What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-15 compared with 2021-08-16 · 158 added, 131 removed, 558 unchanged (34% of the section changed)

4 unchanged sentences

(Dollars in Thousands)

September 30,

2021 December 31,

17 unchanged sentences

Term Loan - Net of Issuance Costs 7,131 —

Insurance Financing Note Payable 1,312 —

Customer Deposits 100 152

8 unchanged sentences

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

no shares issued and outstanding at June 30, 2021 and December 31, 2020

no shares issued and outstanding at September 30, 2021 and December 31, 2020

Common Stock, $ 0.0001 par value;

170,000,000 shares authorized;

93,811,381 and 93,573,165 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

93,966,381 and 93,573,165 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Additional Paid-in Capital 372,168 371,510

8 unchanged sentences

(Dollars in Thousands, Except Per Share Amounts)

Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

Net Sales $ 15,988 $ 15,280 $ 46,599 $ 47,033

Cost of Sales 16,317 14,934 46,788 44,693

Gross Profit ( 262 ) 881 140 1,994

Gross (Loss) Profit ( 329 ) 346 ( 189 ) 2,340

Research and Product Development 1,221 1,745 5,445 5,183

16 unchanged sentences

(Dollars in Thousands)

Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

Net Loss $ ( 7,581 ) $ ( 7,350 ) $ ( 23,733 ) $ ( 22,227 )

Unrealized Loss on Available-for-Sale Debt Instrument Investments ( 1 ) ( 6 ) ( 8 ) ( 13 )

Unrealized Gain (Loss) on Available-for-Sale Debt Instrument Investments 4 2 ( 4 ) ( 11 )

Foreign Currency Translation Adjustments — 1 3 8

21 unchanged sentences

Balance as of June 30, 2021 93,811,381 $ 9 $ 371,700 $ ( 353,558 ) $ 52 $ 18,203

Net Loss — — — ( 7,581 ) — ( 7,581 )

Unrealized Gain on Available-for-Sale Investments — — — — 4 4

Issued shares for services 155,000 — 107 — — 107

Stock-based Compensation expense — — 361 — — 361

Balance as of September 30, 2021 93,966,381 $ 9 $ 372,168 $ ( 361,139 ) $ 56 $ 11,094

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

19 unchanged sentences

Foreign Currency Translation Adjustments — — — — 1 1

Issuance of common stock, net of offering costs/Public Offering 987,716 — 1,978 — — 1,978

Issuance of common stock, net of offering costs/At-the-Market Offering 987,716 — 1,978 — — 1,978

Vesting of Restricted Stock Units Issued, net of taxes withheld 120,104 — ( 19 ) — — ( 19 )

2 unchanged sentences

Balance as of June 30, 2020 70,156,922 $ 7 $ 337,551 $ ( 321,393 ) $ 46 $ 16,211

Net Loss — — — ( 7,350 ) — ( 7,350 )

Unrealized Gain on Available-for-Sale Investments — — — — 2 2

Foreign Currency Translation Adjustments — — — — 1 1

Issuance of common stock, net of offering costs/Public Offering 23,178,809 2 32,675 — — 32,677

Issuance of common stock, net of offering/At-the-Market Offering 140,892 — 284 — — 284

Vesting of Restricted Stock Units Issued, net of taxes withheld 96,542 — — — — —

Stock-based Compensation — — 250 — — 250

Balance as of September 30, 2020 93,573,165 $ 9 $ 370,760 $ ( 328,743 ) $ 49 $ 42,075

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

3 unchanged sentences

(Dollars in Thousands)

For the six months ended June 30, 2021 and 2020

For the nine months ended September 30, 2021 and 2020

Cash Flows From Operating Activities:

13 unchanged sentences

Increase in Inventory ( 554 ) ( 953 )

Decrease (Increase) in Prepaid and Other Assets 1,293 ( 608 )

Decrease in Prepaid and Other Assets 1,760 161

Increase in Accounts Payable 679 1,172

1 unchanged sentence

Decrease in Lease Liability ( 1,266 ) ( 1,056 )

Decrease in Other Liabilities ( 1,163 ) ( 96 )

(Decrease) Increase in Other Liabilities ( 825 ) 423

Decrease in Deferred License Revenue ( 1,485 ) ( 1,338 )

5 unchanged sentences

Purchase of Equipment ( 408 ) ( 970 )

Cash Provided By Investing Activities 1,135 700

Cash (Used In) Provided By Investing Activities ( 229 ) 2,575

Cash Flows From Financing Activities:

6 unchanged sentences

Offering Costs from the Issuance of Common Stock / At-the-Market Offering — ( 63 )

Proceeds from the Issuance of Common Stock for payment related to services provided 107 —

Repurchase of Common Stock to Pay Employee Withholding Taxes ( 6 ) ( 18 )

14 unchanged sentences

Rockwell Medical, Inc.

("Rockwell Medical," "Rockwell" or the "Company") is a commercial-stage, biopharmaceutical company developing and commercializing our next-generation parenteral iron technology platform, ferric pyrophosphate citrate (“FPC”), which we believe has the potential to lead to transformative treatments for iron deficiency in multiple disease states, that we believe could reduce healthcare costs and improve patients’ lives.

