Randy Milby - CEO Harry O'Grady - CFO Tony Pfaffle - Chief Scientific Officer

Scott Henry - Roth Capital Partners Paul Schneider - Private Investor John Marcel - XG Capital Dores Steinberg - Private Investor Charles Perras - Private Investor Gerry Fershtman - Maxim Group

Greetings and welcome to the CorMedix Fourth Quarter and Year End 2014 Results Conference Call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. I would now like to turn the conference over to our host Mr. Randy Milby, Chief Executive Officer for CorMedix. Thank you sir, you may begin.

Good morning and welcome to the CorMedix, fourth quarter 2014 conference call. I will begin by providing you with an update on our commercial strategy and operational progress. Then Harry O'Grady our CFO, who is here with me today in New Jersey, will provide a more detailed summary of our financial results. First, I want to remind you that this conference call may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. All statements other than statements of historical facts regarding management's expectations, beliefs, goals, plans or the Company's prospects, future financial position, future revenues and projected cost should be considered forward-looking. Our actual results may differ materially from these projections or estimates due to a variety of important factors including uncertainties related to clinical development, regulatory approvals and commercialization. These risks are described in greater detail in CorMedix filing with the SEC, copies of which are available free-of-charge at the SEC's Web site or upon a request from CorMedix. CorMedix may not actually achieve the goals or plans described in these forward-looking statements and investors should not place undue reliance on these statements. Please note that CorMedix does not intend to update these forward-looking statements except as required by law. CorMedix is a specialty pharmaceutical and biomedical device company focused on developing and commercializing therapeutic products for the treatment of infectious disease in both acute and chronic care settings. Our first commercial product being marketed outside of United States is Neutrolin, which is used to prevent central venous catheter or central line-associated bloodstream infections and thrombosis or clotting. Neutrolin is novel formulation of Taurolidine, citrate and heparin at 1000 units per mil that provides a combination preventative solution, decreases of triple threat of infection, thrombosis and biofilm to keep catheter's operating safely and efficiently by optimizing catheter blood flow while minimizing infections and biofilm formation for oncology, hemodialysis and intensive care patients. Today I will update you on the key near and longer-term catalyst for CorMedix growth. First, plans for the U.S. clinical trial and commercial development. Second, our effort to identify and engage strategic partners to accelerate the clinical development and commercialization of Neutrolin. Third, commercialization of Neutrolin in the European Union and expanding the product label to include new indications. And fourth, expansion beyond the EU through marketing and distribution partners in the Middle-East, Asia and Latin America. As you know Neutrolin is a Class III medical drug device in the European Union. But the FDA regards it as a drug for purposes of regulatory approval in the United States. As we discussed during the third quarter call, the FDA's division of anti-infective products in Cedar has said that we can initiate a pivotal clinical study in United States. This IND includes a pivotal Phase III protocol for Neutrolin in hemodialysis patients with a central venous catheter. Just to give you an idea of the market potential here, it is estimated that there are approximately a 127 million catheter days in hemodialysis in the United States per year. The Phase III clinical trial will be a multi-centered, randomized, controlled study conducted in the United States. The study will include about 600 patients moderated for catheter related bloodstream infections and the relevant comparison will be Neutrolin versus heparin as a control arm. We intend to propose a second study with about 500 patients for a new indication in oncology patients undergoing total parenteral nutrition. We are developing a smaller Phase II 2b study to elucidate the use of Neutrolin in critical care and intensive care patients as part of our overall submission package. As a testament to the value of Neutrolin, we are pleased to announce that the receipt of the fast track designation from the FDA to prevent catheter related bloodstream infections in patients receiving hemodialysis. Fast track designation is intended to facilitate the development and expedite the review of drugs to treat serious conditions and fill unmet medical needs. As a result, we expect to have more frequent interactions with the FDA during the drug development process. Importantly, products designated as fast track can obtain rolling review of the marketing application that can lead to an expedited approval. In addition, in December we were thrilled to learn that the Neutrolin has been designated a qualified infectious disease product or QIDP under the federal GAIN Act which provides incentives for the development of new antimicrobials. This provides for extension market exclusivity beyond the drug approval by five years above and beyond the standard five years for new chemical entity. When combined with the possible additional extension for pediatric use this means that Neutrolin could enjoy an aggregate period of post market approval exclusivity in the United States of as long as 10.5 years from the date of launch. The value of Neutrolin is being recognized by the FDA with the fast track and QIDP designation. We have completed internal health economics market research which gives us a clear commercial path and will help us in our strategic partner discussions. I want to offer a few observations as to how best realize this vision for the commercialization of Neutrolin. We have been working to identify a strategic partner to complete the phase III clinical study, as it would be challenging for us to execute a trial of that scope and magnitude on our own. We have had interest and continue to discussions and I believe that