CORMEDIX INC.
10-Ks and 10-Qs
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SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed by the
Registrant
☒
Filed by a Party other than the Registrant ☐
Check the
appropriate box:
☐
Preliminary Proxy Statement
☐
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
☒
Definitive
Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material Pursuant to § 240.14a-12
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CorMedix
Inc.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement if Other Than the
Registrant)
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Payment of Filing
Fee (Check the appropriate box):
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☒ No
fee required.
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☐ Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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1) Title of each
class of securities to which transaction applies:
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2) Aggregate number
of securities to which transaction applies:
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3) Per unit price
or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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4) Proposed maximum
aggregate value of transaction:
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5) Total fee
paid:
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☐ Fee
paid previously with preliminary materials.
☐ Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount
Previously Paid:
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2) Form, Schedule
or Registration Statement No.:
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3) Filing
Party:
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4) Date
Filed:
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CORMEDIX
INC.
1430
U.S. Highway 206, Suite 200
Bedminster,
New Jersey 07921
NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
TO
BE HELD JULY 31, 2017
TO THE STOCKHOLDERS
OF
CORMEDIX
INC.
A special meeting
of stockholders of CorMedix Inc. will be held at 1545 U.S. Highway
206, First Floor Conference Room, Bedminster, New Jersey, on July
31, 2017, at 11:00 a.m. Eastern time, for the following
purposes:
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1.
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To approve an
amendment to our Amended and Restated Certificate of Incorporation
to increase the number of authorized shares of capital stock from
82,000,000 shares to 162,000,000 shares and to increase the number
of authorized shares of common stock from 80,000,000 shares to
160,000,000 shares; and
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2.
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To approve an
adjournment of the special meeting, if necessary, to solicit,
additional proxies if there are not sufficient votes in favor of
Proposal No. 1.
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These matters are
more fully described in the proxy statement accompanying this
notice.
The Board has fixed
the close of business on June 23, 2017 as the record date for the
determination of stockholders entitled to notice of and to vote at
the meeting or any adjournment thereof. A list of stockholders
eligible to vote at the meeting will be available for review during
our regular business hours at our principal offices in Bedminster,
New Jersey for the 10 days prior to the meeting for review for any
purposes related to the meeting.
You are cordially
invited to attend the meeting in person. However, to assure your
representation at the meeting, you are urged to vote by proxy by
following the instructions contained in the accompanying proxy
statement. You may revoke your proxy in the manner described in the
proxy statement at any time before it has been voted at the
meeting. Any stockholder attending the meeting may vote in person
even if he or she has returned a proxy.
Your vote is important
.
Whether or not you plan to attend the special
meeting, we hope that you will vote as soon as
possible.
Bedminster, New
Jersey
Dated: June 29,
2017
By Order of the
Board of Directors
Antony E. Pfaffle,
M.D.,
Secretary
i
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING
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Q:
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Who
may vote at the meeting?
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A:
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The Board of
Directors has set June 23, 2017 as the record date for the meeting.
If you owned shares of our common stock at the close of business on
June 23, 2017, you may attend and vote at the meeting. Each
stockholder is entitled to one vote for each share of common stock
held on all matters to be voted on. As of June 23, 2017, there were
59,340,139 shares of our common stock outstanding and entitled to
vote at the meeting. Our outstanding Series C-2, C-3, D and E
preferred stock is non-voting and therefore has no voting rights at
the special meeting.
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Q:
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What
is the difference between holding shares as a stockholder of record
and as a beneficial owner?
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A:
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If your shares are
registered directly in your name with our transfer agent, VStock
Transfer, LLC, you are considered, with respect to those shares, a
“stockholder of record.” If you are a stockholder of
record, we have sent the proxy materials to you
directly.
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If your shares are
held in a stock brokerage account or by a bank or other holder of
record, you are considered the “beneficial owner” of
shares held in street name. In that case, the proxy materials has
been forwarded to you by your broker, bank, or other holder of
record who is considered, with respect to those shares, the
stockholder of record. As the beneficial owner, you have the right
to direct your broker, bank, or other holder of record on how to
vote your shares by using the voting instruction card you
receive.
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Q:
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What
is the quorum requirement for the meeting?
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A:
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A majority of our
outstanding shares of capital stock entitled to vote as of the
record date must be present at the meeting in order for us to hold
the meeting and conduct business. This is called a quorum. Your
shares will be counted as present at the meeting if
you:
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are present and
entitled to vote in person at the meeting; or
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properly submitted
a proxy card or voter instruction card in advance of or at the
meeting.
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If you are present
in person or by proxy at the meeting, but abstain from voting on
any or all proposals, your shares are still counted as present and
entitled to vote. The proposals listed in this proxy statement
identify the votes needed to approve or ratify the proposed
actions.
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Q:
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What
proposals will be voted on at the meeting?
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A:
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The proposals to be
voted on at the meeting are as follows:
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1.
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To approve an
amendment to our Amended and Restated Certificate of Incorporation
to increase the number of authorized shares of capital stock from
82,000,000 shares to 162,000,000 shares and to increase the number
of authorized shares of common stock from 80,000,000 shares to
160,000,000 shares; and
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2.
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To approve an
adjournment of the special meeting, if necessary, to solicit,
additional proxies if there are not sufficient votes in favor of
Proposal No. 1.
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ii
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We will also
consider any other business that properly comes before the meeting.
As of the record date, we are not aware of any other matters to be
submitted for consideration at the meeting. If any other matters
are properly brought before the meeting, the persons named in the
enclosed proxy card or voter instruction card will vote the shares
they represent using their best judgment.
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Q:
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How
may I vote my shares in person at the meeting?