("Rockwell Medical," "Rockwell", the "Company" or "We") is a commercial-stage, biopharmaceutical company developing and commercializing our next-generation parenteral iron technology platform, ferric pyrophosphate citrate (“FPC”), which we believe has the potential to lead to transformative treatments for iron deficiency in multiple disease states, reduce healthcare costs and improve patients’ lives.

We are also one of the two major suppliers of life saving hemodialysis concentrate products to kidney dialysis clinics in the United States.

We have two novel, FDA approved therapies, Triferic and Triferic AVNU, which are the first two products developed from our FPC platform.

We are marketing both products to kidney dialysis centers for their patients receiving dialysis.

In 2021, we intend to advance our FPC platform strategy outside of dialysis by starting a Phase II trial for the treatment of iron deficiency anemia in patients outside of dialysis, who are receiving long-term and or chronic intravenous medications for various therapeutic needs in the home infusion setting.

In our R&D pipeline, we are also exploring FPC’s impact in the treatment of hospitalized patients with acute heart failure, with the potential to begin another Phase 2 trial in these patients in 2022.

We are the second largest supplier of hemodialysis concentrates in the United States generating approximately $ 60 million in annual revenue.

The Company has two novel, FDA approved therapies, Triferic and Triferic AVNU, which are the first two products developed from our FPC platform.

The Company is target marketing both products to kidney dialysis centers for their patients receiving dialysis and working to find a commercial partner to expand our commercial efforts within the United States.

In 2021, Rockwell has been working to advance our FPC platform strategy outside of dialysis by starting a Phase II trial for the treatment of iron deficiency anemia in patients, who are receiving long-term and or chronic intravenous medications for various therapeutic needs in the home infusion setting.

In the Company's R&D pipeline, we are also exploring FPC’s impact in the treatment of hospitalized patients with acute heart failure, with the potential to begin another Phase II trial in these patients in 2022.

Rockwell Medical is the second largest supplier of hemodialysis concentrates in the United States generating approximately $ 60 million in annual revenue.

The Company's reputation for excellent service, quality, and reliability is based on over 25 years of service to kidney dialysis centers.

Our approximately 300 dedicated employees, as well as a management team with experience in manufacturing, logistics, pharmaceutical development and commercialization gives us a solid foundation upon which to grow.

The Company's approximately 300 dedicated employees, as well as a management team with experience in manufacturing, logistics, pharmaceutical development and commercialization provides Rockwell with a solid foundation upon which to grow.

Liquidity and Capital Resources

Since inception, Rockwell has incurred significant net losses and has funded its operations primarily through revenue from commercial products, proceeds from the issuance of debt and equity securities and payments from partnerships.

At June 30, 2021, Rockwell had an accumulated deficit of approximately $ 353.6 million and stockholders' equity of $ 18.2 million.

As of June 30, 2021, Rockwell had approximately $ 41.0 million of cash, cash equivalents and investments available-for-sale, and working capital of $ 18.4 million.

Net cash used in operating activities for the six months ended June 30, 2021 was approximately $ 17.4 million.

The Company is subject to certain covenants and cure provisions under its Loan Agreement with Innovatus.

As of the date of this report, the Company is in compliance with all covenants.

As a result of the ongoing COVID-19 pandemic and its effect on the Company's sales activities, among other factors, the Company may not be able to satisfy such covenants over the next 12 months.

However, based on the foregoing, the Company has classified amounts payable under the Loan Agreement as a current liability.

If and when the Company reaches an agreement with Innovatus to avoid an event of default, the amounts payable under the Loan Agreement will be reclassified.

The financial statements for June 30, 2021, have been prepared with the assumption that the Company will be able to agree to an appropriate remedy during the applicable cure period for any future breaches of operating covenants.

If the Company is unable to comply with the covenants under the Loan Agreement, it would pursue all available cure options in order to regain compliance (See Note 15 for further detail).

The Company expects it will require additional capital to sustain its operations and make the investments it needs to execute its strategic plan, including the commercialization of Triferic (dialysate) and Triferic AVNU in dialysis, generating additional data for Triferic in dialysis, developing FPC for iron deficiency anemia in patients undergoing home infusion and for progressing our pipeline development program of new indications for its FPC platform.

At September 30, 2021, Rockwell had an accumulated deficit of approximately $ 361.1 million and stockholders' equity of $ 11.1 million.

As of September 30, 2021, Rockwell had approximately $ 33.2 million of cash, cash equivalents and investments available-for-sale, and working capital of $ 24.3 million.

Net cash used in operating activities for the nine months ended September 30, 2021 was approximately $ 24.5 million.

Based on the currently available working capital, the adjustments made to sales and marketing efforts for Triferic and Triferic AVNU and the implementation of key efficiency initiatives within our concentrates business, 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 expects it will require additional capital to sustain its operations and make the investments it needs to execute its strategic plan developing FPC for iron deficiency anemia in patients undergoing home infusion and for progressing our pipeline development program of new indications for its FPC platform.

If the Company is unable to generate sufficient revenue from sales of its commercial products and from partnerships, the Company will need to obtain additional equity or debt financing.

If the Company attempts to obtain additional debt or equity financing, the Company cannot assume that such financing will be available on favorable terms, if at all.

Based on the currently available working capital and managements assumption that the Company will be able to agree to an appropriate remedy, 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.