the fast track and QIDP designation has increased this interest. As noted in our recent press release we have retained Evercore as our advisor in this matter as we believe it is the best way for us to accelerate the process and importantly to ensure that we explore all possible options to maximize Neutrolin’s value and underlying value to our shareholders. These options might include product development collaboration, a merger or sale of assets. We are in the preparation phase and they will launch the process in the coming weeks. We are working closely with the Evercore professionals as they identify and evaluate various strategic alternatives. I want to reiterate what we have disclosed publicly, which is that, we do not know if we will succeed in this effort but we are convinced that we need to assure ourselves and our shareholders that we’ve explored all viable options. As you can appreciate given the sensitive nature we are not providing updates until the outcome is completed. As you know we launched Neutrolin in European Union beginning in Germany last year as a class III medical device. Knowing that the value proposition of the medical device is different compared to the reimbursed drug, we initiated a Neutrolin usage monitoring program. This is a registry study in selective dialysis center and hospitals. To-date we have 175 patients enrolled and have reported one infection and one thrombosis during 9,935 catheter days. As a comparison you would ordinarily expect per 1,000 catheter days between 2.5 and five infections and between 0.5 and three thrombosis, to-date this is over a 95% reduction in inflections. Although this study is not designed to show statistical significance we believe this provides compelling evidence demonstrating the anti-infective anti-clotting value of Neutrolin and de-risk the U.S. phase III study. We are presenting these interim results in two international conferences, [Dr. Hollenbeck] a member of our European Union Scientific Advisory Board will present a poster session at the vascular access society conference in Barcelona on April 18th and Dr. [indiscernible], the Chairman of our European Union Scientific Advisory Board will give a late [pancreal] oral presentation at the National Kidney Foundation Annual Meeting in Dallas on March the 28. We are encouraged about what we believe are excellent Neutrolin usage monitoring programs results and we have been working to better understand the German physician’s perspectives so that we can translate these positive data into meaningful medical communications with our nephrologists, oncologist, intensive care units with patients on central venous catheter. Although we’re not satisfied with our sales revenue and commercial progress in Germany; we have restructured teams to account for the label’s expansion and we are gathering the valuable data in the Neutrolin usage monitoring program. We need to make clear the value of our product for the patient and to do that we must better develop and articulate the medical and scientific data to present to physicians to determine the optimal share voice and capability in Germany. To that end, we have conducted additional market research and prepared new marketing materials for the expanded product label to address those patients with the central venous catheter are being treated for cancer or in hospital intensive care units or receiving total parenteral nutrition. This label now includes new indications for use of our product in oncology patients receiving chemo, IV hydration, IV medication via a central venous catheter as well as patients receiving medication and IV fluids via central venous catheters and intensive care or critical care of units. Let me make one other comment that relates to our commercial position in Europe. As we discussed last quarter we filed a patent infringement actions in Germany against our primary competitor TauroPharm, claiming infringement of our European patent which is granted by the European patent office on January 8, 2014. Our patent covers low heparin catheter lock solutions for maintaining patency and preventing infection in the hemodialysis catheter. There was a hearing of this matter on January 30 before a three judge panel; the court date for rendering judgment is currently scheduled for March 27th. On January 15, 2015, we filed a second complain in Germany against TauroPharm claiming unfair competition based upon their usurpation of our product knowhow and our proprietary information. This oral hearing is scheduled for June 18, 2015. Of course I cannot tell you how these will play out these kinds of cases are complicated; in any case I cannot comment on specific aspects of an ongoing legal matter. But I can tell you that we continue to believe we have a strong case and we are confident that we have the freedom to operate and commercialize our product in a manner that we’re doing now. As I have said to you previously we seek to market Neutrolin on a global basis in those territories where there is evident medical need and adequate reimbursement. We're very active in identifying pursing commercial partnerships in the EU, Asia, Latin America and the Middle East. In general, we're seeking partners with a regulatory and marketing strength that have historically focused on hemo-dialysis and in the hospital marketing including oncology, critical care, ICU and total parenteral nutrition. I strongly believe that this is the best commercial strategy for CorMedix, in that it would allow us to prudently introduce Neutrolin to a larger number of central venous catheter patients throughout the world while minimizing our expenses and fixed capital commitments that would be substantial if we were to establish in country operations. As you can surmise, it maybe that in working with Evercore on a broader strategic efforts we will further enhance our international expansion as well. In summary, Neutrolin was designated a qualified infectious disease product, we were branded Fast Track status by the FDA and we're pursuing our clinical development strategy. We continue to focus on execution, we're in the early phases of commercialization of Neutrolin outside the United States with our expanded label and we're accelerating our efforts to collaborate with a global partner and expand to additional countries. We