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A:
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If your shares are
registered directly in your name with our transfer agent, VStock
Transfer, LLC, you are considered, with respect to those shares,
the stockholder of record. As the stockholder of record, you have
the right to vote in person at the meeting. You will need to
present a form of personal photo identification in order to be
admitted to the meeting. If your shares are held in a brokerage
account or by another nominee or trustee, you are considered the
beneficial owner of shares held in street name. As the beneficial
owner, you are also invited to attend the meeting. Because a
beneficial owner is not the stockholder of record, you may not vote
these shares in person at the meeting unless you obtain a
“legal proxy” from your broker, nominee, or trustee
that holds your shares, giving you the right to vote the shares at
the meeting.
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Q:
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How
can I vote my shares without attending the meeting?
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A:
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Whether you hold
shares directly as a registered stockholder of record or
beneficially in street name, you may vote without attending the
meeting. If your common stock is held by a broker, bank or other
nominee, they should send you instructions that you must follow in
order to have your shares voted. If you hold shares in your own
name, you may vote by proxy in any one of the following
ways:
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Via the Internet on
the secured website https://www.proxyvote.com and following the
voting instructions on that website;
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Via telephone by
calling 1-800-690-6903 in the United States and outside the United
States and following the recorded instructions; or
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By completing,
dating, signing and returning the proxy card included in these
proxy materials.
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The Internet and
telephone voting procedures are designed to authenticate
stockholders’ identities by use of a control number to allow
stockholders to vote their shares and to confirm that
stockholders’ instructions have been properly recorded.
Voting via the Internet or telephone must be completed by 11:59
p.m. Eastern Time on July 30, 2017. Of course, you can always come
to the meeting and vote your shares in person. If you submit or
return a proxy card without giving specific voting instructions,
your shares will be voted as recommended by the Board of
Directors.
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Q:
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How
can I change my vote after submitting it?
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A:
If you
are a stockholder of record, you can revoke your proxy before your
shares are voted at the meeting by:
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Filing a written
notice of revocation bearing a later date than the proxy with our
Corporate Secretary either before the meeting at 1430 U.S. Highway
206, Suite 200, Bedminster, New Jersey 07921, or at the meeting ,
at 1545 U.S. Highway 206, First Floor, Bedminster, New Jersey
07921;
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Duly executing a
later-dated proxy relating to the same shares and delivering it to
our Corporate Secretary either before the meeting at 1430 U.S.
Highway 206, Suite 200, Bedminster, New Jersey 07921, or at the
meeting and before the taking of the vote, at 1545 U.S. Highway
206, First Floor, Bedminster, New Jersey 07921; or
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Attending the
meeting and voting in person (although attendance at the meeting
will not in and of itself constitute a revocation of a
proxy).
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If you are a
beneficial owner of shares, you may submit new voting instructions
by contacting your bank, broker, or other holder of record. You may
also vote in person at the meeting if you obtain a legal proxy from
them as described in the answer to a previous
question.
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Q:
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Where
can I find the voting results of the meeting?
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A:
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We will announce
the voting results at the special meeting. We will publish the
results in a Form 8-K filed with the SEC within four business days
of the special meeting.
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CORMEDIX
INC.
1430
U.S. Highway 206, Suite 200
Bedminster,
New Jersey 07921
PROXY
STATEMENT
SPECIAL
MEETING OF STOCKHOLDERS
JULY
31, 2017
This proxy
statement has been prepared by the management of CorMedix Inc.
“We,” “our” and the “Company”
each refers to CorMedix Inc.
In accordance with
the rules of the SEC, we are mailing a printed copy of our proxy
materials to each stockholder of record, including the notice, this
proxy statement, and a proxy card for the meeting. We mailed the
proxy materials on or about June 30, 2017 to our stockholders of
record and beneficial owners as of June 23, 2017, the record date
for the meeting. This proxy statement contains instructions for
voting by proxy over the Internet or by telephone or by completing
and returning the enclosed proxy card.
GENERAL
INFORMATION ABOUT SOLICITATION VOTING AND ATTENDING
Who
Can Vote
You are entitled to
attend the meeting and vote your common stock if you held shares as
of the close of business on June 23, 2017. At the close of business
on June 23, 2017, a total of 59,340,139 shares of common stock were
outstanding and entitled to vote. Each share of common stock has
one vote.
Counting
Votes
Consistent with
state law and our bylaws, the presence, in person or by proxy, of
at least a majority of the shares entitled to vote at the meeting
will constitute a quorum for purposes of voting on a particular
matter at the meeting. Once a share is represented for any purpose
at the meeting, it is deemed present for quorum purposes for the
remainder of the meeting and any adjournment thereof unless a new
record date is set for the adjournment. Shares held of record by
stockholders or their nominees who do not vote by proxy or attend
the meeting in person will not be considered present or represented
and will not be counted in determining the presence of a quorum.
Signed proxies that withhold authority or reflect abstentions will
be counted for purposes of determining whether a quorum is
present.
Assuming the
presence of a quorum at the meeting:
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The vote on the
amendment to our Amended and Restated Certificate of Incorporation
to increase the number of authorized shares of capital stock from
82,000,000 shares to 162,000,000 shares and to increase the number
of authorized shares of common stock from 80,000,000 shares to
160,000,000 shares requires the affirmative vote of a majority of
the shares outstanding and able to vote at the meeting. Abstentions
will effectively be a vote against this proposal.
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The vote on the
adjournment of the special meeting requires the affirmative vote of
a majority of the shares represented and able to vote at the
meeting. Abstentions will have no effect on this
proposal.
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1
With respect to
“routine” matters, such as the amendment to the
Certificate of Incorporation and the proposal to adjourn, a bank,
brokerage firm, or other nominee has the authority (but is not
required) under the rules governing self-regulatory organizations,
or SRO rules, including the NYSE MKT, on which our common stock is
listed, to vote its clients’ shares if the clients do not
provide instructions. When a bank, brokerage firm, or other nominee
votes its clients’ shares on routine matters without
receiving voting instructions, these shares are counted both for
establishing a quorum to conduct business at the meeting and in
determining the number of shares voted FOR, AGAINST or ABSTAINING
with respect to such routine matters.
