing, handling and disposing of these materials comply with federal, state and local laws and regulations, we cannot completely eliminate the risk of accidental injury or contamination from these materials. In the event of such an accident, we could be held liable for any resulting damages and any liability could materially adversely affect our business, financial condition and results of operations. In addition, the federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous or radioactive materials and waste products may require us to incur substantial compliance costs that could materially adversely affect our business, financial condition and results of operations.

If we lose key management or scientific personnel, 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 and scientific staff. Any employment agreement we enter into will not ensure the retention of the employee who is a party to the agreement. In addition, we have only limited ability to prevent former employees from competing with us. Furthermore, our future success will also depend in part on the continued service of our key scientific and management personnel and our ability to identify, hire, and retain 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. Moreover, our work force is located in the New York/New Jersey metropolitan area, where competition for personnel with the scientific and technical skills that we seek is extremely high and is likely to remain high. Because of this competition, our compensation costs may increase significantly.

If we are unable to hire additional qualified personnel, our ability to grow our business may be harmed.

Over time, we will need to hire additional qualified personnel with expertise in clinical testing, clinical research and testing, government regulation, formulation and manufacturing, and sales and marketing. We compete for qualified individuals with numerous biopharmaceutical companies, universities and other research institutions. Competition for such individuals is intense, and we cannot be certain that our search for such personnel will be successful. Attracting and retaining such qualified personnel will be critical to our success.

We will need to hire accounting personnel to perform the expanded fiscal and financial management responsibilities associated with running a public company.

We currently use third party personnel to meet our internal accounting needs. In order to meet the heightened accounting and budgeting needs associated with operating a public company, it will be necessary to hire full-time accounting personnel, including a Chief Financial Officer. The hiring of a Chief Financial Officer is crucial to ensure the coordination and appropriate supervision of all financial and fiscal management aspects of our operations. The ability to retain a qualified Chief Financial Officer, and other appropriate accounting personnel as needed, will be essential to our success.

We may not successfully manage our growth.

Our success will depend upon the expansion of our operations and the effective management of our growth, which will place a significant strain on our management and our administrative, operational and financial resources. To manage this growth, we must expand our facilities, augment our operational, financial and management systems and hire and train additional qualified personnel. If we are unable to manage our growth effectively, our business may be materially harmed.

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Risks Related to Our Intellectual Property

If we and our licensors do not obtain protection for and successfully defend our respective intellectual property rights, our 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 and other technologies and successfully defending any patents that we currently have or will obtain against third-party challenges. We are currently seeking further patent protection for numerous 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 those stated below.

In addition, the United States Patent and Trademark Office (the “PTO”) and patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical and/or 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.

The patent applications in our patent portfolio are exclusively licensed to us. To support our patent strategy, we have engaged in a review of patentability and freedom to operate issues, including performing certain searches. We may not be aware, however, of all patents, published applications or published literature that may affect our business either by blocking our ability to commercialize our product candidates, preventing the patentability of our product candidates 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 candidates.

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, 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 if they are breached, or that our trade secrets will not otherwise become known or be independently discovered by competitors. If any of these events occurs, or we otherwise lose protection for our trade secrets or proprietary know-how, the value of this information may be greatly reduced.

Patent protection and other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial risk that such protections will prove inadequate.

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Intellectual property disputes could require us to spend time and money to address such disputes and could limit our intellectual property rights.

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. We may become subject to infringement claims or litigation arising out of patents and pending applications of our competitors, or additional interference proceedings declared by the PTO to determine the priority of inventions. The defense and prosecution of intellectual property suits, PTO proceedings, and related legal and administrative proceedings are costly and time-consuming to pursue, and their outcome is uncertain. 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. An adverse determination in litigation or interference proceedings to which we may become a party could subject us to significant liabilities, require us to obtain licenses from third parties, or restrict or prevent us from selling our products in certain markets. Although patent and intellectual property disputes might be settled through licensing or similar arrangements, the costs associated with such arrangements may be substantial and could include our paying large fixed payments and ongoing royalties. Furthermore, the necessary licenses may not be available on satisfactory terms or at all.

If we infringe the rights of third parties we could be prevented from selling products and forced to pay damages and defend against litigation.

If our products, methods, processes and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we may have to do one or more of the following:

Risks Related to Our Dependence on Third Parties

If we are not able to develop collaborative marketing relationships with licensees or partners, or create an effective sales, marketing, and distribution capability, we may be unable to market our products successfully.

Our business strategy may rely on out-licensing product candidates to or collaborating with larger firms with experience in marketing and selling pharmaceutical products. There can be no assurance that we will be able to successfully establish marketing, sales, or distribution relationships, that such relationships, if established, will be successful, or that we will be successful in gaining market acceptance for our products. To the extent that we enter into any marketing, sales, or distribution arrangements with third parties, our product revenues will be lower than if we marketed and sold our products directly, and any revenues we receive will depend upon the efforts of such third-parties. If we are unable to establish such third-party sales and marketing relationships, or choose not to do so, we will have to establish our own in-house capabilities. We currently have no sales, marketing, or distribution infrastructure. To market any of our products directly, we would need to develop a marketing, sales, and distribution force that has both technical expertise and the ability to support a distribution capability. The establishment of a marketing, sales, and distribution capability would significantly increase our costs, possibly requiring substantial additional capital. In addition, there is intense competition for proficient sales and marketing personnel, and we may not be able to attract individuals who have the qualifications necessary to market, sell, and distribute our products. There can be no assurance that we will be able to establish internal marketing, sales, or distribution capabilities. If we are unable to, or

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choose not to establish these capabilities, or if the capabilities we establish are not sufficient to meet our needs, we will be required to establish collaborative marketing, sales, or distribution relationships with third parties.

If we or our collaborators are unable to manufacture our products in sufficient quantities or are unable to obtain regulatory approvals for a manufacturing facility, we may be unable to meet demand for our products and we may lose potential revenues.

Completion of our clinical trials and commercialization of our product candidates require access to, or development of, facilities to manufacture a sufficient supply of our product candidates. All of our manufacturing processes currently are, and we expect them to continue to be, outsourced to third parties. If, for any reason, we become unable to rely on our current sources for the manufacture of our product candidates, either for clinical trials or, at some future date, for commercial quantities, then we would need to identify and contract with additional or replacement third-party manufacturers to manufacture compounds for pre-clinical, clinical, and commercial purposes. We may not be successful in identifying such additional or replacement third-party manufacturers, or in negotiating acceptable terms with any that we do identify. Such third-party manufacturers must receive FDA approval before they can produce clinical material or commercial product, and any that are identified may not receive such approval. We may be in competition with other companies for access to these manufacturers’ facilities and may be subject to delays in manufacturing if the manufacturers give other clients higher priority than they give to us. If we are unable to secure and maintain third-party manufacturing capacity, the development and sales of our products and our financial performance may be materially affected.

Before we can begin to commercially manufacture our product candidates, we must obtain regulatory approval of the manufacturing facility and process. Manufacturing of drugs for clinical and commercial purposes must comply with current Good Manufacturing Practices (referred to herein as “cGMPs”), and applicable non-U.S. regulatory requirements. The cGMP requirements govern quality control and documentation policies and procedures. Complying with cGMP and non-U.S. regulatory requirements will require that we expend time, money, and effort in production, recordkeeping, and quality control to assure that the product meets applicable specifications and other requirements. We, or our contracted manufacturing facility, must also pass a pre-approval inspection prior to FDA approval. Failure to pass a pre-approval inspection may significantly delay FDA approval of our products. If we fail to comply with these requirements, we would be subject to possible regulatory action and may be limited in the jurisdictions in which we are permitted to sell our products. As a result, our business, financial condition, and results of operations may be materially adversely affected.

Corporate and academic collaborators may take actions that delay, prevent, or undermine the success of our products.

Our operating and financial strategy for the development, clinical testing, manufacture, and commercialization of product candidates is heavily dependent on our entering into collaborations with corporations, academic institutions, licensors, licensees, and other parties. Our current strategy assumes that we will successfully establish these collaborations or similar relationships. However, there can be no assurance that we will be successful establishing such collaborations. Some of our existing collaborations are, and future collaborations may be, terminable at the sole discretion of the collaborator. Replacement collaborators might not be available on attractive terms, or at all. The activities of any collaborator will not be within our control and may not be within our power to influence. There can be no assurance that any collaborator will perform its obligations to our satisfaction or at all, that we will derive any revenue or profits from such collaborations, or that any collaborator will not compete with us. If any collaboration is not pursued, we may require substantially greater capital to undertake development and marketing of our proposed products and may not be able to develop and market such products effectively, if at all. In addition, a lack of development and marketing collaborations may lead to significant delays in introducing proposed products into certain markets and/or reduced sales of proposed products in such markets.

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Data provided by collaborators and others upon which we rely that has not been independently verified could turn out to be false, misleading, or incomplete.

We rely on third-party vendors, scientists, and collaborators to provide us with significant data and other information related to our projects, clinical trials, and business. If such third parties provide inaccurate, misleading, or incomplete data, our business, prospects, and results of operations could be materially adversely affected.

Risks Related to this Offering and Ownership of Our Securities

We are currently controlled by our executive officers, directors and principal stockholders, and after this offering, our executive officers, directors and principal stockholders will have significant influence regarding all matters submitted to our stockholders for approval.

Our directors, executive officers and 5% or greater stockholders currently beneficially own approximately 66.3% of our voting capital stock. When this offering is completed, our directors, executive officers and 5% or greater stockholders will, in the aggregate, beneficially own shares representing     % of our voting capital stock, assuming such persons do not purchase any Units in this offering. As a result, if these stockholders were to choose to act together, they would be able to exercise significant influence with respect to all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, will exercise significant influence with respect to the election of directors and approval of any merger, consolidation, sale of all or substantially all of our assets or other business combination or reorganization. This concentration of voting power could delay or prevent an acquisition of us on terms that other stockholders may desire. The interests of this group of stockholders may not always coincide with your interests or the interests of other stockholders, and they may act in a manner that advances their best interests and not necessarily those of other stockholders, and might affect the prevailing market price for our securities.

There are certain interlocking relationships among us and certain affiliates of Paramount BioCapital, Inc., which may present potential conflicts of interest.

Lindsay A. Rosenwald, M.D. is the Chairman, Chief Executive Officer and sole stockholder of Paramount BioCapital, Inc. Dr. Rosenwald currently beneficially owns approximately 17.5% of our voting capital stock. In addition, certain trusts established for the benefit of Dr. Rosenwald’s children currently own less than one percent of our voting capital stock, and certain trusts established for the benefit of Dr. Rosenwald and his family currently own approximately 12.4% of our voting capital stock. Certain other employees of Paramount BioCapital, Inc. or its affiliates are also current stockholders and/or directors of the Company. Paramount BioSciences, LLC, of which Dr. Rosenwald is the sole member, and certain trusts established for the benefit of Dr. Rosenwald’s children also have loaned us amounts from time to time pursuant to the PBS Note and Family Trusts Note (each as defined below). As of September 30, 2009, approximately $601,000, including accrued and unpaid interest, remained outstanding under such notes. For more information regarding these relationships and other relationships between us and related parties, see “Certain Relationships and Related Transactions.”

Generally, Delaware corporate law, under which we are governed, requires that any transactions between us and any of our affiliates be on terms that, when taken as a whole, are substantially as favorable to us as those then reasonably obtainable from a person who is not an affiliate in an arms-length transaction. We believe that the terms of the agreements we have entered into with our affiliates satisfy the requirements of Delaware law, but in the event that one or more parties challenges the fairness of such terms we could have to expend substantial resources in resolving the challenge and we can make no guarantees as to the result. Furthermore, none of our affiliates, Paramount BioSciences, LLC or Dr. Rosenwald is obligated pursuant to any agreement or understanding with us to make any additional products or technologies available to us, nor can there be any assurance, and we do not expect and purchasers of the Units should not expect, that any biomedical or pharmaceutical product or technology identified by such affiliates, Paramount BioSciences, LLC or Dr. Rosenwald in the future will be made available to us. In addition, certain of our current officers and directors or certain of any officers or directors hereafter appointed may from time to time serve as officers or directors of other biopharmaceutical or biotechnology companies. There can be no assurance that such other companies will not have interests in conflict with our own.

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Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our amended and restated certificate of incorporation and amended and restated by-laws that will become effective upon the completion of this offering may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors. Because our Board of Directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware (referred to herein as the “DGCL”), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. We have not opted out of the restrictions under Section 203.

If you purchase securities in this offering, you will suffer immediate dilution of your investment.

Assuming our sale of      Units at an assumed public offering price of $     per Unit (which is the mid-point of the estimated initial offering price range set forth on the cover of this prospectus) and after deducting the underwriting discount and commissions and estimated offering expenses, our as adjusted net tangible book value as of      would be approximately $     million, or $     per share of common stock outstanding. This represents an immediate increase in net tangible book value of $     per share of common stock to our existing stockholders and an immediate dilution of $     per share of common stock to the new investors purchasing Units in this offering. Purchasers of Units in this offering will have contributed approximately     % of the aggregate price paid by all owners of our common stock but will own only approximately     % of our common stock outstanding after this offering.

To the extent outstanding options or warrants are exercised, you will incur further dilution.

You will also incur dilution as a result of the conversion of our senior convertible notes, the Paramount Notes and our Non-Voting Common Stock upon the completion of this offering. Assuming an offering price of $       per Unit, the 12% Notes and the Paramount Notes will automatically convert into        Units and the 8% Notes will automatically convert into        shares of common stock. In addition, all shares of Non-Voting Common Stock will automatically convert into shares of common stock, on a one-for-one basis, upon the completion of this offering. See “Description of Capital Stock” on page 76 for more information regarding these securities.

An active trading market for our common stock and other securities may not develop.

This is our initial public offering of equity securities and prior to this offering, there has been no public market for our common stock or other securities.

The initial public offering price for the Units sold in this offering will be determined through negotiations with the underwriters. We intend to apply for listing our Units, as well as our common stock and warrants issued as a part of the Units, on NYSE Amex. The Units will begin trading on or promptly after the date of this prospectus. Each of the common stock and warrants will trade separately within the first      trading days following the earlier to occur of the expiration of the underwriters’ over allotment option or its exercise in full.

An active trading market for our common stock and other securities may never develop or be sustained. If an active market for our common stock and other securities does not develop, it may be difficult for you to sell the securities you purchase in this offering without depressing the market price for such securities.

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If the prices of our securities are volatile, purchasers of our securities could incur substantial losses.

The prices of our securities are likely to be volatile. The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their securities at or above the price paid in this initial public offering. The market prices of our securities may be influenced by many factors, including but not limited to the following:

For these reasons and others, you should consider an investment in our securities as risky and invest only if you can withstand a significant loss and wide fluctuations in the value of your investment.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our securities. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our securities to decline and delay the development of our product candidates. Pending the application of these funds, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

We intend to use the proceeds from this offering as follows: (i) approximately $       for CRMX003 development; (ii) approximately $       for CRMX001 development; and (iii) the balance to fund working capital and other general corporate purposes, which may include the acquisition or licensing of complementary technologies, products or businesses. Because of the number and variability of factors that will determine our use of the proceeds from this offering, their ultimate use may vary substantially from their currently intended use. For a further description of our intended use of the proceeds of this offering, see the “Use of Proceeds” section of this prospectus.

A significant number of our shares of our common stock will become eligible for sale upon the completion of this offering, and a significant number of additional shares of our common stock may become eligible for sale at a later date, and their sale could depress the market price of our common stock.

Each Unit issued in this offering will consist of two shares of common stock and a warrant to purchase one share of common stock. We will also issue a warrant to purchase        Units to the underwriters that, if executed, would result in the issuance of an additional        shares of common stock and warrants to purchase an additional        shares of common stock. Additionally, following the completion of this offering, we will have outstanding other warrants that, if executed, would result in the issuance of an additional 140,000 shares of common stock.

As of September 30, 2009, we had outstanding $13,764,911 aggregate principal amount and interest of 12% Notes and $601,194 aggregate principal amount and interest outstanding under the Paramount Notes, all

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of which will automatically convert into Units upon the completion of this offering. In addition, in October and November 2009, we issued $2,619,973 aggregate principal amount of 8% Notes (as defined below), all of which, together with accrued and unpaid interest thereon, will automatically convert into shares of common stock upon the completion of this offering. Assuming an offering price of $       per Unit, the 12% Notes and the Paramount Notes will automatically convert into        Units and the 8% Notes will automatically convert into        shares of common stock. In addition, all shares of Non-Voting Common Stock will automatically convert into shares of common stock on a one-for-one basis upon the completion of this offering.

We have issued options to purchase 185,000 shares of our common stock to our officers, directors and employees under our 2006 Stock Incentive Plan. Options to purchase 78,333 of such shares are currently exercisable or will be exercisable within 60 days of the date of this prospectus.

The sale or even the possibility of sale of the shares of common stock described above could substantially reduce the market price for our common stock or our ability to obtain future financing.

Future sales and issuances of our equity securities or rights to purchase our equity securities, including pursuant to equity incentive plans, would result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be further diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to existing stockholders.

Pursuant to our 2006 Stock Incentive Plan, our Board of Directors is authorized to award up to a total of 925,000 shares of common stock or options to purchase shares of common stock to our officers, directors and employees. As of November 24, 2009, options to purchase 185,000 shares of common stock had been issued under the 2006 Stock Incentive Plan. Stockholders will experience dilution in the event that additional shares of common stock are issued under the 2006 Stock Incentive Plan, or options previously issued or to be issued under the 2006 Stock Incentive Plan are exercised.

If our existing securityholders exercise their registration rights, they may substantially reduce the market price of our common stock. The existence of these rights may make it more difficult for us to effect future offerings.

Following the completion of this offering, holders of        Units and holders of        shares of common stock will be entitled to certain “demand” and “piggyback” registration rights. Additionally, a warrant to purchase      Units that we will issue to the underwriters as partial compensation for their services as underwriters will provide for certain “demand” and “piggyback” registration rights at our expense with respect to the underlying shares of common stock during the five year period commencing six months after the effective date. See “Description of Capital Stock” on page 76 for more information on these registration rights.

If these holders exercise their registration rights with respect to all of their securities, then there would be up to an additional        shares of common stock eligible for trading in the public market. The presence of this additional number of shares of common stock eligible for trading in the public market may substantially reduce the market price of our common stock. In addition, the existence of these holders’ piggyback registration rights may make it more difficult for us to effect future public offerings and may reduce the amount of capital that we are able to raise for our own account in these offerings.

We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the Securities and Exchange Commission (the “SEC”) and NYSE Amex, have imposed various new requirements

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on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these new compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. We expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage.

The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we will be required to perform system and process evaluation and testing of our internal control over financial reporting to allow management and possibly our independent registered public accounting firm to report, commencing in our annual report on Form 10-K for the year ending December 31, 2011, on the effectiveness of our internal control over financial reporting. To date, our independent registered public accounting firm has identified a number of deficiencies in our internal controls over financial reporting that it deemed to be material weaknesses. Our compliance with Section 404 will require that we incur substantial costs and expend significant management efforts. We currently do not have an internal accounting group, and we will need to hire additional accounting and financial staff. Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner or if we are not able to remediate the material weaknesses identified by our independent registered public accounting firm, the market price of our stock could decline and we could be subject to sanctions or investigations by NYSE Amex, the SEC or other regulatory authorities, which would require additional financial and management resources.

There is no guarantee that our securities will be listed on NYSE Amex.

We will apply to have our Units, common stock and warrants listed on NYSE Amex. After the completion of this offering, we believe that we will satisfy the listing requirements and expect that our Units, common stock and warrants will be listed on NYSE Amex. Such listing, however, is not guaranteed. If the application is not approved, we will seek to have our Units, common stock and warrants quoted on the OTC Bulletin Board. Even if such listing is approved, there can be no assurance any broker will be interested in trading our securities. Therefore, it may be difficult to sell any securities you purchase in this offering if you desire or need to sell them. Our lead underwriter, Maxim Group LLC (“Maxim”), is not obligated to make a market in our securities, and even after making a market, can discontinue market making at any time without notice. Neither we nor the underwriters can provide any assurance that an active and liquid trading market in our securities will develop or, if developed, that the market will continue.

If securities or industry analysts do not publish research or reports or publish unfavorable research about our business, the price of our common stock and other securities and their trading volume could decline.

The trading market for our common stock and other securities will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of us the trading price for our common stock and other securities would be negatively affected. In the event we obtain securities or industry analyst coverage, if one or more of the analysts who covers us downgrades our securities, the price of our securities would likely decline. If one or more of these analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase of our securities could decrease, which could cause the price of our common stock and other securities and their trading volume to decline.

We have never paid dividends and do not expect to pay dividends for the foreseeable future.

We have never paid dividends on our capital stock and do not anticipate paying any dividends for the foreseeable future. Accordingly, to the extent the securities you purchase in this offering convert into equity securities, you should not expect to receive dividends on such equity securities.

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The pro forma information below is illustrative only and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited and unaudited financial statements and the related notes appearing elsewhere in this prospectus.

		As of September 30, 2009
		Actual				Pro Forma				Pro Forma As Adjusted
		(Unaudited)				(Unaudited)				(Unaudited)
Cash		$	24,093			$
Note payable – Galenica, Ltd.			1,000,000
Senior convertible notes			10,745,000
Notes payable – related parties			510,429
8% notes			—
Stockholders’ deficiency:
Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued			—
Common stock – Non-voting – Class A, $.001 par value; 5,000,000 shares authorized; 193,936 issued and outstanding			194
Common stock – Class A, $.001 par value; 33,000,000 shares authorized; 5,079,077 issued and outstanding, respectively			5,079
Common stock – Classes B – F, $.001 par value; 2,000,000 shares authorized; 1,000,000 issued and escrowed			1,000,000
Deferred stock issuances			(1,125	)
Additional paid-in capital			5,265,621
Deficit accumulated during the development stage			(20,790,575	)
Total stockholders’ deficiency			(15,519,806	)
Total capitalization		$	(3,264,377	)

The table above does not include the following:

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DILUTION

If you invest in our securities, your investment will be diluted immediately to the extent of the difference between the public offering price per share of common stock, assuming no value is attributed to the warrants underlying the Units you purchase in this offering, and the net tangible book value per share of common stock immediately after this offering.