have completed several market research studies which articulate the value of Neutrolin and we have a publication plan in place to publish these results in peer-reviewed journals. The positive Neutrolin usage monitoring program data highlights the value proposition of Neutrolin and de-risks the Phase III studies in United States. We have accomplished much this quarter and while there is more to do to accelerate our commercial progress in the EU we're encouraged by the progress evident in these recent successes. I look forward to your questions. With that I would like to turn the call over to Harry O'Grady to provide detail on our financial updates. Harry O'Grady: Thank you again for joining us today. I would like to now review the financial information filed yesterday on our Form 10-K. As mentioned on our last call we expected our cash product increase as we continue our commercial efforts in Germany and the Middle East, increased business development activities, increased legal cost to defend our intellectual property and have additional research and development activities to support product registration and future commercialization initiatives. As a result, we ended the key year with cash balance of approximately $4.3 million. For the quarter ended December 31, 2014 we recorded a net loss of 2.2 million of this amount 400,000 were non-cash items mainly consisting of 200,000 for stock based compensation and $200,000 Charge associated with pre-launch inventory buildup and start up relating manufacturing inefficiencies. In Q4 sales were approximately $85,000 while cost of goods were approximately 274,000. A majority of these costs are not ongoing expense and so as our sales increase, we anticipate that our gross margins will continue to improve. In Q4 we took a charge of 175,000 associated with pre-launch inventory build-up and start up related manufacturing inefficiencies. Our operating costs were $2 million comprised of 500,000 for R&D and 1.5 million for SG&A generating loss of operations of 2.2 million. Included in these amounts are 200,000 of stock based compensation in the aforementioned inventory charge of 200,000, resulting in a cash loss of $1.8 million. This is approximately 100,000 higher than Q3 spend and approximately 300,000 higher than the spend in Q1 and Q2. The R&D spend was primarily attributable to the cost related to regulatory development and commercial market development of Neutrolin in the U.S. as well as manufacturing efficiency improvements. The SG&A spend funded our commercial operations in Europe and the Middle East and a variety of other items including legal fees to defender IP increased business development activities and higher personnel accounting and consulting costs. For the full year we have reported a net loss of $20.5 million, of this amount 13.9 million were non-cash items mainly consisting of 2.2 million per stock base compensation and 8.8 million loss for revaluation derivative liabilities and a $2.5 million loss on the modification of equity investment derivatives attributes. In September 15, 2014 we entered into consent and exchange agreements with the investors holding certain classes of securities that had features set to record derivative liability accounting treatment. Pursuant to the agreements the company and investors agreed to amend and restate these [securities] to remove anti-delusion price resets, cash silent features and certain change of control provisions that court both entities to classify its derivative liabilities. The detail of the term based transactions are available on our 10-K and other public filings. As a result of these modifications all the outstanding derivative liability were reclassify to equity. We do not anticipate any further charge off our P&L related to derivative liabilities going forward. Please keep in mind that while this caring treatment resulted in losses on our income statement this year they are not cash expenses and do not impact our ability to fund operations. For 2014 sales were approximately $189,000 and cost of goods were approximately $446,000. The majority of these costs, again I’m our ongoing expenses and as our sales increase we anticipate our gross margin will stand to improve. In Q4 again we took the charge of $175,000 related to the pre-launch inventory buildup and startup related manufacturing efficiencies. Our operating costs for 2014 were 8.6 million comprised of 1.3 million for R&D and 7.6 million for SG&A generating a loss from operation of 8.9 million. Included in these amounts were 2.2 million for stock-based compensation and the 200,000 inventory charge resulting in an operating cash flow of $6.5 million. The R&D spend was primarily attributed to cost related regulatory development, commercial market development of Neutrolin in the U.S. as well as the manufacturing efficiency improvements I just mentioned. The SG&A spend funded our commercial operations in the Middle-East supported the legal defense of our IP, increased our business development activities and focused on higher personnel accounting and consulting costs. Due to the higher than anticipated costs of sales in marketing support oncology label expansion, increased business development activities, increased legal costs related to the defend our intellectual property and the additional research and development activities to support product registration and future commercial initiatives and we believe that our cash resources as of December 31, 2014 will be sufficient to enable us to fund our projected operating requirements into the third quarter of 2015. This also assumes that we will partner the U.S. clinical trials; we will not be successful in signing any of the partnership agreements and not alter our current operating expense level. This does do give affect the receipt of approximately $2 million of fund received through March 10th from the exercise of warrants set to expire by April 30, 2015 and the ability to access up to 2.5 million under the [back stop] agreement entered into the existing institutional investor, Manchester Security Corp; an affiliate of Elliott Associates on March 3, 2015. Finally this does not do affect the receipt of additional funds from the exercise of warrants especially those set to expire by April 30, 2015. I'll turn this back over to Randy.