In summary, if you
do not vote your proxy, your bank, brokerage firm, or other nominee
may either cast a vote or leave your shares unvoted
altogether.
We strongly
encourage you to provide instructions to your bank, brokerage firm,
or other nominee by voting your proxy. This action ensures that
your shares will be voted in accordance with your wishes at the
meeting.
Cost
of this Proxy Solicitation
We will pay the
cost of this proxy solicitation. In addition to soliciting proxies
by mail, our directors and employees might solicit proxies
personally and by telephone. None of these individuals will receive
any additional compensation for this. We have not retained, but may
in the future retain, a proxy solicitor to assist in the
solicitation of proxies for a fee. We will, upon request, reimburse
brokers, banks and other nominees for their expenses in sending
proxy materials to their principals and obtaining their
proxies.
Attending
the Special Meeting
If you are a holder
of record and plan to attend the special meeting, please bring a
photo identification to confirm your identity. If you are a
beneficial owner of common stock held by a bank or broker, i.e., in
“street name,” you will need proof of ownership to be
admitted to the meeting. A recent brokerage statement or letter
from a bank or broker are examples of proof of ownership. If you
want to vote in person your common stock held in street name, you
must get a proxy in your name from the registered
holder.
2
PROPOSAL
NO. 1 - APPROVAL OF THE AMENDMENT TO OUR AMENDED AND
RESTATED
CERTIFICATE
OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF
CAPITAL
STOCK FROM 82,000,000 SHARES TO 162,000,000 SHARES AND TO INCREASE
THE
NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK FROM 80,000,000 SHARES TO
160,000,000 SHARES
Our Board of Directors has approved and
recommended a proposal to amend our amended and restated
Certificate of Incorporation (“Certificate of
Incorporation”), substantially in the form of
Appendix
A
hereto, to increase our
shares of authorized capital stock from 82,000,000 shares to
162,000,000 shares and to increase the number of authorized shares
of common stock from 80,000,000 to 160,000,000
shares.
We
previously had sought approval at the 2017 Annual Meeting of
Stockholders to increase the authorized capital shares to
202,000,000 and the common shares to 200,000,000. We believed that
the cushion of approximately 91,000,000 shares that such an
increase would provide for future use (after reserving shares
issuable upon the exercise of the warrants issued in the May 2017
financing discussed below) was reasonable in light of our
anticipated capital needs for the ongoing and planned Phase 3
clinical trials, activities related to the anticipated NDA
submission and pre-launch commercialization efforts for Neutrolin
and our other operations. Further, we wanted to have sufficient
authorized shares to be able to take advantage of any financing
opportunities that might present themselves in the future without
having to delay such financing to seek sufficient authorized
shares, since a delay could result in our missing such a financing
opportunity.
However,
in light of stockholder concerns, we are reducing the number of
authorized shares for which we are seeking approval from our
original proposal and now are seeking to increase the authorized
capital shares to 162,000,000 (rather than 202,000,000 shares) and
the authorized common shares to 160,000,000 (rather than
200,000,000 shares). We believe this amount of authorized shares is
sufficient for our most pressing need, which is continuing the LOCK
IT 100 trial through to the completion of patient enrollment.
Further, we believe that the current requested increase in
authorized shares is in line with increases sought by other
comparable public pharmaceutical companies, as well as the
guidelines of Institutional Investor Services. This lower amount of
authorized shares, however, will likely necessitate the need to
come back to our stockholders for approval of additional authorized
shares sooner than we initially anticipated with the larger
increase as originally proposed.
If
approved by our stockholders, we intend to file the amendment with
the Secretary of State of Delaware as soon as practicable following
the special meeting, and the amendment will be effective upon such
filing. If the proposal is not approved by our stockholders, our
Certificate of Incorporation will continue as currently in
effect.
Current Structure
As
of June 23, 2017, we had 82,000,000 authorized shares, with
80,000,000 shares designated as common stock, $0.001 par value per
share, of which 59,340,139 shares were issued and outstanding, and
2,000,000 shares of preferred stock, $0.001 par value per share, of
which 442,585 shares were issued and outstanding. Of the remaining
20,659,861 authorized shares of common stock, 6,228,999 shares are
reserved for issuance upon the conversion of the outstanding shares
of our Series C, Series D and Series E preferred stock, 5,627,045
shares are reserved for issuance upon the exercise of issued and
outstanding options, 87,217 shares are reserved for issuance upon
the vesting of restricted stock units, 141,849 shares are reserved
for issuance pursuant to deferred director compensation, 4,568,283
shares are reserved for future issuance under our 2013 Stock
Incentive Plan, and 4,006,468 shares are reserved for issuance upon
the exercise of issued and outstanding warrants. This leaves no
shares of our authorized common stock available for future
issuance.
Background and Purpose of the Amendment
As reported on May
3, 2017, we closed on an underwritten public offering of 18,619,301
shares of our common stock, par value $0.001 per share, together
with Series A Warrants to purchase up to an aggregate of 13,964,476
shares of our common stock and Series B Warrants to purchase up to
an aggregate of 13,964,476 shares of our common stock. The gross
proceeds from the sale of shares was approximately $14.0 million,
before deducting underwriting discounts and commissions and
estimated offering expenses.
Each Series A
Warrant has an exercise price of $1.05 per share of common stock
and will expire five years following the Exercisable Date (defined
below). Each Series B Warrant has an exercise price of $0.75 per
share of common stock and will expire thirteen months following the
Exercisable Date.
We also issued to
the underwriter of the offering warrants to purchase up to an
aggregate of 1,117,158 shares of common stock, with an exercise
price of $0.9375, which represents 125% of the public offering
price per combined share and related warrants. The underwriter
warrants will expire five years following the Exercisable Date.
