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Item 1. Financial Statements

2025-08-14 compared with 2025-05-12 · 200 added, 128 removed, 504 unchanged (39% of the section changed)

35 unchanged sentences

Total Liabilities 22,216 26,622

Commitments and Contingencies (see Note 13)

2025 December 31,

1 unchanged sentence

Preferred Stock, $ 0.0001 par value, 2,000,000 shares authorized;

15,000 shares issued and outstanding at March 31, 2025 and December 31, 2024

15,000 shares issued and outstanding at June 30, 2025 and December 31, 2024

Common Stock, $ 0.0001 par value;

170,000,000 shares authorized;

34,257,903 and 34,056,920 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

34,430,352 and 34,056,920 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional Paid-in Capital 431,034 430,207

8 unchanged sentences

(In thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net Sales $ 16,071 $ 25,832 $ 34,985 $ 48,508

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General and Administrative 3,280 3,449 6,971 7,225

Operating Loss ( 1,360 ) ( 1,324 )

Operating (Loss) Income ( 1,349 ) 515 ( 2,709 ) ( 809 )

Other Income (Expense):

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Total Other Expense, net ( 143 ) ( 172 ) ( 298 ) ( 579 )

Net Loss $ ( 1,515 ) $ ( 1,731 )

Basic and Diluted Net Loss per Share $ ( 0.04 ) $ ( 0.06 )

Basic and Diluted Weighted Average Shares Outstanding 34,107,640 29,327,204

Net (Loss) Income $ ( 1,492 ) $ 343 $ ( 3,007 ) $ ( 1,388 )

Basic Net (Loss) Income per Share $ ( 0.05 ) $ 0.01 $ ( 0.09 ) $ ( 0.05 )

Diluted Net (Loss) Income per Share $ ( 0.05 ) $ 0.01 $ ( 0.09 ) $ ( 0.05 )

Basic Weighted Average Shares Outstanding 34,311,306 30,451,622 34,204,487 29,889,413

Diluted Weighted Average Shares Outstanding 34,311,306 32,033,776 34,204,487 29,889,413

The accompanying notes are an integral part of the condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

Three Months Ended March 31,

Net Loss $ ( 1,515 ) $ ( 1,731 )

Reclassification of Realized Gain on Available-for-Sale Investments Included in Net Loss ( 56 ) —

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net (Loss) Income $ ( 1,492 ) $ 343 $ ( 3,007 ) $ ( 1,388 )

Reclassification of Realized Gain on Available-for-Sale Investments Included in Net (Loss) Income ( 64 ) ( 25 ) ( 120 ) ( 25 )

Unrealized Gain on Available-for-Sale Investments 61 — 123 25

Comprehensive Loss $ ( 1,509 ) $ ( 1,706 )

Foreign Currency Translation Adjustments — ( 4 ) — ( 4 )

Comprehensive (Loss) Income $ ( 1,495 ) $ 314 $ ( 3,004 ) $ ( 1,392 )

The accompanying notes are an integral part of the condensed consolidated financial statements.

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COMPREHENSIVE

INCOME (LOSS) TOTAL

STOCKHOLDERS'

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Net Loss — — — — — ( 1,515 ) — ( 1,515 )

Reclassification of Realized Gains on Available-for-Sale Investments — — — — — — ( 56 ) ( 56 )

Reclassification of Realized Gain on Available-for-Sale Investments — — — — — — ( 56 ) ( 56 )

Unrealized Gain on Available-for-Sale Investments — — — — — — 62 62

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Balance as of March 31, 2025 15,000 — 34,257,903 3 430,652 ( 399,193 ) 60 31,522

Net Loss — — — — — ( 1,492 ) — ( 1,492 )

Reclassification of Realized Gain on Available-for-Sale Investments — — — — — — ( 64 ) ( 64 )

Unrealized Gain on Available-for-Sale Investments — — — — — — 61 61

Vesting of Restricted Stock Units Issued, net of taxes withheld — — 172,449 — — — — —

Stock-based Compensation — — — — 382 — — 382

Balance as of June 30, 2025 15,000 $ — 34,430,352 $ 3 $ 431,034 $ ( 400,685 ) $ 57 $ 30,409

The accompanying notes are an integral part of the condensed consolidated financial statements.

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except share amounts)

PREFERRED STOCK COMMON STOCK ADDITIONAL PAID-IN CAPITAL ACCUMULATED

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Issuance of Warrant in connection with the Third Amendment (Note 11)

— — — — 247 — — 247

Stock-based Compensation — — — — 251 — — 251

Balance as of March 31, 2024 15,000 — 29,556,474 3 419,545 ( 398,929 ) 24 20,643

Net Income — — — — — 343 — 343

Reclassification of Realized Gains on Available-for-Sale Debt Instrument Investments Included in Net Income — — — — — — ( 25 ) ( 25 )

Foreign Currency Translation Adjustments — — — — — — ( 4 ) ( 4 )

Issuance of Common Stock, net of Offering Costs/At-the-Market Offering — — 1,350,169 — 2,203 — — 2,203

Vesting of Restricted Stock Units Issued, net of Taxes Withheld — — 123,575 — — — — —

Stock-based Compensation — — — — 338 — — 338

Balance as of June 30, 2024 15,000 $ — 31,030,218 $ 3 $ 422,086 $ ( 398,586 ) $ ( 5 ) $ 23,498

The accompanying notes are an integral part of the condensed consolidated financial statements.