Our net tangible book value as of September 30, 2009 was approximately $(15.5) million, or $(2.47) per common share. Net tangible book value per share is determined by dividing tangible stockholders’ equity, which is total tangible assets less total liabilities, by the aggregate number of shares of common stock outstanding. Tangible assets represent total assets excluding goodwill and other intangible assets. Dilution in net tangible book value per share represents the difference between the amount per share of common stock issued as a part of the Units paid by purchasers of Units in this offering and the net tangible book value per share of our common stock immediately afterwards. Assuming the sale by us of        shares of common stock issued as a part of the Units at an assumed public offering price of $     per Unit (which is the mid-point of the estimated initial offering price range set forth on the cover of this prospectus) and after deducting the underwriting discount and commissions and estimated offering expenses, our as adjusted net tangible book value as of      would be approximately $     million, or $     per common share. This represents an immediate increase in net tangible book value of $     per share to our existing shareholders and an immediate dilution of $     per share to the new investors purchasing Units in this offering.

The following table illustrates this per share dilution, assuming no value is attributed to the warrants issued as a part of the Units:

Assumed initial public offering price per share						$
Historical net tangible book value per share		$	(2.47	)
Increase attributable to the conversion of convertible promissory notes		$
Increase attributable to the conversion of Non-Voting Common Stock		$
Pro forma net tangible book value per share before this offering		$
Increase per share attributable to new investors		$
Pro forma net tangible book value per share after this offering						$
Dilution per share to new investors						$

The following table sets forth, on an as adjusted basis as of     , the difference between the number of shares of common stock issued as a part of the Units, the total cash consideration paid, and the average price per share paid by our existing shareholders and by new public investors before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, using an assumed public offering price of $     per Unit.

		Shares Purchased								Total Consideration								Average Price per Share
		Number				Percent				Amount				Percent
Existing stockholders							%			$					%			$
New stockholders
Total							100.0	%							100.0	%

If the underwriters’ over-allotment option of      Units, which will include      shares of common stock issued as a part of the Units, is exercised in full, the number of shares of common stock held by existing stockholders will be reduced to     % of the total number of shares to be outstanding after this offering, and the number of shares held by the new investors will be increased to      shares, or     %, of the total number of shares of common stock outstanding after this offering.

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The foregoing information is based on 6,360,601 shares of common stock issued and outstanding as of November 24, 2009, including the shares of common stock held in escrow for NDP pending the achievement of certain milestones under the NDP License Agreement, and assumes the automatic conversion of all of our outstanding convertible notes into an aggregate of          Units and          shares of common stock upon the completion of this offering and the automatic conversion of all outstanding shares of Non-Voting Common Stock into shares of common stock on a one-for-one basis upon the completion of this offering. The table above excludes (i) 185,000 shares of common stock issuable upon exercise of outstanding options at a weighted average exercise price of $1.05 per share; (ii) 740,000 shares of common stock reserved for issuance under our stock incentive plan; and (iii)          shares of common stock issuable upon exercise of outstanding warrants at a weighted average exercise price of $     per share, all of which are currently exercisable. To the extent the options or warrants are exercised, there will be further dilution to new investors. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our shareholders.

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SELECTED FINANCIAL DATA

The following statement of operations data for 2007 and 2008, and the balance sheet data as of December 31, 2007 and 2008 are derived from our audited financial statements, which are included elsewhere in this document. The statement of operations data for the nine months ended September 30, 2008 and 2009, along with the period from July 28, 2006 (Inception) to September 30, 2009, and the balance sheet data as of September 30, 2009, have been derived from our unaudited financial statements, which are also included elsewhere in this document. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the audited financial statements and include all adjustments necessary for the fair presentation of our financial position and results of operations for these periods. The following selected financial data should be read together with our financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus. The selected financial data in this section is not intended to replace our financial statements and the accompanying notes. Our historical results are not necessarily indicative of our future results.

Statement of Operations Data

		Year Ended December 31, 2007				Year Ended December 31, 2008				Nine Months Ended September 30, 2008				Nine Months Ended September 30, 2009				Period from July 28, 2006 (Inception) to September 30, 2009
										(Unaudited)				(Unaudited)				(Unaudited)
Operating expenses:
Research and development		$	3,820,429			$	3,083,002			$	2,508,358			$	994,195			$	8,650,106
General and administrative			1,667,056				1,732,602				1,286,567				1,090,386				4,699,733
Loss from operations			(5,487,485	)			(4,815,604	)			(3,794,925	)			(2,084,581	)			(13,349,839	)
Interest income			60,830				25,903				25,511				2,104				88,837
Interest expense, including amortization of deferred financing costs and debt discounts			(1,810,871	)			(4,207,044	)			(3,648,417	)			(1,498,510	)			(7,529,573	)
Net loss		$	(7,237,526	)		$	(8,996,745	)		$	(7,417,831	)		$	(3,580,987	)		$	(20,790,575	)
Basic and diluted net loss per common share		$	(1.51	)		$	(1.75	)		$	(1.45	)		$	(0.70	)
Weighted average common shares outstanding  – basic and diluted			4,778,291				5,147,700				5,111,134				5,147,700

Balance Sheet Data

		December 31, 2007				December 31, 2008				September 30, 2009
										(Unaudited)
Cash		$	2,534,478			$	1,380,012			$	24,093
Total Assets			4,112,803				1,620,298				123,922
Total Liabilities			8,508,742				13,647,446				15,643,728
Deficit Accumulated During the Development Stage			(8,212,843	)			(17,209,588	)			(20,790,575	)
Total Stockholders’ Deficiency			(4,395,939	)			(12,027,148	)			(15,519,806	)

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development costs; (v) personnel related expenses, including salaries, benefits, travel, and related costs for the personnel involved in drug development; (vi) activities relating to regulatory filings and the advancement of our product candidates through preclinical studies and clinical trials; and (vii) facilities and other allocated expenses, which include direct and allocated expenses for rent, facility maintenance, as well as laboratory and other supplies. All research and development is expensed as incurred.

Conducting a significant amount of development is central to our business model. Through September 30, 2009, we incurred approximately $8.7 million in research and development expenses since our inception in July 2006. Product candidates in later-stage clinical development generally have higher development costs than those in earlier stages of development, primarily due to the significantly increased size and duration of the clinical trials. We plan to increase our research and development expenses for the foreseeable future in order to complete development of our two most advanced product candidates, CRMX003 and CRMX001, and our earlier-stage research and development projects.

The following table summarizes the percentages of our research and development payments related to our two most advanced product candidates and other projects. The percentages summarized in the following table reflect payments directly attributable to each development candidate, which are tracked on a project basis. A portion of our internal costs, including indirect costs relating to our product candidates, are not tracked on a project basis and are allocated based on management’s estimate.

		Year Ended December 31,								Nine Months Ended September 30,								Period from July 28, 2006 (Inception) through September 30, 2009
		2007				2008				2008				2009
CRMX003			0.8	%			54.1	%			54.6	%			43.6	%			17.0	%
CRMX001			97.9	%			32.6	%			33.7	%			43.0	%			77.9	%
CRMX002			—				0.8	%			0.9	%			—				0.2	%
CRMX004			1.3	%			12.5	%			10.8	%			13.4	%			4.9	%

The process of conducting pre-clinical studies and clinical trials necessary to obtain FDA approval is costly and time consuming. The probability of success for each product candidate and clinical trial may be affected by a variety of factors, including, among others, the quality of the product candidate’s early clinical data, investment in the program, competition, manufacturing capabilities and commercial viability. As a result of the uncertainties discussed above, the uncertainty associated with clinical trial enrollments and the risks inherent in the development process, we are unable to determine the duration and completion costs of current or future clinical stages of our product candidates or when, or to what extent, we will generate revenues from the commercialization and sale of any of our product candidates. Development timelines, probability of success and development costs vary widely. We are currently focused on developing our two most advanced product candidates, CRMX003 and CRMX001. However, we may need to raise additional capital in the future in order to fund the development and commercialization of CRMX003, CRMX001, or our other product candidates.

General and Administrative Expense

General and administrative expense consists primarily of salaries and other related costs, including stock-based compensation expense, for persons serving in our executive, finance and accounting functions. Other general and administrative expense includes facility-related costs not otherwise included in research and development expense, promotional expenses, costs associated with industry and trade shows, and professional fees for legal services and accounting services. We expect that our general and administrative expenses will increase as we add personnel and become subject to the reporting obligations applicable to public companies. From our inception in July 2006 through September 30, 2009, we spent $4.7 million on general and administrative expense.

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Interest Income and Interest Expense

Interest income consists of interest earned on our cash and cash equivalents and marketable securities. Interest expense consists of interest incurred on the 12% Notes, PBS Notes and Family Trust Notes as well as the amortization of deferred financing costs and our debt discount attributable to the issuance of the 12% Notes.

Results of Operations

Comparison of the Nine Months Ended September 30, 2009 and September 30, 2008

Research and Development Expense .  Research and development expense was $994,195 for the nine months ended September 30, 2009, a decrease of $1,514,163, or 60%, from $2,508,358 for the nine months ended September 30, 2008. The decrease was primarily due to the refocusing of our business strategy on business development and fund raising activities.

General and Administrative Expense .  General and administrative expense was $1,090,386 for the nine months ended September 30, 2009, a decrease of $196,181, or 15%, from $1,286,567 for the nine months ended September 30, 2008. The decrease was primarily due to a reduction in headcount and outsourced activities.

Interest Income and Interest Expense .  Interest income was $2,104 for the nine months ended September 30, 2009, a decrease of $23,407, or 92%, from $25,511 for the nine months ended September 30, 2008. The decrease was primarily due to lower average cash balances.

Interest expense was $1,498,510 for the nine months ended September 30, 2009, a decrease of $2,149,907, or 59%, from $3,648,417 for the nine months ended September 30, 2008. The decrease was primarily due to lesser charges related to the amortization of our deferred financing costs and debt discount in 2009.

Comparison of the Years Ended December 31, 2008 and December 31, 2007

Research and Development Expense .  Research and development expense was $3,083,002 for the year ended December 31, 2008, a decrease of $737,427, or 19%, from $3,820,429 for the year ended December 31, 2007. The decrease was primarily due to the completion, in 2007, of our initial start-up manufacturing and clinical development activities.

General and Administrative Expense .  General and administrative expense was $1,732,602 for the year ended December 31, 2008, an increase of $65,546, or 4%, from $1,667,056 for the year ended December 31, 2007. The increase was primarily due to an increase in headcount and relocation to independent office space.

Interest Income and Interest Expense .  Interest income was $25,903 for the year ended December 31, 2008, a decrease of $34,927, or 57%, from $60,830 for the year ended December 31, 2007. The decrease was primarily due to lower average cash balances and interest rates in 2008.

Interest expense was $4,207,044 for the year ended December 31, 2008, an increase of $2,396,173, or 132%, from 1,810,871 for the year ended December 31, 2007. The increase was primarily due to an increase in charges related to the amortization of our deferred financing costs and debt discount attributable to our fund raising activities.

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Liquidity and Capital Resources

Sources of Liquidity

As a result of our significant research and development expenditures and the lack of any approved products to generate product sales revenue, we have not been profitable and have generated operating losses since we were incorporated in July 2006. We have funded our operations through September 30, 2009 principally with $11,745,000 in convertible notes. The following table summarizes our funding sources as of November 24, 2009:

Source		Amount Raised ($) (1)				Principal and Interest Outstanding as of September 30, 2009				Shares of Common Stock Issuable Upon Conversion (Upon Completion of the Offering) (2)
12% Notes
First Bridge Notes (July and September 2007)			8,645,000				10,423,679
Second Bridge Notes (August 2008)			2,100,000				2,304,515
Galenica Note (April 2009)			1,000,000				1,036,717
8% Notes (October 2009)			2,619,973				—	(3)
Paramount Notes
PBS Notes			1,062,003	(4)			166,479
Family Trust Notes			1,430,000				434,715
Total			16,856,976				16,986,078

(1)

Represents gross proceeds.

(2)

Assumes principal and interest outstanding at the time of the completion of the offering is the same as the principal and interest outstanding as of September 30, 2009.

(3)

The 8% Notes were not issued until October and November 2009.

(4)

Includes $52,003 in aggregate principal amount of notes issued to PBS in respect of expenses paid by PBS on our behalf.

12% Notes

In July and September of 2007, we issued a series of convertible promissory notes in the aggregate principal amount of $8,645,000 (the “First Bridge Notes”). In August 2008, we issued another series of convertible promissory notes in the aggregate principal amount of $2,100,000 on terms substantially the same as the First Bridge Notes (the “Second Bridge Notes”). In April 2009, we issued a convertible note in the principal amount of $1,000,000 to Galenica, Ltd., a pharmaceuticals company (“Galenica”), on terms substantially the same as the First Bridge Notes and the Second Bridge Notes (the “Galenica Note”, and together with the First Bridge Notes and the Second Bridge Notes, the “12% Notes”). The 12% Notes are unsecured obligations of ours with a maturity date of July 31, 2010 and currently accrue interest at the rate of 12% per annum. The aggregate amount of accrued and unpaid interest under the 12% Notes as of September 30, 2009 was $2,019,911.

The outstanding principal amount of the 12% Notes, and all accrued interest thereon, will automatically convert into Units at a conversion price equal to at the lesser of (a) the lowest price at which our equity securities of are sold in a Qualified Financing and (b) $30,000,000 divided by the number of shares of common stock outstanding immediately prior to the Qualified Financing (determined on a fully diluted basis), upon the terms and conditions on which such securities are issued in the Qualified Financing. For purposes of the 12% Notes, “Qualified Financing” means the closing of an equity financing or series of related equity financings by us resulting in aggregate gross cash proceeds (before commissions or other transaction expenses, and excluding any such proceeds resulting from any conversion of First Bridge Notes) to us of at least $10,000,000 minus the aggregate principal amount of Second Bridge Notes. This offering, if consummated, will be considered a Qualified Financing. Assuming an offering price of $       per Unit, the 12% Notes will automatically convert into            Units.

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In connection with the issuance of the First Bridge Notes, we issued seven-year warrants to their purchasers (the “First Bridge Warrants”). The First Bridge Warrants are currently exercisable and entitle the holders thereof to purchase that number of shares of common stock equal to 40% of the principal amount of the First Bridge Notes purchased by the original holder divided by $1.00, at a per share exercise price of $1.00.

In connection with the issuance of the Second Bridge Notes, we issued seven-year warrants to their purchasers (the “Second Bridge Warrants”). The Second Bridge Warrants entitle the holders thereof to purchase that number of shares of common stock equal to 40% of the principal amount of the Second Bridge Notes purchased by them divided by the lowest price at which our equity securities are sold in a Qualified Financing at a per share exercise price equal to 110% of such lowest price paid, subject to adjustment as set forth in the Second Bridge Warrants. If a Qualified Financing does not occur on or before the second anniversary of the initial closing of the Second Bridge Notes offering, August 18, 2010, then the Second Bridge Warrants will be exercisable for that number of shares of common stock equal to 40% of the principal amount of the Second Bridge Notes purchased by the original holder divided by $1.00, at a per share exercise price of $1.00. For purposes of the Second Bridge Warrants, “Qualified Financing” has the same meaning as it does in connection with the 12% Notes.

The First Bridge Warrants and the Second Bridge Warrants will be cancelled prior to the completion of this offering.

8% Notes

In October and November 2009, we issued another series of convertible promissory notes in the aggregate principal amount of $2,619,973 (the “8% Notes”). The 8% Notes are unsecured obligations of ours with a maturity date of October 30, 2011 and currently accrue interest at the rate of 8% per annum.

The outstanding principal amount of the 8% Notes, and all accrued interest thereon, will automatically convert into shares of common stock upon the completion of a Qualified IPO. For purposes hereof, “Qualified IPO” means the completion of an underwritten initial public offering of equity securities by us resulting in aggregate gross cash proceeds (before commissions or other expenses) to us of at least $10,000,000. This offering, if consummated, will be considered a Qualified IPO. Assuming an offering price of $       per Unit, the 8% Notes will automatically convert into          shares of common stock at a conversion price equal to 70% of the portion of the price of the Units sold in this offering that is allocated to the common stock.

In connection with the issuance of the 8% Notes, we issued seven-year warrants to the purchasers of the 8% Notes (the “8% Noteholder Warrants”). The 8% Noteholder Warrants entitle the holders thereof to purchase a number of shares of common stock equal to 60% of the principal amount of the 8% Notes divided by the price at which our equity securities are sold in a Qualified IPO, at a per share exercise price equal to 110% of the offering price in the Qualified IPO, subject to adjustment as set forth in the warrant. If a Qualified IPO does not occur on or before the second anniversary of the closing of the offering of the 8% Noteholder Warrants, then each warrant will be exercisable for that number of shares of common stock equal to 60% of the principal amount of the note purchased by the original holder divided by $1.00, at a per share exercise price of $1.00. In the event of a sale of the Company (whether by merger, consolidation, sale or transfer of our capital stock or assets or otherwise) prior to, but not in connection with, a Qualified IPO, the 8% Noteholder Warrants will terminate immediately upon such sale without opportunity for exercise. Assuming an offering price of $       per Unit, the 8% Noteholder Warrants will entitle the holders thereof to purchase         shares of common stock at a conversion price equal to       .

Paramount Notes

From July 26, 2006 through September 30, 2009, Paramount BioSciences, LLC (“PBS”), of which Lindsay A. Rosenwald is the sole member, had loaned us an aggregate principal amount of $1,062,003 pursuant to a future advance promissory note, dated July 28, 2006, as amended on June 15, 2007 and as amended and restated on September 30, 2009 (the “PBS Note”). From August 11, 2006 through September 30, 2009, certain trusts established for the benefit of Dr. Rosenwald’s children (the “Family Trusts”) had loaned us an aggregate principal amount of $1,430,000 pursuant to a future advance promissory note, dated August 11, 2006, as amended on June 15, 2007 and July 22, 2008 and as amended and restated on

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September 30, 2009 (the “Family Trusts Note” and together with the PBS Note, the “Paramount Notes”). As of September 30, 2009, $166,479, including accrued and unpaid interest, was outstanding under the PBS Note, and $434,715, including accrued and unpaid interest, was outstanding under the Family Trusts Note. The Paramount Notes will mature on July 31, 2010 and all outstanding principal amount of the Paramount Notes, and all accrued interest thereon, will automatically convert into the securities issued in a Qualified Financing on the same terms as the 12% Notes. This offering, if consummated, will be considered a Qualified Financing. Assuming an offering price of $       per Unit, the Paramount Notes will automatically convert into          Units.

Net Cash Used in Operating Activities

Net cash used in operations was $4.1 million for the year ended December 31, 2008. The net loss for the year ended December 31, 2008 is higher than cash used in operating activities by approximately $4.9 million. The primary drivers for the difference are adjustments for non-cash charges such as amortization of deferred financing costs and our debt discount of $3.3 million and interest accruals of $0.9 million related to our senior convertible notes and stock-based compensation of $0.6 million related to a license agreement, consulting agreement and option and warrant issuances to employees and consultants. Net cash used in operations was $4.8 million for the year ended December 31, 2007. The net loss for the year ended December 31, 2007 is higher than cash used in operating activities by approximately $2.4 million. The primary drivers for the difference are adjustments for non-cash charges such as amortization of deferred financing costs and our debt discount of $1.5 million and interest accruals of $0.2 million related to our senior convertible notes as well as an increase in accounts payable and accrued expenses of $1.0 million tied to an increase in head count and operating activities.

Net cash used in operations was $1.5 million for the nine months ended September 30, 2009. The net loss for the nine months ended September 30, 2009 is higher than cash used in operating activities by approximately $2.1 million. The primary drivers for the difference is adjustments for non-cash charges such as amortization of deferred financing costs and our debt discount of $0.6 million and interest accruals of $0.9 million related to our senior convertible notes as well as an increase in accounts payable and accrued expenses of $0.5 million tied to cash conservation during 2009 fund raising activities. Net cash used in operations was $3.2 million for the nine months ended September 30, 2008. The net loss for the nine months ended September 30, 2008 is higher than cash used in operating activities by approximately $4.3 million. The primary drivers for the difference are the adjustments for non-cash charges of deferred financing costs and our debt discount of $3.1 million and interest accruals of $0.6 million related to our senior convertible notes and stock-based compensation of $0.6 million related to a license agreement, consulting agreement and option and warrant issuances to employees and consultants.

Net Cash Used in Investing Activities

No cash was used in investing activities for the year ended December 31, 2008. Net cash used in investing activities was $47,255 for the year ended December 31, 2007. Net cash used in investing activities reflects $47,255 for the purchase of furniture and fixtures as well as computer equipment related to our move to new office space during 2007.

No cash was used in investing activities for the nine months ended September 30, 2009 and 2008.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $3.0 million for the year ended December 31, 2008. Net cash provided by financing activities consisted primarily of private placements of our senior convertible notes through which we received gross proceeds of $2.1 million and a promissory note issued in connection with a term sheet with Galenica, Ltd. through which we received proceeds of $1.0 million which was offset by cash paid for financing costs of approximately $141,000. Net cash provided by financing activities was $7.4 million for the year ended December 31, 2007. Net cash provided by financing activities consisted primarily of our senior convertibles notes through which we received gross proceeds of $8.6 million as well as proceeds from related party notes of $1.5 million offset by a repayment of principal under the related party notes of $2.0 million and cash paid from financing costs of approximately $0.8 million.

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Net cash provided by financing activities was $105,365 for the nine months ended September 30, 2009, consisted primarily of $165,000 of proceeds received under related party notes offset by cash paid for financing costs of approximately $60,000. Net cash provided by financing activities was $1.9 million for the nine months ended December 31, 2008, consisted primarily of $2.1 million gross proceeds from our senior convertible notes offset by cash paid for financing costs of approximately $0.2 million.

Funding Requirements

We expect to incur losses from operations for the foreseeable future. We expect to incur increasing research and development expenses, including expenses related to the hiring of personnel and additional clinical trials. We expect that our general and administrative expenses will also increase as we expand our finance and administrative staff, add infrastructure, and incur additional costs related to being a public company, including directors’ and officers’ insurance, investor relations programs, and increased professional fees. Our future capital requirements will depend on a number of factors, including the timing and outcome of clinical trials and regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims and other intellectual property rights, the acquisition of licenses to new products or compounds, the status of competitive products, the availability of financing, and our success in developing markets for our product candidates.