Other than the exercise price, the terms of the underwriter
warrants are the same as the Series A warrants.
We do
not currently have a sufficient number of authorized shares of
common stock to cover the shares issuable upon exercise of the
warrants issued in the offering. As a result, before any warrants
can become exercisable, we need to receive stockholder approval of
an amendment to our Amended and Restated Certificate of
Incorporation (the “Charter Amendment”) to increase the
number of authorized shares of common stock, as recommended in this
proxy statement. The warrants will be exercisable on any day on or
after the date that we publicly announce through the filing of a
Current Report on Form 8-K that the Charter Amendment has been
approved by our stockholders and has become effective (the
“Exercisable Date”).
Therefore, the
longer the Charter Amendment remains unapproved, the longer the
warrants will be exercisable should the Charter Amendment
ultimately be approved.
In the event our stockholders do not
approve the Charter Amendment, the warrants will not be
exercisable. As agreed with the underwriter, until we receive
approval of the Charter Amendment, we cannot sell any shares of
common stock or securities convertible into common
stock.
Further, the lack
of a sufficient number of authorized shares to satisfy the exercise
of the warrants issued in the May 2017 financing resulted in the
creation of a derivative liability during the second quarter of
2017. Unless and until the Charter Amendment is approved and
effective, there could be adverse mark-to-market and other
accounting consequences due to maintaining the warrants as a
derivative liability, which could reduce our stockholders’
equity to an amount less than the minimum amount required by the
NYSE MKT. Therefore, our ability to maintain the listing of our
common stock on the NYSE MKT will be weakened during the period of
time during which the Charter Amendment is not approved. The
failure to maintain our NYSE MKT listing will make our common stock
and the warrants less liquid and could negatively impact their
price, and would also make any future equity financing more
difficult and likely more expensive.
Currently, we have
no shares of authorized common stock available for future
issuance.
The Board of
Directors believes it is vital to our best interests to have
sufficient additional authorized but unissued shares of common
stock available in order to provide flexibility for corporate
action in the future. Management believes that the availability of
additional authorized shares for issuance from time to time in the
Board of Directors’ discretion in connection with possible
future financings or for other corporate uses is critical both to
our ability to continue our operations in the near-term as well as
to our long-term success and, therefore, is in the best interests
of our company and our stockholders.
3
In light of our
need for additional financing to continue our operations in the
future, even after giving effect to the recent financing in May
2017, the Board of Directors believes that we must have available
unissued shares to draw on to support our future operations. We
have an existing at-the-market common stock program, which we
cannot access unless the proposed increase in the authorized shares
is approved. Further, the investors in the recent financing will
lose the value of their warrants, and we would lose the cash
proceeds from any exercise of those warrants, if the proposed
increase in the authorized shares is not approved. Additionally,
our Board of Directors believes that debt and other non-equity
financing would be difficult to obtain in the event our
stockholders do not approve the Charter Amendment due to the
inability to offer and sell convertible debt as well as the lack of
support for the Company that a failure to approve the Charter
Amendment would indicate.
The
lack of approval for the Charter Amendment also will negatively
impact our current operations.
We have already
commenced efforts to defer or reprioritize the timing of certain
expenses in light of our current cash position, and the expected
increase in expense of the LOCK IT 100 trial.
In the event the
Charter Amendment is not approved at this meeting, and therefore
future equity financing is not available to us, we expect to
commence immediately after the special meeting further reductions
of our operating expenses, which would negatively impact the timing
of our ongoing and planned clinical trials for Neutrolin and other
pipeline candidates. We anticipate that any reduction in
operating expenses will likely include at a minimum a slowing of
the rate of enrollment of patients into our LOCK IT 100 clinical
trial, although we will strive to minimize the impact on the trial
as much as possible. Any slowing in the enrollment rate of the LOCK
IT 100 trial will likely delay the date on which we could have the
requisite number of catheter-related blood stream infections to
trigger the interim efficacy review and the longer it will take
before the trial results are known. This will further strain our
cash resources and potentially jeopardize our ability to retain
employees and complete the LOCK IT 100 trial, let alone commence
the LOCK IT 200 trial, both of which, if successful, are necessary
for FDA approval.
For the reasons
above, our Board of Directors believes that the proposed Charter
Amendment is vital to the future of our company by providing
necessary shares for future financings and other needs, without
which we believe we may not be able to support our ongoing and
planned clinical trials for Neutrolin or indeed our future
operations. Such an outcome would severely limit the options
available to us to continue our operations and derive value from
our pipeline. This could ultimately result in the cessation of our
operations and/or a decrease in the value of our assets and our
securities. In such event, we could be forced to sell or otherwise
dispose of our assets, including Neutrolin, at prices far below
their true value. Our Board of Directors recommends that you vote
“
FOR
” the
Charter Amendment.
We currently have
no specific understandings, arrangements or agreements with respect
to any future actions that would require us to issue a material
amount of the additional new shares of our common stock other than
the reservation of shares for issuance upon the exercise of the
warrants issued in the May 2017 financing.
We have called the
special meeting to consider the Charter Amendment because the
Charter Amendment
as originally
proposed
was not approved at our 2017 Annual Meeting of
Stockholders that was held on June 12, 2017. We intend to continue
to seek stockholder approval of the Charter Amendment until such
approval is received due to the need for future financing to fund
our operations.
Effects of the Amendment
If
the proposed amendment of our Certificate of Incorporation is
approved, the number of authorized shares of capital stock will be
increased from 82,000,000 shares to 162,000,000 shares and the
number of authorized shares of common stock of our Company will be
increased from 80,000,000 to 160,000,000.
Of
the 160,000,000 shares of authorized common stock, 80,000,000 is
either outstanding or reserved for issuance as of the date of this
proxy statement and an additional 29,046,110 shares will be
reserved for issuance upon exercise of the warrants issued in the
May 2017 financing. Therefore, of the proposed increase in
authorized shares, approximately 51,000,000 shares will be
available for issuance in the future.