Currently, because the Company's public float is less than $75 million, we are subject to the baby shelf limitations under our current registration statement on Form S-3, which limit the amount we may offer under our Form S-3.

This could limit our ability to raise capital under this registration statement.

Additionally, the Company has received a delisting notification letter from the Nasdaq Stock Market ("Nasdaq") regarding compliance with minimum bid requirements.

The notification letter states that the Company has 180 calendar days, or until December 8, 2021, to regain compliance with Nasdaq Listing Rule 5450(a)(1).

To regain compliance, the closing bid price of the Company’s common stock must be at least $ 1.00 per share for a minimum of 10 consecutive business days at any time prior to December 8, 2021.

In the event that the Company does not regain compliance by December 8, 2021, the Company may be eligible for additional time to reach compliance with the minimum bid price requirement.

The Company is working on a plan to meet the minimum compliance requirements set forth by Nasdaq.

Based on the above, if the Company attempts to obtain additional debt or equity financing, the Company cannot assume that such financing will be available on favorable terms, if at all.

In addition, the Company is subject to certain covenants and cure provisions under its Loan Agreement with Innovatus.

As of the date of this report, the Company is in compliance with all covenants.

(See Note 15 for further detail).

ROCKWELL MEDICAL, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

The COVID-19 pandemic and resulting domestic and global disruptions have adversely affected Rockwell's business and operations, including, but not limited to, our sales and marketing efforts, research and development activities, and the operations of third parties upon whom the Company relies.

Quarantines, shelter-in-place, executive and similar government orders and the recent surge in infections domestically may continue to negatively impact Rockwell's sales and marketing activities, particularly if its sales representatives are unable to interact with current and potential customers to the same extent as before onset of the COVID-19 pandemic.

The COVID-19 pandemic and resulting domestic and global disruptions in the supply chain and labor market, among other areas, have adversely affected Rockwell's business and operations, including, but not limited to, our sales and marketing efforts, research and development activities, our plant and transportation operations and the operations of third parties upon whom the Company relies.

Quarantines, shelter-in-place, executive and similar government orders and the recent surge in infections domestically may continue to negatively impact Rockwell's business, including with regard to the Company’s manufacturing and transportation and remaining sales and marketing activities.

The Company's international business development activities may also continue to be negatively impacted by COVID-19, especially with the recent surge in infections internationally, ongoing international travel restrictions and quarantines or shelter-in-place orders.

2 unchanged sentences

however, current conditions in the financial and credit markets may limit the availability of funding, refinancing or increase the cost of funding.

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.

Due to the continued 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.

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

2 unchanged sentences

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 June 30, 2021, condensed consolidated statements of operations for the three and six months ended June 30, 2021 and 2020, condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2021 and 2020, condensed consolidated statement of changes in stockholders' equity for the three and six months ended June 30, 2021 and 2020, and condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 are unaudited, but include all adjustments, consisting of normal recurring adjustments, that 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, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021 or for any future interim period.

The condensed consolidated balance sheet at September 30, 2021, condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020, condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2021 and 2020, condensed consolidated statement of changes in stockholders' equity for the three and nine months ended September 30, 2021 and 2020, and condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 are unaudited, but include all adjustments, consisting of normal recurring adjustments, that 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 nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021 or for any future interim period.

The condensed consolidated balance sheet at December 31, 2020 has been derived from audited financial statements, however, it does not include all of the information and notes required by U.S.

27 unchanged sentences

Securities that could potentially dilute net income per share in the future that were not included in the computation of diluted loss per share were as follows:

As of June 30,

As of September 30,

Options to purchase common stock 5,871,620 6,682,192

51 unchanged sentences

In thousands of U.S.

dollars ($) Three Months Ended June 30, 2021 Six Months Ended June 30, 2021

dollars ($) Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021

Products By Geographic Area Total U.S.

11 unchanged sentences

In thousands of U.S.

dollars ($) Three Months Ended June 30, 2020 Six Months Ended June 30, 2020

dollars ($) Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020

Products By Geographic Area Total U.S.

13 unchanged sentences

In thousands of U.S.

dollars ($) June 30, 2021 December 31, 2020

dollars ($) September 30, 2021 December 31, 2020

Receivables, which are included in "Trade and other receivables" $ 6,036 $ 4,171

Contract liabilities $ 8,705 $ 10,190

There were no material losses recognized related to any receivables arising from the Company’s contracts with customers for the three and six months ended June 30, 2021 and 2020.

For the three and six months ended June 30, 2021 and June 30, 2020, the Company did not recognize any material bad-debt expense.

There were no material contract assets recorded on the condensed consolidated balance sheet as of June 30, 2021 and December 31, 2020.

The Company does not generally accept returns of its concentrate products and no material reserve for returns of concentrate products was established as of June 30, 2021 or December 31, 2020.

There were no material losses recognized related to any receivables arising from the Company’s contracts with customers for the three and nine months ended September 30, 2021 and 2020.

For the three and nine months ended September 30, 2021 and September 30, 2020, the Company did not recognize any material bad-debt expense.

There were no material contract assets recorded on the condensed consolidated balance sheet as of September 30, 2021 and December 31, 2020.