Our expected future expenditures related to product development are as follows:

We believe that the net proceeds from this offering, together with our existing cash, will be sufficient to enable us to fund our operating expenses and capital expenditure requirements at least until the end of 2011. We believe that if we sell        Units in this offering at an initial public offering price of $     per share ($1.00 lower than the mid-point of the price range set forth on the cover page of this prospectus), or if we sell a fewer number of Units in this offering than anticipated, the resultant reduction in proceeds we receive from the offering would cause us to require additional capital earlier. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials.

We do not anticipate that we will generate product revenue for at least the next several years. In the absence of additional funding, we expect our continuing operating losses to result in increases in our cash used in operations over the next several quarters and years.

We may need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements. We do not currently have any commitments for future external funding. We may need to raise additional funds more quickly if one or more of our assumptions prove to be incorrect or if we choose to expand our product development efforts more rapidly than we presently anticipate, and we may decide to raise additional funds even before we need them if the conditions for raising capital are favorable. We may seek to sell additional equity or debt securities or obtain a bank credit facility. The sale of additional equity or debt securities, if convertible, could result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also result in covenants that would restrict our operations.

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Additional equity or debt financing, grants, or corporate collaboration and licensing arrangements may not be available on acceptable terms, if at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate our research and development programs, reduce our planned commercialization efforts or obtain funds through arrangements with collaborators or others that may require us to relinquish rights to certain product candidates that we might otherwise seek to develop or commercialize independently.

Financial Uncertainties Related to Potential Future Milestone Payments

We have acquired rights to develop and commercialize our product candidates through licenses granted by various parties. Certain of these licensing arrangements contain cash milestone payments and royalties.

On July 28, 2006, we entered into a contribution agreement, amended on October 6, 2009 (the “Shiva Contribution Agreement”), with Shiva Biomedical, LLC (“Shiva”), Picton Pharmaceuticals, Inc, a Delaware corporation (“Picton”), and the stockholders of Picton, including Lindsay Rosenwald, the Family Trusts and several of our current directors and officers (Antony Pfaffle, Timothy Hofer and Stephen Pilatzke). Pursuant to the Shiva Contribution Agreement, Shiva contributed to us its kidney products business and granted us an exclusive, worldwide license agreement for a patent estate covering proprietary formulations of deferiprone and a biomarker diagnostic test for measuring levels of labile iron (the “Shiva Technology”). The Shiva Technology served as the basis for CRMX001 and CRMX002, respectively. In addition to an initial fee and equity stake in the Company provided to Shiva under the Shiva Contribution Agreement, we are also required to make cash payments to Shiva upon the achievement of certain clinical and regulatory-based milestone and the maximum aggregate amount of such payments, assuming achievement of all milestones, is $10,000,000. Events that trigger milestone payments include but are not limited to the reaching of various stages of applicable clinical trials and regulatory approval processes. Under the terms of the Shiva Contribution Agreement, in the event that the Shiva Technology is commercialized, we are also obligated to pay to Shiva annual royalties based upon net sales of the products. In the event that we sublicense Shiva Technology to a third party, we are obligated to pay to Shiva a portion of the royalties, fees or other lump-sum payments we receive from the sublicense.

On January 30, 2008, we entered into a License and Assignment Agreement (the “NDP License Agreement”) with ND Partners LLC, a Delaware limited liability company (“NDP”). Pursuant to the NDP License Agreement, NDP granted us exclusive, worldwide licenses for certain antimicrobial catheter lock solutions, processes for treating and inhibiting infections, a biocidal lock system and a taurolidine delivery apparatus, and the corresponding United States and foreign patents and applications (the “NDP Technology”). We acquired such licenses and patents through our assignment and assumption of NDP’s rights under certain separate license agreements by and between NDP and Dr. Hans-Dietrich Polaschegg, Dr. Klaus Sodemann, and Dr. Johannes Reinmueller. NDP also granted us exclusive licenses, with the right to grant sublicenses, to use and display certain trademarks in connection with the NDP Technology. In addition to an initial fee and equity stake in the Company provided to NDP under the NDP License Agreement, we are also required to make payments to NDP upon the achievement of certain regulatory and sales-based milestones. Such payments will be made in the form of shares of common stock currently held in escrow for NDP, and may amount to up to 213,562 shares of common stock, subject to certain anti-dilution adjustments.

On January 30, 2008, we also entered into an Exclusive License and Consulting Agreement with Dr. Polaschegg (the “Polaschegg License Agreement”). Pursuant to the Polaschegg License Agreement, Dr. Polaschegg granted us an exclusive, worldwide license for a gel lock invention and certain taurolidine treatments and the corresponding United States patent applications (the “Polaschegg Technology”). The Polaschegg Technology serves as a basis for CRMX004. As consideration for the rights to the Polaschegg Technology, in addition to an initial fee, we agreed to pay Dr. Polaschegg certain royalty payments ranging from 1% to 3% of the net sales of the Polaschegg Technology. The Polaschegg License Agreement also sets forth certain minimum royalty payments (on an annual basis) to be made to Dr. Polaschegg in connection with the Polaschegg Technology.

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Potential milestone payments for licensed technologies may or may not be triggered and may vary in size, depending on a number of variables, almost all of which are currently uncertain. Additionally, we believe we will not begin selling any products that would require us to make any such royalty payments until the end of 2012. Whether we will be obligated to make milestone or royalty payments in the future is subject to the success of our product development efforts and, accordingly, is inherently uncertain.

Critical Accounting Policies

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

While our significant accounting policies are more fully described in Note 2 to our financial statements included at the end of this prospectus, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported financial results and affect the more significant judgments and estimates that we use in the preparation of our financial statements.

Stock-Based Compensation

We account for stock options according to the Financial Accounting Standards Board Accounting Standards Codification No. 718 (“ASC 718”), “Compensation — Stock Compensation”. Under ASC 718, share-based compensation cost is measured at grant date, based on the estimated fair value of the award, and is recognized as expense over the employee’s requisite service period on a straight-line basis.

We account for stock options granted to non-employees on a fair value basis using the Black-Scholes option pricing method in accordance with SFAS 123R and Emerging Issues Task Force No. 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services” (“EITF No. 96-18”), The initial non-cash charge to operations for non-employee options with vesting are revalued at the end of each reporting period based upon the change in the fair value of the options and amortized to consulting expense over the related vesting period.

For the purpose of valuing options and warrants granted to employees, non-employees and directors and officers of the Company during the year ended December 31, 2008, we used the Black-Scholes option pricing model utilizing the assumptions noted in the following table. No options were issued during the year ended December 31, 2007. To determine the risk-free interest rate, we utilized the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected term of our awards. We estimated the expected life of the options granted based on anticipated exercises in the future periods assuming the success of its business model as currently forecasted. The expected dividend yield reflects our current and expected future policy for dividends on its common stock. The expected stock price volatility for our stock options was calculated by examining historical volatilities for publicly traded industry peers as we do not have any trading history for our common stock. We will continue to analyze the expected stock price volatility and expected term assumptions as more historical data for our common stock becomes available. Given the limited service period for its current employees, directors and officers and non-employees, as well as the senior nature of the roles of those employees and directors and officers, we currently estimate that we will experience no forfeitures for those options currently outstanding.

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Recent Accounting Pronouncements

None.

Off-Balance Sheet Arrangements

Since our inception, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.

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The following table summarizes our product candidates.

Product		Intended Indication		Status of Clinical Programs		Commercial Rights
CRMX003 (CorMedix Neutrolin®)		Prevention of catheter-related blood stream infections and maintenance of catheter function in hemodialysis patients who are asymptomatic for catheter-related blood stream infections using both incident and prevalent catheters with any brand of central venous catheter		In Europe, CorMedix Neutrolin® (taurolidine 1.35%, citrate 4% and heparin 1000 u/mL) is considered to be a Type 3 device requiring submission and approval of a CE mark for marketing of the product. In the U.S., CorMedix Neutrolin® is considered to be a device/drug combination product, requiring submission and approval of a Premarket Approval application for marketing of the product. We anticipate starting a pivotal trial in the U.S. following the completion of this offering.		Worldwide
CRMX004		Prevention of catheter-related blood stream infections and maintenance of catheter function in hemodialysis patients who are asymptomatic for catheter-related blood stream infections using both incident and prevalent catheters with any brand of central venous catheter		In Europe, CRMX004 is considered to be a Type 3 device requiring submission and approval of a CE mark for marketing of the product. In the U.S. CRMX004 is considered to be a device/drug combination product, requiring submission and approval of a Premarket Approval application for marketing of the product. CRMX004 is in the pre-clinical phase of development.		Worldwide
CRMX001		Prevention (decrease in the rate of incidence) of morbidity and mortality associated with acute kidney injury in subjects with moderate to severe chronic kidney disease and other risk factors undergoing interventional cardiac procedures and receiving an iodinated radiocontrast agent		We currently have an approved Investigational New Drug application in the U.S. and final approval for marketing will be obtained following approval of a New Drug Application. We anticipate staring a phase II biomarker proof of concept study following the completion of this offering.		Worldwide
CRMX002		Urine diagnostic test for “toxic labile iron” that could be used to diagnose chronic kidney disease, identify patients at risk for the disease, identify likely treatment responders and monitor response to therapy with CRMX001		We anticipate starting pre-clinical assay development following the completion of this offering.		Worldwide

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CRMX003 (CorMedix Neutrolin®) and CRMX004

Market Opportunity

Patients undergoing hemodialysis require access to the vascular system in order to perform treatments on a multiple scheduled basis each week. According to a U.S. Renal Data System 2008 Annual Data Report, approximately 80,000 hemodialysis patients relied on a central venous catheter in 2008. One of the major complications for the use of a central venous catheter for hemodialysis treatment is catheter-related blood stream infections and the inflammatory complications associated with them. Catheter-related blood stream infections and inflammatory complications associated with these are a primary cause of morbidity in the end-stage renal disease hemodialysis patient population, and the second most common cause of mortality. Recent data from the United States Renal Data System (USRDS, 2008) indicates nearly 2 catheter infection events per-patient year or 5.37 per 1000 catheter days.

Prevention of catheter-related blood stream infections and inflammatory complications requires decontamination of the intraluminal surface of the catheter to prevent the systemic dissemination of the organisms contained within the biofilm and an anticoagulant to retain patency. The current standard of catheter care is to instill a heparin lock solution at a concentration of 1000 – 5000 u/mL into each catheter lumen immediately post treatment, in order to prevent clotting between dialysis treatments. However, a heparin lock solution provides no protection from the risk of infection. Currently, there are no pharmacologic agents approved for the prevention of catheter-related blood stream infections in central venous catheters.

There is a significant unmet need for prevention of catheter-related blood stream infections in the hemodialysis patient population as well as for other patient populations utilizing central venous catheters, such as oncology/chemotherapy, total parenteral nutrition and intensive care unit patients.

CRMX003

CRMX003, or CorMedix Neutrolin®, is a broad-spectrum antimicrobial/antifungal and anticoagulant combination that is active against common microbes including antibiotic-resistant strains and in addition may prevent biofilm formation. We believe that using CorMedix Neutrolin® as a catheter lock solution will significantly reduce the incidence of catheter-related blood stream infections, thus reducing the need for local and systemic antibiotics while prolonging catheter life.

CRMX004

We believe that CRMX004, a thixotropic gel formulation of Neutrolin®, could be developed for the indication for prevention of catheter-related blood stream infections and maintenance of catheter function in hemodialysis. CRMX004 would provide an alternative to CRMX003 that may have superior applications in hemodialysis catheters.

Our Formulation

CRMX003

CorMedix Neutrolin® contains 1.35% taurolidine, 4% Citrate and 1000 u/mL heparin.

Taurolidine was first synthesized around 1972 by Geistlich Pharma. Taurolidine is a derivative of the amino acid taurine. It is a potent antimicrobial agent with a novel mechanism of action. Taurolidine releases methylol derivatives which selectively interact with components of bacterial/fungal cell walls resulting in irreparable injury to the microorganism.

Taurolidine has several clinically beneficial characteristics relating to its antimicrobial action, including:

We believe these characteristics give taurolidine a potential advantage over conventional antibiotics in the control and near eradication of infections. However, taurolidine was not successfully commercialized for systemic use because of several clinically-significant limitations, including the following:

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Because of these issues, the adoption of taurolidine in the clinical setting has been limited. For the 15 years prior to Biolink utilizing taurolidine in a catheter lock formulation, the only clinical use was as a lavage solution for treating peritonitis (taurolidine mixed with PVP).

Citrate (4%) is considered to be non-inferior to heparin as an anticoagulant and in addition improves the antimicrobial activity and solubility of taurolidine. Heparin at a concentration of 1000 u – 5000 u/mL is an anticoagulant widely used as a catheter locking solution in hemodialysis.

The rationale for commercializing CorMedix Neutrolin®is to capture the established efficacy of heparin as an anticoagulant and to combine it with the established potent antimicrobial and anticoagulant properties of taurolidine and citrate, respectively.

CRMX004

We are currently in the process of optimizing the thixotropic gel formulation of Neutrolin®; however the formulation will be a semi-solid gel that liquifies under the pressure of insertion and withdrawal from the catheter, a property known as thixotropic. This would prevent any “spillage” from the catheter tip and from the end of the catheter in the event the luer lock becomes disengaged. The solid nature of the gel when at rest in the catheter could also negate the need for an anticoagulant within the formulation.

Development

Previous Formulations (Biolink Neutrolin®)

Biolink Neutrolin® was a catheter lock solution that had been under development by a company known as Biolink Corporation (“Biolink”) to address the limitations of the current standard of catheter care. Biolink Neutrolin® contained taurolidine, a potent antimicrobial agent, and citric acid, which lowers pH thereby enhancing taurolidine’s antimicrobial activity and improves the solubility of taurolidine and is a stabilizing agent. Taurolidine provides broad-spectrum antimicrobial activity against Gram positive and Gram negative bacteria, including antibiotic-resistant strains, as well as activity against several clinically important fungi. Biolink Neutrolin® also contained Citrate, which acts as an anticoagulant.

On July 27, 2001, Biolink submitted an Investigational Device Exemption (#G0102000) to initiate clinical trials of Biolink Neutrolin®. In 2001, Biolink Neutrolin® was considered to be a device in Europe, and the CE marking classification rendered it a Type 2A device when it was formulated without the inclusion of heparin. This means that the manufacturer needs approval/certification from a Notified Body for its quality systems and takes responsibility to deem the device marketable (CE marked). During the development of Biolink Neutrolin®, Biolink decided to first pursue a CE marking of the product in Europe before its development and approval in the United States. Biolink utilized TUV of Germany as the Notified Body to obtain approval of compliance of Quality Systems Requirements (QSR) Certification. Biolink obtained QSR certification in 2002, which remained valid until March 2005.

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Published Clinical Studies of Neutrolin® (taurolidine 1.35% + citrate 4%) are listed below:

Study

Number of Catheters (Patients)

Average Duration

CRBI per 1,000 Catheter Days (Taurolidine - Citrate CLS vs. Control)

Control Group

Taurolidine - Citrate CLS: % Patients Without Infection

Catheter Dysfunction

Betjes and van Atgern Nephrol. Dial. Transplant 2004 19:1546-1551

76 (58)

158 d

0 vs. 2.1 (P=0.047)

RCT vs. heparin 5,000 u/mL

100

Catheter removal: 2 heparin 1 Neutrolin

Taylor J of Renal Care 2008 34(3):116-120

~20/month

180 d

0.6 vs. 5.2 (P<0.001)

Cross-over cohort vs. heparin 5,000 u/mL

(89% reduction)

Incr. urokinase resolved with? 500 u/mL heparin

Sodemann Poster: American Society of Nephrology 2001

76 (76)

250 d (41 patient years)

0.20

None

96

No increase

Allon Clin. Infect. Dis. 2003 36 (12):1539-44

20/30 Neutrolin (taurolidine + citrate)/ Heparin

85 d

0.60 vs. 5.6 (P<0.001)

Case-control vs. heparin 5,000 u/mL

94

Unassisted catheter patency 24% vs 68%

Prior to its filing for bankruptcy in August 2003, Biolink had an Investigational Device Exemption approved by the FDA for Biolink Neutrolin®. A small non-randomized, case-control study of the Biolink Neutrolin® solution (formulated with a lower pH) versus the standard heparin lock solution was carried out in 20 catheter-dependent hemodialysis patients at the University of Alabama, Birmingham. Biolink Neutrolin® dramatically reduced the frequency of catheter-related blood stream infections, although in these same patients, blood flow problems related to some type of thrombus formation (measured by increased use of tissue plasminogen activator) was increased compared to the heparin control. Laboratory studies indicated that the blood flow issues may have resulted from the low pH of the Biolink Neutrolin® formulation, and this was subsequently adjusted. Furthermore, after some testing by Biolink, this issue resulted in the addition of heparin to the catheter lock solution. The FDA then approved a pivotal trial to be conducted with a vanguard phase (four centers, 60 patients) before proceeding to the main study. This trial would include Biolink Neutrolin® solution with heparin added at the bedside. At this point all development activity stopped however, due to Biolink’s filing for bankruptcy. A German company, TauroPharm GmbH (“TauroPharm”), established by Biolink to manufacture Biolink Neutrolin®, launched the product in Europe under the name of TauroLock (taurolidine and 4% citrate without heparin).

TauroLock is currently being used in Europe and the Middle East as a catheter lock solution in hemodialysis, in intensive care units and for oncology/chemotherapy patients. TauroLock is registered as a device and has the approval of a CE Mark from the Technischer Ueberwachungs Verein (TUV) in Munich, Germany. Several small studies using TauroLock have appeared in the published literature in Europe, all of which demonstrate positive results with near eradication of infection and limited blood flow issues, particularly with added heparin. In November 2007, TauroPharm launched two new products called TauroLock Heparin 500 and TauroLock Heparin 100 to address the needs of those customers who were using TauroLock and adding heparin separately.

Extensive pre-clinical testing has been completed with Biolink Neutrolin® and its use in hemodialysis catheters, including compatibility with catheter materials; safety, as demonstrated through biocompatibility testing and direct injection in dogs; efficacy in anticoagulation models, in-vitro antimicrobial efficacy models and biofilm elimination, and stability, including forced degradation models.

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Development of CorMedix Neutrolin® to Date

As a result of the NDP License Agreement and the Polaschegg License Agreement we entered into in January 2008, as described below under “License Agreements and Intellectual Property,” CorMedix is now the current Sponsor of the Biolink Neutrolin® Investigational Device Exemption. The conditional Investigational Device Exemption approval obtained from the FDA on March 12, 2003 outlined the need for the following actions in order for the Investigational Device Exemption to be fully approved for conducting a pivotal clinical trial to support marketing approval:

As there have been changes in the standards of patient and catheter care since the earlier Investigational Device Exemption approval, we held an informal pre-Investigational Device Exemption meeting with the FDA in October 2008 to discuss the current registration requirements for developing CorMedix Neutrolin® as a device/drug combination product.

We intend to submit a new Investigational Device Exemption, or supplement the current Investigational Device Exemption, to the FDA requesting approval of a clinical trial for CorMedix Neutrolin® by mid-2010. The addition of heparin is made to address the catheter patency issue, as highlighted in the study carried out at the University of Alabama. The proposed trial will be a double-blind study involving CorMedix Neutrolin® compared to the current standard of catheter care, the heparin lock. It is anticipated that the study will be of 15 months duration (9 months recruitment, 6 months follow-up), with an expected product launch 12 to 15 months following completion of the trial and submission of the Premarket Approval application to the FDA.

Our strategy is to obtain worldwide approval for CorMedix Neutrolin® solution, and to obtain “Orphan” designation and qualify for FDA grants (of up to $400,000). An Orphan Device grant request was submitted in February 2009. We expect the FDA to remove the requirement for a vanguard phase to the pivotal trial based on the substantial European experience that has been gained with the product in the last 6 years.

Projected key regulatory submissions/communications for both the United States and European Union in the next 12 months include:

Development Plans for CRMX003 (CorMedix Neutrolin®)

Pivotal Clinical Trial Design

We plan to conduct a phase III, prospective, multicenter, double-blind, randomized, active comparator controlled study of approximately 400 patients to demonstrate the safety and effectiveness of CorMedix Neutrolin® (1.35% taurolidine, 4% citrate and heparin 1000 u/mL) in preventing catheter-related blood stream infections and maintaining catheter patency in patients receiving hemodialysis therapy as treatment for End Stage Renal Disease three times a week with a tunneled silicone or polyurethane hemodialysis catheter that has demonstrated the ability to deliver sufficient blood flow to enable successful hemodialysis. Patients can be enrolled with either incident catheters (catheters placed less than one week prior to entry) or prevalent catheters.

Subjects will be randomized in a 1:1 ratio to receive either CorMedix Neutrolin® or the active comparator heparin (1000 u/ml) as a catheter locking solution. CorMedix Neutrolin® or heparin will be

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instilled into central venous hemodialysis catheters following all dialysis sessions and will be withdrawn prior to the initiation of the next dialysis session. All subjects will receive standard of care consistent with clinical practice guidelines recommended by KDOQI for the placement, care and use of central venous catheters for hemodialysis therapy.

A total of 400 randomized subjects are planned for this trial, which will have co-primary endpoints. Each will be powered at 90%, such that the aggregate endpoint will have 80% power (0.9*0.9). Calculation of the sample size was based upon the assumption that the cumulative event rate for catheter-related blood stream infections would be 22.6% at 180 days. Although published data have consistently demonstrated an 80 – 90% reduction in catheter-related blood stream infections with Neutrolin®, we conservatively calculated sample size based upon an assumed 60% reduction in catheter-related blood stream infections. Using an α of 0.05 and a power of 90% (2-sided), the required sample size was 190 patients in each arm. The patency endpoint tests the hypothesis that the use of CorMedix Neutrolin® is non-inferior to the heparin comparator for the composite endpoint of requirement for catheter intervention (including use of a tissue plasminogen activator) or requirement for catheter replacement due to catheter thrombosis/dysfunction. A non-inferiority margin of 10% was assumed as was an event rate of 36%. Using an α of 0.05 and a power of 90% (1-sided), the required sample size was 200 patients per arm. The planned treatment duration is 180 days.