Operator, now we'll open the conference to questions please.

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Scott Henry with Roth Capital Partners. Please proceed with your question.

Couple of questions. For starter, the ongoing strategic process. What would you expect is the timeline for that in terms of resolution?

Well as you know, as I mentioned in my discussion, it's just getting started Scott, so it's really hard for us to say. I mean it could go as quickly as one month to as long as six months. It really depends, but I wouldn’t expect anything in the immediate near term because we just started the process. So we're working with them now to prepare the packets and a lot of the information.

And then shifting to the pipeline, when would you expect to start the Phase III program for Neutrolin in the U.S.?

Well, we are finalizing the discussions with our CROs. We’ve identified -- we haven’t signed with a CRO at this point, but we expect to start the Phase III study in dialysis first in late third quarter, fourth quarter. And right now we're working on preparation of the clinical supply and as you know part of the reason that we're using the strategic alternative is to accelerate the partnership discussions.

So you expect to start that in the second half of '15, correct?

That's the goal, but a lot of its contingent upon the partnership discussions that we're having.

So we would expect data probably by the end of 2016, maybe early '17?

This is -- Scott, Tony Pfaffle Chief Scientific Officer. So yes we're all -- as Randy was saying we're all prepped to begin the study at the beginning of the second half of this year, so that's approximately June timeframe. And of course whether it slips a few weeks forward or backward and we are focusing on that as the timeframe for starting the trial. We have March to enroll our forces, as we speak; we have as Randy mentioned the CRO process selection which is coming to final recommendation. We have EDC or Electronic Data Capture vendors ready to be selected. We have if you go to our Web site and look at our Scientific Advisory Board; we work closely with Amy Young, who is Head of R&D at Davita for the sites where the dialysis centers will be. We have as Randy was mentioning the supply of product and [indiscernible] all ready to go, so whether we're going to do it on our own, which we're quite capable of with the Scientific Advisory Board and Regulatory Committee which includes such luminaries as Doug Webb who ran the [indiscernible], Bruce Polsky who is essentially advisor to many infectious disease companies including, Vertex; Michael Landau, Paul Flyer who is at the FDA for five years. A variety of very high level people who have contributed to this effort to move the process forward and whether we go it on our own or we go it with a partner that Evercore finds, we’re ready.

Shifting gears to the European launch, first of all were all of the revenues in fourth quarter were those all Neutrolin European revenues to 85,000? Harry O'Grady: We had about $50,000 from the Saudi -- with the Arabian Trade House in Saudi Arabia.

What was that a milestone or what was that? Harry O'Grady: On stocking we put the --.

Okay, stocking. And when we think about 2015 any thought on the magnitude we may see should we -- of growth in 2015 for European Neutrolin, I mean is it feasible that you could have $1 million in revenues or how should we think about 2015?

Well, what we’re doing right now is, we have people on the ground in Austria and the Netherlands so one way to look at it is; there has been progress made as we’ve gotten the label expansion and in Germany that’s transcends into Austria and the Netherlands and we also have queued up more in the Middle East so we announced -- you saw that what that Harry just mentioned that the Saudi Arabia; we have other countries that we’ve gotten registration. But I don’t announce those until we actually have initial sales within those countries.

I had one financial question as well, the warrants that got extended for a month what is the exercise price on those? Harry O'Grady: $3.4375.

So I guess what I don’t understand and my question is, why bother extending them -- they’re already deep in the money why not have the people just exercise them ahead of that? Harry O'Grady: We had two different as you saw on the press release we had two different tranches of warrants we had IPO warrants and then we had the post IPO warrants that was really depth that we switched into warrants. So they were set up and we just extended them to deepen the money but we wanted to make it easier because the post IPO warrants the underlying shares were not registered. So we wanted to give a chance for all of their investors obviously to exercise.

Okay. Well, it sounds like they would have exercised anyways, but I guess I am not following that. But so the final question, when you think about 2015; SG&A and R&D, how should we think about those? I guess R&D is the bigger lever; SG&A is probably a little more easy to predict. Harry O'Grady: I think R&D is going to -- we got to spend some more money to get ready for the trial. SG&A we will be spending more money mainly on the business development activity and the IP defense and we also, as I’ve mentioned there is going to be increase in the manufacturing -- some of the manufacturing efficiency initiatives that we have to address our cost of goods.

Thank you. Our next question comes from the line of Paul Schneider, Private Investor. Please proceed with your question.

Randy and company it’s certainly great to see that the company is finally getting some recognition in the market. I am curious with -- you’ve discussed the warrants that expire April 30, 2015. Assuming that all those warrants are exercised, how much additional revenue or how much additional money will the company receive?

That would bring in about $13.5 million plus or minus.

Okay, addition, above and beyond what’s already been brought in?

Yes.

And so if you start phase III trials second half 2015, when would you expect them to be complete and when would you expect could you just give me a delta time frame, when would you expect them to be complete and when would you expect NDA submission?