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(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows From Operating Activities:

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Purchase of Equipment ( 227 ) ( 425 )

Net Cash Used In Investing Activities ( 1 ) ( 139 )

Net Cash (Used In) Provided By Investing Activities ( 104 ) 1,578

Cash Flows From Financing Activities:

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Net Cash (Used In) Provided By Financing Activities ( 1,433 ) 2,243

Net Decrease in Cash and Cash Equivalents ( 4,271 ) ( 2,341 )

Effect of Exchange Rate Changes on Cash and Cash Equivalents — ( 3 )

Net (Decrease) Increase in Cash and Cash Equivalents ( 3,180 ) 2,880

Cash and Cash Equivalents at Beginning of Period 15,662 8,983

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Issuance of Warrant in Connection with the Third Amendment as Debt Issuance Costs $ — $ 247

Right of Use Assets - Operating Obtained in Exchange for Lease Liabilities - Operating $ 1,006 $ 1,549

Change in Unrealized Gain on Investments Available-for-Sale $ 3 $ —

Increase in Prepaid Assets from Insurance Financing Note Payable $ 660 $ 670

The accompanying notes are an integral part of the condensed consolidated financial statements.

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Hemodialysis is the most common form of end-stage kidney disease treatment and is usually performed in freestanding outpatient dialysis centers, hospital-based outpatient centers, skilled nursing facilities, or a patient’s home.

Rockwell provides the hemodialysis community with products controlled by a Quality Management System regulated by the U.S.

Food and Drug Administration (“FDA”).

Rockwell manufactures hemodialysis concentrates under current Good Manufacturing Practices ("cGMP") regulations at its three facilities in Michigan, South Carolina, and Texas, and manufactures dry acid concentrate mixers at its facility in Iowa.

Rockwell delivers the majority of its hemodialysis concentrates products and mixers to dialysis clinics throughout the United States and internationally utilizing its own delivery trucks and third-party carriers.

The Company operates in a single segment.

Rockwell was incorporated in the state of Michigan in 1996 and re-domiciled to the state of Delaware in 2019.

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Liquidity and Capital Resources

As of March 31, 2025, Rockwell had approximately $ 17.3 million of cash, cash equivalents and investments available-for-sale, and working capital of $ 21.8 million.

Net cash used in operating activities for the three months ended March 31, 2025 was approximately $ 3.5 million.

Based on the currently available working capital along with the expectation of management of its ability to execute on its operational plans as discussed below, management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of the filing of this report.

As of June 30, 2025, Rockwell had approximately $ 18.4 million of cash, cash equivalents and investments available-for-sale, and net working capital of $ 20.7 million.

Net cash used in operating activities for the six months ended June 30, 2025 was approximately $ 1.6 million.

Based on the currently available net working capital along with the expectation of management of its ability to execute on its operational plans as discussed below, management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of the filing of this report.

The Company continues to review its operational plans and execute on the acquisition of new customers, and has implemented cost containment activities.

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The Company has satisfied those conditions and will now make interest-only payments for the full 36 months.

As of March 31, 2025, the Company is in compliance with all covenants.

As of June 30, 2025, the Company was in compliance with all covenants, except for the revenue covenant, which was remediated pursuant to the terms of the Loan Agreement by agreeing to an updated financial projection with Innovatus.

In addition, the global macroeconomic environment is uncertain, and could be negatively affected by, among other things, changes in U.S.

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At this time, the Company is unable to quantify the potential effects, if any, of this economic and political instability on its future operations.

On July 4, 2025, the U.S.

119-21, a U.S.

federal statute passed by the 119th United States Congress that included tax and spending policies (the “Act”), which contains a broad range of tax reform provisions affecting businesses, including extending or reinstating certain provisions of the 2017 Tax Cuts and Jobs Act, tax relief measures, modifications of certain energy tax credits granted under the Inflation Reduction Act and limits on various tax deductions, among other key provisions.

The Company is currently evaluating the full effects of the Act on its condensed consolidated financial statements.

As the Act was signed into law after the close of the second quarter, the impacts are not included in the Company’s operating results for the six months ended June 30, 2025.

Rockwell has utilized a range of financing methods to fund its operations in the past;

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Due to the rapidly evolving nature of the global situation, it is not possible to predict the extent to which these conditions could adversely affect the Company's liquidity and capital resources in the future.

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements

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Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements.

The condensed consolidated balance sheet at March 31, 2025, and the condensed consolidated statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for the three months ended March 31, 2025 and 2024 are unaudited, but include all adjustments, consisting of normal recurring adjustments the Company considers necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented.

The results for the three months ended March 31, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025 or for any future interim period.

The condensed consolidated balance sheet at June 30, 2025, and the condensed consolidated statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for the three and six months ended June 30, 2025 and 2024 are unaudited, but include all adjustments, consisting of normal recurring adjustments the Company considers necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented.

The results for the three and six months ended June 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025 or for any future interim period.