The
amendment will not change the par value of the shares of our common
stock, affect the number of shares of our common stock that are
outstanding, or affect the legal rights or privileges of holders of
existing shares of common stock. The increase will not have any
effect on the authorized or outstanding shares of preferred stock.
The increase will not have any effect on any outstanding equity
incentive awards or warrants to purchase our common
stock.
In
deciding upon an appropriate number of common shares to propose in
the Charter Amendment, we originally considered our expected cash
needs over the next few years, which we anticipated would be driven
by the completion of the LOCK IT 100 and the planned LOCK IT 200
clinical trials, related chemistry, manufacturing, and control
requirements for the anticipated NDA submission of Neutrolin, and
necessary pre-launch commercial activities. In light of our
reduction of the requested increase in authorized shares to
160,000,000 and given our current stock price, we believe that we
will have sufficient shares available to fund our operations
through to the completion of enrollment of the LOCK IT 100 clinical
trial. As noted above, after taking into account the 29,046,110
shares reserved for issuance under the warrants issued in the May
2017 financing, we would have approximately 51,000,000 shares
available for possible issuance under our ATM program or any other
potential equity financing.
Should
we need additional authorized shares of capital stock in the
future, we would need to seek stockholder approval for such an
increase.
Vote Required
Approval
of the amendment to our Certificate of Incorporation to increase
our authorized shares of capital stock from 82,000,000 shares to
162,000,00 shares and the authorized shares of common stock from
80,000,000 to 160,000,000 requires the receipt of the affirmative
vote of a majority of the shares of our common stock issued and
outstanding as of the record date.
4
Possible Anti-Takeover Implications of the Authorized Share
Increase
We have no intent
or plan to employ the additional unissued authorized shares as an
anti-takeover device. As indicated above, the purpose of the
increase in our authorized shares of common stock is to ensure that
we have sufficient authorized common stock to, among other things,
provide flexibility to consummate future equity financings and
other corporate opportunities. However, our authorized but unissued
shares of common stock could (within the limits imposed by
applicable law and regulation) be issued in one or more
transactions that could make a change of control more difficult and
therefore more unlikely.
Our Board did not
propose the increase in our authorized shares of capital and common
stock in response to any effort known to our Board to accumulate
common stock or to obtain control of our company by means of a
merger, tender offer or solicitation in opposition to management.
Further, our Board does not currently contemplate recommending the
adoption of any other amendments to our Certificate of
Incorporation that could be construed as limiting the ability of
third parties to consummate a takeover or effect a change of
control. Although this proposal to increase the authorized number
of shares of capital and common stock has been prompted by business
and financial considerations and not by the threat of any known or
threatened hostile takeover attempt, stockholders should be aware
that approval of this proposal could facilitate future efforts by
our Company to oppose changes in control of our company and
perpetuate our company’s management, including transactions
in which the stockholders might otherwise receive a premium for
their shares over then-current market prices.
The issuance of
shares of common stock should the warrants issued in the May 2017
financing be exercised will have the effect of diluting the
earnings or loss per share and book value per share, as well as the
ownership and voting rights of the holders of our then-outstanding
shares of common stock. The issuance in the future of additional
authorized shares of common stock may have the effect of diluting
the earnings or loss per share and book value per share, as well as
the ownership and voting rights of the holders of our
then-outstanding shares of common stock. In addition, an increase
in the number of authorized but unissued shares of common stock may
have a potential anti-takeover effect, as our ability to issue
additional shares could be used to thwart persons, or otherwise
dilute the stock ownership of stockholders, seeking to control our
company. The increase in the authorized shares of capital and
common stock is not being recommended by our Board as part of an
anti-takeover strategy.
Recommendation
The
Board of Directors has unanimously
approved the amendment to our Amended and Restated Certificate of
Incorporation and recommends that you vote
FOR
Proposal No. 1.
5
PROPOSAL
NO. 2 - ADJOURNMENT PROPOSAL
TO
APPROVE THE ADJOURNMENT OF THE SPECIAL MEETING, IF NECESSARY, IN
THE REASONABLE DISCRETION OF THE CHIEF EXECUTIVE OFFICER OF THE
COMPANY, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE INSUFFICIENT
VOTES AT THE TIME OF THE SPECIAL MEETING TO APPROVE PROPOSAL NO.
1.
Background
Our
Board believes that if the number of shares of our common stock
present in person or represented by proxy at the special meeting
and voting in favor of the Charter Amendment is insufficient to
approve such proposal, it is in the best interests of the
stockholders to enable our Board to continue to seek to obtain a
sufficient number of additional votes to approve the Charter
Amendment for up to 30 days (the “Adjournment
Proposal”).
In
the Adjournment Proposal, we are asking stockholders to authorize
the holder of any proxy solicited by our Board to vote in favor of
adjourning or postponing the special meeting or any adjournment or
postponement thereof. If our stockholders approve this proposal, we
could adjourn or postpone the special meeting, and any adjourned
session of the special meeting for up to 30 days, to use the
additional time to solicit additional proxies in favor of the
Charter Amendment.
Additionally,
approval of the Adjournment Proposal could mean that, in the event
we receive proxies indicating that a majority of the number of
outstanding shares of our common stock will vote against the
Charter Amendment, we could adjourn or postpone the special meeting
without a vote on the Charter Amendment and use the additional time
to solicit the holders of those shares to change their vote in
favor of the Charter Amendment.
Vote
Required
Approval
of the Adjournment Proposal requires the affirmative vote of the
holders of a majority of the shares of our common stock present in
person or represented by proxy at the special meeting and entitled
to vote on this proposal.
Recommendation
The
Board of Directors recommends that you
vote
FOR
Proposal No.
2.