The Company does not generally accept returns of its concentrate products and no material reserve for returns of concentrate products was established as of September 30, 2021 or December 31, 2020.

The contract liabilities primarily relate to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products

Transaction price allocated to remaining performance obligations

For the three and six months ended June 30, 2021, revenue recognized from performance obligations related to prior periods was not material.

For the three and nine months ended September 30, 2021, revenue recognized from performance obligations related to prior periods was not material.

ROCKWELL MEDICAL, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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, totaled $ 9.1 million as of June 30, 2021.

The amount relates primarily to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products.

1 unchanged sentence

The Baxter Agreement includes minimum commitments of product sales over the duration of the agreement.

Unfulfilled minimum commitments related to the Baxter Agreement are product sales of $ 6.2 million as of June 30, 2021, which is amortized ratably through expiration of the Baxter Agreement on October 2, 2024.

Unfulfilled minimum commitments related to the Baxter Agreement are product sales of $ 5.7 million as of September 30, 2021, which is amortized ratably through expiration of the Baxter Agreement on October 2, 2024.

Investments - Available-for-Sale

Investments available-for-sale consisted of the following as of June 30, 2021 and December 31, 2020 (table in thousands):

June 30, 2021

Investments available-for-sale consisted of the following as of September 30, 2021 and December 31, 2020 (table in thousands):

September 30, 2021

Amortized Cost Unrealized Gain Unrealized Loss Accrued Interest Income Fair Value

6 unchanged sentences

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.

As of June 30, 2021 and December 31, 2020, the amortized cost and estimated fair value of our available-for-sale securities were due within one year.

Components of inventory, net of reserves, as of June 30, 2021 and December 31, 2020 are as follows (table in thousands):

As of September 30, 2021 and December 31, 2020, the amortized cost and estimated fair value of our available-for-sale securities were due within one year.

Components of inventory, net of reserves, as of September 30, 2021 and December 31, 2020 are as follows (table in thousands):

September 30,

2021 December 31,

3 unchanged sentences

Total $ 5,554 $ 5,089

As of June 30, 2021, the Company classified $ 1.1 million of inventory as non-current, all of which was related to Triferic or the active pharmaceutical ingredient and raw materials for Triferic.

As of June 30, 2021, the total Triferic inventory net of reserve was $ 1.7 million.

As of September 30, 2021, the Company classified $ 1.5 million of inventory as non-current, all of which was related to Triferic or the active pharmaceutical ingredient and raw materials for Triferic.

As of September 30, 2021, the total Triferic inventory net of reserve was $ 1.6 million.

The $ 1.6 million net value of Triferic inventory consisted of $ 0.4 million of Triferic (dialysate) finished goods with expiration dates ranging from September 2021 to December 2023, $ 0.4 million of Triferic API with estimated remaining shelf life extending beyond 2022, and $ 0.9 million of raw materials for Triferic with estimated remaining shelf life extending beyond 2025.

3 unchanged sentences

Property and Equipment

As of June 30, 2021 and December 31, 2020, the Company’s property and equipment consisted of the following (table in thousands):

As of September 30, 2021 and December 31, 2020, the Company’s property and equipment consisted of the following (table in thousands):

September 30,

2021 December 31,

5 unchanged sentences

Property and Equipment, net $ 2,507 $ 2,642

Depreciation expense for each of the three and six months ended June 30, 2021 and 2020 totaled $ 0.2 million and $ 0.4 million.

Depreciation expense for three months ended September 30, 2021 and 2020 was $ 0.1 million and $ 0.2 million, respectively.

Depreciation expense for the nine months end September 30, 2021 and 2020 was $ 0.5 million and $ 0.6 million, respectively.

Accrued Liabilities

Accrued liabilities as of June 30, 2021 and December 31, 2020 consisted of the following (table in thousands):

Accrued liabilities as of September 30, 2021 and December 31, 2020 consisted of the following (table in thousands):

September 30,

2021 December 31,

7 unchanged sentences

In October 2014, the Company entered into the Baxter Agreement with Baxter and received an upfront fee of $ 20 million.

The upfront fee was recorded as deferred revenue and is being recognized based on the proportion of product shipments to Baxter in each period, compared with total expected sales volume over the term of the Baxter Agreement, which expires in October 2024.

The Company recognized revenue of approximately $ 0.5 million and $ 1.0 million for each of the three and six months ended June 30, 2021 and 2020.

Deferred revenue related to the Baxter Agreement totaled $ 6.2 million as of June 30, 2021 and $ 7.2 million as of December 31, 2020.

The Company recognized revenue of approximately $ 0.5 million and $ 1.5 million for each of the three and nine months ended September 30, 2021 and 2020.

Deferred revenue related to the Baxter Agreement totaled $ 5.7 million as of September 30, 2021 and $ 7.2 million as of December 31, 2020.

If a “Refund Trigger Event” occurs under the Baxter Agreement prior to December 31, 2021, Rockwell would be obligated to repay 25 % of the upfront fee.

1 unchanged sentence

The upfront fee was recorded as deferred revenue and is being recognized as revenue based on the agreement term.

The Company recognized approximately $ 53,000 and $ 0.1 million revenue for each of the three and six months ended June 30, 2021 and 2020.