The total cost for the study is estimated to be approximately $10 million. The primary endpoints for the study are discussed below.

Freedom from Infection — Up to 180 day freedom from catheter-related bloodstream infections following the initial instillation of CorMedix Neutrolin® solution, or heparin alone

The primary hypothesis is that CorMedix Neutrolin® will significantly increase the time to event of catheter-related blood stream infection, and will reduce the total number of episodes of catheter-related blood stream infection. Catheter-related blood stream infections are defined in the following manner:

Patency Endpoint — Duration of time that patency and adequate function is maintained up to 180 days following the initial instillation of CorMedix Neutrolin®, or heparin alone

The primary hypothesis is that the instillation of CorMedix Neutrolin® is non-inferior to heparin alone in maintaining patency and catheter function. For the purposes of this study, the endpoint can be satisfied by either of the following clinical events:

Secondary Efficacy Endpoints

Secondary efficacy endpoints include mortality, infection rate per-1,000 catheter days, patency-related catheter removal/exchange rate per 1,000 catheter days, frequency of requirement for thrombolytic therapy (tPA) to restore access patency, assessed as events per 1,000 catheter days, freedom from thrombolytic therapy (tPA) at 90 days and 180 days, preservation of catheter blood flow (Qb), and dialysis adequacy (the ability of

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the hemodialysis catheter to deliver sufficient blood flow to enable successful hemodialysis as defined by a monthly average single pool Kt/V (spKt/V) greater than or equal to 1.2 based on all values available for each patient-month).

Efficacy Analysis

The primary efficacy analysis will include all patients. Given the anticipated censoring rate that would normally occur in any study of central venous catheters in hemodialysis patients, the primary analysis will be time to event using the Kaplan-Meier method. As the incidence of catheter-related blood stream infection is quite variable between dialysis units, patients will be stratified by unit and incident vs. prevalent catheter status. Given that hemodialysis patients have multiple co-morbidities, and that patients dialyzing with a central catheter have a high mortality rate, Cox proportional hazards modeling will be done to identify possible confounding covariates (as risk factors for catheter-related blood stream infections have been identified in other studies). Confounding variables will be identified using logistic regression. Additionally, the impact of variables that are thought to be risk factors (age, gender, race, existence of diabetes and previous catheter-related blood stream infections) will be entered into the model. If there are no statistical or clinically relevant confounding covariates, differences in survival will be analyzed using the log-rank test. If important confounding covariates are identified, the primary comparison will be done using the Cox Proportional Hazards Model.

Development Plans for CRMX004

We are conducting pre-clinical laboratory tests with a view to commencing animal studies in the first quarter of 2010 and if successful would expect to start human pilot studies in the fourth quarter of 2010.

Product Commercialization

CRMX003

We expect to launch CorMedix Neutrolin® for the prevention of catheter-related blood stream infections and maintenance of catheter function in hemodialysis patients late in 2012.

The sales model will primarily be one of achieving formulary listing and inclusion as policy and procedure with the key customers (Fresenius and Davita, as dialysis providers, cover 70% of dialysis patients). Key account managers will be required as well as medical liaison specialists.

It is anticipated that the costs of CorMedix Neutrolin® will be included in the future dialysis “bundle”, which will transition in from 2011 – 2014. In the interim, for those centers not participating in the bundle, the product will be billable on the basis of a separate billing “J” code. In any future model of full capitation reimbursement for dialysis services, the value proposition for CorMedix Neutrolin® would be even stronger. Clear demonstration of cost-effectiveness will be important for CMS, private payers and users of CorMedix Neutrolin®.

CRMX004

We will formulate plans for the commercialization of CRMX004 when the product reaches a later stage of development.

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CRMX001

Market Opportunity — Prevention of Morbidity and Mortality Associated with Contrast Induced Nephropathy

Contrast-induced nephropathy, or CIN, is a common and potentially serious complication arising from the use of iodinated contrast media used in X-ray procedures to identify the status of blood vessels in different parts of the body. CIN is most commonly defined as a new onset or exacerbation of renal dysfunction after contrast administration without other identifiable causes. There are an estimated 150,000 cases per year in the United States. It is the third most common cause of hospital-acquired renal insufficiency (11% of cases) after low blood pressure and major surgery, and is associated with increased mortality, cardiovascular complications (myocardial infarction, stroke, heart failure, etc.), in-hospital and long term, increased dialysis, permanent kidney damage, and delayed discharge/re-hospitalization. In addition, CIN, or the risk of developing CIN, disrupts the workflow of the catheterization laboratory — a key profit center of many hospitals. Any decrease in case load potentially reduces revenue. The most important risk factor for developing CIN is the presence of chronic kidney disease, or CKD.

Currently, the standard of care to prevent CIN in high risk patients with CKD is hydration before and after the procedure with saline (e.g., 1 – 1.5 mL/kg/h of 0.9% saline given 3 – 12 hours before and 6 – 24 hours after contrast procedure) or bicarbonate (3 mL/kg/h given for 1 hour before and 3 – 6 hours afterwards). Additional methods to reduce the risk of developing CIN include minimizing the volume of contrast used, utilizing low or iso-osmolar contrast agents, and withholding potentially nephrotoxic drugs.

There is no single therapeutic intervention that has conclusively and consistently proven to be effective in the prevention of CIN, and there are no FDA-approved preventative treatments. N-acetylcysteine (NAC —  Mucomyst), an antioxidant and free radical scavenger, has been extensively studied in the prevention of CIN, but study results are conflicting. Other therapies that have suggested some efficacy in studies include vitamin C, Prostaglandin E1, theophylline, statins and bicarbonate.

We expect that the incidence of CIN will increase as the number of procedures requiring contrast grows with the ever-expanding scope of image-guided radiological interventions and the burgeoning older population.

There is accumulating evidence that iron plays an important role in the pathogenesis of CIN and the progression of CKD. The mechanism by which iron causes tissue injury in these renal diseases likely involves the generation of reactive oxygen species which cause damage to cell membranes, proteins and deoxyribonucleic acid. Reactive oxidants have the ability to cause both local tissue damage and also to instigate toxic effects distant from their site of generation. We believe that deferiprone, which traps or chelates iron, reducing oxidative stress and cellular injury, will be an effective treatment for the prevention of morbidity and mortality associated with CIN.

Deferiprone is a logical choice for evaluation of the potential therapeutic effect of iron chelation in these renal and cardiovascular diseases for a variety of reasons. There is clear experimental and clinical evidence of the efficacy of deferiprone as an oral iron chelator, complimented by an extensive safety database gathered from the administration of deferiprone for long periods of time and often at considerably higher drug exposure levels than is likely to be required for the suggested renal indications. Deferiprone is able to mobilize iron from reticuloendothelial, hepatocellular and myocardial stores, from intracellular ferritin and hemosiderin, and from transferrin and non-transferrin bound iron present in the serum. Due to its small size and neutral charge, deferiprone is able to access multiple intracellular iron pools and shuttle iron to acceptor molecules in the extracellular space. Deferiprone is also known to be partially excreted in an active form in the urine.

Market Opportunity — Treatment of Chronic Kidney Disease

According to the National Kidney Foundation’s website, one in nine Americans (approximately 20 million people) has chronic kidney disease, or CKD. CKD may lead to the eventual need for dialysis, or early death from cardiovascular diseases. Early detection can help prevent the progression of kidney disease to kidney failure.

We believe deferiprone has the potential to substantially impact the disease burden and reduce the progression of CKD.

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The role of iron in the pathogenesis of chronic renal disease has been proven through research using animal models and human data demonstrating an increased amount of iron in the kidneys and urine of patients with CKD. Furthermore, the use of iron chelators has been demonstrated to reduce or prevent injury in several studies using animal models to research CKD. Most importantly, small proof of concept trials in humans support the potential role of iron chelation in the treatment of CKD. These studies include cohorts of patients with early diabetic renal disease as well as patients with various forms of chronic glomerulonephritis. Both studies demonstrated a reduction in proteinuria (an important predictor of protection from progressive loss of kidney function) over a treatment period of six to nine months and did not demonstrate safety concerns. These studies provide strong supportive evidence for conducting phase II trials in either diabetic nephropathy or chronic glomerulonephritis.

Current treatments for CKD depend upon the primary diagnosis and overall activity of the disease. For diabetics, control of blood pressure and blood sugar are recognized to provide protection against the development and/or progression of CKD. However, even with excellent control of risk factors (and the use of angiotensin-receptor blockers) patients still have “residual risk” for loss of kidney function. On the other hand, high-risk patients with a variety of forms of chronic glomerulonephritis (a very heterogeneous population) are frequently treated with immunosuppressive therapy. However, there are subsets of patients within each of these populations that don’t respond well to any current therapy. Although our Phase II program in CKD is not completely defined, we currently believe that we might initially study patients with either unresponsive IgA Nephropathy or Focal Segmental Glomerulosclerosis.

Our Formulations

We have acquired a range of formulations of deferiprone, which we believe are novel, patentable and targeted to different conditions, including a slow release formulation that allows twice-daily dosing. Oral administration of deferiprone achieves rapid therapeutic plasma concentrations of drug followed by sustained plasma levels using a combination of immediate release and extended release formulations.

CorMedix deferiprone tablets are 900 mg formulated as separate immediate release and extended release tablets. The intended dose is one immediate release tablet and two extended release tablets twice a day for eight days. The unique combination of one immediate release tablet and two extended release tablets, which we plan to use in our lead CIN indication, results in a lower peak drug concentration (Cmax), reducing nausea, while allowing extended iron trapping for 12 hours.

These formulations have been studied in a pharmacokinetic study in the United States including patients with mild to moderate CKD.

Development

Deferiprone is marketed in approximately 50 countries outside of the United States as a treatment for iron overload in a rare condition called Thalassemia major. We benefit substantially from the international body of knowledge already in place, which we believe significantly reduces development risk for future programs. The basic efficacy and safety of deferiprone is well-known from treatment of iron overload disorders, and it has been shown to be very effective at reducing heart damage due to iron. In general, deferiprone is well tolerated, but as with other iron chelators in the iron overload setting, some patients may experience white cell suppression with long-term and high doses; this side effect has not been seen to date with the short term dosing proposed in our study.

Prevention of Morbidity and Mortality Associated with Contrast Induced Nephropathy

Our first targeted indication for deferiprone is for the prevention (decrease in the rate of incidence) of morbidity and mortality associated with acute kidney injury in subjects with moderate to severe CKD and other risk factors undergoing interventional cardiac procedures and receiving an iodinated radiocontrast agent. There are multiple lines of evidence that form the scientific and clinical basis for our belief in the potential efficacy of deferiprone in preventing the morbidity and mortality associated with x-ray dye, which are described below.

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Our current regulatory strategy for deferiprone is to obtain approval in the United States for the marketing of deferiprone for the prevention (decrease in the rate of incidence) of morbidity and mortality associated with acute kidney injury in subjects with moderate to severe CKD and risk factors undergoing interventional cardiac procedures and receiving an iodinated radiocontrast agent. Our goal is to be the first company to obtain this approval. As a second step, we plan to develop a strategy for the approval of deferiprone for the above indication in the rest of the world, with Europe as the next region of interest. We also believe that we may be able to obtain orphan status for this indication, thus extending our regulatory exclusivity.

An in-person meeting with the FDA was held on March 27, 2007, to discuss development plans for the approval of deferiprone for the prevention (decrease in the rate of incidence) of acute kidney injury secondary to contrast agent administration in high risk patients with CKD. This meeting was instrumental in reaching the following key verbal agreements with the FDA:

On September 10, 2007, a response was obtained from the FDA confirming the satisfactory design of the pivotal clinical study to support marketing approval.

Our current expectation is that completion of the New Drug Application for deferiprone for the desired indication will require completion of the following: a single, pivotal safety and efficacy clinical trial (DEFEND-AKI), a thorough QT/QTc study and a drug-drug interaction study. The total cost to file the New Drug Application is anticipated to be approximately $30 million (DEFEND-AKI study, pharmacology studies, manufacturing/CMC and regulatory filing costs).

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Biomarker Study: Dr. Peter McCullough, William Beaumont Hospital, Royal Oak, MI

Prior to commencement of the pivotal trial, we have decided to initially perform a small biomarker “proof of concept” study, which is planned to begin in the first quarter of 2010. We expect that the trial will generate specific data on the ability of our formulations of deferiprone to reduce biomarker evidence of acute kidney injury, consequently reducing the risk of the phase III trial, potentially enhancing the primary endpoint and providing pharmacokinetic data that is required for our patent continuation filing. This study will include exactly the same population as DEFEND-AKI and will recruit 60 patients over 6 months and cost approximately $1 million. The primary endpoint will be a reduction in biomarkers with CRMX001 versus placebo (NGAL, Cystatin C, creatinine, liver fatty acid binding protein, Kidney injury molecule-1, glutathione-S- transferase).

Pivotal Clinical Trial: DEFEND-AKI

The phase III pivotal trial is already designed and would be the largest pharmaceutical trial ever conducted for the prevention of CIN. In addition, the patient population will also be the highest-risk population ever studied. Currently there is no proven pharmaceutical therapy that prevents or reduces the frequency/severity of CIN. Given this need, and the clear relationship between the development of CIN (defined as a change in renal function) and important clinical outcomes, the FDA has allowed us a unique opportunity to register CRMX001 following the successful completion of a single pivotal trial.

The trial will be a randomized, double-blind, placebo-controlled, parallel-arm, multicenter study. The entry criteria for the trial includes the requirement for moderate to severe CKD as determined by an eGFR <60 mL/min, and at least one additional risk factor (diabetes, age greater than or equal to 75 years or heart failure). The patients will receive either low or iso-osmolar radiocontrast dye for a cardiac interventional procedure. Standard of care will be provided to all patients. This includes the avoidance of nephrotoxic medications, limiting contrast volume as much as clinically possible and hydration both before and after the procedure.

CRMX001 will be given as one immediate release tablet and two extended release tablets (total dose 2.7 g) 1 – 3 hours before angiography and given twice daily for a total of eight days. This dose is close to the initial starting dose for treatment of iron-overload disorders. Eight days of dosing was selected as contrast may be retained in patients with CKD for an extended period and oxidative stress is also present for at least 72 hours in some patients. Patients will be monitored for 90 days following the procedure and the composite endpoint includes any of the following: death, myocardial infarction, dialysis, stroke/TIA, heart failure or re-hospitalization. Given the known safety profile of deferiprone, no significant toxicity or safety issues are anticipated during the trial. From a statistical perspective, the trial is powered (80%) to demonstrate a  1/3 reduction of the composite event rate (30% to 20%) at an α of 0.025.

The principal investigator for the DEFEND-AKI trial will be Peter McCullough M.D., who is widely considered to be one of the foremost authorities on CIN. The “Executive Committee” for the trial consists of Peter McCullough, John Hirshfeld, Bruce Molitoris, Christian Mueller and Sudhir Shah (a principal stockholder of CorMedix). The Clinical Research Organization conducting the trial is Quintiles, Inc., which has significant recent experience in catheterization lab studies. Ninety study sites for the trial have been identified in the United States, Germany, Poland and Switzerland.

Treatment of Chronic Kidney Disease

The risk-benefit profile of deferiprone must be carefully balanced with the underlying condition given the rare occurrence of neutropenia agranulocytosis with chronic therapy. Therefore, a careful development plan will be conducted, taking into account dose-response and the impact on surrogate markers of disease and safety — including our own catalytic iron biomarker test — to ensure that a patient population and dose regimen with the best risk-benefit profile is selected prior to starting a phase III trial.

An Investigational New Drug Application (No. 62,180) is already in place for CKD progression. We could anticipate beginning a new proof of concept study in 2010 with dose-ranging utilizing extended release formulations. We are consulting with some of the world’s experts in the field to design our program. We have also received direction from the FDA in an in-person meeting held in March 2007. In particular, we are exploring the FDA’s willingness to consider the use of novel endpoints beyond the typical death/dialysis or

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doubling of serum creatinine typically required for registration of such an indication. Assuming successful completion of the proof of concept study, which, according to our current timelines, we estimate will take approximately eighteen months, we could potentially commence a phase III trial for deferiprone in 2012 and have a product launch in 2015.

Primary Glomerulonephritis

We currently have early proof of concept from two studies in diabetic nephropathy and glomerulonephritis which were presented at the 40 ^th Annual American Society of Nephrology meeting in November 2007. In these studies, deferiprone was able to significantly reduce protein in the urine, a sign of active kidney disease and a predictor for loss of kidney function. The glomerulonephritis study was conducted in fourteen patients with the following types of glomerulonephritis: Membranous, Focal Segmental Sclerosis, IgA nephropathy, Membranoproliferative and secondary glomerulonephritis (SLE, hemolytic-uremic syndrome, Henoch-Schonlein purpura). Deferiprone was given in a dose of 50mg/Kg/day for six months and consistent reduction (48%) in proteinuria, regardless of etiology, was demonstrated.

We have completed a pharmacokinetic study in renally impaired patients, and are discussing the optimal design of our next studies with the FDA and world experts. Some of these options include focused orphan indications such as specific types of glomerulonephritis (IgA nephropathy, FSGS, etc.).

Product Commercialization

Prevention of Morbidity and Mortality Associated with Contrast Induced Nephropathy

The primary target audience for the CIN indication will be catheterization laboratory-based interventional cardiologists and secondarily nephrologists and interventional radiologists. There are 6,300 interventional cardiologists and approximately 2,200 catheterization labs in the United States of which 1,000 “target” labs conduct the majority of procedures.

We believe that a “sales” force of approximately 50, including medical liaisons, sales representatives and management would be adequate to support the product. The rapid inclusion in relevant guidelines would be important to accelerate uptake. Given the medical safety issue surrounding the use of radiocontrast in at-risk patients and the anticipated morbidity-mortality label for deferiprone, we expect the ramp-up to peak sales and penetration to be faster (3 years) and larger (up to 90%) than for a typical new product launch.

We conducted a formal value-based pricing analysis based on expected events avoided. This analysis shows that the product is cost-neutral at a per-treatment cost of $3,500 (using a threshold cost per-QALYG less than $50,000) and, we believe, highly cost-effective at a cost of $1,000 per treatment (cost per QALYG of only $3,500). The actual cost-effectiveness will ultimately depend on the results of the DEFEND-AKI trials and the chosen sales price.

Given the largely in-patient nature of this high-risk patient group, reimbursement is expected to be via specific Disease Related Groups that cover these high-risk patients.

All in all, we believe that the disease area known as CIN represents a reasonably fast-to-market opportunity — with significant sales potential.

Treatment of Chronic Kidney Disease

The target physician population for CKD will depend upon the intended indication. If we ultimately develop CRMX001 as a therapy to reduce “residual risk” in patients with diabetic nephropathy, the target group would include both nephrologists and endocrinologists, although nephrologists are more likely to care for these more advanced stage patients. Currently in the United States, there are approximately 5,500 nephrologists, although it is likely that a subset of these would treat the majority of these high-risk patients. However, to reach a larger population it would be important to achieve guideline endorsement for CRMX001 in this specific population.

If the CKD indication is partial or unresponsive chronic glomerulonephritis, the physician pool is much smaller. These patients are generally seen at major nephrology centers that specialize in the care of uncommon chronic glomerular disorders (such as the Center for Glomerular Diseases at Columbia University in New York City). Key opinion leader support and inclusion on treatment guidelines will be very important for this indication.

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Life Cycle Management

Prevention of Morbidity and Mortality Associated with Contrast Induced Nephropathy

Pending a positive result from the first study, and successful issuance of a CIN patent, we could extend the product label by conducting additional studies, which could include:

We believe that the value drivers (exclusivity, first mover advantage, development costs, unmet need) and ultimately return on investment is maximized by rapid execution, for the reasons stated below.

Treatment of Chronic Kidney Disease

We believe that the target population for use of deferiprone for the prevention (decrease in the rate of incidence) of morbidity and mortality associated with acute kidney injury numbers fewer than 200,000 patients in the United States, making it a potential orphan indication. As a result, we anticipate that we will achieve at minimum 7 years of exclusivity (5 years of regulatory Hatch-Waxman exclusivity with the first United States registration of Deferiprone and an additional 2 years for the orphan indication).

There are other potential indications for deferiprone, which have pediatric uses. With the approval of the pediatric uses during the above exclusivity period(s), six months will be added to the above exclusivity

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periods. In addition, if CRMX001 is first to market, it will also be considered a Reference Listed Drug and we will be able to list our patents regarding deferiprone (currently pending) in the Orange Book. This should delay generic competition for several years beyond the above-mentioned exclusivity periods.

CRMX002 (Labile Iron Diagnostic Test)

Market Opportunity

Iron is an essential element within all cells of the body. Iron’s importance, in part, has to do with its ability to cycle between two different chemical forms. One of these forms, however, can be damaging to cells through a process called “oxidative stress”. Labile iron has been shown to be both a cause and a marker of multiple types of tissue injury and is increased in the urine of patients with chronic kidney disease and in the blood of patients that have acute coronary syndromes (ex. heart attack).

Based on the toxicity of raised labile iron to cells and tissues, we see a possible future in which testing for “toxic labile iron” could be as relevant as testing for HbA1c or LDL cholesterol, in other words making the concept of “knowing your labile iron number” as important as knowing your cholesterol.

To this end, we aim to develop, validate and, make widely available, a urine diagnostic test for labile iron that could be used to diagnose CKD, identify patients at risk for CKD and identify likely treatment responders and monitor response to therapy with CRMX001.

Formulation

We envision a diagnostic test that would be performed by multiple reference laboratories worldwide. Depending upon the actual performance characteristics of the assay, it is possible that it could be performed in most large hospital laboratories. The clinical validation of the assay as to its sensitivity and specificity to diagnose or monitor chronic renal diseases will largely determine demand, which, in turn, will determine how widely and easily available the assay will become.

Development

Our issued chronic kidney disease patents cover the use of a diagnostic test for urine labile iron and allow us to develop the market for this biomarker. We anticipate developing assay methodology and validating this against current methodologies. Once we have established a reproducible test we will scale-up the test and establish predictive levels for risk, diagnosis and treatment monitoring. We expect that the fully developed test would then be licensed to a global diagnostic company before the launch of CRMX001 in chronic kidney disease.

The timeline for development of CRMX002 will be determined based in part on our funds available.