The condensed consolidated balance sheet at December 31, 2024 has been derived from audited financial statements;

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Actual results could differ from those estimates.

The most significant accounting estimates inherent in the preparation of the financial statements include estimates associated with revenue recognition, and impairments of long-lived asse ts.

Loss Per Share

Basic and diluted net loss per share for the three months ended March 31, 2025 and 2024 was calculated as follows:

Three Months Ended

The most significant accounting estimates inherent in the preparation of the financial statements include estimates associated with revenue recognition, and impairments of long-lived assets.

Income (Loss) Per Share

Basic and diluted net income (loss) per share for the three and six months ended June 30, 2025 and 2024 was calculated as follows:

Three Months Ended June 30, Six Months Ended June 30,

(In thousands, except share and per share amounts) 2025 2024 2025 2024

Net Loss $ ( 1,515 ) $ ( 1,731 )

Net Loss Attributable to Common Stockholders $ ( 1,515 ) $ ( 1,731 )

Net (Loss) Income $ ( 1,492 ) $ 343 $ ( 3,007 ) $ ( 1,388 )

Accretion of Series X Preferred Stock ( 153 ) — ( 153 ) —

Undistributed Earnings to Participating Securities — ( 58 ) — —

Net (Loss) Income Attributable to Common Stockholders $ ( 1,645 ) $ 285 $ ( 3,160 ) $ ( 1,388 )

Weighted Average Number of Shares of Common Stock Outstanding - Basic and Diluted 34,311,306 30,451,622 34,204,487 29,889,413

Net Loss per Share Attributable to Common Stockholders - Basic and Diluted $ ( 0.04 ) $ ( 0.06 )

Incremental Shares Attributable to the Assumed Exercise of Outstanding Options to Purchase Common Stock — 35,185 — —

Incremental Shares Attributable to the Assumed Vesting of Unvested Restricted Stock Units — 183,333 — —

Incremental Shares Attributable to the Assumed Conversion of Preferred Stock — 1,363,636 — —

Diluted Weighted Average Number of Shares of Common Stock Outstanding 34,311,306 32,033,776 34,204,487 29,889,413

Net (Loss) Income per Share Attributable to Common Stockholders - Basic and Diluted $ ( 0.05 ) $ 0.01 $ ( 0.09 ) $ ( 0.05 )

Diluted Net (Loss) Income per Share Attributable to Common Stockholders $ ( 0.05 ) $ 0.01 $ ( 0.09 ) $ ( 0.05 )

Basic income (loss) per share (“EPS”) is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities.

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The Company’s potentially dilutive securities include stock options, restricted stock awards and units, convertible preferred stock and warrants.

The following table includes the potential shares of common stock that were excluded from the computation of diluted EPS attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Three Months Ended March 31,

The following table includes the potential shares of common stock that were excluded from the

computation of diluted EPS attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Warrants to Purchase Common Stock 3,984,484 3,984,484 3,984,484 3,984,484

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Unvested Restricted Stock Units 1,166,660 — 1,166,660 534,309

Unvested Restricted Stock Units - Market Condition 717,000 — 717,000 —

Unvested Restricted Stock Awards 891 891 891 891

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Rockwell's customer mix is diverse, with most customer sales concentrations under 10%.

For the three months ended March 31, 2025, revenues from sales to two customers, DaVita, Inc.

("DaVita") and Fresenius Medical Care North America ("Fresenius") were approximately 27 % and 10 % of total revenues for the period, respectively.

For the three months ended March 31, 2024, revenues from DaVita and Fresenius were approximately 44 % and 7 % of total revenues for the period, respectively.

At March 31, 2025, DaVita, Nipro Medical Corporation ("Nipro") and Fresenius represented 17 %, 16 %, and 10 % of the total net consolidated accounts receivable balance, respectively.

For the three months ended June 30, 2025, revenues from sales to three customers, DaVita, Inc.

("DaVita"), Fresenius Medical Care North America ("Fresenius") and Nipro Medical Corporation ("Nipro") were approximately 11 %, 10 % and 11 % of total revenues for the period, respectively, and 20 %, 10 % and 9 % of total revenues for the six months ended June 30, 2025, respectively.

For the three months ended June 30, 2024, revenues from DaVita, Fresenius and Nipro were approximately 45 %, 8 % and 7 % of total revenues for the period, respectively, and 44 %, 7 % and 6 % of total revenues for the six months ended June 30, 2024, respectively.

At June 30, 2025, DaVita, Nipro and Fresenius represented 5 %, 15 %, and 11 % of the total net consolidated accounts receivable balance, respectively.

At December 31, 2024, DaVita represented 20 % of the total net consolidated accounts receivable balance.

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Deferred License Revenue

The Company received upfront fees under three distribution and license agreements that have been deferred as a contract liability and presented on the accompanying condensed consolidated balance sheets as deferred license revenue.

The amounts received from Sun Pharmaceutical Industries Ltd.

("Sun Pharma"), Jeil Pharmaceutical Co., Ltd.

("Jeil Pharma") and Drogsan Pharmaceuticals ("Drogsan Pharma") are recognized as revenue over the estimated term of the applicable distribution and license agreement as regulatory approval was not received and the Company did not have sufficient experience in China, India, South Korea and Turkey, respectively, to determine that regulatory approval was probable as of the execution of the agreement.