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
Principal
Stockholders
The following table
shows the number of shares of our common stock beneficially owned
as of June 23, 2017 by:
|
●
|
each person known
by us to own beneficially more than 5% of the outstanding shares of
our common stock;
|
|
●
|
each
director;
|
|
●
|
each of our
executive officers; and
|
|
●
|
all of our
directors and executive officers as a group.
|
This table is based
upon the information supplied by our Named Executive Officers,
directors and principal stockholders and from Schedules 13D and 13G
filed with the SEC. Except as indicated in footnotes to this table,
the persons named in this table have sole voting and investment
power with respect to all shares of common stock shown, and their
address is c/o CorMedix Inc., 1430 U.S. Highway 206, Suite 200,
Bedminster, New Jersey 07921. As of June 23, 2017, we had
59,340,139
shares of common
stock outstanding. Beneficial ownership in each case also includes
shares issuable upon exercise of outstanding options and warrants
that can be exercised within 60 days after June 23, 2017 for
purposes of computing the percentage of common stock owned by the
person named. Options owned by a person are not included for
purposes of computing the percentage owned by any other
person.
|
Name and Address
of Beneficial Owner
|
Common
Stock
Beneficially
Owned
(1)
|
|
|
|
Shares
|
%
|
|
5% or Greater Stockholders
|
|
|
|
Elliott Associates,
L.P. (2)
|
5,928,080
|
9.9
%
|
|
Sabby Management,
LLC (3)
|
5,133,332
|
8.7
%
|
|
CVI Investments,
Inc. (4)
|
3,800,000
|
6.4
|
|
|
|
|
|
Directors and Named Executive Officers:
|
|
|
|
Khoso Baluch
(5)
|
85,000
|
*
|
|
Janet M. Dillione
(6)
|
168,303
|
*
|
|
Michael W. George
(7)
|
195,000
|
*
|
|
Myron Kaplan
(8)
|
100,000
|
*
|
|
Taunia Markvicka
(9)
|
207,100
|
*
|
|
Robert Cook
(10)
|
50,000
|
*
|
|
Judith
Abrams
|
-0-
|
--
|
|
John Armstrong
(11)
|
195,008
|
*
|
|
|
|
|
|
All executive officers and directors as a
group (8 persons)
(12)
|
1,000,411
|
1.8
%
|
|
|
|
|
|
|
* Less than 1%
|
|
|
(1)
|
Based upon
59,340,139
shares of our common
stock outstanding on June 23, 2017 and, with respect to each
individual holder, rights to acquire our common stock exercisable
within 60 days of June 23, 2017.
|
|
|
|
|
7
|
|
(2)
|
Due to the
Ownership Limitation (as defined below), Elliott Associates, L.P.
(“Elliott Associates”) may be deemed the beneficial
owner of 5,928,080 shares of our common stock through securities
held by it and by Manchester Securities Corp., a wholly-owned
subsidiary of Elliott Associates (“Manchester”), and
Elliott International, L.P. (“Elliott International”),
the investment advisor of which is an affiliate of the investment
advisor of Elliott Associates. Notwithstanding the above, Elliott
Associates beneficially holds: (i) 1,311,234 shares of our common
stock held by Manchester, (ii) 2,754,990 shares of our common stock
held by Elliott International, (iii) 2010 warrants held by
Manchester exercisable for 390,720 shares of our common stock, (iv)
May 2013 warrants exercisable for 500,000 shares of our common
stock, (v) 52,500 shares of our Series C-2 non-voting convertible
preferred stock convertible into 525,000 shares of our common
stock, (vi) October 2013 warrants exercisable for 262,500 shares of
our common stock, (vii) 97,500 shares of our Series C-2 non-voting
convertible preferred stock held by Elliott International
convertible into 975,000 shares of our common stock, (viii) October
2013 warrants held by Elliott International exercisable for 487,500
shares of our common stock, (ix) 73,962 shares of our Series D
non-voting convertible preferred stock held by Manchester
convertible into 1,479,240 shares of our common stock, (x) 89,623
shares of our Series E non-voting convertible preferred stock held
by Manchester convertible into 1,959,759 shares of our common
stock, (xi) May 2017 warrants held by Manchester exercisable for
1,280,000 shares of our common stock, and (xii) May 2017 warrants
held by Elliott International exercisable for 2,720,002 shares of
our common stock (the May 2013 warrants, the October 2013 warrants
and the May 2017 warrants shall collectively be referred to herein
as the “Convertible Securities”). However, in
accordance with Rule 13d-4 under the Exchange Act, the number of
shares of our common stock into which the Convertible Securities
are convertible or exercisable, as applicable, are limited pursuant
to the terms of the Convertible Securities to that number of shares
of our common stock which would result in Elliott Associates having
aggregate beneficial ownership of, with respect to the May 2013
warrants, the October 2013 warrants, the May 2017 warrants, the
Series C-2 preferred stock, the Series D preferred stock and the
Series E preferred stock, 9.99% of the total issued and outstanding
shares of our common stock (the "Ownership Limitation"). Elliott
Associates disclaims beneficial ownership of any and all shares of
our common stock issuable upon any conversion or exercise of the
Convertible Securities if such conversion or exercise would cause
Elliott Associates’ aggregate beneficial ownership to exceed
or remain above the applicable Ownership Limitation (as is
currently the case). Therefore, Elliott Associates disclaims
beneficial ownership of any shares of our common stock, issuable
upon any conversion or exercise of the May 2013 warrants, the
October 2013 warrants, the May 2017 warrants, the Series C-2
preferred stock, the Series D preferred stock and the Series E
preferred stock, which conversion of exercise would be prohibited
by the Ownership Limitation. The business address of Elliott
Associates is 40 West 57th Street, 30th Floor, New York, New York
10019. Based solely on information contained in a Schedule 13D
filed with the SEC on May 3, 2017 by Elliott Associates and other
information known to us.