Product Commercialization

Depending upon the actual performance characteristics of the assay, it is possible that it could be performed in most large hospital laboratories. Consequently we envision the assay being available in most central laboratories. The test could also be developed into a point of care product for use in doctor’s offices.

We would seek to partner the diagnostic product with a suitable diagnostic company.

Manufacturing

All of our manufacturing processes currently are, and we expect them to continue to be, outsourced to third parties. We rely on third-party manufacturers to produce sufficient quantities of drug product for use in clinical trials. We intend to continue this practice for any future clinical trials and commercialization of our products.

A U.S.-based Active Pharmaceutical Ingredient developer, has agreed in principle to provide Active Pharmaceutical Ingredient (manufactured in India at an FDA-compliant facility) and a Drug Master File for CRMX003, subject to entering into a definitive supply agreement, which we expect to do once sufficient funding is available. The clinical trial material and finished product will be manufactured by either or both a European and U.S. company.

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The deferiprone drug substance for CRMX001 is sourced from a company based in India. This site has received previous FDA audits and was also audited by us. No significant issues were identified. The finished product is manufactured by a United States company which was also recently audited by the FDA without citations. The first phase III commercial-sized batch has been produced. Stability studies are ongoing in PVC and ACLAR blisters and bottles and no substantive stability issues have been identified to date. Additional API is available for production of the second and third batches required for the New Drug Application. In order to meet the requirements for 18 months stability, production of these batches will commence when the pivotal trial is about to start. The clinical trial packaging was undertaken by a United States company.

Competitive Landscape for Our Products

CRMX003 and CRMX004 — Prevention and Treatment of Catheter-Related Blood Stream Infections

Products in development in the United States for the prevention and treatment of catheter-related blood stream infections are listed below.

Product		Company		Mechanism		Estimated Launch		Differentiation
Zuragen		Ash Access		Antimicrobial and anticoagulant Methylene blue + parabens + citrate 7%		2011		First potential approvable treatment for catheter-related blood stream infections in the U.S. Potentially need to undertake a 2 nd pivotal trial which will delay launch
B-Lock		Great Lakes Pharmaceuticals Inc.		Minocycline + EDTA + ethanol combinations		Pre Investigational Device Exemption discussions with the FDA		Contains an antibiotic

Antibiotic or antimicrobial coated catheters have been launched by some device companies as short term prevention of catheter infection. These are not effective for hemodialysis catheters due to long term use and high blood flow.

CRMX001 — Prevention of Morbidity and Mortality Associated with Contrast Induced Nephropathy

There are only three other iron traps, or chelators, currently marketed. We believe that none are suited for use in cardiorenal disease and that our patents would preclude the marketing of any iron chelator for cardiorenal indications without a cross-license with us.

The Ferriprox® brand of deferiprone is sold in Europe and Asia as a 500mg immediate release formulation with a high Cmax (associated with nausea) that must be given three times daily, exhibiting a completely different pharmacokinetic profile from the CorMedix formulations.

Deferoxamine (Desferal®) has been available for the longest period of time. It is given intravenously or subcutaneously and due to the large size of the molecule, it does not adequately penetrate cells. Further, we believe the parenteral delivery system will preclude its use in our targeted indications and that multiple days of therapy are likely required.

Desferasirox (Exjade®) is an oral iron trap that was recently launched in the United States and European Union. It has a different pharmacokinetic profile than CRMX001 and is excreted primarily in the feces. Post-marketing experience has revealed frequent and significant renal adverse events (increasing proteinuria and creatinine) including cases of fatal renal failure, making it unlikely, in our opinion, that this product could be used for cardiorenal indications.

A comparison of CRMX001 with the other three currently marketed iron chelators is found below:

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		Deferiprone CMX001 (CorMedix)		Deferiprone Ferriprox® (1)		Desferasirox Exjade® (2)		Deferoxamine (3) Desferal®
Route		Oral IR/ER (b.i.d)		Oral IR (t.i.d)		Oral daily		I.V./S.C.
Renal Toxicity		No		No		Yes		No
Active drug in urine		Yes		Yes		No		Yes
Method of use patents in cardiorenal disease		Yes		No		No		No
Effective at redistributing iron/ membrane permeable		Yes		Yes		Yes		No
Launch date		N/A		2000 EU		2006		1970s

We do not believe that currently available iron traps are suited for development for the prevention (decrease in the rate of incidence) of morbidity and mortality associated with CIN either because of an intravenous form of delivery in the case of deferoxamine or because of documented renal toxicity in the case of desferasirox (Exjade®).

We do not believe there are any late stage investigational new drugs currently in development for this indication. Off-label studies continue to be conducted for N-acetyl cysteine and sodium bicarbonate, but results are inconclusive.

However, there are a number of device-based approaches currently under development by our competitors, including those listed below.

We believe that none of these approaches will match the efficacy and simplicity of a short course of deferiprone tablets given before and after contrast administration.

CRMX001 — Treatment of Chronic Kidney Disease

Although we have not yet made a final decision, we believe that our initial studies would be in patients with unresponsive or partially responsive forms of chronic glomerulonephritis, specifically IgA Nephropathy and Focal Segmental Glomerulosclerosis. The treatments for these two disorders are largely targeted to drugs that modify the body’s immune system (glucocorticoids, azathioprine, cyclosporine, cytoxan, etc.). However, there are groups of patients that do not respond at all or that have only a partial response or toxicity from the drugs themselves. This would likely be our target population.

There are other compounds in clinical trials for these specific diseases. Most are immune-modulating therapies (mycophenolate mofetil, Rituximab, sirolimus, active forms of vitamin D, etc.) and therapies targeting the Renin-Angiotensin System (angiotensin converting-enzyme inhibitors, angiotensin receptor blockers and direct rennin inhibitors). Our proof of concept studies suggests that deferiprone will reduce proteinuria in patients with these disorders and thus may improve long-term outcomes.

Government Regulation

General

The production, distribution, and marketing of products employing our technology, and our development activities, are subject to extensive governmental regulation in the United States and in other countries. In the

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United States, our products are regulated as drugs and are subject to the Federal Food, Drug, and Cosmetic Act, as amended, and the regulations of the FDA, as well as to other federal, state, and local statutes and regulations. These laws, and similar laws outside the United States, govern the clinical and preclinical testing, manufacture, safety, effectiveness, approval, labeling, distribution, sale, import, export, storage, record-keeping, reporting, advertising, and promotion of our products. Product development and approval within this regulatory framework, if successful, will take many years and involve the expenditure of substantial resources. Violations of regulatory requirements at any stage may result in various adverse consequences, including the FDA’s and other health authorities’ delay in approving or refusal to approve a product. Violations of regulatory requirements also may result in enforcement actions.

The following paragraphs provide further information on certain legal and regulatory issues with a particular potential to affect our operations or future marketing of products employing its technology.

Research, Development, and Product Approval Process

The research, development, and approval process in the United States and elsewhere is intensive and rigorous and generally takes many years to complete. The typical process required by the FDA before a therapeutic drug may be marketed in the United States includes:

During preclinical testing, studies are performed with respect to the chemical and physical properties of candidate formulations. These studies are subject to GLP requirements. Biological testing is typically done in animal models to demonstrate the activity of the compound against the targeted disease or condition and to assess the apparent effects of the new product candidate on various organ systems, as well as its relative therapeutic effectiveness and safety. An Investigational New Drug Application must be submitted to the FDA and become effective before studies in humans may commence.

Clinical trial programs in humans generally follow a three-phase process. Typically, Phase 1 studies are conducted in small numbers of healthy volunteers or, on occasion, in patients afflicted with the target disease. Phase 1 studies are conducted to determine the metabolic and pharmacological action of the product candidate in humans and the side effects associated with increasing doses, and, if possible, to gain early evidence of effectiveness. In Phase 2, studies are generally conducted in larger groups of patients having the target disease or condition in order to validate clinical endpoints, and to obtain preliminary data on the effectiveness of the product candidate and optimal dosing. This phase also helps determine further the safety profile of the product candidate. In phase III, large-scale clinical trials are generally conducted in patients having the target disease or condition to provide sufficient data for the statistical proof of effectiveness and safety of the product candidate as required by United States and foreign regulatory agencies.

In the case of products for certain serious or life-threatening diseases, the initial human testing may be done in patients with the disease rather than in healthy volunteers. Because these patients are already afflicted with the target disease or condition, it is possible that such studies will also provide results traditionally obtained in Phase 2 studies. These studies are often referred to as “Phase 1/2” studies. However, even if patients participate in initial human testing and a Phase 1/2 study carried out, the sponsor is still responsible for obtaining all the data usually obtained in both Phase 1 and Phase 2 studies.

Before proceeding with a study, sponsors may seek a written agreement from the FDA regarding the design, size, and conduct of a clinical trial. This is known as a Special Protocol Assessment (“SPA”). Among

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other things, SPAs can cover clinical studies for pivotal trials whose data will form the primary basis to establish a product’s efficacy. SPAs help establish up-front agreement with the FDA about the adequacy of a clinical trial design to support a regulatory approval, but the agreement is not binding if new circumstances arise. There is no guarantee that a study will ultimately be adequate to support an approval even if the study is subject to an SPA.

United States law requires that studies conducted to support approval for product marketing be “adequate and well controlled.” In general, this means that either a placebo or a product already approved for the treatment of the disease or condition under study must be used as a reference control. Studies must also be conducted in compliance with good clinical practice requirements, and informed consent must be obtained from all study subjects.

The clinical trial process for a new compound can take ten years or more to complete. The FDA may prevent clinical trials from beginning or may place clinical trials on hold at any point in this process if, among other reasons, it concludes that study subjects are being exposed to an unacceptable health risk. Trials may also be prevented from beginning or may be terminated by institutional review boards, who must review and approve all research involving human subjects. Side effects or adverse events that are reported during clinical trials can delay, impede, or prevent marketing authorization. Similarly, adverse events that are reported after marketing authorization can result in additional limitations being placed on a product’s use and, potentially, withdrawal of the product from the market.

Following the completion of clinical trials, the data are analyzed to determine whether the trials successfully demonstrated safety and effectiveness and whether a product approval application may be submitted. In the United States, if the product is regulated as a drug, a New Drug Application must be submitted and approved before commercial marketing may begin. The New Drug Application must include a substantial amount of data and other information concerning the safety and effectiveness of the compound from laboratory, animal, and human clinical testing, as well as data and information on manufacturing, product quality and stability, and proposed product labeling.

Each domestic and foreign manufacturing establishment, including any contract manufacturers CorMedix may decide to use, must be listed in the New Drug Application and must be registered with the FDA. The application generally will not be approved until the FDA conducts a manufacturing inspection, approves the applicable manufacturing process for the drug product, and determines that the facility is in compliance with cGMP requirements.

Under the Prescription Drug User Fee Act, as amended, the FDA receives fees for reviewing an New Drug Application and supplements thereto, as well as annual fees for commercial manufacturing establishments and for approved products. These fees can be significant. For fiscal year 2010, the New Drug Application review fee alone is $1,405,500, although certain limited deferral, waivers, and reductions may be available.

Each New Drug Application submitted for FDA approval is usually reviewed for administrative completeness and reviewability within 45 to 60 days following submission of the application. If deemed complete, the FDA will “file” the New Drug Application, thereby triggering substantive review of the application. The FDA can refuse to file any New Drug Application that it deems incomplete or not properly reviewable. The FDA has established performance goals for the review of New Drug Applications — six months for priority applications and 10 months for standard applications. However, the FDA is not legally required to complete its review within these periods and these performance goals may change over time. Moreover, the outcome of the review, even if generally favorable, typically is not an actual approval but an “action letter” that describes additional work that must be done before the application can be approved. The FDA’s review of an application may involve review and recommendations by an independent FDA advisory committee. Even if the FDA approves a product, it may limit the approved therapeutic uses for the product as described in the product labeling, require that warning statements be included in the product labeling, require that additional studies be conducted following approval as a condition of the approval, impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a risk management plan, or otherwise limit the scope of any approval.

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Significant legal and regulatory requirements also apply after FDA approval to market under a New Drug Application. These include, among other things, requirements related to adverse event and other reporting, product advertising and promotion 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. The FDA also enforces the requirements of the Prescription Drug Marketing Act which, among other things, imposes various requirements in connection with the distribution of product samples to physicians.

The regulatory framework applicable to the production, distribution, marketing, and/or sale, of our products may change significantly from the current descriptions provided herein in the time that it may take for any of its products to reach a point at which a New Drug Application is approved.

Overall research, development, and approval times depend on a number of factors, including the period of review at FDA, the number of questions posed by the FDA during review, how long it takes to respond to the FDA’s questions, the severity or life-threatening nature of the disease in question, the availability of alternative treatments, the availability of clinical investigators and eligible patients, the rate of enrollment of patients in clinical trials, and the risks and benefits demonstrated in the clinical trials.

Drugs for Serious or Life-Threatening Illnesses

The Federal Food, Drug, and Cosmetic Act, as amended, and FDA regulations provide certain mechanisms for the accelerated “Fast Track” approval of products intended to treat serious or life-threatening illnesses which have been studied for safety and effectiveness and which demonstrate the potential to address unmet medical needs. The procedures permit early consultation and commitment from the FDA regarding the preclinical and clinical studies necessary to gain marketing approval. Provisions of this regulatory framework also permit, in certain cases, New Drug Applications to be approved on the basis of valid surrogate markets of product effectiveness, thus accelerating the normal approval process. Where the FDA approves a product on the basis of a surrogate market, it requires the sponsor to perform post-approval, or Phase 4, studies as a condition of approval, and may withdraw approval if post-approval studies do not confirm the intended clinical benefit or safety of the product. Special rules would also apply to the submission to the FDA of advertising and promotional materials prior to use.

Orphan Drugs

Under the Orphan Drug Act, special incentives exist for companies to develop products for rare diseases or conditions, which are defined to include those diseases or conditions that affect fewer than 200,000 people in the United States, companies may request that the FDA grant a drug orphan designation prior to approval. Products designated as orphan drugs are eligible for special grant funding for research and development, FDA assistance with the review of clinical trial protocols, potential tax credits for research, reduced filing fees for marketing applications, and a special seven-year period of market exclusivity after marketing approval. Orphan drug exclusivity prevents FDA approval of applications by others for the same drug and the designated orphan disease or condition. The FDA may approve a subsequent application from another entity if the FDA determines that the application is for a different drug or different use, or if the FDA determines that the subsequent product is clinically superior, or that the holder of the initial orphan drug approval cannot assure the availability of sufficient quantities of the drug to meet the public’s need. A grant of an orphan designation is not a guarantee that a product will be approved. If a sponsor receives orphan drug exclusivity upon approval, there can be no assurance that the exclusivity will prevent another entity or a similar drug from receiving approval for the same or other uses.

Controlled Substances

Compounds that have a potential for patient dependence and abuse are classified as controlled substances under the Controlled Substances Act, regulations of the DEA, and similar state and foreign laws. In the United States, for new chemical entities under development for medicinal use, designated staff at the FDA make recommendations about whether a drug should be scheduled as a controlled substance, and the Drug Enforcement Administration (“DEA”) makes the final determination. States then either follow the federal classification or make their own determination. In the case of a new drug approved by the FDA, the final DEA scheduling determination generally occurs several months or longer after the FDA’s approval.

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Drugs that are scheduled as controlled substances are subject to stringent regulatory requirements, including requirements for registering manufacturing and distribution facilities, security controls and employee screening, recordkeeping, reporting, product labeling and packaging, import and export. There are five federal schedules for controlled substances, known as Schedule I, II, III, IV and V. The regulatory requirements that apply to a drug vary depending on the particular controlled substance schedule into which a drug is placed, based on consideration of its potential for dependence and abuse and its medicinal uses. Schedules I and II contain the most stringent restrictions and requirements, and Schedule V the least. No products with recognized medicinal uses are in Schedule I. For substances in Schedule I and II, quotas must be obtained from the DEA in order to manufacture, procure, and distribute inventory. For all controlled substances, there are potential criminal and civil penalties that apply for the failure to meet applicable legal requirements. Healthcare professionals must have special DEA licenses in order to prescribe controlled substances.

Other United States Regulatory Requirements

In the United States, the research, manufacturing, distribution, sale, and promotion of drug and biological products are potentially subject to regulation by various federal, state, and local authorities in addition to the FDA, including the Centers for Medicare and Medicaid Services (formerly the Heath Care Financing Administration), other divisions of the United States Department of Health and Human Services (e.g., the Office of Inspector General), the United States Department of Justice and individual United States Attorney offices within the Department of Justice, and state and local governments. For example, sales, marketing, and scientific/educational grant programs must comply with the anti-fraud and abuse provisions of the Social Security Act, the False Claims Act, the privacy provision of the Health Insurance Portability and Accountability Act, and similar state laws, each as amended. Pricing and rebate programs must comply with the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act of 1990 and the Veterans Health Care Act of 1992, each as amended. If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply. All of these activities are also potentially subject to federal and state consumer protection, unfair competition, and other laws.

Moreover, CorMedix is now, and may become subject to, additional federal, state, and local laws, regulations, and policies relating to safe working conditions, laboratory practices, the experimental use of animals, and/or the use, storage, handling, transportation, and disposal of human tissue, waste, and hazardous substances, including radioactive and toxic materials and infectious disease agents used in conjunction with our research work.

Foreign Regulatory Requirements

CorMedix and its collaborative partners may be subject to widely varying foreign regulations, which may be quite different from those of the FDA, governing clinical trials, manufacture, product registration and approval, and pharmaceutical sales. Whether or not FDA approval has been obtained, CorMedix or its collaboration partners must obtain a separate approval for a product by the comparable regulatory authorities of foreign countries prior to the commencement of product marketing in these countries. In certain countries, regulatory authorities also establish pricing and reimbursement criteria. The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. In addition, under current United States law, there are restrictions on the export of products not approved by the FDA, depending on the country involved and the status of the product in that country.

Reimbursement and Pricing Controls

In many of the markets where CorMedix or its collaborative partners would commercialize a product following regulatory approval, the prices of pharmaceutical products are subject to direct price controls (by law) and to drug reimbursement programs with varying price control mechanisms. Public and private health care payors control costs and influence drug pricing through a variety of mechanisms, including through negotiating discounts with the manufacturers and through the use of tiered formularies and other mechanisms that provide preferential access to certain drugs over others within a therapeutic class. Payors also set other criteria to govern the uses of a drug that will be deemed medically appropriate and therefore reimbursed or otherwise covered. In particular, many public and private health care payors limit reimbursement and coverage

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to the uses of a drug that are either approved by the FDA or that are supported by other appropriate evidence (for example, published medical literature) and appear in a recognized drug compendium. Drug compendia are publications that summarize the available medical evidence for particular drug products and identify which uses of a drug are supported or not supported by the available evidence, whether or not such uses have been approved by the FDA. For example, in the case of Medicare coverage for physician-administered oncology drugs, the Omnibus Budget Reconciliation Act of 1993, with certain exceptions, prohibits Medicare carriers from refusing to cover unapproved uses of an FDA-approved drug if the unapproved use is supposed by one or more citations in the American Hospital Formulary Service Drug Information the American Medical Association Drug Evaluations, or the United States Pharmacopoeia Drug Information. Another commonly cited compendium, for example under Medicaid, is the DRUGDEX Information System.

License Agreements and Intellectual Property

CRMX001 and CRMX002

On July 28, 2006, we entered into the Shiva Contribution Agreement. Pursuant to the Shiva Contribution Agreement, Shiva contributed to us its kidney products business and granted us an exclusive, worldwide license agreement for a patent estate covering proprietary formulations of deferiprone and a biomarker diagnostic test for measuring levels of labile iron, the Shiva Technology. The Shiva Technology served as the basis for CRMX001 and CRMX002, respectively. In addition to an initial fee and equity stake in the Company provided to Shiva under the Shiva Contribution Agreement, we are also required to make cash payments to Shiva upon the achievement of certain clinical and regulatory-based milestone and the maximum aggregate amount of such payments, assuming achievement of all milestones, is $10,000,000. Events that trigger milestone payments include but are not limited to the reaching of various stages of applicable clinical trials and regulatory approval processes. Under the terms of the Shiva Contribution Agreement, in the event that the Shiva Technology is commercialized, we are also obligated to pay to Shiva annual royalties based upon net sales of the products. In the event that we sublicense Shiva Technology to a third party, we are obligated to pay to Shiva a portion of the royalties, fees or other lump-sum payments we receive from the sublicense.

Pursuant to the Shiva Contribution Agreement, we have licensed worldwide rights to “Kidney Disease” use patents for deferiprone as well as the following patents and patent applications:

The original composition of the patent for deferiprone has now expired.

Three patent families for deferiprone were developed and filed by Shiva Biomedical, LLC and licensed by CorMedix. All these patents are focused on the application of iron chelators in cardiorenal disease. The earliest patent family, originally filed in 2000 (now issued in the United States and a notice of allowance received in Europe), has broad claims related to the diagnosis (based on urine catalytic iron) and treatment of progressive kidney disease (all forms of glomerulonephritis and other nephropathies). The patent covers the use of any iron chelator (including deferoxamine and desferasirox) in this setting and will expire in 2020.

The second patent family, focused on the prevention of acute renal failure associated with iodinated radiocontrast dyes (CIN), was filed in August 2005, and is still undergoing prosecution. This patent also seeks the broad application of all iron chelators and through the filing of a continuation in part application is anticipated to have a significant formulation element (drug product claim/s) as well as method of treatment claims and if issued, will expire in 2025.

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The third patent, seeks to apply iron chelators to reduce the so-called erythropoietin ‘resistance’ sometimes encountered in the dialysis setting, on the basis that this approach reduces inflammation and oxidative stress and increases iron flux.

In addition to the above three patent families, a fourth patent application, filed by us in November 2006, seeks to apply iron chelators and catalytic iron in the treatment of and diagnosis of gadolinium-induced toxicity. Gadolinium is a contrast agent commonly used for magnetic resonance imaging.