During the three months ended March 31, 2025, all remaining deferred revenue relating to Sun Pharma, Jeil Pharma, and Drogsan Pharma was recognized, resulting in $ 0.3 million of revenue recorded.

The Company received upfront fees under three distribution and license agreements, which were recognized as revenue over the estimated term of the applicable distribution and license agreement as regulatory approval was not received and the Company did not have sufficient experience in China, India, South Korea and Turkey to determine that regulatory approval was probable as of the execution of the agreement.

During the six months ended June 30, 2025, all remaining deferred revenue relating to the distribution and license agreements was recognized, resulting in $ 0.3 million of revenue recorded.

All license agreements have been terminated.

Product Purchase Agreement

On September 18, 2023, Rockwell and its long-time customer, DaVita, a leading provider of kidney care, entered into an Amended and Restated Products Purchase Agreement (the "Amended Agreement"), which amends and restates the Product Purchase Agreement, dated July 1, 2019, as amended, under which the Company supplies DaVita with certain dialysis

concentrates.

Under the Amended Agreement, the Company and DaVita agreed to an increase in product pricing, effective September 1, 2023.

The term of the Amended Agreement was scheduled to expire on December 31, 2024.

Prior to the expiration, the Company received written notice from DaVita, notifying the Company that DaVita intended to extend the term of the Amended Agreement through December 31, 2025 (the "Extension Term").

expiration, the Company received written notice from DaVita, notifying the Company that DaVita intended to extend the term of the Amended Agreement through December 31, 2025 (the "Extension Term").

However, DaVita subsequently indicated that it will completely transition to another supplier by mid-2025, subject to further discussion between Rockwell and DaVita.

DaVita has agreed to a one-time, non-refundable payment of $ 0.9 million to ensure supply continuity for products purchased during the three months ended March 31, 2025.

This $ 0.9 million one-time, non-refundable payment was recorded as revenue during the three months ended March 31, 2025.

Discussion between Rockwell and DaVita are ongoing.

DaVita has agreed to quarterly, non-refundable payments totaling $ 1.3 million during the six months ended June 30, 2025 to ensure supply continuity during the transition period for products purchased.

These quarterly, non-refundable payments of $ 0.3 million and $ 1.3 million were recorded as revenue during the three and six months ended June 30, 2025, respectively.

Discussions between Rockwell and DaVita are ongoing and the Company continues to supply DaVita as of the filing date of this report.

Disaggregation of revenue

Revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.

In thousands Three Months Ended March 31, 2025

In thousands Three Months Ended June 30, 2025 Six Months Ended June 30, 2025

Products By Geographic Area Total U.S.

Rest of World Total U.S.

Rest of World

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Net Revenue $ 16,071 $ 14,189 $ 1,882 $ 34,985 $ 30,625 $ 4,360

In thousands Three Months Ended March 31, 2024

In thousands Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

Products By Geographic Area Total U.S.

Rest of World Total U.S.

Rest of World

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The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.

In thousands March 31, 2025 December 31, 2024 January 1, 2024

In thousands June 30, 2025 December 31, 2024 January 1, 2024

Accounts Receivable, net $ 8,084 $ 8,291 $ 10,901

Contract Liabilities, which are included in deferred license revenue $ — $ 475 $ 521

There were no other material contract assets recorded on the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024.

The Company does not generally accept returns of its concentrate products and no material reserve for returns of concentrates products was established as of March 31, 2025 or December 31, 2024.

There were no other material contract assets recorded on the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024.

The Company does not generally accept returns of its concentrate products and no material reserve for returns of concentrates products was established as of June 30, 2025 or December 31, 2024.

Transaction price allocated to remaining performance obligations

Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, was nil as of March 31, 2025.

The Company applies the practical expedient in ASC 606, paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Intangible Assets and Deferred Consideration

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The details of our intangible assets subject to amortization are set forth below (in thousands):

March 31, 2025

June 30, 2025

Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount

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Customer Relationships 20 years $ 11,035 $ ( 828 ) $ 10,207

During each of the three months ended March 31, 2025 and 2024, the Company recorded amortization of its customer relationship intangible asset of $ 0.1 million.

Estimated future amortization expense on the Company's customer relationships intangible asset as of March 31, 2025 is as follows (table in thousands):

During each of the three months ended June 30, 2025 and 2024, the Company recorded amortization of its customer relationship intangible asset of $ 0.1 million.

During each of the six months ended June 30, 2025 and 2024, the Company recorded amortization of its customer relationship intangible asset of $ 0.3 million.

Estimated future amortization expense on the Company's customer relationships intangible asset as of June 30, 2025 is as follows (table in thousands):

Year ending December 31:

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A portion of the purchase price of the Evoqua Asset Acquisition was deferred on the acquisition date, with payment terms extending through April 2026.

As of March 31, 2025, a deferred consideration liability of $ 2.9 million, which encompasses both Deferred Consideration - Current and Deferred Consideration - Long-Term, is presented on the accompanying condensed consolidated balance sheet.

During the three and six months ended June 30, 2025, we made payments of $ 0.4 million and $ 0.9 million, respectively.