|
|
|
|
|
|
(3)
|
Consists of (i)
2,566,666 shares of our common stock, and (ii) 2,566,666 shares of
our common stock issuable upon the exercise of warrants. The
business address of Sabby Management is 10 Mountainview Road, Suite
205, Upper Saddle River, New Jersey 07458. Based solely on
information contained in a Schedule 13D filed with the SEC on May
3, 2017 by Sabby Management, LLC and other information known to
us.
|
|
|
|
|
|
|
(4)
|
Consists of (i)
1,900,000 shares of our common stock and (ii) 1,900,000 shares of
our common stock issuable upon the exercise of warrants. The
business address of CVI Investments, Inc. is P.O. Box 309GT, Ugland
House, South Church Street, George Town, Grand Cayman KY1-1104,
Cayman Islands. Based solely on information contained in a Schedule
13D filed with the SEC on May 8, 2017 by CVI Investments, Inc. and
other information known to us.
|
|
|
|
|
|
|
(5)
|
Consists of 85,000
shares of our common stock.
|
|
|
(6)
|
Consists of (i)
39,969 shares of our common stock, and (ii) 128,334 shares of our
common stock issuable upon the exercise of stock options. Does not
include an aggregate of 35,269 shares of our common stock that were
deferred as director fee compensation and that are not issuable
until after the individual’s cessation of service with our
Board.
|
|
|
(7)
|
Consists of (i)
10,000 shares of our common stock and (ii) 185,000 shares of our
common stock issuable upon exercise of stock options. Does not
include an aggregate of 42,598 shares of our common stock that were
deferred as director fee compensation and that are not issuable
until after the individual’s cessation of service with our
Board.
|
|
|
(8)
|
Consists of (i)
50,000 shares of our common stock, and (ii) 50,000 shares of our
common stock issuable upon exercise of stock options.
|
|
|
(9)
|
Consists of (i)
37,100 shares of our common stock, and (ii) 170,000 shares of our
common stock issuable upon the exercise of stock
options.
|
|
|
|
|
|
|
(10)
|
Consists of 50,000
shares of our common stock.
|
|
|
|
|
|
|
(11)
|
Consists of 195,008
shares of our common stock issuable upon exercise of stock
options.
|
|
(12)
|
Consists of (i) the
following held by our directors and executive officers (A) 272,069
shares of our common stock, and (B) 728,342 shares of our common
stock issuable upon exercise of stock options, as referenced in
footnotes 5 through 11.
|
Subsequent to June
23, 2017, on June 26, 2017, Mehmood Khan, M.D., and Steven W.
Lefkowitz were elected to our Board and Michael George and Taunia
Markvicka resigned as directors. In addition, Gary Gelbfish, M.D.,
a shareholder, was appointed by our largest shareholder Elliott
Management as an observer to our Board of Directors. The
appointment was made pursuant to a letter agreement, dated March 3,
2015, between us and Manchester, an affiliate of Elliott
Management, which letter agreement was entered into as part of the
backstop financing made available to us by Manchester in March
2015. Mr. Lefkowitz beneficially owns an aggregate of
185,720 shares of our common stock (including shares held by his
wife, his minor son and his business’s money purchase plan)
as well as warrants to purchase an aggregate of 37,500 shares of
our common stock (including warrants held by his business’s
money purchase plan).
8
DEADLINE
FOR STOCKHOLDER PROPOSALS FOR 2018 ANNUAL MEETING
Stockholder
proposals to be included in the proxy statement for our next annual
meeting of stockholders must be received by us not later than
December 27, 2017. Under our bylaws, stockholder proposals to be
considered at our next annual meeting, including nominees for
director, must be received by us not later than 60 days prior to
that meeting. All submissions must comply with all of the
requirements of our bylaws and Rule 14a-8 of the Exchange Act.
Proposals should be mailed to Antony E. Pfaffle, Corporate
Secretary, CorMedix Inc., 1430 U.S. Highway 206, Suite 200,
Bedminster, New Jersey 07921.
Management’s
proxy holders for the next annual meeting of stockholders will have
discretion to vote proxies given to them on any stockholder
proposal of which we do not have notice prior to March 12,
2018.
DELIVERY
OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS
The SEC has adopted
rules that permit companies to deliver a single copy of proxy
materials to multiple stockholders sharing an address unless a
company has received contrary instructions from one or more of the
stockholders at that address. Upon request, we will promptly
deliver a separate copy of proxy materials to one or more
stockholders at a shared address to which a single copy of proxy
materials was delivered. Stockholders may request a separate copy
of proxy materials by contacting us either by calling (908)
517-9500 or by mailing a request to 1430 U.S. Highway 206, Suite
200, Bedminster, New Jersey 07921. Stockholders at a shared address
who receive multiple copies of proxy materials may request to
receive or a single copy of proxy materials in the future in the
same manner as described above.
OTHER
MATTERS
Our
management does not intend to present any other items of business
and is not aware of any matters other than those set forth in this
proxy statement that will be presented for action at the special
meeting. However, if any other matters properly come before the
special meeting, the persons named in the enclosed proxy intend to
vote the shares of our common stock that they represent in
accordance with their best judgment.
9
DIRECTIONS
TO CORMEDIX INC. SPECIAL MEETING AT
1545
U.S HIGHWAY 206, FIRST FLOOR CONFERENCE ROOM, BEDMINSTER, NEW
JERSEY 07921
Directions
from US-202/206 North
Merge onto
US-202/206 North. Keep left to stay on US-202 N/US-206 N.
Continue for approximately 1 mile. Pass the fourth traffic
light and turn left at the driveway after the Shell gas
station. Park at the back of the building.
Directions
from Areas North Of Bedminster via I-287
Follow ROUTE 287
SOUTH to EXIT 22 (U.S. 202/206 NORTH) towards Bedminster.