Deferred revenue related to the Wanbang Agreement totaled $ 2.6 million as of June 30, 2021 and $ 2.7 million as of December 31, 2020.

The Company recognized approximately $ 53,000 and $ 0.2 million revenue for each of the three and nine months ended September 30, 2021 and 2020.

Deferred revenue related to the Wanbang Agreement totaled $ 2.6 million as of September 30, 2021 and $ 2.7 million as of December 31, 2020.

In January 2020, the Company entered into license and supply agreements with Sun Pharma (the "Sun Pharma Agreements"), for the rights to commercialize Triferic (dialysate) (ferric pyrophosphate citrate) in India.

1 unchanged sentence

In consideration for the license, the Company received an upfront fee of $ 0.1 million, and will be eligible for milestone payments and royalties on net sales.

A Joint Alliance Committee, comprised of members from the Company and Sun Pharma, will guide the development and execution for Triferic (dialysate) in

A Joint Alliance Committee,

ROCKWELL MEDICAL, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

comprised of members from the Company and Sun Pharma, will guide the development and execution for Triferic (dialysate) in India.

Sun Pharma will be responsible for all clinical and regulatory approval, as well as commercialization activities.

The upfront fee was recorded as deferred revenue and is being recognized as revenue based on the agreement term.

The Company recognized revenue of approximately $ 2,500 and $ 5,000 for each of the three and six months ended June 30, 2021 and 2020.

Deferred revenue related to the Sun Pharma Agreement totaled $ 85,000 and $ 90,000 as of June 30, 2021 and December 31, 2020, respectively.

The Company recognized revenue of approximately $ 2,500 and $ 7,500 for each of the three and nine months ended September 30, 2021 and 2020.

Deferred revenue related to the Sun Pharma Agreement totaled $ 82,500 and $ 90,000 as of September 30, 2021 and December 31, 2020, respectively.

In September 2020, the Company entered into a license and supply agreements with Jeil Pharma (the "Jeil Pharma Agreements"), for the rights to commercialize Triferic (dialysate) (ferric pyrophosphate citrate) in South Korea.

4 unchanged sentences

The upfront fee was recorded as deferred revenue and is being recognized as revenue based on the agreement term.

The Company recognized revenue of $ 2,500 and nil for the three months ended June 30, 2021 and 2020, respectively, and $ 5,000 and nil for the six months ended June 30, 2021 and 2020, respectively.

Deferred revenue related to the Jeil Pharma Agreement totaled approximately $ 0.2 million as of June 30, 2021 and December 31, 2020.

The Company recognized revenue of $ 2,500 and nil for the three months ended September 30, 2021 and 2020, respectively, and $ 7,500 and nil for the nine months ended September 30, 2021 and 2020, respectively.

Deferred revenue related to the Jeil Pharma Agreement totaled approximately $ 0.2 million as of September 30, 2021 and December 31, 2020.

In June 2021, the Company entered into license and supply agreements with Drogsan Pharma (the "Drogsan Agreements"), for the rights to commercialize Triferic (dialysate) and Triferic AVNU in Turkey.

Under the terms of the Drogsan Agreements, Drogsan Pharma will be the exclusive commercialization partner for Triferic (dialysate) and Triferic AVNU in Turkey.

In consideration for the license, the Company is due to receive an upfront fee of $ 0.2 million, and will be eligible for milestone payment and royalties on net sales.

In consideration for the license, the Company received an upfront fee of $ 0.15 million, and will be eligible for milestone payment and royalties on net sales.

A Joint Alliance Committee, comprised of members from the Company and Drogsan Pharma, will guide the execution for Triferic (dialysate) and Triferic AVNU in Turkey.

1 unchanged sentence

The upfront fee will be recorded as deferred revenue and will be recognized as revenue based on the agreement term.

The Company recognized revenue of $ 3,750 for the three months ended September 30, 2021.

Deferred revenue related to the Drogsan Agreements totaled approximately $ 0.15 million as of September 30, 2021.

Stockholders’ Equity

Preferred Stock

As of June 30, 2021 and December 31, 2020, there were 2,000,000 shares of preferred stock, $ 0.0001 par value per share, authorized and no shares of preferred stock issued or outstanding.

As of June 30, 2021 and December 31, 2020, there were 170,000,000 shares of common stock, $ 0.0001 par value per share, authorized and 93,811,381 and 93,573,165 shares issued and outstanding, respectively.

As of September 30, 2021 and December 31, 2020, there were 2,000,000 shares of preferred stock, $ 0.0001 par value per share, authorized and no shares of preferred stock issued or outstanding.

As of September 30, 2021 and December 31, 2020, there were 170,000,000 shares of common stock, $ 0.0001 par value per share, authorized and 93,966,381 and 93,573,165 shares issued and outstanding, respectively.

Controlled Equity Offering (or "At the Market" Offering)

3 unchanged sentences

333-227363), which was originally filed with the SEC on September 14, 2018 and declared effective by the SEC on October 1, 2018, the base prospectus contained within the registration statement, and a prospectus supplement that was filed with the SEC on March 22, 2019.

Sales of the shares, if any, pursuant to the Sales Agreement, may be made in sales deemed to be an “at the market" offering as defined in Rule 415(a) of the Securities Act, including sales made directly through the Nasdaq Global Market or on any other existing trading market for the Company’s common stock.