As of June 30, 2025, a deferred consideration liability of $ 2.5 million is presented in Deferred Consideration - Current on the accompanying condensed consolidated balance sheet.

ROCKWELL MEDICAL, INC.

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Investments - Available-for-Sale

Investments available-for-sale consisted of the following as of March 31, 2025 and December 31, 2024 (table in thousands):

March 31, 2025

Investments available-for-sale consisted of the following as of June 30, 2025 and December 31, 2024 (table in thousands):

June 30, 2025

Amortized Cost Unrealized Gain Fair Value

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The fair value of investments available-for-sale are determined using quoted market prices from daily exchange-traded markets based on the closing price as of the balance sheet date and are classified as a Level 1 measurement under ASC 820, Fair Value Measurements.

During the three months ended March 31, 2025, the Company sold the investments outstanding as of December 31, 2024 for a realized gain of $ 0.1 million, which is included in realized gain on available-for-sale investments on the condensed consolidated statements of operations.

As of March 31, 2025, the Company's remaining available-for-sale securities are U.S.

During the three and six months ended June 30, 2025, the Company sold the investments outstanding as of March 31, 2025 and December 31, 2024 for $ 0.1 million and $ 0.1 million, respectively, which is included in realized gain on available-for-sale investments on the condensed consolidated statements of operations.

As of June 30, 2025, the Company's remaining available-for-sale securities are U.S.

Department of the Treasury bonds and are all due within one year.

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Notes to Condensed Consolidated Financial Statements

The Company’s significant segment expenses for its one segment for the three months ended March 31, 2025 and 2024 consisted of the following (table in thousands):

Three Months Ended March 31,

The Company’s significant segment expenses for its one segment for the three and six months ended June 30, 2025 and 2024 consisted of the following (table in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net Sales $ 16,071 $ 25,832 $ 34,985 $ 48,508

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Administrative Costs 1,470 1,742 3,194 3,843

Operating Loss ( 1,360 ) ( 1,324 )

Other Expense:

Operating (Loss) Income ( 1,349 ) 515 ( 2,709 ) ( 809 )

Other Income (Expense):

Realized Gain on Investments 64 51 120 51

2 unchanged sentences

Total Other Expense, net ( 143 ) ( 172 ) ( 298 ) ( 579 )

Net Loss $ ( 1,515 ) $ ( 1,731 )

Components of inventory, net of reserves, as of March 31, 2025 and December 31, 2024 were as follows (table in thousands):

Net (Loss) Income $ ( 1,492 ) $ 343 $ ( 3,007 ) $ ( 1,388 )

Components of inventory, net of reserves, as of June 30, 2025 and December 31, 2024 were as follows (table in thousands):

2025 December 31,

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(See Note 4, Deferred License Revenue section).

During the three months ended March 31, 2025, the Company wrote off this remaining inventory balance, resulting in an expense of $ 0.2 million recorded within cost of sales in the condensed consolidated statement of operations.

As of March 31, 2025 and December 31, 2024, Rockwell had total current concentrate inventory aggregating $ 5.5 million and $ 6.2 million, respectively, against which Rockwell had reserved $ 0.5 million at both March 31, 2025 and December 31, 2024.

During the six months ended June 30, 2025, the Company wrote off this remaining inventory balance, resulting in an expense of $ 0.2 million recorded within cost of sales in the condensed consolidated statement of operations.

As of June 30, 2025 and December 31, 2024, Rockwell had total current concentrate inventory aggregating $ 4.7 million and $ 6.2 million, respectively, against which Rockwell had reserved $ 0.5 million at both June 30, 2025 and December 31, 2024.

ROCKWELL MEDICAL, INC.

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Property and Equipment

As of March 31, 2025 and December 31, 2024, the Company’s property and equipment consisted of the following (table in thousands):

As of June 30, 2025 and December 31, 2024, the Company’s property and equipment consisted of the following (table in thousands):

2025 December 31,

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Property and Equipment, net $ 5,129 $ 5,785

Depreciation and amortization expense for each of the three months ended March 31, 2025 and 2024 was $ 0.4 million.

Depreciation and amortization expense for each of the three months ended June 30, 2025 and 2024 was $ 0.4 million.

Depreciation and amortization expense for each of the six months ended June 30, 2025 and 2024 was $ 0.8 million.

Accrued Liabilities

Accrued liabilities as of March 31, 2025 and December 31, 2024 consisted of the following (table in thousands):

Accrued liabilities as of June 30, 2025 and December 31, 2024 consisted of the following (table in thousands):

2025 December 31,

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If the Company’s common stock trades above $ 22.00 for a period of 30 calendar days, the accretion will thereafter cease.

As of March 31, 2025, the Series X Preferred Stock accreted a total of $ 0.3 million.

As of June 30, 2025, the Series X Preferred Stock accreted a total of $ 0.5 million.

The Series X Convertible Preferred Stock is convertible to common stock at a rate equal to the Face Amount, divided by a conversion price of $ 11.00 per share (subject to adjustment for future stock splits, reverse stock splits and similar recapitalization events).

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Specifically, until DaVita holds less than 50 % of its original investment in the Company's Series X Convertible Preferred Stock, the Company may only incur additional debt in the form of a purchase money loan, a working capital line of up to $ 5 million or to refinance existing debt, unless DaVita consents.