Follow directions from US-202/206 North above.
Directions
from Areas South Of Bedminster via I-287
Follow ROUTE 287
NORTH to EXIT 22B (U.S. 202/206 NORTH) towards Bedminster. Follow
directions from US-202/206 North above.
Directions
Jersey City, Newark (Airport), New York, and Areas East of
Bedminster via I-78
Follow I-78 to
Exit 29 to I-287 North toward US 202/206/Morristown, stay right at
the fork onto I-287. Follow ROUTE 287 NORTH to EXIT 22B (U.S.
202/206 NORTH) towards Bedminster. Follow directions from
US-202/206 North above.
Directions
from Pennsylvania, Phillipsburg, Clinton, and Areas West of
Bedminster via I-78
Follow I-78 to
Exit 29 to I-287 North toward US 202/206/Morristown, stay left at
the fork onto I-287. Follow ROUTE 287 NORTH to EXIT 22B (U.S.
202/206 NORTH) towards Bedminster. Follow directions from
US-202/206 North above.
Directions
from I-80, East or West.
Follow I-80
(East-bound or West-bound) to the juncture with I-287 South.
Follow I-287 South to Exit 22 Bedminster. Follow directions
from US-202/206 North above.
10
Appendix
A
CORMEDIX
INC.
Proposed Amendment to the Amended and Restated Certificate of
Incorporation
CERTIFICATE OF AMENDMENT
TO
THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED
OF
CORMEDIX INC.
The undersigned, for purposes of amending the
Amended and Restated Certificate of Incorporation, as amended (the
“
Certificate
”), of CorMedix Inc., a corporation
organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, does hereby certify as
follows:
FIRST
: The name of the corporation is
CorMedix Inc. (the “
Corporation
”).
SECOND
: The Certificate was filed with the
Office of the Secretary of State of the State of Delaware on
December 3, 2012.
THIRD
: Article FOURTH of the Certificate is
hereby amended to read, in its entirety, as
follows:
“The
total number of shares of all classes of stock which the
Corporation shall have the authority to issue is 162,000,000
shares. The Corporation is authorized to have two classes of
shares, designated as Common Stock and Preferred Stock. The total
number of shares of Common Stock which the Corporation is
authorized to issue is 160,000,000 shares, and the par value of
each of the shares of Common Stock is $0.001. The total number of
shares of Preferred Stock which the Corporation is authorized to
issue is 2,000,000 shares, and the par value of each of the shares
of Preferred Stock is $0.001.
The
Preferred Stock may be issued in one or more series at such time or
times and for such consideration or considerations as the
Corporation’s Board of Directors may determine. Each series
of Preferred Stock shall be so designated as to distinguish the
shares thereof from the shares of all other series and classes.
Except as otherwise provided in this Amended and Restated
Certificate of Incorporation, as amended, different series of
Preferred Stock shall not be construed to constitute different
classes of shares for the purpose of voting by
classes.
The
Board of Directors is expressly authorized to provide for the
issuance of all or any shares of any authorized but undesignated
Preferred Stock in one or more series, each with such designations,
preferences, voting powers (or no voting powers), relative,
participating, optional or other special rights and privileges and
such qualifications, limitations or restrictions thereof as shall
be stated in the resolution or resolutions adopted by the Board of
Directors to create such series, and a certificate of said
resolution or resolutions shall be filed in accordance with the
General Corporation Law of the State of Delaware. The authority of
the Board of Directors with respect to each such series shall
include, without limitation of the foregoing, the right to provide
that the shares of each such series may: (i) have such distinctive
designation and consist of such number of shares; (ii) be subject
to redemption at such time or times and at such price or prices;
(iii) be entitled to the benefit of a retirement or sinking fund
for the redemption of such series on such terms and in such
amounts; (iv) be entitled to receive dividends (which may be
cumulative or non-cumulative) at such rates, on such conditions,
and at such times, and payable in preference to, or in such
relation to, the dividends payable on any other class or classes or
any other series of stock; (v) be entitled to such rights upon the
voluntary or involuntary liquidation, dissolution or winding up of
the affairs, or upon any distribution of the assets of the
Corporation in preference to, or in such relation to, any other
class or classes or any other series of stock; (vi) be convertible
into, or exchangeable for, shares of any other class or classes or
any other series of stock at such price or prices or at such rates
of exchange and with such adjustments, if any; (vii) be entitled to
the benefit of such conditions, limitations or restrictions, if
any, on the creation of indebtedness, the issuance of additional
shares of such series or shares of any other series of Preferred
Stock, the amendment of this Amended and Restated Certificate of
Incorporation, as amended, or the Corporation’s By-Laws, the
payment of dividends or the making of other distributions on, or
the purchase, redemption or other acquisition by the Corporation
of, any other class or classes or series of stock, or any other
corporate action; or (viii) be entitled to such other preferences,
powers, qualifications, rights and privileges, all as the Board of
Directors may deem advisable and as are not inconsistent with law
and the provisions of this Amended and Restated Certificate of
Incorporation, as amended.”
FOURTH
: Except as expressly amended herein, all
provisions of the Certificate filed with the Office of the
Secretary of State of the State of Delaware on December 3, 2012,
shall remain in full force and effect.
1
FIFTH
:
The foregoing amendment was duly adopted by the
Board of Directors and by the stockholders of the Corporation in
accordance with Section 242 of the General Corporation Law of the
State of Delaware.
IN WITNESS
WHEREOF
, the undersigned, being
a duly authorized officer of the Corporation, does hereby execute
this Certificate of Amendment to the Amended and Restated
Certificate of Incorporation, as amended, this ___ day of
_______________, 2017.
|
|
CORMEDIX
INC.
|
|
|
|
|
|
By:__________________________________________
|
|
|
Name: Khoso
Baluch
|
|
|
Title: Chief
Executive Officer
|
2
TABLE OF CONTENTS