CRMX003 and CRMX004

On January 30, 2008, we entered into a License and Assignment Agreement with NDP. Pursuant to the NDP License Agreement, NDP granted us exclusive, worldwide licenses for certain antimicrobial catheter lock solutions, processes for treating and inhibiting infections, a biocidal lock system and a taurolidine delivery apparatus, and the corresponding United States and foreign patents and applications, the NDP Technology. We acquired such licenses and patents through our assignment and assumption of NDP’s rights under certain separate license agreements by and between NDP and Dr. Hans-Dietrich Polaschegg, Dr. Klaus Sodemann, and Dr. Johannes Reinmueller. NDP also granted us exclusive licenses, with the right to grant sublicenses, to use and display certain trademarks in connection with the NDP Technology. As consideration in part for the rights to the NDP Technology, we paid NDP an initial licensing fee of $325,000 and granted NDP an equity interest in the Company, consisting presently of 533,905 shares of common stock, subject to certain anti-dilution adjustments. In addition, we are required to make payments to NDP upon the achievement of certain regulatory and sales-based milestones. Such payments will be made in the form of shares of common stock currently held in escrow for NDP, presently amounting to 213,562 shares of common stock, subject to certain anti-dilution adjustments. The NDP License Agreement contains other customary clauses and terms as are common in similar agreements in the industry.

On January 30, 2008, we also entered into an Exclusive License and Consulting Agreement with Dr. Polaschegg. Pursuant to the Polaschegg License Agreement, Dr. Polaschegg granted us an exclusive, worldwide license for a gel lock invention and certain taurolidine treatments and the corresponding United States patent applications, the Polaschegg Technology. The Polaschegg Technology serves as a basis for CRMX004. As consideration for the rights to the Polaschegg Technology, in addition to an initial fee, we agreed to pay Dr. Polaschegg certain royalty payments ranging from 1% to 3% of the net sales of the Polaschegg Technology. The Polaschegg License Agreement also sets forth certain minimum royalty payments (on an annual basis) to be made to Dr. Polaschegg in connection with the Polaschegg Technology. The Polaschegg License Agreement contains other customary clauses and terms as are common in similar agreements in the industry.

Pursuant to the NDP License Agreement and the Polaschegg License Agreement, we have licensed worldwide rights to the following patents and patent applications:

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We believe that this patent portfolio covers effective solutions to the various problems discussed previously when using taurolidine in clinical applications, and specifically in hemodialysis applications. We intend to file additional patent applications to cover any additional related subject matter we develop.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth the name, age and position of each of our directors and executive officers.

Name		Age		Position
John C. Houghton		46		President and Chief Executive Officer, Director
Russell H. Ellison, M.D., M.Sc.		62		Chairman of the Board
Mark Houser, M.D., M.B.A.		58		Chief Medical Officer
Mahendra Patel, Ph.D.		60		Director
Antony E. Pfaffle, M.D.		46		Director
Timothy Hofer		35		Director, Secretary
Stephen Pilatzke		30		Treasurer

The business experience for the past five years (and, in some instances, for prior years) of each of the Company’s executive officers and directors are as follows:

John C. Houghton became our President and Chief Executive Officer in May 2009. Previously, Mr. Houghton was our Chief Business Officer from January 2007 to May 2009. Mr. Houghton was the Vice President for Global Sales & Marketing at Stryker Biotech, a manufacturer of medical devices and medical equipment, from February 2005 to December 2006, where he helped build the United States and European Union sales and marketing infrastructure. Mr. Houghton worked for Aventis, Inc. and predecessor company Rhone-Poulenc Rorer Ltd. from 1992 to 2005, now a part of Sanofi-Aventis, an international pharmaceutical company, where he held positions of increasing responsibility, culminating in his role as Global New Products Marketing & Licensing Head for Cardiovascular, Diabetes, Respiratory, Inflammation and Bone. Mr. Houghton received his B.Sc. degree from Liverpool University in 1987.

Russell H. Ellison, M.D., M.Sc. joined us as Chairman of the Board in July 2007. Dr. Ellison serves as Executive Vice President of PBS. From October 2005 until June 2007, Dr. Ellison served as the Vice President of Clinical Development of Fibrogen, Inc., a privately held biotechnology company. From August 2002 to December 2004, Dr. Ellison served as Vice President of Medical Affairs and Chief Medical Officer of Sanofi-Synthelabo, USA, a pharmaceutical company. From May 1997 to August 2002, Dr. Ellison served as Vice President, Medical Affairs and Chief Medical Officer of Hoffman-La Roche, Inc., a pharmaceutical company. Dr. Ellison also serves as a director of several privately held development stage biotechnology companies. Dr. Ellison holds an M.D. from the University of British Columbia and an M.Sc. (with distinction) from The London School of Tropical Medicine and Hygiene.

Mark Houser, M.D., M.B.A. joined us as our Chief Medical Officer in March 2007. Previously, Dr. Houser worked for Ortho Biotech Products, a biopharmaceutical company that is an affiliate of Johnson & Johnson, a health, medical devices and pharmaceuticals conglomerate, from August 2002 to February 2007, where he held positions of increasing responsibility, culminating in his role as Medical Director, Internal Medical Clinical Affairs. Dr. Houser is Clinical Professor of Pediatrics at the University of Nebraska Medical Center, where he has been on teaching staff since 1983. Dr. Houser earned a Masters of Business Administration degree from Arizona State University in 2002, and completed his medical degree at University of Nebraska Medical Center in 1975.

Mahendra Patel, Ph.D. has been a director of CorMedix since March 2008. Dr. Patel is the Chief Executive Officer of Navinta LLC, a technology development company that supplies dosage formulations to the pharmaceutical industry. Previously, Dr. Patel served as Chief Scientific Officer in charge of Global Pharmaceutical Development and as Support Leader to the Business Development and Merger & Acquisition groups at Sandoz, a Novartis affiliate, from January 2000 to December 2004. He is a member of the Board of Directors of Emcure Pharmaceuticals based in Pune, India, and of Zydus Pharmaceuticals USA. Dr. Patel received his M.S. and Ph.D. degrees in Pharmacy from the University of Wisconsin, Madison, and his B.Sc. degree in Chemistry from Gujarat University, India. Dr. Patel is a director of Shiva BioMedical, LLC, which is one of our technology licensors and major stockholders.

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Antony E. Pfaffle, M.D. has been a director of CorMedix since February 2007. Dr. Pfaffle has been a Partner at Bearing Circle Capital, L.P., an investment fund, since May 2007. He was a Managing Director at Paramount BioCapital, Inc. and Senior Vice-President of Business Development at Paramount BioSciences, LLC from December 2005 to May 2007. Dr. Pfaffle was a Principal and Founder of Black Diamond Research, an investment research company, from July 2001 to December 2005. Dr. Pfaffle is an internist who practiced nephrology at New York Hospital, Lenox Hill and Memorial Sloan-Kettering. Dr. Pfaffle received his M.D. degree from New York Medical College in 1989.

Timothy M. Hofer has been a director of CorMedix since February 2007, and was appointed our Secretary in November 2006. Mr. Hofer is Senior Vice President, Legal Affairs for Paramount BioCapital, Inc. and Paramount Biosciences, LLC, where he has been employed since April 2005. Mr. Hofer also serves as an officer and director of several privately held development stage biotechnology companies. From July 2000 until March 2005, Mr. Hofer was an associate in the Mergers & Acquisitions/Private Equity practice group of the New York office of the law firm O’Melveny & Myers LLP, and its predecessor, O’Sullivan Graev & Karabell, LLP.

Stephen Pilatzke has been our Treasurer since February 2008. Mr. Pilatzke currently serves as the Senior Controller of PBS, where he has been employed since December 2005. Previously, Mr. Pilatzke worked as an auditor at Eisner LLP, an accounting and advisory firm, from November 2001 through December 2005. Mr. Pilatzke is an officer of several privately held biotechnology companies. Mr. Pilatzke received his Bachelor’s degree in Accounting from Binghamton University in 2001. Mr. Pilatzke is a certified public accountant.

Director Independence

We anticipate that each of our directors and nominees, with the exception of                 , will qualify as “independent” under the listing standards of NYSE Amex (even though we are not currently listed on such exchange), federal securities laws and SEC rules with respect to members of boards of directors and members of all board committees on which he or she serves.

Arrangements Regarding Nomination for Election to the Board of Directors

The Underwriting Agreement with Maxim Group LLC, referred to herein as Maxim, will provide that we will permit Maxim to either (i) designate one individual who meets the independence criteria of NYSE Amex to serve on the Board of Directors for the three-year period following the closing of this offering or (ii) in the event that the individual designated by Maxim is not elected to the Board of Directors, have a representative of Maxim attend all meetings of the Board of Directors as an observer during such three-year period. Such director or observer, as the case may be, will attend meetings of the Board of Directors, receive all notices and other correspondence and communications sent by us to our directors, and such director will receive compensation equal to the highest compensation of other non-employee directors, excluding the Chairman of the Audit Committee. We expect to appoint a designee of Maxim to our Board of Directors prior to the completion of this offering.

Under the terms of the Shiva Contribution Agreement, Shiva has the right to appoint one person to our Board of Directors during the term of the Shiva Contribution Agreement. Mr. Patel was appointed to our Board of Directors pursuant to this right.

Board Committees

Our Board of Directors does not have any committees at this time. Prior to the completion of this offering, our Board of Directors will have the following committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by our Board of Directors.

Audit Committee

Our Audit Committee will consist of           , each of whom will satisfy the independence requirements under NYSE Amex and SEC rules and regulations applicable to audit committee members and have an understanding of fundamental financial statements.            will serve as chairman of the Audit Committee.

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           will qualify as an “audit committee financial expert” as that term is defined in the rules and regulations of the SEC. The designation of            as an “audit committee financial expert” will not impose on him any duties, obligations or liability that are greater than those that are generally imposed on him as a member of our Audit Committee and our Board of Directors, and his designation as an “audit committee financial expert” pursuant to this SEC requirement will not affect the duties, obligations or liability of any other member of our Audit Committee or Board of Directors.

The Audit Committee will monitor our corporate financial statements and reporting and our external audits, including, among other things, our internal controls and audit functions, the results and scope of the annual audit and other services provided by our independent registered public accounting firm and our compliance with legal matters that have a significant impact on our financial statements. Our Audit Committee also will consult with our management and our independent registered public accounting firm prior to the presentation of financial statements to stockholders and, as appropriate, initiates inquiries into aspects of our financial affairs. Our Audit Committee will be responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters, and will have established such procedures to become effective upon the effectiveness of the registration statement of which this prospectus forms a part. In addition, our Audit Committee will be directly responsible for the appointment, retention, compensation and oversight of the work of our independent auditors, including approving services and fee arrangements. All related party transactions will be approved by our Audit Committee before we enter into them.

Both our independent auditors and internal financial personnel will regularly meet with, and will have unrestricted access to, the Audit Committee.

Compensation Committee

Our Compensation Committee will consist of       , each of whom will satisfy the independence requirements of NYSE Amex and SEC rules and regulations. Each member of this committee will be a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended.        will serve as chairman of the Compensation Committee.

The Compensation Committee will review and approve our compensation policies and all forms of compensation to be provided to our executive officers and directors, including, among other things, annual salaries, bonuses, and other incentive compensation arrangements. In addition, our Compensation Committee will administer our stock option and employee stock purchase plans, including granting stock options to our executive officers and directors. Our Compensation Committee also will review and approve employment agreements with executive officers and other compensation policies and matters.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee will consist of             , each of whom will satisfy the independence requirements of NYSE Amex and SEC rules and regulations.        will serve as chairman of the Nominating and Corporate Governance Committee.

Our Nominating and Corporate Governance Committee will identify, evaluate and recommend nominees to our Board of Directors and committees of our Board of Directors, conduct searches for appropriate directors and evaluate the performance of our Board of Directors and of individual directors. The Nominating and Corporate Governance Committee also will be responsible for reviewing developments in corporate governance practices, evaluating the adequacy of our corporate governance practices and reporting and making recommendations to the Board of Directors concerning corporate governance matters.

Family Relationships

There are no family relationships between any of our directors or executive officers.

Scientific Advisory Boards

CorMedix has established two Scientific Advisory Boards that provide guidance to the Company on matters of scientific relevance.

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Our Cardiorenal Advisory Board is composed of leading physicians with special expertise in cardiorenal disease, representing the fields of nephrology, diabetes and endocrinology and cardiology. We believe these outstanding physicians will provide the high-level critical thinking and cutting-edge expertise we will require as we work to become a leading innovator in this exciting, challenging area of medicine. They provide feedback and advice regarding unmet medical needs, new therapeutic options, guidance on the design and conduct of clinical studies; and critical thinking on product development strategies and in-licensing opportunities.

Our Ferroscience Advisory Board is composed of leading scientists in the field of iron biology, or “ferroscience” to provide feedback and advice regarding the role of iron and oxidative stress in tissue injury and cardiorenal disease, and the current and potential future uses of iron chelation therapy.

In addition to our Scientific Advisory Boards, we have a Neutrolin® consultant group, which is composed of leading physicians with expertise in hemodialysis, infectious diseases (specifically catheter-related blood stream infections) and vascular access. We believe that the group will be able to advise us on the optimal development plan, with particular emphasis on clinical trial design.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following Summary Compensation Table shows the compensation awarded to or earned by our President and Chief Executive Officer and other two most highly-compensated executive officers for fiscal 2008. Also shown is the compensation awarded to or earned by our former President and Chief Executive Officer due to the fact that he held such positions during a portion of fiscal 2008. The persons listed in the following Summary Compensation Table are referred to herein as the “Named Executive Officers.”

Name and Principal Position		Year				Salary ($)				Bonus ($)				Option Awards ($)				Total ($)
John Houghton President and Chief Executive Officer (1)			2008				220,000				75,000				3,265	(2)			298,265
Bruce Cooper Former President and Chief Executive Officer (3)			2008				350,000				100,000				—				450,000
Mark Houser Chief Medical Officer			2008				220,000				—				3,265	(4)			223,265
Stephen Pilatzke Treasurer (5)			2008				—				—				—				—

(1)

Mr. Houghton became our President and Chief Executive Officer in May 2009. Previously, Mr. Houghton was our Chief Business Officer from January 2007 to May 2009.

(2)

On August 1, 2008, under the 2006 Stock Incentive Plan, our Board of Directors granted Mr. Houghton options to purchase 15,000 shares of our common stock at an exercise price of $1.05 per share. One-third of the options vest on each of the first three anniversaries of the grant date.

(3)

Dr. Cooper served as our President and Chief Executive Officer from November 2006 to June 2009.

(4)

On August 1, 2008, under the 2006 Stock Incentive Plan, our Board of Directors granted Dr. Houser options to purchase 15,000 shares of our common stock at an exercise price of $1.05 per share. One-third of the options vest on each of the first three anniversaries of the grant date.

(5)

Mr. Pilatzke is not compensated by us for his services as Treasurer. Mr. Pilatzke is an employee of Paramount BioSciences, LLC.

Employment Agreements and Arrangements

John Houghton

On December 22, 2006, we entered into an employment agreement with Mr. Houghton to act as our Chief Business Officer (the “Original Houghton Employment Agreement”), for an initial term of three years. We have agreed with Mr. Houghton to amend and restate his employment agreement, effective as of November 25, 2009 (the “Amended and Restated Houghton Employment Agreement”) in connection with his appointment as our President and Chief Executive Officer in May 2009.

Pursuant to the Amended and Restated Houghton Employment Agreement, Mr. Houghton will receive an annual base salary of $250,000, and is eligible for annual milestone bonus payments of up to 30% of his base salary. The Amended and Restated Houghton Employment Agreement will also provide for incentive bonuses of $25,000 or $50,000 if we license a therapeutic drug, diagnostic, device or biologic through Mr. Houghton’s primary efforts, depending on the safety and efficacy of such compound. In addition, the Amended and Restated Houghton Employment Agreement will provide for a $50,000 bonus upon consummation of this offering and certain market capitalization bonuses. In connection with his entry into the Original Houghton Employment Agreement, on January 2, 2007, Mr. Houghton was issued 105,999 restricted shares of common stock, one third of which vests on each of the first three anniversaries of the grant, if Mr. Houghton remains our employee. The Original Houghton Employment Agreement further entitled Mr. Houghton to a one-time $30,000 cash payment in reimbursement for relocation expenses. The Original Houghton Employment Agreement did, and the Amended and Restated Houghton Agreement will, provide for severance payments in certain circumstances, as discussed in detail below.

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Mark Houser

On February 14, 2007, we entered into an employment agreement with Dr. Houser to act as our Chief Medical Officer (the “Houser Employment Agreement”) for an initial term of three years, which term will extend automatically for additional one-year periods unless appropriate notice is given by one of parties. Pursuant to the Houser Employment Agreement, Dr. Houser receives an annual base salary of $220,000, and is eligible for annual milestone bonus payments of up to 30% of his base salary. In connection with his entry into the Houser Employment Agreement, on March 1, 2007, Dr. Houser was issued 105,999 restricted shares of common stock, one third of which vests on each of the first three anniversaries of the grant, if Dr. Houser remains our employee. The Houser Employment Agreement provides for severance payments in certain circumstances, as discussed in detail below.

Bruce Cooper

On November 9, 2006, we entered into an employment agreement with Dr. Cooper to act as our President and Chief Executive Officer (the “Cooper Employment Agreement”) for a term of three years. Pursuant to the Cooper Employment Agreement, Dr. Cooper received an annual base salary of $350,000, with a guaranteed annual bonus of $100,000 provided he was employed on the last day of the applicable year. Dr. Cooper was also eligible for annual milestone bonus payments of up to 40% of his base salary. The Cooper Employment Agreement further provided for market capitalization bonuses of between $125,000 and $1,000,000 depending on the attainment of market capitalization milestones. The Cooper Employment Agreement provided for the issuance to Dr. Cooper of common stock equal to 7.5% of our then outstanding common stock on a fully-diluted basis, with the shares vesting on each of the first three anniversaries of the grant, if Dr. Cooper remained our employee. The Cooper Employment Agreement also provided anti-dilution protections under which we were obligated to issue stock options to Dr. Cooper sufficient to maintain his ownership percentage at 7.5% of the outstanding common stock on a fully diluted basis. Such options were to vest, if at all, annually from the date of grant in equal proportions on each anniversary of Dr. Cooper’s employment agreement, such right terminating once we raised $10 million through the sale of our equity securities. The Cooper Employment Agreement also provided for severance payments in certain circumstances, as discussed in detail below.

Dr. Cooper resigned from his position as our Chief Executive Officer in June 2009, and continued to serve as a member of our Board of Directors until November 2009.

Potential Payments Upon Termination or Change in Control

John Houghton

Pursuant to the Amended and Restated Houghton Employment Agreement, if we terminate Mr. Houghton as a result of his death or disability, Mr. Houghton, or his estate, as applicable, will receive his base salary, plus any accrued but unpaid annual milestone bonus and incentive bonus he is owed for a period of three months following his death or disability, and all unvested restricted shares and stock options held by Mr. Houghton that are scheduled to vest within the next year will be accelerated and vest as of the termination date. If we terminate Mr. Houghton for cause or Mr. Houghton terminates his employment other than for good reason, Mr. Houghton will receive his base salary and unreimbursed expenses through the date of termination. If we terminate Mr. Houghton upon the occurrence of a change of control, and on the date of termination the fair market value of our common stock is more than $50,000,000 (as determined by the Board of Directors in good faith), Mr. Houghton will receive his base salary and benefits for a period of six months following his termination, and all unvested restricted shares and stock options held by Mr. Houghton that are scheduled to vest will be accelerated and vest as of the termination date. If we terminate Mr. Houghton for reasons other than those stated above or Mr. Houghton terminates his employment for good reason, Mr. Houghton will receive his base salary and benefits for a period of six months following his termination, and all unvested restricted shares and stock options will be accelerated and vest as of the termination date.

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Mark Houser

Pursuant to the Houser Employment Agreement, if we terminate Dr. Houser as a result of his death or disability, Dr. Houser, or his estate, as applicable, will receive his base salary, plus any accrued but unpaid annual milestone bonus and incentive bonus he is owed through the date of his death or disability, and all unvested restricted shares and stock options held by Dr. Houser that are scheduled to vest on the next succeeding anniversary of March 1, 2007 will be accelerated and vest as of the termination date. If we terminate Dr. Houser for cause or Dr. Houser terminates his employment other than for good reason, Dr. Houser will receive his base salary and unreimbursed expenses through the date of termination. If we terminate Dr. Houser within 30 days prior to or 60 days following the occurrence of a change of control, and on the date of termination the fair market value of our common stock is less than twice the amount we have raised in gross proceeds through the sale of equity securities (as determined by the Board of Directors in good faith), Dr. Houser will receive his base salary and benefits for a period of three months following his termination, and all unvested restricted shares and stock options held by Dr. Houser that are scheduled to vest on the next succeeding anniversary of March 1, 2007 will be accelerated and vest as of the termination date. If we terminate Dr. Houser for reasons other than those stated above or Dr. Houser terminates his employment for good reason, Dr. Houser will receive his base salary and benefits for a period of six months following his termination, and all unvested restricted shares and stock options will be accelerated and vest as of the termination date.

Outstanding Equity Awards at Fiscal Year-End Table

The following table sets forth certain information, on an award-by-award basis, concerning unexercised options to purchase common stock and common stock that has not yet vested for each Named Executive Officer and outstanding as of December 31, 2008.

		Option Awards																Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable				Number of Securities Underlying Unexercised Options (#) Unexercisable				Option Exercise Price ($)				Option Expiration Date				Number of Shares That Have Not Vested (#)				Market Value of Shares That Have Not Vested ($)
John Houghton (1)			—				15,000				1.05				8/1/2018
																			35,333				37,100
Bruce Cooper			—				—				—				—				—				—
Mark Houser (2)			—				15,000				1.05				8/1/2018
																			35,333				37,100
Stephen Pilatzke			—				—				—				—				—				—

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Incentive Plan may serve to broaden the equity participation of key employees and further link the long-term interests of management and stockholders. Awards under the 2006 Stock Incentive Plan are limited to shares, and options to purchase shares, of our common stock.

To date, no shares of common stock, and options to purchase 185,000 shares of common stock, have been issued under the 2006 Stock Incentive Plan. As of November 24, 2009, 740,000 shares of common stock remain authorized for issuance under the 2006 Stock Incentive Plan.