Additionally, the Series X Preferred Stock has a deemed liquidation event and redemption clause which could be triggered if the sale of all or substantially all of the Company's assets relating to the Company's dialysis concentrates business

Since the Series X Preferred Stock may be redeemed if certain assets are sold at the option of the holder, but is not mandatorily redeemable and the sale of the assets that would allow for redemption is within the control of the Company, the preferred stock has been classified as permanent equity and initially recognized at fair value of $ 15 million (the proceeds on the date of issuance) less issuance costs of $ 0.1 million, resulting in an initial value of $ 14.9 million.

Since the Series X Preferred Stock may be redeemed if certain assets are sold at the option of the holder, but is not mandatorily redeemable as the sale of the assets that would allow for redemption is within the control of the Company, the preferred stock has been classified as permanent equity and initially recognized at fair value of $ 15 million (the proceeds on the date of issuance) less issuance costs of $ 0.1 million, resulting in an initial value of $ 14.9 million.

The Company will assess at each reporting period whether conditions have changed to now meet the mandatory redemption definition which could trigger liability classification.

As of each of March 31, 2025 and December 31, 2024, there were 2,000,000 shares of preferred stock, $ 0.0001 par value per share, authorized and 15,000 shares of preferred stock issued and outstanding.

As of March 31, 2025 and 2024, the Company reserved for issuance the following shares of common stock related to the potential exercise of employee stock options, unvested restricted stock, convertible preferred stock, and warrants (collectively, "common stock equivalents"):

As of March 31,

As of each of June 30, 2025 and December 31, 2024, there were 2,000,000 shares of preferred stock, $ 0.0001 par value per share, authorized and 15,000 shares of preferred stock issued and outstanding.

As of June 30, 2025 and 2024, the Company reserved for issuance the following shares of common stock related to the potential exercise of employee stock options, unvested restricted stock and awards, convertible preferred stock, and warrants (collectively, "common stock equivalents"):

As of June 30,

Common Stock and Common Stock Equivalents:

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Convertible Preferred Stock 1,405,001 1,363,636

Unvested Restricted Stock Units - Market Condition 717,000 —

Warrants to Purchase Common Stock 3,984,484 3,984,484

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The offering and sale of such shares has been registered under the Securities Act of 1933, as amended.

During the three months ended March 31, 2025, no shares were sold pursuant to the Sales Agreement.

During the three and six months ended June 30, 2025, no shares were sold pursuant to the Sales Agreement.

Approximately $ 21.1 million remains available for sale under the ATM facility.

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Stock-based Compensation

The Company recognized total stock-based compensation expense during the three months ended March 31, 2025 and 2024 as follows (table in thousands):

Three Months Ended

The Company recognized total stock-based compensation expense during the three and six months ended June 30, 2025 and 2024 as follows (table in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Service-based Awards:

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Performance-based Restricted Stock Awards

A summary of the Company’s performance based restricted stock awards during the three months ended March 31, 2025 is as follows:

A summary of the Company’s performance-based restricted stock awards during the six months ended June 30, 2025 is as follows:

Performance-based Restricted Stock Awards Number of Shares Weighted Average

Unvested at January 1, 2025 891 $ 62.70

Unvested at March 31, 2025 891 $ 62.70

Unvested at June 30, 2025 891 $ 62.70

Performance-based restricted stock awards are measured based on their fair value on the date of grant and amortized over the vesting period of 20 months.

As of March 31, 2025, there is no unrecognized stock-based compensation expense related to performance based restricted stock awards.

As of June 30, 2025, there is no unrecognized stock-based compensation expense related to performance-based restricted stock awards.

Restricted Stock Units - Market Condition

During the three months ended June 30, 2025, the Company granted 717,000 restricted stock units with a market condition ("RSU-MC") under its Amended and Restated 2018 Long Term Incentive Plan.

The RSU-MCs are subject to both service and market based vesting conditions.

The RSU-MCs will vest, subject to the recipient's continued employment through the vesting date, if the average closing price of the Company's common stock equals or exceeds $ 2.14 per share for any consecutive 60 -day trading period occurring prior to the third anniversary of the grant date.

Except in the event of a change in control or termination due to death or disability, no portion of the award will vest before the first anniversary of the grant date.

The RSU-MCs qualify as equity instruments and are accounted for under ASC 718, Compensation, Stock Compensation ("ASU 718").

The fair value of RSU-MCs was measured on the date of grant using the Monte Carlo Simulation valuation model.

The stock-based compensation expense recorded in connection with these restricted stock units during the six months ended June 30, 2025 was insignificant.

The vesting periods range from one to three years.

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Service-based Restricted Stock Units

A summary of the Company’s service-based restricted stock units during the three months ended March 31, 2025 is as follows:

A summary of the Company’s service-based restricted stock units during the six months ended June 30, 2025 is as follows:

Service-based Restricted Stock Units Number of Shares Weighted Average

Unvested at January 1, 2025 584,309 $ 1.72

Granted 1,000,000 1.07

Vested ( 417,649 ) 1.85

Unvested at March 31, 2025 383,326 $ 1.62

The fair value of service based restricted stock units are measured on the date of grant and amortized over the vesting period.