The Company intends to use the proceeds from the offering for working capital and other general corporate purposes.

The Company may suspend or terminate the Sales Agreement at any time.

The registration statement on Form S-3 expired on October 1, 2021 and no further sales may be made under the Sales Agreement.

During the three and nine months ended September 30, 2021, the Company has not sold shares of its common stock pursuant to the Sales Agreement.

Approximately $ 32.3 million remained available for sale under this facility as of September 30, 2021.

ROCKWELL MEDICAL, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

During the three and six months ended June 30, 2021, the Company has not sold shares of its common stock pursuant to the Sales Agreement.

Approximately $ 32.3 million remains available for sale under this facility.

The Company is not required to sell any shares at any time during the term of the facility.

The Company's ability to sell common stock under the facility may be limited by several factors including, among other things, the trading volume of its common stock and certain black-out periods that the Company may impose upon the facility, among other things.

Stock-Based Compensation

The Company recognized total stock-based compensation expense during the three and six months ended June 30, 2021 and 2020 as follows (table in thousands):

The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2021 and 2020 as follows (table in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

10 unchanged sentences

Restricted Stock

A summary of the Company’s restricted stock awards during the six months ended June 30, 2021 is as follows:

A summary of the Company’s restricted stock awards during the nine months ended September 30, 2021 is as follows:

Number of Shares Weighted Average

1 unchanged sentence

Forfeited ( 68,500 ) $ 5.70

Unvested at June 30, 2021 78,300 $ 5.70

A summary of the Company’s restricted stock awards during the six months ended June 30, 2020 is as follows:

Unvested at September 30, 2021 78,300 $ 5.70

A summary of the Company’s restricted stock awards during the nine months ended September 30, 2020 is as follows:

Number of Shares Weighted Average

Unvested at January 1, 2020 146,800 $ 5.70

Unvested at June 30, 2020 146,800 $ 5.70

Unvested at September 30, 2020 146,800 $ 5.70

The fair value of 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 June 30, 2021, unvested restricted stock awards of 78,300 were related to performance-based awards.

As of September 30, 2021, unvested restricted stock awards of 78,300 were related to performance-based awards.

The forfeited performance-based restricted stock awards of 68,500 was due to the termination of the Company's former Chief Science Officer on January 19, 2021.

4 unchanged sentences

Service-Based Restricted Stock Units

A summary of the Company’s service-based restricted stock units during the six months ended June 30, 2021 is as follows:

A summary of the Company’s service-based restricted stock units during the nine months ended September 30, 2021 is as follows:

Number of Shares Weighted Average

3 unchanged sentences

Forfeited ( 11,799 ) 4.81

Unvested at June 30, 2021 342,604 $ 1.17

A summary of the Company’s service-based restricted stock units during the six months ended June 30, 2020 is as follows:

Unvested at September 30, 2021 342,271 $ 1.17

A summary of the Company’s service-based restricted stock units during the nine months ended September 30, 2020 is as follows:

Number of Shares Weighted Average

3 unchanged sentences

Forfeited ( 159,724 ) 4.26

Unvested at June 30, 2020 420,062 $ 3.27

Unvested at September 30, 2020 245,405 $ 2.72

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

The vesting periods range from 1 to 3 years.

Stock-based compensation expense of $ 0.1 million and $ 0.2 million was recognized for the three and six months ended June 30, 2021, respectively.

Stock-based compensation expense of nil and $ 0.2 million was recognized for the three and six months ended June 30, 2020, respectively.

As of June 30, 2021, the unrecognized stock-based compensation expense was $ 0.3 million, which is expected to be recognized over an estimated weighted average remaining term of less than 1 year.

Stock-based compensation expense of $ 0.1 million and $ 0.3 million was recognized for the three and nine months ended September 30, 2021, respectively.

Stock-based compensation expense of nil and $ 0.2 million was recognized for the three and nine months ended September 30, 2020, respectively.

As of September 30, 2021, the unrecognized stock-based compensation expense was $ 0.2 million, which is expected to be recognized over an estimated weighted average remaining term of less than 1 year.

Performance-Based Restricted Stock Units

As of June 30, 2021, there were no outstanding performance-based restricted stock units.

A summary of the Company’s performance-based restricted stock units during the six months ended June 30, 2020 is as follows:

As of September 30, 2021, there were no outstanding performance-based restricted stock units.

A summary of the Company’s performance-based restricted stock units during the nine months ended September 30, 2020 is as follows:

Number of Shares Weighted Average

1 unchanged sentence

Forfeited ( 988,958 ) 4.48

Unvested at June 30, 2020 83,333 $ 3.09

Unvested at Unvested at September 30, 2020 — $ —

Service-Based Stock Options

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

The fair value of the service-based stock options granted for the six months ended June 30, 2021 were based on the following assumptions:

The fair value of the service-based stock options granted for the nine months ended September 30, 2021 were based on the following assumptions:

September 30,

Exercise price $ 0.61 - $ 1.73

2 unchanged sentences

Term (years) 5.5 - 6

A summary of the Company’s service-based stock option activity for the six months ended June 30, 2021 is as follows:

A summary of the Company’s service-based stock option activity for the nine months ended September 30, 2021 is as follows:

Options Weighted

6 unchanged sentences

Expired ( 1,333,220 ) 7.16 — —

Outstanding at June 30, 2021 5,695,801 $ 3.07 7.8 $ 5,000

Exercisable at June 30, 2021 2,387,440 $ 5.25 5.8 $ —

A summary of the Company’s service-based stock option activity for the six months ended June 30, 2020 is as follows:

Outstanding at September 30, 2021 5,871,620 $ 2.95 7.7 $ —

Exercisable at September 30, 2021 2,539,438 $ 4.96 5.8 $ —

A summary of the Company’s service-based stock option activity for the nine months ended September 30, 2020 is as follows:

Options Weighted

6 unchanged sentences

Expired ( 4,090,150 ) 8.24 — —

Outstanding at June 30, 2020 5,625,562 $ 4.90 6.7 $ 1,000

Exercisable at June 30, 2020 2,809,954 $ 7.09 4.3 $ —

Outstanding at September 30, 2020 5,932,192 $ 4.54 6.7 $ —

Exercisable at September 30, 2020 2,889,218 $ 6.95 3.8 $ —

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

During the six months ended June 30, 2021, the Company granted stock options to purchase up to 1,522,162 shares of common stock to certain employees.

During the six months ended June 30, 2021, 277,764 shares were forfeited and 1,266,553 shares expired.

During the nine months ended September 30, 2021, the Company granted stock options to purchase up to 1,872,162 shares of common stock to certain employees.

During the nine months ended September 30, 2021, 385,278 shares were forfeited and 1,333,220 shares expired.

Forfeitures are recorded in the period of occurrence;

compensation expense is adjusted accordingly.

Stock-based compensation expense recognized for service-based stock options was $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2021, respectively.

Stock-based compensation expense recognized for service-based stock options was $ 0.3 million and $ 0.8 million for the three and six months ended June 30, 2020, respectively.

As of June 30, 2021, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $ 2.0 million, which is expected to be recognized over an estimated weighted average remaining term of 3.0 years.

Performance-Based Stock Options

Stock-based compensation expense recognized for service-based stock options was $ 0.3 million and $ 1.0 million for the three and nine months ended September 30, 2021, respectively.

Stock-based compensation expense recognized for service-based stock options was $ 0.2 million and $ 1.0 million for the three and nine months ended September 30, 2020, respectively.

As of September 30, 2021, total stock-based compensation expense related to unvested options not yet recognized totaled

ROCKWELL MEDICAL, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

A summary of the performance-based stock options for the six months ended June 30, 2021 is as follows:

approximately $ 1.7 million, which is expected to be recognized over an estimated weighted average remaining term of 3.0 years.

Performance-Based Stock Options

A summary of the performance-based stock options for the nine months ended September 30, 2021 is as follows:

Number of Shares Weighted Average

1 unchanged sentence

Expired ( 750,000 ) 2.20

Outstanding at June 30, 2021 375,000 $ 2.20

Exercisable at June 30, 2021 — $ —

A summary of the performance-based stock options for the six months ended June 30, 2020 is as follows:

Outstanding at September 30, 2021 — $ —

Exercisable at September 30, 2021 — $ —

A summary of the performance-based stock options for the nine months ended September 30, 2020 is as follows:

Number of Shares Weighted Average

2 unchanged sentences

Forfeited ( 388,125 ) $ 4.70

Outstanding at June 30, 2020 600,000 $ 2.45

Exercisable at June 30, 2020 — $ —

Stock-based compensation expense recognized for performance-based stock options was nil and $( 0.3 ) million for the three and six months ended June 30, 2021, respectively.

Stock-based compensation expense recognized for performance-based stock options was $( 0.6 ) million and $( 0.5 ) million for the three and six months ended June 30, 2020, respectively.

The reduction in stock-based compensation expense was due to the performance criteria of certain performance-based options granted to officers of the Company becoming non-probable as of March 31, 2021.

The Company will continue to assess the probability of the performance criteria until such time the criteria becomes probable and the performance-based stock option vests or continues to be non-probable and the performance-based stock option expires.

As of June 30, 2021, there was no unrecognized stock-based compensation expense related to unvested performance-based stock options.

Outstanding at September 30, 2020 750,000 $ 2.20

Exercisable at September 30, 2020 — $ —

Stock-based compensation expense recognized for performance-based stock options was nil and $( 0.4 ) million for the three and nine months ended September 30, 2021, respectively.

Stock-based compensation expense recognized for performance-based stock options was $ 0.1 million and $( 0.4 ) million for the three and nine months ended September 30, 2020, respectively.

The increase in expired performance-based stock options and reduction in stock-based compensation expense was due to the performance criteria of certain performance-based options granted to officers of the Company becoming non-probable as of September 30, 2021.

As of September 30, 2021, there was no unrecognized stock-based compensation expense related to unvested performance-based stock options.

Licensing Agreements

8 unchanged sentences

As of December 31, 2020, the Company had fulfilled its reimbursement obligation of certain legal expenses.

As of June 30, 2021, the Company accrued $ 0.2 million relating to certain IP reimbursement expenses and certain sublicense royalty fees within accrued liabilities on the condensed consolidated balance sheet.