Administration

The 2006 Stock Incentive Plan will be administered by a compensation committee appointed by our Board of Directors. The compensation committee will consist of two or more non-employee directors, each of whom is intended to be, to the extent required by Rule 16b-3 under the Securities Exchange Act of 1934 and Section 162(m) of the Internal Revenue Code (the “Code”), a non-employee director under Rule 16b-3 and an outside director under Section 162(m), or if no committee exists, the Board of Directors. References below to the compensation committee include a reference to the board for those periods in which the board is acting. The compensation committee has the full authority to administer and interpret the 2006 Stock Incentive Plan and to take any other actions and make all other determinations that it deems necessary or appropriate in connection with the 2006 Stock Incentive Plan or the administration or interpretation thereof.

Eligibility and Types of Awards

Our employees, directors and consultants, advisors or other independent contractors who provide services to us are eligible to be granted stock options, stock awards and performance shares under the 2006 Stock Incentive Plan.

Available Shares

Subject to adjustment upon certain corporate transactions or events, a maximum of 925,000 shares of our common stock may be issued under the 2006 Stock Incentive Plan. In addition, subject to adjustment upon certain corporate transactions or events, a participant may not receive awards with respect to more than 300,000 shares of common stock in any year. If an option or other award granted under the 2006 Stock Incentive Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards. Unless previously terminated by our Board of Directors, no new award may be granted under the 2006 Stock Incentive Plan after the tenth anniversary of the date that such plan was initially approved by our stockholders.

Awards Under the Plan

Stock Options .  The terms of specific options, including whether options will constitute “incentive stock options” for purposes of Section 422(b) of the Code, will be determined by the compensation committee. The exercise price of an option will be determined by the compensation committee and reflected in the applicable award agreement. The exercise price with respect to incentive stock options may not be lower than 100% (110% in the case of an incentive stock option granted to a 10% stockholder, if permitted under the plan) of the fair market value of the common stock on the date of grant. Each option will be exercisable after the period or periods specified in the award agreement, which will generally not exceed ten years from the date of grant (or five years in the case of an incentive stock option granted to a 10% stockholder, if permitted under the plan). Options will be exercisable at such times and subject to such terms as determined by the compensation committee.

Stock Awards and Restricted Stock .  A stock award consists of the transfer by us to a participant of shares of common stock as additional compensation for their services. Restricted stock will be subject to restrictions as the compensation committee will determine, and such restrictions may include a prohibition against transfer until such time as the compensation committee determines, forfeiture upon a termination of employment or other service during the applicable restriction period and such other conditions or restrictions as the compensation committee may deem advisable.

Performance Shares .  A performance share consists of an award paid in shares of common stock or cash (as determined by the compensation committee), subject to performance objectives to be achieved by the participant before the end of a specified period. The grant of performance shares to a participant does not

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create any rights in such participant as a shareholder until the payment of shares of common stock with respect to an award. In the event that a participant’s employment or consulting engagement with us is terminated for any reason other than normal retirement, death or disability prior to the achievement of the participant’s performance objectives, the participant’s rights to the performance shares will expire and terminate unless otherwise determined by the compensation committee.

Change in Control

Upon a change in control of us (as defined in the 2006 Stock Incentive Plan), if the acquiring entity or successor to the Company does not assume the incentive awards or replace them with substantially equivalent incentive awards, all outstanding options will vest and become immediately exercisable in full, the restrictions on all shares of restricted stock awards will lapse immediately and all performance shares will be deemed to be met and payment made immediately.

Amendment and Termination

Our Board of Directors may amend the 2006 Stock Incentive Plan as it deems advisable, except that it may not amend the 2006 Stock Incentive Plan in any way that would adversely affect a participant with respect to an award previously granted. In addition, our Board of Directors may not amend the 2006 Stock Incentive Plan without shareholder approval if such approval is then required pursuant to Section 422 of the Code, the regulations promulgated thereunder or the rules of any stock exchange or similar regulatory body.

Director Compensation

The following table sets forth information regarding compensation earned by our directors who are not Named Executive Officers during the fiscal year ended December 31, 2008.

Director		Fees Earned or Paid in Cash ($)				Stock Awards ($)				Option Awards ($)				Total ($)
Russell H. Ellison			—				—				26,116 (1)				26,116
Mahendra Patel			—				—				—				—
Antony E. Pfaffle			—				—				—				—
Timothy Hofer			—				—				—				—

(1)

On August 1, 2008, Dr. Ellison was awarded options to purchase 120,000 shares of common stock at an exercise price of $1.05 per share. One-third of the options vest on each of the first three anniversaries of the grant date.

Other than Dr. Ellison, our directors did not receive compensation for their service on our Board of Directors in 2008. The Board of Directors or a committee thereof will adopt a comprehensive director compensation policy prior to the completion of this offering.

Mr. Hofer does not receive any compensation from us for his service as our Corporate Secretary. Mr. Hofer is an employee of Paramount BioSciences, LLC and Paramount BioCapital, Inc.

Indemnification of Officers and Directors

Our amended and restated certificate of incorporation that will be in effect upon the closing of this offering limits the personal liability of directors for breach of fiduciary duty to the maximum extent permitted by the General Corporation Law of the State of Delaware, referred to herein as the DGCL. Our amended and restated certificate of incorporation provides that no director will have personal liability to us or to our stockholders for monetary damages for breach of fiduciary duty or other duty as a director. However, these provisions do not eliminate or limit the liability of any of our directors for any of the following:

•

any breach of their duty of loyalty to us or our stockholders;

•

acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

•

voting or assenting to unlawful payments of dividends or other distributions; or

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Any amendment to or repeal of these provisions will not eliminate or reduce the effect of these provisions in respect of any act or failure to act, or any cause of action, suit or claim that would accrue or arise prior to any amendment or repeal or adoption of an inconsistent provision. If the DGCL is amended to provide for further limitations on the personal liability of directors of corporations, then the personal liability of our directors will be further limited in accordance with the DGCL.

In addition, our amended and restated certificate of incorporation provides that we must indemnify our directors and officers and we must advance expenses, including attorneys’ fees, to our directors and officers in connection with legal proceedings, subject to very limited exceptions.

We have entered into, and intend to continue to enter into, separate indemnification agreements with each of our officers and directors. These agreements, among other things, require us to indemnify our officers and directors for certain expenses, including attorney’s fees, judgments, fines and settlement amounts incurred by an officer or director in any action or proceeding arising out of their services as one of our officers and directors, or any of our subsidiaries or any other company or enterprise to which the person provides services at our request, to the fullest extent permitted by Delaware law. We will not indemnify an officer director, however, unless he or she acted in good faith, reasonably believed his or her conduct was in, and not opposed, to our best interests, and, with respect to any criminal action or proceeding, had no reason to believe his or her conduct was unlawful.

Equity Compensation Plan Information

The following table provides information as of December 31, 2008 about the common stock that may be issued upon exercise of options, warrants and rights under all of our equity compensation plans as of December 31, 2008.

Plan Category		Number of Shares to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1)				Weighted Average Exercise Price of Outstanding Options, Warrants and Rights				Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
		(a)				(b)				(c)
Equity compensation plans approved by security holders			235,000			$	1.05				690,000
Equity compensation plans not approved by security holders			—				—				—
Total			235,000			$	1.05				690,000

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approval processes. Under the terms of the Shiva Contribution Agreement, in the event that the Shiva Technology is commercialized, we are also obligated to pay to Shiva annual royalties based upon net sales of the products. In the event that we sublicense Shiva Technology to a third party, we are obligated to pay to Shiva a portion of the royalties, fees or other lump-sum payments we receive from the sublicense.

Pursuant to the terms of the Shiva Contribution Agreement, we are currently obligated to issue additional shares of common stock to Shiva BioMedical, LLC sufficient to maintain its ownership percentage, as defined, at 7.0% of the outstanding common stock on a fully diluted basis, until such time that we have raised $25 million through the sale of our equity securities or until an initial public offering, reverse merger or a sale of the Company. This obligation will expire upon the completion of this offering.

In connection with the Shiva Contribution Agreement, on July 28, 2006, we entered into a consulting agreement with Sudhir Shah, a member of our Cardiorenal Advisory Board and President of Shiva, which was amended and restated on January 10, 2008 (the “Shah Consulting Agreement”). Pursuant to the Shah Consulting Agreement, Dr. Shah provides us with consulting services involving areas mutually agreed to by Dr. Shah and us for up to 40 hours per month and he serves on one of our Scientific Advisory Boards. As compensation for Dr. Shah’s consulting services, we agreed to pay Dr. Shah $7,000 per month, which fee will be increased to $12,000 per month if we consummate a sale of equity securities (excluding convertible debt instruments) or assets in a transaction or series of related transactions with gross proceeds of at least $10,000,000. Under the Shah Consulting Agreement, the consulting services were to be provided for an initial one-year period, which ended on January 10, 2009, and thereafter on a month-to-month basis upon mutual agreement of the parties. We are currently continuing the consulting arrangement on such month-to-month basis.

Mahendra Patel, a director of the Company, is also a director of Shiva.

ND Partners, LLC

As consideration in part for the rights to the NDP Technology, we paid NDP an initial licensing fee of $325,000 and granted NDP an equity interest in the Company, consisting presently of 533,905 shares of common stock, subject to certain anti-dilution adjustments. In addition, we are required to make payments to NDP upon the achievement of certain regulatory and sales-based milestones. Such payments will be made in the form of shares of common stock currently held in escrow for NDP, presently amounting to 213,562 shares of common stock, subject to certain anti-dilution adjustments.

Pursuant to the terms of a stockholder agreement with NDP, we are currently obligated to issue additional shares of common stock to NDP sufficient to maintain its ownership percentage at 5.0% of the outstanding common stock (7.0%, including the escrow shares) on a fully diluted basis, until such time that the Company has raised $25 million through the sale of its equity securities or until an initial public offering, reverse merger or a sale of the Company. This obligation will expire upon the completion of this offering.

John Houghton

In conjunction with the execution of the Houghton Employment Agreement, Mr. Houghton purchased 105,999 restricted shares of our common stock at a purchase price of $0.001 per share pursuant to the terms of a stock purchase agreement. One third of these purchased shares vest on each of the first three anniversaries of such purchase, in each case only if Mr. Houghton remains employed by the Company at such times.

In addition, we have paid a total of $75,000 in finder’s fees to John Houghton, our Chief Executive Officer, in connection with the in-licensing of our product candidates.

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Except as otherwise set forth below, the address of each of the persons or entities listed in the table is c/o CorMedix Inc., 86 Summit Avenue, Suite 301, Summit, NJ 07901-3647.

		Shares Beneficially Owned Prior to Offering (1)								Shares Beneficially Owned After the Offering
Name		Number				Percentage				Number				Percentage
Named Executive Officers and Directors:
John C. Houghton			110,999	(2)			1.7	%
Mark Houser, M.D.			75,666	(3)			1.2	%
Russell H. Ellison, M.D.			40,000	(4)			*
Mahendra Patel, Ph.D.			773,717	(5)			12.2	%
Antony E. Pfaffle, M.D.			116,362	(6)			1.8	%
Timothy Hofer			58,181				*
Stephen Pilatzke			3,879				*
All executive officers and directors as a group (eight persons)			1,128,804				18.4	%
5% Stockholders:
Lindsay A. Rosenwald, M.D.			1,113,188	(7)			17.5	%
Lester E. Lipschutz			787,377	(8)			12.4	%
Shiva BioMedical, LLC			773,717				12.2	%
ND Partners, LLC			747,467	(9)			11.8	%
Bruce Cooper, M.D.			421,130				6.6	%

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The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances, including but not limited to in the event of a stock split, stock dividend, recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for the issuances of common stock or securities convertible or exercisable into common stock at a price below their respective exercise prices.

The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their warrants and received shares of common stock. After issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

No warrants will be exercisable unless at the time of exercise a prospectus relating to common stock issuable upon exercise of the warrants is current and the common stock has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. Under the terms of the warrant agreement, we have agreed to meet these conditions and use our best efforts to maintain a current prospectus relating to common stock issuable upon exercise of the warrants until the expiration of the warrants. However, we cannot assure you that we will be able to do so, and if we do not maintain a current prospectus related to the common stock issuable upon exercise of the warrants, holders will be unable to exercise their warrants and we will not be required to settle any such warrant exercise. If the prospectus relating to the common stock issuable upon the exercise of the warrants is not current or if the common stock is not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside, we will not be required to net cash settle or cash settle the warrant exercise, the warrants may have no value, the market for the warrants may be limited and the warrants may expire worthless.

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The holders of Non-Voting Common Stock, except as otherwise required under Delaware law, are not entitled or permitted to vote on any matter required or permitted to be voted upon by the holders of common stock. Upon our liquidation, dissolution or winding up, after payment of all our debts and liabilities, and after payment in full of a $20 million preference amount to the holders of our common stock, the holders of our common stock and Non-Voting Common Stock (on an as-converted basis) will be entitled to share ratably in all of our assets that are legally available for distribution.

Preferred Stock

The Board of Directors has the authority at any time to establish the rights and preferences of, and issue up to, 10,000,000 shares of preferred stock, of which none currently have designation.

Convertible Notes

12% Notes

In July and September of 2007, we issued a series of convertible promissory notes in the aggregate principal amount of $8,645,000, referred to herein as the First Bridge Notes. In August 2008, we issued another series of convertible promissory notes in the aggregate principal amount of $2,100,000 on terms substantially the same as the First Bridge Notes, referred to herein as the Second Bridge Notes. In June 2009, we issued a convertible note in the principal amount of $1,000,000 to Galenica, on terms substantially the same as the First Bridge Notes and the Second Bridge Notes, referred to herein as the Galenica Note, and together with the First Bridge Notes and the Second Bridge Notes, as the 12% Notes. The 12% Notes are unsecured obligations of ours with a maturity date of July 31, 2010 and currently accrue interest at the rate of 12% per annum. The aggregate amount of accrued and unpaid interest under the 12% Notes as of September 30, 2009 was $2,019,911.

The outstanding principal amount of the 12% Notes, and all accrued interest thereon, will automatically convert into Units at a conversion price equal to at the lesser of (a) the lowest price at which our equity securities are sold in a Qualified Financing and (b) $30,000,000 divided by the number of shares of common stock outstanding immediately prior to the Qualified Financing (determined on a fully diluted basis), upon the terms and conditions on which such securities are issued in the Qualified Financing. For purposes of the 12% Notes, “Qualified Financing” means the closing of an equity financing or series of related equity financings by us resulting in aggregate gross cash proceeds (before commissions or other transaction expenses, and excluding any such proceeds resulting from any conversion of First Bridge Notes) to us of at least $10,000,000 minus the aggregate principal amount of Second Bridge Notes. This offering, if consummated, will be considered a Qualified Financing. Assuming an offering price of $       per Unit, the 12% Notes will automatically convert into          Units.

8% Notes

In October and November 2009, we issued another series of convertible promissory notes in the aggregate principal amount of $2,619,973, referred to herein as the 8% Notes. The 8% Notes are unsecured obligations of ours with a maturity date of October 29, 2011 and currently accrue interest at the rate of 8% per annum.

The outstanding principal amount of the 8% Notes, and all accrued interest thereon, will automatically convert into shares of common stock upon the completion of a Qualified IPO. For purposes hereof, “Qualified IPO” means the completion of an underwritten initial public offering of equity securities by us resulting in aggregate gross cash proceeds (before commissions or other expenses) to us of at least $10,000,000. This offering, if consummated, will be considered a Qualified IPO. Assuming an offering price of $       per Unit, the 8% Notes will automatically convert into          shares of common stock at a conversion price equal to 70% of the portion of the price of the Units sold in this offering that is allocated to the common stock.

Paramount Notes

From July 26, 2006 through September 30, 2009, PBS had loaned us an aggregate principal amount of $1,062,003 and from August 11, 2006 through September 30, 2009, the Family Trusts had loaned us an aggregate principal amount of $1,430,000. The loans from PBS are evidenced by the PBS Note and the loans

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from the Family Trusts are evidenced by the Family Trusts Note, which together with the PBS Note, are referred to herein as the Paramount Notes. As of September 30, 2009, $166,479, including accrued and unpaid interest, was outstanding under the PBS Note and $434,715, including accrued and unpaid interest, was outstanding under the Family Trusts Note. The Paramount Notes will mature on July 31, 2010 and all outstanding principal amount of the Paramount Notes, and all accrued interest thereon, will automatically convert into the securities issued in a Qualified Financing on the same terms as the 12% Notes. This offering, if consummated, will be considered a Qualified Financing. Assuming an offering price of $     per Unit, the Paramount Notes will automatically convert into          Units.

Currently Outstanding Warrants

All of the warrants described below are currently outstanding and none have been exercised.

12% Noteholder Warrants

In connection with the issuance of the First Bridge Notes, we issued seven-year warrants to their purchasers (the “First Bridge Warrants”). The First Bridge Warrants are currently exercisable and entitle the holders thereof to purchase that number of shares of common stock equal to 40% of the principal amount of the First Bridge Notes purchased by the original holder divided by $1.00, at a per share exercise price of $1.00.

In connection with the issuance of the Second Bridge Notes, we issued seven-year warrants to their purchasers (the “Second Bridge Warrants”). The Second Bridge Warrants entitle the holders thereof to purchase that number of shares of common stock equal to 40% of the principal amount of the Second Bridge Notes purchased by them divided by the lowest price at which our equity securities are sold in a Qualified Financing at a per share exercise price equal to 110% of such lowest price paid, subject to adjustment as set forth in the Second Bridge Warrants. If a Qualified Financing does not occur on or before the second anniversary of the initial closing of the Second Bridge Notes offering, August 18, 2010, then the Second Bridge Warrants will be exercisable for that number of shares of common stock equal to 40% of the principal amount of the Second Bridge Notes purchased by the original holder divided by $1.00, at a per share exercise price of $1.00. For purposes of the Second Bridge Warrants, “Qualified Financing” has the same meaning as it does in connection with the 12% Notes.

The First Bridge Warrants and the Second Bridge Warrants will be cancelled prior to the completion of this offering.

8% Noteholder Warrants

In connection with the issuance of the 8% Notes, we issued seven-year warrants to the purchasers of the 8% Notes, referred to herein as the 8% Noteholder Warrants. The 8% Noteholder Warrants entitle the holders thereof to purchase a number of shares of common stock equal to 60% of the principal amount of the 8% Notes divided by the price at which our equity securities are sold in a Qualified IPO, at a per share exercise price equal to 110% of the offering price in the Qualified IPO, subject to adjustment as set forth in the warrant. If a Qualified IPO does not occur on or before the second anniversary of the closing of the offering of the 8% Noteholder Warrants, then each warrant will be exercisable for that number of shares of common stock equal to 60% of the principal amount of the note purchased by the original holder divided by $1.00, at a per share exercise price of $1.00. In the event of a sale of the Company (whether by merger, consolidation, sale or transfer of our capital stock or assets or otherwise) prior to, but not in connection with, a Qualified IPO, the 8% Noteholder Warrants will terminate immediately upon such sale without opportunity for exercise. Assuming an offering price of $       per Unit, the 8% Noteholder Warrants will entitle the holders thereof to purchase          shares of common stock at a conversion price equal to       .

First Bridge Placement Agent Warrants

Paramount received, as partial compensation for its services in connection with the offering of the First Bridge Notes, a warrant exercisable for such number of shares of common stock equal to 10% of the amount of the aggregate purchase price of the First Bridge Notes sold through Paramount ($7,215,000) divided by $1.00, or 721,500 shares, at a per share exercise price of $1.00.

Co-placement agents with respect the offering of the First Bridge Notes received, as partial compensation for their services, a warrant exercisable for such number of shares of common stock equal to 10% of the

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amount of the aggregate purchase price of the First Bridge Notes sold through the co-placement agents ($1,430,000) divided by $1.00, or 143,000 shares, at a per share exercise price of $1.00.

These warrants and the warrant issued to Paramount, which are collectively referred to herein as the First Bridge Placement Agent Warrants, will be cancelled prior to completion of this offering.

Consultant Warrants

Pursuant to a consulting agreement we entered into with Frank Prosl on January 30, 2008, as partial compensation for Mr. Prosl’s consulting services, we issued to Mr. Prosl a warrant to purchase 40,000 shares of our common stock at a purchase price of $1.36 per share, subject to adjustment.

In connection with a consulting agreement we entered into with Donald Consultants Ltd. on January 30, 2008, which agreement has since been terminated, we issued to Linda Donald a warrant to purchase 100,000 shares of our common stock at a purchase price of $1.36 per share, subject to adjustment.

These warrants are referred to herein as the “Consultant Warrants”.

Registration Rights

12% Notes and 8% Notes

Holders of          Units, after giving effect to the conversion of our outstanding 12% Notes upon completion of this offering, have rights, under the terms of the purchase agreements between us and these holders, to require us to file registration statements under the Securities Act, subject to limitations and restrictions, or request that their Units be covered by a registration statement that we are otherwise filing, subject to specified exceptions.

Similarly, holders of          shares of our common stock, after giving effect to the conversion of our outstanding 8% Notes upon completion of this offering, have rights, under the terms of the purchase agreements between us and these holders, to require us to file registration statements under the Securities Act, subject to limitations and restrictions, or request that their shares of common stock be covered by a registration statement that we are otherwise filing, subject to specified exceptions.

We refer to the Units or shares of common stock issuable upon conversion of our 12% Notes or 8% Notes, as the case may be, as registrable securities. The purchase agreements for our 12% Notes and 8% Notes do not provide for any liquidated damages, penalties or other rights in the event we do not file a registration statement. These rights will continue in effect following this offering.

Demand Registration Rights

At any time after 180 days following the effective date of this registration statement, subject to certain exceptions, (a) the holders of a majority of the registrable securities issuable upon the conversion of our 12% Notes have the right to demand that we file a registration statement covering the offering and sale of at least 51% of the registrable securities issuable upon the conversion of our 12% Notes then outstanding and (b) the holders of a majority of the registrable securities issuable upon the conversion of our 8% Notes have the right to demand that we file a registration statement covering the offering and sale of at least 51% of the registrable securities issuable upon the conversion of our 8% Notes then outstanding.

We have the ability to delay the filing of such registration statement under specified conditions, such as during the period starting with the date of filing of and ending on the date 180 days following the effective date of this offering or if our board of directors determines that it is advisable to delay such filing or if we are in possession of material nonpublic information that would be in our best interests not to disclose. Postponements at the discretion of our board of directors cannot exceed 90 days from the date of such determination by our board of directors. We are not obligated to file such registration statement on more than one occasion upon the request of the holders of a majority of the registrable securities issuable upon the conversion of our 12% Notes, and we are not obligated to file such registration statement on more than one occasion upon the request of the holders of a majority of the registrable securities issuable upon the conversion of our 8% Notes.

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Form S-3 Registration Rights

If we are eligible to file a registration statement on Form S-3, the holders of the registrable securities issuable upon the conversion of our 12% Notes and the holders of the registrable securities issuable upon the conversion of our 8% Notes each have the right, on one or more occasions, to request registration on Form S-3 of the sale of the registrable securities held by such holder provided such securities are anticipated to have an aggregate sale price (before deducting any underwriting discounts and commissions) of at least $5,000,000.

We have the ability to delay the filing of any such registration statement under the same conditions as described above under “Demand Registration Rights,” and we are not obligated to effect more than one registration of registrable securities on Form S-3 in any twelve-month period for the holders of the registrable securities issuable upon the conversion of our 12% Notes or more than one such registration for the holders of the registrable securities issuable upon the conversion of our 8% Notes.

Piggyback Registration Rights

The holders of the registrable securities described above have piggyback registration rights. Under these provisions, if we register any securities for public sale, including pursuant to any stockholder-initiated demand registration, these holders will have the right to include their shares in the registration statement, subject to customary exceptions. The underwriters of any underwritten offering will have the right to limit the number of shares having registration rights to be included in the registration statement, and piggyback registration rights are also subject to the priority rights of stockholders having demand registration rights in any demand registration.

Expenses of Registration

We will pay all registration expenses related to any demand, Form S-3 or piggyback registration, other than underwriting discounts and commissions and any professional fees or costs of accounting, financial or legal advisors to any of the holders of registrable securities.

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to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of the corporation’s voting stock. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

Our Corporate Charter Documents

Our amended and restated certificate of incorporation and amended and restated bylaws will include provisions that are intended to enhance the likelihood of continuity and stability in our Board of Directors and in its policies. These provisions might have the effect of delaying or preventing a change in control and may make the removal of incumbent management more difficult even if such transactions could be beneficial to the interests of stockholders. These provisions will be described in an amendment to this registration statement.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock, and we cannot assure you that a significant public market for our common stock will develop or be sustained after this offering. As described below, no shares currently outstanding will be available for sale immediately after this offering due to certain contractual and securities law restrictions on resale. Sales of substantial amounts of our common stock in the public market after the restrictions lapse could cause the prevailing market price to decline and limit our ability to raise equity capital in the future.

Upon completion of this offering, we will have outstanding an aggregate of          shares of common stock, assuming no exercise of the underwriters’ option to purchase additional shares and no exercise of options or warrants to purchase common stock that were outstanding as of the date of this prospectus. The shares of common stock being sold in this offering will be freely tradable without restriction or further registration under the Securities Act.

The remaining          shares of common stock held by existing stockholders are restricted securities as that term is defined in Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Section 4(1), or Rule 144 or 701 promulgated under the Securities Act, which rules are summarized below.

The following table shows approximately when the          shares of our common stock that are not being sold in this offering, but which will be outstanding when this offering is complete, will be eligible for sale in the public market:

Days After Date of this Prospectus		Shares Eligible for Sale		Comment
Upon Effectiveness				Shares sold in this offering
90 Days				Shares saleable under Rules 144 and 701 that are not subject to the lock-up
180 Days				Lock-up released, subject to extension; shares saleable under Rules 144 and 701

Resale of          of the restricted shares that will become available for sale in the public market starting 180 days after the effective date will be limited by volume and other resale restrictions under Rule 144 because the holders are our affiliates.

Rule 144

The availability of Rule 144 will vary depending on whether restricted shares are held by an affiliate or a non-affiliate. Under Rule 144 as in effect on the date of this prospectus, once we have been a reporting company subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act for 90 days, an affiliate who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell within any three-month period a number of shares that does not exceed the greater of either of the following:

•

1% of the number of shares of common stock then outstanding, which will equal          shares immediately after this offering; and

•

the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

However, the six month holding period increases to one year in the event we have not been a reporting company for at least 90 days. In addition, any sales by affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and the availability of current public information about us.

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The volume limitation, manner of sale and notice provisions described above will not apply to sales by non-affiliates. For purposes of Rule 144, a non-affiliate is any person or entity who is not our affiliate at the time of sale and has not been our affiliate during the preceding three months. Once we have been a reporting company for 90 days, a non-affiliate who has beneficially owned restricted shares of our common stock for six months may rely on Rule 144 provided that certain public information regarding us is available. The six month holding period increases to one year in the event we have not been a reporting company for at least 90 days. However, a non-affiliate who has beneficially owned the restricted shares proposed to be sold for at least one year will not be subject to any restrictions under Rule 144 regardless of how long we have been a reporting company.

Rule 701

Under Rule 701, common stock acquired upon the exercise of certain currently outstanding options or pursuant to other rights granted under our stock plans may be resold, to the extent not subject to lock-up agreements, (a) by persons other than affiliates, beginning 90 days after the effective date of this offering, subject only to the manner-of-sale provisions of Rule 144, and (b) by affiliates, subject to the manner-of-sale, current public information and filing requirements of Rule 144, in each case, without compliance with the one-year holding period requirement of Rule 144. All Rule 701 shares are, however, subject to lock-up agreements and will only become eligible for sale upon the expiration of the contractual lock-up agreements. Maxim may release all or any portion of the securities subject to lock-up agreements.

Lock-Up Agreements

We and each of our officers, directors, and greater than     % stockholders have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable for shares of our common stock for a period of 180 days after the effective date of the registration statement of which this prospectus is a part without the prior written consent of Maxim. This 180-day restricted period will be automatically extended if: (1) during the last 17 days of the 180-day restricted period we issue an earnings release or announce material news or a material event; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period following the last day of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the material news or material event.

In addition, the holders of our 12% Notes and our 8% Notes have agreed pursuant to the purchase agreements for our 12% Notes and our 8% Notes not to sell the Units or shares of our common stock they receive upon conversion of our 12% Notes or 8% Notes for a period of 180 days after the effective date of the registration statement of which this prospectus is a part.

Registration Rights

After the completion of this offering, the holders of          shares of our common stock and holders of          Units will be entitled to the registration rights described in the section titled “Description of Capital Stock — Registration Rights.” All such shares are covered by lock-up agreements. Following the expiration of the lock-up period, registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares purchased by our affiliates.

Form S-8 Registration Statements

Prior to the expiration of the lock-up period, we intend to file one or more registration statements on Form S-8 under the Securities Act to register the shares of our common stock that are issuable pursuant to our 2006 Stock Incentive Plan. See “Executive Compensation — Equity Compensation Plan Information” for additional information. Subject to the lock-up agreements described above and any applicable vesting restrictions, shares registered under these registration statements will be available for resale in the public market immediately upon the effectiveness of these registration statements, except with respect to Rule 144 volume limitations that apply to our affiliates.

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UNDERWRITING

Subject to the terms and conditions of the underwriting agreement, the underwriters named below, through their representative, Maxim Group LLC, referred to herein as Maxim, have severally agreed to purchase from us on a firm commitment basis the following respective number of Units at a public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus:

Underwriters		Number of Units
Maxim Group LLC

The underwriting agreement provides that the obligation of the underwriters to purchase all of the        Units being offered to the public is subject to specific conditions, including the absence of any material adverse change in our business or in the financial markets and the receipt of certain legal opinions, certificates and letters from us, our counsel and the independent auditors. Subject to the terms of the underwriting agreement, the underwriters will purchase all of the        Units being offered to the public, other than those covered by the over-allotment option described below, if any of these Units are purchased.

Over-Allotment Option

We have granted to the underwriters an option, exercisable not later than 45 days after the effective date of the registration statement, to purchase up to        additional Units at the public offering price less the underwriting discounts and commissions set forth on the cover of this prospectus. The underwriters may exercise this option only to cover over-allotments made in connection with the sale of the Units offered by this prospectus. The over-allotment option will only be used to cover the net syndicate short position resulting from the initial distribution. To the extent that the underwriters exercise this option, each of the underwriters will become obligated, subject to conditions, to purchase approximately the same percentage of these additional Units as the number of Units to be purchased by it in the above table bears to the total number of Units offered by this prospectus. We will be obligated, pursuant to the option, to sell these additional Units to the underwriters to the extent the option is exercised. If any additional Units are purchased, the underwriters will offer the additional Units on the same terms as those on which the other Units are being offered hereunder.

Commissions and Expenses

The underwriting discounts and commissions are 10% of the initial public offering price. We have agreed to pay the underwriters the discounts and commissions set forth below, assuming either no exercise or full exercise by the underwriters of the underwriters’ over-allotment option. In addition, we have agreed to pay to the underwriters a corporate finance fee equal to 1% of the gross proceeds of this offering as a non-accountable expense allowance.

We have been advised by the representative of the underwriters that the underwriters propose to offer the Units to the public at the public offering price set forth on the cover of this prospectus and to dealers at a price that represents a concession not in excess of $     per Unit under the public offering price of $     per Unit. The underwriters may allow, and these dealers may re-allow, a concession of not more than $     per Unit to other dealers. After the initial public offering, the representative of the underwriters may change the offering price and other selling terms.

The following table summarizes the underwriting discounts and commissions we will pay to the underwriters. The underwriting discounts and commissions are equal to the public offering price per share less the amount per share the underwriters pay us for the shares.

Fee per Unit (1)

Total Without Exercise of Over-Allotment

Total With Exercise of Over-Allotment

Public offering price

$

$

$

Discount

$

$

$

Proceeds before expenses

$

$

$

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We estimate that the total expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding underwriting discounts and commissions, will be approximately $        , all of which are payable by us.

Underwriters’ Warrants

We have also agreed to issue to the underwriters warrants to purchase a number of our Units equal to an aggregate of 8% of the Units sold in this offering. The warrants will have an exercise price equal to 110% of the offering price of the Units sold in this offering and may be exercised on a cashless basis. The warrants are exercisable commencing six months after the effective date of the registration statement related to this offering, and will be exercisable for four and a half years thereafter. The warrants are not redeemable by us. The warrants also provide for one demand registration of the shares of common stock underlying the warrants at our expense, an additional demand at the warrant holder’s expense and unlimited “piggyback” registration rights at our expense with respect to the underlying shares of common stock during the five year period commencing six months after the closing date. The warrants and the          Units (including the shares of common stock and warrants underlying the Units) have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA. The underwriters (or permitted assignees under the Rule) may not sell, transfer, assign, pledge, or hypothecate the warrants or the securities underlying the warrants, nor will they engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the date of this prospectus. Additionally, the option may not be sold transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180 day period) following the effective date of the registration statement except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners. The warrants will provide for adjustment in the number and price of such warrants (and the shares of common stock and warrants underlying such warrants) in the event of recapitalization, merger or other structural transaction to prevent mechanical dilution.

Lock-Up Agreements

We and each of our officers, directors, and greater than     % stockholders have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable for shares of our common stock for a period of 180 days after the effective date of the registration statement of which this prospectus is a part without the prior written consent of Maxim. This 180-day restricted period will be automatically extended if: (1) during the last 17 days of the 180-day restricted period we issue an earnings release or announce material news or a material event; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period following the last day of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the material news or material event.

Pricing of this Offering

Prior to this offering there has been no public market for any of our securities. The public offering price of the Units and the terms of the warrants were negotiated between us and Maxim. Factors considered in determining the prices and terms of the Units, including the common stock and warrants underlying the Units, include:

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However, although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities for an operating company in a particular industry since the underwriters are unable to compare our financial results and prospects with those of public companies operating in the same industry.

In connection with this offering, the underwriters may distribute prospectuses electronically. No forms of prospectus other than printed prospectuses and electronically distributed prospectuses that are printable in Adobe. PDF format will be used in connection with this offering.

The underwriters have informed us that they do not expect to confirm sales of Units offered by this prospectus to accounts over which they exercise discretionary authority without obtaining the specific approval of the account holder.

Price Stabilization, Short Positions and Penalty Bids

The underwriters may engage in over-allotment, stabilizing transactions, syndicate covering transactions, and penalty bids or purchasers for the purpose of pegging, fixing or maintaining the price of the common stock, in accordance with Regulation M under the Securities Exchange Act of 1934:

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of the common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the common stock. In addition, neither we nor any of the underwriters make representation that the underwriters will engage in these stabilizing transactions or that any transaction, once commenced, will not be discontinued without notice.

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Other Terms

We have also agreed that if following the successful completion of the offering, Maxim conducts a solicitation for the exercise of outstanding warrants at our written request, we will pay to Maxim a cash fee equal to 3% of the total proceeds received from the exercise of any and all warrants (other than any warrants held by Maxim or its affiliates) as a result of such solicitation by Maxim, provided that Maxim is designated as the soliciting broker on the exercise form of the warrant certificate evidencing the warrants so exercised.

The Underwriting Agreement will provide that we will permit Maxim to either (i) designate one individual who meets the independence criteria of NYSE Amex to serve on our Board of Directors for the three-year period following the closing of this offering or (ii) in the event that the individual designated by Maxim is not elected to our Board of Directors, have a representative of Maxim attend all meetings of our Board of Directors as an observer during such three-year period. Such director or observer, as the case may be, will attend meetings of our Board of Directors, receive all notices and other correspondence and communications sent by us to our directors, and such director will receive compensation equal to the highest compensation of other non-employee directors, excluding the Chairman of the Audit Committee.

In addition, we have agreed to grant to Maxim, upon the consummation of this offering, the right of first negotiation to co-manage any public underwriting or private placement of our debt or equity securities or the debt or equity securities of our subsidiaries and successors (excluding (i) shares issued under any compensation or stock option plan approved by our stockholders, (ii) shares issued by us in payment of the consideration for an acquisition or as part of strategic partnerships and transactions and (iii) conventional banking arrangements and commercial debt financing) which includes the right to underwrite or place a minimum of 50% of the securities to be sold therein, for a period of eighteen (18) months after completion of this offering. If Maxim fails to accept in writing any such proposal for such public or private sale within ten (10) days after receipt of a written notice from us containing such proposal, then Maxim will have no claim or right with respect to any such sale contained in any such notice. If, thereafter, such proposal is modified in any material respect, we will adopt the same procedure as with respect to the original proposed public or private sale, and Maxim shall have the right of first negotiation with respect to such revised proposal.

Although we are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering, and have no present intent to do so, any of the underwriters may, among other things, assist us in raising additional capital, as needs may arise in the future. If any of the underwriters provide services to us after this offering, we may pay such underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that if no agreement will be entered into with any of the underwriters and no fees for such services will be paid to any of the underwriters prior to the date which is 90 days after the effective date of the registration statement, unless FINRA determines that such payment would not be deemed underwriters compensation in connection with this offering.

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Relationships

Certain of the underwriters or their affiliates have provided from time to time and may in the future provide investment banking, lending, financial advisory and other related services to us and our affiliates for which they have received and may continue to receive customary fees and commissions.

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CORMEDIX, INC.
(A Development Stage Company)

		Page
Condensed Balance Sheets September 30, 2009 (Unaudited) and December 31, 2008			F-2
Condensed Statements of Operations (Unaudited) Nine Months Ended September 30, 2009 and 2008 and Period from July 28, 2006 (Inception) to September 30, 2009			F-3
Condensed Statement of Changes in Stockholders’ Deficiency (Unaudited) Nine Months Ended September 30, 2009			F-4
Condensed Statements of Cash Flows (Unaudited) Nine Months Ended September 30, 2009 and 2008 and Period from July 28, 2006 (Inception) to September 30, 2009			F-5
Notes to Unaudited Condensed Financial Statements			F-6 – F-9

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CORMEDIX, INC.
(A Development Stage Company)
  
CONDENSED BALANCE SHEETS

		September 30, 2009				December 31, 2008 (Note 1)
ASSETS
Current assets:
Cash		$	24,093				1,380,012
Other current assets			4,339				4,668
Total current assets			28,432				1,384,680
Office equipment, net			26,603				34,061
Deferred financing costs, net			57,154				121,051
Other assets			11,733				80,506
Total assets		$	123,922			$	1,620,298
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities:
Accounts payable and accrued expenses		$	1,277,623			$	822,068
Note payable – Galenica, Ltd.			1,000,000				—
Interest payable – Galenica, Ltd.			36,717				—
Senior convertible notes			10,745,000				—
Interest payable – senior convertible notes			1,983,194				—
Notes payable – related parties			510,429				—
Interest payable – related parties			90,765				—
Total current liabilities			15,643,728				822,068
Senior convertible notes, net			—				10,309,125
Interest payable – senior convertible notes			—				1,094,428
Note payable – Galenica, Ltd.			—				1,000,000
Notes payable – related parties			—				344,679
Interest payable – related parties			—				77,146
Total liabilities			15,643,728				13,647,446
Commitments
Stockholders’ deficiency:
Preferred stock, $.001 par value; 10,000,000 shares authorized; none Issued			—				—
Common stock – Non-voting – Class A, $.001 par value; 5,000,000 shares authorized; 193,936 issued and outstanding			194				194
Common stock – Class A, $.001 par value; 33,000,000 shares authorized; 5,079,077 issued and outstanding			5,079				5,079
Common stock – Class B, $.001 par value; 1,600,000 shares authorized; 800,000 issued and escrowed			800				800
Common stock – Class C, $.001 par value; 100,000 shares authorized; 50,000 issued and escrowed			50				50
Common stock – Class D, $.001 par value; 100,000 shares authorized; 50,000 issued and escrowed			50				50
Common stock – Class E, $.001 par value; 100,000 shares authorized; 50,000 issued and escrowed			50				50
Common stock – Class F, $.001 par value; 100,000 shares authorized; 50,000 issued and escrowed			50				50
Deferred stock issuances			(1,125	)			(1,125	)
Additional paid-in capital			5,265,621				5,177,292
Deficit accumulated during the development stage			(20,790,575	)			(17,209,588	)
Total stockholders’ deficiency			(15,519,806	)			(12,027,148	)
Total liabilities and stockholders’ deficiency		$	123,922			$	1,620,298

 
 
See Notes to Unaudited Condensed Financial Statements.

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CORMEDIX, INC.
(A Development Stage Company)
  
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

		Nine Months Ended September 30, 2009				Nine Months Ended September 30, 2008				Period from July 28, 2006 (Inception) to September 30, 2009
Operating expenses:
Research and development		$	994,195			$	2,508,358			$	8,650,106
General and administrative			1,090,386				1,286,567				4,699,733
Loss from operations			(2,084,581	)			(3,794,925	)			(13,349,839	)
Interest income			2,104				25,511				88,837
Interest expense, including amortization of debt discount and deferred financing costs			(1,498,510	)			(3,648,417	)			(7,529,573	)
Net loss		$	(3,580,987	)		$	(7,417,831	)		$	(20,790,575	)
Basic and diluted net loss per common share		$	(0.70	)		$	(1.45	)
Weighted average common shares outstanding – basic and diluted			5,147,700				5,111,134

 
 
See Notes to Unaudited Condensed Financial Statements.

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CORMEDIX, INC.
(A Development Stage Company)
  
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY (Unaudited)
Nine Months Ended September 30, 2009

		Non-Voting Common Stock –  Class A								Common Stock –  Class A								Common Stock Class B – F								Deferred Stock Issuance				Additional Paid-in Capital				Deficit Accumulated During the Development Stage				Total
		Shares				Amount				Shares				Amount				Shares				Amount
Balance at January 1, 2009			193,936			$	194				5,079,077			$	5,079				1,000,000			$	1,000			$	(1,125	)		$	5,177,292			$	(17,209,588	)		$	(12,027,148	)
Stock-based compensation																															88,329								88,329
Net loss																																			(3,580,987	)			(3,580,987	)
Balance at September 30, 2009			193,936			$	194				5,079,077			$	5,079				1,000,000			$	1,000			$	(1,125	)		$	5,265,621			$	(20,790,575	)		$	(15,519,806	)

 
 
See Notes to Unaudited Condensed Financial Statements.

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CORMEDIX, INC.
(A Development Stage Company)
  
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

		Nine Months Ended September 30, 2009				Nine Months Ended September 30, 2008				Period from July 28, 2006 (Inception) to September 30, 2009
Cash flows from operating activities:
Net loss		$	(3,580,987	)		$	(7,417,831	)		$	(20,790,575	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation			88,329				249,442				439,582
Stock issued in connection with license agreement			—				328,948				328,948
Stock issued in connection with a consulting agreement			—				7,721				7,721
Amortization of deferred financing costs			123,532				979,900				1,659,275
Amortization of debt discount			435,875				2,089,389				3,741,196
Interest payable – Galenica, Ltd.			36,717				—				36,717
Interest payable – senior convertible notes			888,766				566,190				1,983,194
Expenses paid on behalf of the Company satisfied through the issuance of notes			750				—				52,003
Interest payable – related party			13,619				12,937				90,765
Depreciation			7,458				7,459				23,120
Changes in operating assets and liabilities:
Other current assets			329				(64,203	)			(4,339	)
Other assets			68,773				500,580				(11,733	)
Accounts payable and accrued expenses			455,555				(420,059	)			1,277,623
Net cash used in operating activities			(1,461,284	)			(3,159,527	)			(11,166,503	)
Cash flows from investing activities:
Purchase of office and computer equipment			—				—				(49,723	)
Cash flows from financing activities:
Proceeds from notes payable to related party			165,000				—				2,440,000
Proceeds from senior convertible notes			—				2,100,000				10,745,000
Proceeds from Galenica, Ltd. promissory note			—				—				1,000,000
Payments for deferred financing costs			(59,635	)			(219,133	)			(967,934	)
Repayment of amounts loaned under related party notes			—				—				(1,981,574	)
Proceeds from receipt of stock subscriptions and issuances of common stock			—				—				4,827
Net cash provided by financing activities			105,365				1,880,867				11,240,319
Net (decrease)/increase in cash			(1,355,919	)			(1,278,660	)			24,093
Beginning of period			1,380,012				2,534,478				—
End of period		$	24,093			$	1,255,818			$	24,093
Supplemental schedule of non-cash financing activities:
Stock issued to technology finders and licensors		$	—			$	125			$	1,125
Warrants issued to placement agent		$	—			$	—			$	748,495
Debt discount on senior convertible notes		$	—			$	747,215			$	3,741,196
Cash paid for interest during the period		$	—			$	—			$	18,425