Unvested at June 30, 2025 1,166,660 $ 1.12

The fair value of service-based restricted stock units is measured on the date of grant and amortized over the vesting period.

The vesting periods range from one to three years.

As of March 31, 2025, the unrecognized stock-based compensation expense was $ 0.2 million, which is expected to be recognized over the next 1.4 years.

As of June 30, 2025, the unrecognized stock-based compensation expense was $ 1.1 million, which is expected to be recognized over the next 1.6 years.

Service-based Stock Option Awards

There were no service-based stock option awards granted during the three months ended March 31, 2025.

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

A summary of the Company’s service based stock option activity for the three months ended March 31, 2025 is as follows:

The fair value of the service-based stock option awards granted during the six months ended June 30, 2025 were based on the following assumptions:

Six Months Ended

June 30, 2025

Six Months Ended

June 30, 2024

Exercise price $ 1.07 $ 1.39 - $ 1.80

Expected stock price volatility 90.4 % 81.8 %

Risk-free interest rate 4.1 % 4.31 % - 4.45 %

Term (years) 5.86 5.61 - 5.62

A summary of the Company’s service-based stock option activity for the six months ended June 30, 2025 is as follows:

Service-based Stock Option Awards Shares

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Intrinsic Value

(in $1,000's)

(in thousands)

Outstanding at January 1, 2025 1,886,247 $ 3.98

Granted 1,501,500 1.07

Forfeited ( 9,354 ) 1.59

Expired ( 36,501 ) 1.73

Outstanding at March 31, 2025 1,884,476 $ 3.98 7.6 $ —

Exercisable at March 31, 2025 876,490 $ 6.47 6.9 $ —

Outstanding at June 30, 2025

3,341,892 $ 2.71 8.6 $ —

Exercisable at June 30, 2025

913,461 $ 6.41 7.0 $ —

The aggregate intrinsic value is calculated as the difference between the closing price of the Company's common stock at the date indicated and the exercise price of the stock options that had strike prices below the closing price.

As of March 31, 2025, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $ 0.5 million, which is expected to be recognized over the next 2.5 years.

License Agreements

As of June 30, 2025, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $ 1.5 million, which is expected to be recognized over the next 2.8 years.

Commitments and Contingencies

From time to time, the Company has been or may become a party to various disputes, legal actions, proceedings and investigations involving claims incidental to the conduct of its business, including actions by customers, employees, government entities and third parties.

Due to the contract-intensive nature of the Company's business, the Company has been or may in the

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

future become involved in disputes or legal actions with its contract counterparties, which could have a negative impact on the Company's business, results of operations or financial condition.

Product License Agreements

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The Company shall also pay to Charak a percentage of any sublicense income received during the term of the IV Agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis.

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Also pursuant to the Charak MSA, the Company and Charak entered into a Technology License Agreement TPN Triferic dated as of October 7, 2018 (the “TPN Agreement”), pursuant to which Charak granted the Company an exclusive, sub-licensable, royalty-bearing license to SFP for the purpose of commercializing worldwide certain TPN products incorporating SFP.

2 unchanged sentences

The Company shall also pay to Charak a percentage of any sublicense income received during the term of the TPN Agreement, which amount shall not be less than a minimum royalty on net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis.

The potential milestone payments are not considered probable, and no milestone payments have been accrued as of March 31, 2025 and December 31, 2024.

The potential milestone payments are not considered probable, and no milestone payments have been accrued as of June 30, 2025 and December 31, 2024.

Rockwell leases its production facilities and administrative offices as well as certain equipment used in its operations including leases on transportation equipment used in the delivery of its products.

The lease terms range from monthly to six years .

Rockwell occupies a 51,000 square foot facility and a 17,500 -square foot facility in Wixom, Michigan under a lease expiring in August 2027.

Rockwell occupies a 51,000 square foot facility and a 17,500 -square foot facility in Wixom, Michigan under a lease

expiring in August 2027.

During March 2024, the lease for the Wixom facilities was extended by three years to August 2027, which was accounted for as a modification.

Rockwell also occupies two other manufacturing facilities, a 51,000 -square foot facility in Grapevine, Texas under a lease expiring in December 2025, and a 57,000 -square foot facility in Greer, South Carolina under a lease expiring February 2026.

During the three months ended June 30, 2025, Rockwell entered into a lease for a 16,800 -square foot storage facility in Allentown, Pennsylvania, that expires in April 2030, resulting in the recognition of a right-of-use asset and corresponding liability of approximately $ 1.0 million on the condensed consolidated balance sheets.

The following summarizes quantitative information about the Company’s operating and finance leases (table in thousands):

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Operating Leases

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Financing Cash Flows from Finance Leases $ 148 $ 138 $ 294 $ 276

2025 June 30,

Weighted-average Remaining Lease Term – Operating Leases 2.8 2.6

2 unchanged sentences

Weighted-average Discount Rate – Finance Leases 6.5 % 6.4 %

Future minimum rental payments under operating and finance lease agreements are as follows (in thousands):

Future minimum rental payments under operating and finance lease agreements are as follows (table in thousands):

Operating Finance

3 unchanged sentences

Year ending December 31, 2028 328 —

Year ending December 31, 2029 282 —

Total 3,808 1,316

29 unchanged sentences

or (iv) 0 % of the principal amount of the Term Loans prepaid if the payment is made after January 1, 2027 through maturity, and (y) the Final Fee.