Pursuant to the Charak MSA, the aforementioned parties entered into an Amendment, dated as of October 7, 2018 (the “Charak Amendment”), to the 2002 Agreement, under which Charak granted the Company an exclusive, worldwide, non-transferable license to commercialize SFP for the treatment of patients with renal failure.

The Charak Amendment amends the royalty payments due to Charak under the 2002 Agreement such that the Company is liable to pay Charak royalties on net sales

As of September 30, 2021, the Company accrued $ 0.2 million relating to certain IP reimbursement expenses and certain sublicense royalty fees within accrued liabilities on the condensed consolidated balance sheet.

ROCKWELL MEDICAL, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

by the Company of products developed under the license, which includes the Company’s Triferic® product, at a specified rate until December 31, 2021 and thereafter at a reduced rate from January 1, 2022 until February 1, 2034.

The Charak Amendment amends the royalty payments due to Charak under the 2002 Agreement such that the Company is liable to pay Charak royalties on net sales by the Company of products developed under the license, which includes the Company’s Triferic® product, at a specified rate until December 31, 2021 and thereafter at a reduced rate from January 1, 2022 until February 1, 2034.

Additionally, the Company shall pay Charak a percentage of any sublicense income during the term of the agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sub-licensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and be no less than a lower rate of the net sales of the licensed products by the sub-licensee in jurisdictions where there exists no valid claim, on a country-by-country basis.

14 unchanged sentences

This lease is currently being offered for sublease.

At June 30, 2021, the Company had operating and finance lease liabilities of $ 6.2 million and right-of-use assets of $ 6.1 million, which are included in the consolidated balance sheet.

At September 30, 2021, the Company had operating and finance lease liabilities of $ 7.1 million and right-of-use assets of $ 6.9 million, which are included in the consolidated balance sheet.

At December 31, 2020, the Company had operating lease liabilities of $ 3.0 million and right-of-use assets of $ 2.9 million, which are included in the consolidated balance sheet.

3 unchanged sentences

Notes to Condensed Consolidated Financial Statements

Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

Operating leases

47 unchanged sentences

The Company has the option, under certain circumstances, to add 1.00 % of such interest rate amount to the then outstanding principal balance in lieu of paying such amount in cash.

For each of the three months ended June 30, 2021 interest expense amounted to $ 0.6 million.

For the six months ended June 30, 2021 and 2020, interest expense amounted to $ 1.2 million and $ 0.6 million, respectively.

For each of the three months ended September 30, 2021 and 2020, interest expense amounted to $ 0.6 million and $ 0.7 million, respectively.

For the nine months ended September 30, 2021 and 2020, interest expense amounted to $ 1.8 million and $ 1.3 million, respectively.

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

8 unchanged sentences

If the Company is unable to avoid an event of default, any required repayments could have an adverse effect on its liquidity.

As of June 30, 2021, the Company is in compliance with all the reporting and financial covenants.

The financial statements for June 30, 2021 have been prepared with the assumption that the Company will be able to agree to an appropriate remedy during the applicable cure period for any future breaches of operating covenants.

As of September 30, 2021, the Company is in compliance with all the reporting and financial covenants.

The financial statements for September 30, 2021 have been prepared with the assumption that the Company will be able to agree to an appropriate remedy during the applicable cure period for any future breaches of operating covenants.

Based on the foregoing, the Company has classified amounts payable under the Loan Agreement as a current liability.

9 unchanged sentences

Notes to Condensed Consolidated Financial Statements

As of June 30, 2021, the outstanding balance of the Term Loan was $ 21.1 million, net of unamortized issuance costs and unaccreted discount of $ 1.4 million.

The following table reflects the schedule of principal payments on the Term Loan as of June 30, 2021 (in thousands):

On September 24, 2021, the Company, entered into the First Amendment to Loan and Security Agreement (the “Amendment”) with Innovatus Life Sciences Lending Fund I, LP, which amended the Loan Agreement..

Pursuant to the Amendment, the Company (i) shall prepay an aggregate principal amount of $ 7.5 million in Term Loans (as defined in the Loan Agreement) in ten consecutive equal monthly installments commencing on December 1, 2021;

(ii) shall pay an additional prepayment premium of 5 % on prepaid amounts if the Company elects to prepay all outstanding Term Loans on or before September 24, 2023 and (iii) shall maintain minimum liquidity of no less than $ 5.0 million if the aggregate principal amount of Term Loans is greater than $ 15.0 million pursuant to the liquidity covenant in the Loan Agreement.

As of September 30, 2021, the outstanding balance of the Term Loan was $ 21.2 million, net of unamortized issuance costs and unaccreted discount of $ 1.3 million.

The following table reflects the schedule of principal payments on the Term Loan as of September 30, 2021 (in thousands):

Principal Payments

Subsequent Events

Insurance Financing Note Payable

On July 3, 2021, the Company entered into a short-term note payable for $ 2.0 million, bearing interest at 3.93 % per annum to finance various insurance policies.

Principal and interest payments related to this note will begin on July 3, 2021 and are paid on a straight-line amortization over a 9-month period with the final payment due on March 3, 2022.

Principal and interest payments related to this note will begin on July 3, 2021 and are paid on a straight-line amortization over 9 months with the final payment due on March 3, 2022.

As of September 30, 2021, the Company's insurance note payable balance was $ 1.3 million.

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