Paul, this is Tony Pfaffle again. We would expect to start the trial and it would take approximately one year in our estimation to enroll the trial. We have a follow up period of six months but the beauty of having a hemodialysis trial is that patient compliant showing up to the center to get the Neutrolin or Heparin is almost assured because that’s required for life. So we expect to enroll pretty quickly and we expect to be able to complete that somewhere between 12 months in the year then we have been granted Fast Track which will cut our time down substantially and that’s accompanying priority review. So we would think that some time either late in 2016 and more likely in 2017 first half, we would hear a result from FDA and that would be essentially with the Fast Track probably a 2017 event, I would put the timeline in the middle of 2017 and we’d be ready for market late 2017, early 2018. If you are conservative you would say early 2018. But if everything went well and it seems that the wind is at our backs and that the agency has been very helpful in advancing the product with Fast Track and QIDP. There's an unmet need for this product out there and it's been recognized by the federal government and we're optimistic we’ll stay on that time frame. We would start our other Phase III program which is the oncology TPN program about three months after the hemodialysis, however that program would be a shorter program that’s six to nine months because the oncology TPN patients, the incidence of infection in that group is different and you'll have a decoration of infection based on the duration of therapy of TPN in those patients in a quicker period of time. So we would see that following in short order after the hemodialysis trial. I hope that’s helpful.

Yes that’s great. So are you essentially waiting to start trials until you’re partnering or until this process plays out a little further?

The plan always has been, Paul, as you’ve heard from previous calls, to find a strategic partner. But our goal is to have everything queued up ready once the partnership is established. And the thought process on this is, we said on the other side of the table, we want to make it easier for the partner just to listen this is a plug and play, CorMedix has set everything else up and all they need to do is use their infrastructure. Because I want to emphasize, to run these studies it takes a larger infrastructure than we currently we have but we can get everything queued up ready to go.

Thank you. Our next question comes from the line of John Marcel with XG Capital. Please proceed with your question.

My question is when do you expect the current stock registration process to be completed?

We're going to file the S3 either today or after the market today. Go ahead. Harry O'Grady: Yes, looking to file the S3 today and that should -- depending on how the SEC reviews it; it could take two to three, four weeks. We're hoping that we don't answer any questions or -- we think it should be a pretty straight forward filing. So we'll see that how that goes but again we're filing today and hopefully as quickly as possible we'll have these registered.

A follow up question. Do you expect to register more shares in the coming six months?

At this point, no.

Because there is quite a number of warrants out there.

Yes there is a total of about 9 million warrants outstanding.

And those are not going to be registered?

Go ahead. Harry O'Grady: They would be registered; I think if they convert they would be registered and get the stock.

But you are talking about doing a financing our goal is not to do an additional financing.

Thank you. Our next question comes from the line of Dores Steinberg a Private Investor. Please proceed with your question.

I wanted to address -- I read through the 10-K last night and three different places it says, it expresses substantial doubt as to our ability to continue as going concern. Following up with the previous question if you have all these warrants and according to my math when I added it up, not including the ones that will need to be exercised by April 30th, what I see is at least another $6 million that can come in. Why not register those so that that kind of language is cleaned off the filing sheet. It’s just -- I would think that would be a priority of the company. Harry O'Grady: It is and that’s what we're doing today.

Are you saying that once the 5.8 million comes in from the 1.7 million warrants at 3.43 that would satisfy removing that language in the next filing? Harry O'Grady: The language in the file for growing concerned, you look at the ability to finance operations for a year. So we could but once we get the cash in then we would change that thing, until we have the cash that's the basis for the growing concern becomes an opinion. So we are duly registering these stocks be it the, S3s and that will help with the liquidity, if they get exercised.

With that money, does that take you beyond the third quarter warning? It says you have cash until the third quarter? Harry O'Grady: It should.

And secondly in terms of the revenue which was approximately 189,000 for the year from European sales, can you comment if the -- I understand that the rendering of judgment on the 27th is not a final judgment; it will be appealed by one party or the other? But when that's all finalized and I guess probably next year there'll be a final rendering. How will that impact and how will the expanded labeling impact revenue because there are -- all this language about you're not anticipating generating significant product revenue in Europe anytime soon, so does the IP really impact at all?

We haven’t built that into this, so your question about the -- as you said, the rendering of judgment on March the 27th that I put into the call for the infringement. That can be appealed, so from a timeline point of view one thing that you may want to think about is that what's the timeline to the appeal process and that would likely take us for the patent infringement through likely into the middle or the end of 2016. It really depends upon the speculation, it's thought whether we would win or lose as I mentioned, but if we were to win obviously then we can either negotiate something with the other party or they can -- we could file an injunction to have their product removed from the market, but that is a ways of way so we haven’t built that into the 2016 number because we've tried to keep that out given what I just told you that the judgment through the appeal proceedings probably will take us through the end of 2016.

And what about the U.S. patent landscape. I read there are two of them, one of which expires on May 2019 that's the Sodemann patent, the other one, the Prosal patent. Are there other -- obviously other pharmaceutical and medical device companies have deeper pockets, are they also prosecuting patents that could compete with yours? Or others also working in the central catheter field as you are?

This is Tony Pfaffle, the answer is no. The Prosal patent as you probably know, it goes out till 2024. We also have QIDP which gives us a market exclusivity and no one can file an AMBA up until the end of the last year of the exclusivity period, so we feel we're very well protected in the U.S. both with patents and QIDP and there's no one else that we're worried about.

And my last question. You mentioned the Phase III trial in hemodialysis. It does say in the language of the filing at least one Phase III to be conducted, with the FDA, do you have closure that it will be only one or did the FDA suggest it might be more than one that you will need to conduct in order to have approval? And when you mentioned it will be [indiscernible] ready for the market maybe in early 2018 conservatively, does that mean NDA or does that mean on the market?

It means there's only one study needed to hemodialysis. We're doing a second Phase III study to expand the label and into oncology TPN and also into ICU critical care catheter, so there's only one for hemodialysis and the FDA suggested because they really want the product to go forward to put a second Phase III study to expand the indication not only for dialysis catheters which would limit us to one market but also to chemotherapy catheters, TPN catheters and critical care catheters in the intensive care unit. So it's actually better for us, but there are one hemodialysis Phase III and another Phase III being done in oncology TPN.

And you mentioned that you might go in alone if a partner doesn’t emerge. Do you have an internal timeline as to when you'd make that decision?

Our strategy has always been to partner for the very reasons as I said I mean, it’s possible could go along, but strategically we need a partner that has the infrastructure and the bandwidth to really accelerate. It's all about getting the product to the market faster. Harry O'Grady: Yes and mostly commercially -- there's a -- it's a pretty straight forward study, so if you take the bare bones of the dialysis centers, Davita and Fresenius you have a big CRO the CROs that are on final selection process or a global CRO, brand names that everyone on the call would know they have the infrastructure and the ability to conduct and they have conducted several dialysis studies in the last few years. We have a world class regulatory committee that provides the over side of the process. We use Morgan Lewis as our regulatory attorneys that have tremendous amount of experience former FDA people so we're all set to go the partnering would be more of a commercial benefit to the company.

Do you have any sense of what kind of upfront payment you're expecting in the kind of deal you're looking for? Harry O'Grady: That would just be speculation at this point.

And to quantify the burn for 2015 yet, the overall expense count? Harry O'Grady: Yes we're looking at around about $700,000 a month to $800,000 a month.

Thank you [Operator Instructions]. Our next question comes from the line of Charles Perras, Private Investor. Please proceed with your question.

I just want to clarify a couple of things; my question revolves around the size of the market, both for the U.S. and the rest of the world. If it’s possible to let me, know now that Neutrolin is approved for multiple label expansions as you’ve noted. Can you give me a little bit of color around what you see as the size of the market, number of patients and potential future application that you guys are looking at?

That’s a great question so one I think you saw on the K that we put as far as the market opportunity we’ve tended to focus a lot of the data and rather than talk about patients, we talk about catheter days and you can see that that’s the focus as you look to see what the opportunity would be in catheter days. The focus therapeutically if hemodialysis, oncology, ICU critical are and total parenteral nutrition. So the data in the K was ours and we’re going to building that out as far as catheter days that’s how we look at it.

But if you were to just and again I know this is I am sure you guys have worked out and I am sure that that’s how you’re going to approaching potential future partners around there. But when you look at the size of the market I’ve read and I’ve heard some stuff that you guys have said around this being 500 million potential market, is that a U.S. number, is that a global number? And did that include all of the label expansions that you have been getting?

That’s more of a U.S. number so as I said we’ve been focused a lot on the United States and although we have a lot of a data, so that 300 to 500 is more of a U.S. number, it’s a lot larger than that globally.

And that would include both Europe; there is also I am sure abilities in parts of Asia, specifically Japan which I would see as a very large dialysis market?

Yes, although in the Japan dialysis market is a large dialysis market but it’s a very low use of catheter in the Japanese market. So some of your questions actually have to do with country by country it’s a little different on their catheter use rate. But yes we’ve taken that into consideration as far as our market potential globally.

Quickly on a couple other points because I know there are I am sure other questions. Gross profit margins, presently on Neutrolin if you can give me a feel for that but then more importantly and I know there may be a partner that comes in but if somebody can give me some color around if you were to get the U.S. indication you get approval there is going to be significantly larger volume that comes in, what do you guys feel where gross margin percentage could increase to? Harry O'Grady: It’s tough to say right now our margins are very, very tight right now there is one time things we’re doing around testing and validation, et cetera. But we are working on initiatives to get these cost of goods down and it will be volume dependent. But there are initiatives going forward. So, -- and then that’s also dependent on pricing as well in the market. So it’s tough to nail down but we do have initiatives to lower; to significantly lower our cost of goods.

So if I was -- when I went through the 10-K, I was not able to parse that to too much. If you were to just give me some ability, if it’s a range just to help with my modeling that would help quite a bit. Could you give me a feel and I know there is stuff that’s going into it right now and onetime costs and everything. But just a feel of where we are right now in gross margin? Harry O'Grady: Right now we are -- again its market dependent, the margins are tight in Germany it’s tough to say. It depends on where we go. So, I wouldn’t really be giving you a clear answer so --.

One way to look at it so is you were to model this you could say that our margins right now are more like and over the counter type product and that in 2016 when we have -- as Harry just mentioned, we have a number of initiatives underway to lower our COGS and then at that time frame it’s in the pharmaceutical gross margin’s space. So we’re not getting [indiscernible].

That’s good, that actually give me a little bit more color I mean you guys are looking to or even a partner could look at getting these margins closer to pharma margins as opposed to OTC margins.

Exactly, so we have projects underway and one of the reasons you’re seeing that higher R&D cost is because the initiatives that we have underway to lower the COGS and we have a person that’s an experienced supply chain leader that’s leading this charge and we’re looking at the pick off, take as much cost out of the product and lower the COGS as quickly as possible.

Okay, perfect. Harry O'Grady: And [indiscernible] was a big partner, certain they will have a better -- a higher advantage of lowering these costs, you referred them --.

100%, I just wanted to make sure, I mean what I just got now is a clear indication of what I need to model. Fully flushed out your float. If I would include all the warrants that are out now again this is more from a model point of view. How many shares outstanding would I be looking to model? Harry O'Grady: As included in the 10-K, it’s about 44 million.

So 44 million would be the total?

Fully diluted, yes.

Fully diluted flow, okay, perfect. My last question and then I’ll hang up and listen to the rest of the call. What I have read around TauroPharm sales in Europe -- from product that infringes on CorMedix patent. I have read it around 40 million, first of all my question would be is that correct? And if it is correct would those sales be significantly higher since what I am reading is that TauroPharm is selling them at a significant discount. Can you give me a little bit of color on that?

The question -- they're primarily held companies. So the numbers that you're putting out I can't validate those numbers. I can tell you though that they have -- they’re distributing in about 28 different countries. So they do have a foot print, they have been on the marketplace and what was your follow up question on TauroPharm?

I was just saying I think what I have read and again it may not be all accurate, that's why I am asking the question, is that they're selling it at a decent discount, they're not selling it as a proprietary patented product, they almost are selling it -- almost like a generic. Would you anticipate if they are restarted from selling their product anymore that those sales would be significantly higher because they would be priced differently?

Well first of all, we're a class 3 medical device which is at the highest standard to -- we’re a drug device as I mentioned in the call. They’re a class 2, so the components of their product are lower grade than ours, we have a drug master file, they do not. So we're practicing more our medical device more in the pharma space. They have taken a different marketing strategy than we have. So over time we anticipate taking over their foot print.

Thank you. Our next question comes from the line of Doug [indiscernible], a private investor. Please proceed with your question.

A lot of my questions have already been answered. A few additional. First of all I did not hear any mention with regards to CRMD-0004. Where does that stand in your future plans?

This is Tony, Doug. So development of Taurolidine gel product is something that's ongoing. We have a gel formulation group that's advancing that process and we have also potential partners for that process that we're working with and at this particular point in time I say our chief focus is on the solution and moving that forward, but that's close behind the Taurolidine gel and we have some novel applications that we're working to develop and. And as we press release them in the near future and have data; we will definitely let you know.

This is Randy. So it a preclinical product and as Tony said he has a team working on it now and we've evaluated different applications. And the whole point of this is, is that we want to have the Taurolidine franchise and so using the gel is a different mode of delivery for Taurolidine and it capitalizes upon the strength of Taurolidine.

I have understood in the past that maybe -- may have dermal applications outside of the catheter hair space? Harry O'Grady: That's absolutely correct and because there is no resistance, the essential advantage of a Taurolidine based product, whether as oppose to using quinolone based product during other antibiotic gentamycin based product is that, there hasn't been humanly resistance documented the Taurolidine. So lots of infections including MRSA, resisting Gram-negative like Pseudomonas that lead to conditions the staff obviously leading to conditions like Impetigo and MRSA being a major issue for skin infections and regular citizens and athletes and the application of it around a lot of other important procedures whether they'd be surgical or endoscopic is something that we're investigating carefully.

So that could represent a significantly large potential market? Harry O'Grady: We believe so, and we're as you say and as Randy just mentioned looking to leverage the power of Taurolidine in various formulations and use that to commercialize first the solution and then following at the gel in a way that essentially helps patients first and then generates revenue for the company.

I have recently come across some proposed legislation that could be presented to the Congress with regards to companies that acquire QIDP that they could potentially sell nearby that five year exclusivity. Are you all aware of that and where does that stand? Harry O'Grady: You are referring to the 21st Century Cures Act and this is -- it's in committee, so it's moving into the legislative phase and hasn't been induced yet, this from the house energy and commerce committee. You're right it does provide -- there is a section there about antibiotics and it does provide for that -- from a market exclusivity point of view that if you could actually -- you could sell or the 12 months of that of the additional five years, so but it's very early right now, it's really hard for us to talk about how that's going to -- we're aware of it. We have our legal team that's following up with it, but there's no assurance at this point that it's going to pass and we haven’t built any assumptions into our modeling. It's nice to think about, but it's very early Doug.

And Doug it does essentially highlight the fact that all branches of the Federal Government not only FDA and CMS, but Congress itself is passing the GAIN Act which included QIDP and now working on this 21st Century Cure Act that Randy just mentioned, our laser focus on infectious disease issues as well as the executive branch. And President mentioned the problem of infections and resistance in his State of the Union address, so I think when you get bipartisan support for developing anti-infective products and you have a product like Neutrolin and Taurolidine based solutions to resistance, it's a very powerful thing. And that's why I think the interest has been garnered. It's not just a Mi-2 Antibiotic out there; it's something with a novel mechanism of action. It really helps to address these important issues that you just brought up.

Where would you be seen with regards to -- with product sales, are you seeing reorders?

Yes, we're seeing reorders and part of this is the Neutrolin usage modeling program. That program was set at post marketing registry study, so we are seeing reorders with those physicians. And Tony just spent the last week visiting those sites and talking with the doctors. Very positive feedback and as I mentioned in the call, we have registrations in some of the Middle-Eastern countries and we have product, they're sampling it now and they're sampling it in part of their -- the method of operation is to sample and use the product before they do orders. But we are seeing reorders in the German market.

And one last question and then I'll turn over the line. You mentioned that you were seeing on the post market review Neutrolin usage program on approximately 95% reduction in infections and expected infections in thrombosis. What is your target level on the phase III trial in dialysis?

The target would be -- we need to only show a 40% reduction, so as Randy mentioned having this data gives us pores for lots of, not confidence but hope that we can achieve the 40% reduction. All the Phase II trials indicate 80%, 90%, 100% reduction and the NUMP study is tracking in at well over 90% reduction and so we're very optimistic about it. We're going to be presenting as Randy mentioned at -- near you. I know you're based in Texas, we're going to be in Dallas at the Gaylord Center at the National Kidney Foundation, the NKF Meeting at the end of this month and we have an oral presentation given by Dr. Christoph Wanner who is a professor of medicine at the University of Würzburg in Germany and Head of Nephrology. He's going to discuss the NUMP data at that conference in oral presentation and of course you and everyone on the call and all investors are invited to attend that in Dallas 09:00 AM on Saturday morning, March 28.

And what is your endpoint with regards of the number of patients that you want to do in the post market review trial? Harry O'Grady: Post market review we said, total right now -- the total is 200.

And you're currently at 175, is that correct? Harry O'Grady: Right, so what we've done is we've used these -- we've added different sites based upon location throughout Germany, so we're trying to get the broadest footprint that’s possible.

Thank you. Our next question comes from the line of Gerry Fershtman, Maxim Group. Please proceed with your question.

Yes so, on the topic of partnerships -- to the extent that you can and I understand that it's sensitive. When you look at your company and the current market cap consider it fully diluted, can you talk a little bit about where you feel the market cap is now versus where you think maybe it could or should be based on market opportunities when you are in the process, comparables that type of things? Harry O'Grady: That's a little premature for us, but as I mentioned to you earlier on the question about the U.S. opportunity; the 127 million catheter days as we look at that and as you start looking at the number of catheter usage so the market cap is based upon obviously us continuing to deliver on these targets that we’ve set for ourselves and the strategic partner and that's why we wanted to accelerate this with Evercore. Evercore brings a lot more power and acceleration as far as -- to explore these strategic alternatives.

Thank you. Mr. Milby there are no further questions at this time. I’d like to turn the floor back to you for any closing or final remarks.

Thank you. Thanks everyone for being on the call. I just like to summarize again that just as a reminder the highlights for this quarter Neutrolin was designated a qualified infectious disease product. We were grant Fast Track status by the FDA. As Tony mentioned we’re pursuing a clinical development strategy and queuing everything else up for this partnerships. And we’ve engaged Evercore to accelerate and explore the strategic alternatives for Neutrolin. And I can’t really provide any assurances on the timing for the Evercore arrangements. In my ideal world as I mentioned, it could be as short as one month but it could go up to six months. And we’re just at the very beginning of this process. We’ve completed several marketing research studies that articulate the value of Neutrolin and we have a publication and plan to put these results and peer reviewed journals , the NUMP data, the positive Neutrolin usage monitoring program data highlights the value proposition of Neutrolin and frankly de-risks the Phase III study in United States that Tony has talked about. So we’ve accomplished a lot this quarter. We still have a lot to do. And we continue to appreciate your support. Thank you very much.

Thank you. This conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.