The Term Loans will be

mandatorily prepaid upon a change in control of the Company, or upon any early termination/acceleration of the Term Loans.

The Term Loans will be mandatorily prepaid upon a change in control of the Company, or upon any early termination/acceleration of the Term Loans.

In the event of a mandatory prepayment of the Term Loans, the Company shall be required to pay the Prepayment Fee (if applicable), as well as the Final Fee.

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However, the Company may not be able to mutually agree with Innovatus on appropriate remedies to cure a future breach of a covenant, which could give rise to an event of default.

As of March 31, 2025, the Company was in compliance with all covenants under the Third Amendment.

The Loan Agreement includes a financial covenant that requires actual consolidated revenue from the sale and supply of hemodialysis products for the trailing six-month period (ended on the date when tested), to be not less than 85.0 % of the projections for the same period and, beginning with the quarter ending September 30, 2024, actual consolidated revenue from the sale and supply of hemodialysis products for the trailing six-month period (ended on the date when tested), to be not less than 80.0 % of the projections for the same period.

Because those projections were submitted prior to the loss of a substantial amount of business from DaVita, we may not be able to satisfy this covenant if we are unable to acquire enough new business to increase our revenue.

Our inability to satisfy this financial covenant would constitute an event of default.

The Loan Agreement includes a financial covenant that requires actual consolidated revenue from the sale and supply of hemodialysis products for the trailing six-month period (ended

on the date when tested), to be not less than 80.0 % of the projections for the same period beginning with the quarter ending September 30, 2024.

Because those projections were submitted prior to the loss of a substantial amount of business from DaVita, we did not satisfy this covenant in the second quarter of 2025.

We subsequently resolved the noncompliance by submitting an updated financial projection to Innovatus, which Innovatus accepted.

As of June 30, 2025, the Company was in compliance with all covenants under the Third Amendment, other than as described above.

In connection with the execution of the Third Amendment, on January 2, 2024, the Company issued a warrant to purchase shares of the Company’s common stock.

1 unchanged sentence

For additional information, see Note 11.

The effective interest rate used to amortize the debt issuance cost relating to these warrants is 11.0 % as of March 31, 2025.

For each of the three months ended March 31, 2025 and 2024, interest expense amounted to $ 0.2 million.

As of March 31, 2025, the outstanding balance of the Term Loans was $ 8.6 million, net of unamortized issuance costs and discount of $ 0.6 million, and including $ 0.8 million of premium accretion, and paid-in-kind interest of $ 0.2 million.

The effective interest rate used to amortize the debt issuance cost relating to these warrants is 11.0 % as of June 30, 2025.

For each of the three months ended June 30, 2025 and 2024, interest expense amounted to $ 0.2 million.

For each of the six months ended June 30, 2025 and 2024, interest expense amounted to $ 0.5 million.

As of June 30, 2025, the outstanding balance of the Term Loans was $ 8.6 million, net of unamortized issuance costs and discount of $ 0.6 million, and including $ 0.8 million of premium accretion, and paid-in-kind interest of $ 0.2 million.

The Loan Agreement is secured by all assets of the Company and Rockwell Transportation, Inc.

and contains customary representations and warranties and covenants, subject to customary carve outs, and initially included financial covenants related to liquidity and sales of Triferic.

The following table reflects the schedule of principal payments on the Term Loans as of March 31, 2025 (in thousands):

March 31, 2025

The following table reflects the schedule of principal payments on the Term Loans as of June 30, 2025 (table in thousands):

June 30, 2025

2025 (remaining) $ —

1 unchanged sentence

Total Debt Maturities 9,305

Unamortized Issuance Costs, Discount and Premium, net ( 705 )

Unamortized Issuance Costs and Discount, net ( 657 )

Term Loan - Long-Term, net $ 8,648

2 unchanged sentences

Principal and interest payments related to this note began on July 3, 2025 and are being paid in 10 equal monthly payments of $ 0.1 million, with the final payment due on April 3, 2026.

As of March 31, 2025, the balance of the insurance financing note payable was $ 0.1 million.

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

On June 3, 2023, the Company entered into a short-term note payable for $ 0.7 million, bearing interest at a rate of 9.59 % per annum to finance various insurance policies.

Principal and interest payments related to this note began on July 3, 2023 and were paid on a straight-line amortization over nine months with the final payment due on March 3, 2024.

During the three months ended March 31, 2024, the Company's insurance financing note payable balance was paid in full.

As of June 30, 2025, the Company's insurance financing note payable balance was $ 0.7 million.

On June 4, 2024, the Company entered into a short-term note payable with a principal amount of $ 0.7 million, bearing interest at a rate of 7.89 % per annum to finance various insurance policies, which required an upfront payment of $ 0.2 million.

Principal and interest payments related to this note began on July 3, 2024 and were paid in 10 equal monthly payments of $ 0.1 million, with the final payment due on April 3, 2025.

During the six months ended June 30, 2025, the Company's insurance financing note payable balance was paid in full.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements