What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-20 compared with 2024-03-21 · 315 added, 345 removed, 770 unchanged (46% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure material information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate, to allow timely decisions regarding required financial disclosure.

We maintain disclosure controls and procedures that are designed to ensure material information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure.

In designing and evaluating the disclosure controls and procedures, we recognized that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

1 unchanged sentence

Management necessarily was required to apply its judgment in evaluating the cost‑benefit relationship of possible controls and procedures.

Under the supervision of and with the participation of our management, including the Company’s Chief Executive Officer, we evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2023.

Based upon that evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023.

Additionally, the Company’s management, including the Chief Executive Officer, has concluded that the consolidated financial statements included in this Annual Report are fairly stated, in all material respects, in accordance with generally accepting accounting principles in the United States for each of the periods presented herein.

Under the supervision of and with the participation of our management, including the Company’s Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2024.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2024.

Additionally, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, has concluded that the consolidated financial statements included in this Annual Report are fairly stated, in all material respects, in accordance with generally accepting accounting principles in the United States for each of the periods presented herein.

Management’s Report on Internal Control over Financial Reporting

4 unchanged sentences

Therefore, internal control over financial reporting determined to be effective provides only reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of our Chief Executive Officer, our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2023.

In making their assessment of internal control over financial reporting, our management used the criteria described in the 2013 Internal Control—Integrated

Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2024.

In making their assessment of internal control over financial reporting, our management used the criteria described in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024.

5 unchanged sentences

(a) Appointment of Principal Accounting Officer

Effective March 20, 2024, the Company’s Senior Vice President of Finance, Jesse Neri, 46, has, in addition to his current responsibilities, assumed the role of principal accounting officer.

Neri will not receive any additional compensation related to this appointment.

Prior to joining the Company in October 2023, Mr.

Neri was Executive Director of Finance for Hemavant Sciences from August 2022 to October 2023.

Before joining Hemavant, he was Executive Director of Financial Planning and Analysis for Aruvant Sciences from August 2021 to August 2022.

From July 2020 to August 2021, he provided financial consulting services to a variety of life sciences companies.

Previously, he served in a variety of finance roles at Zyla Life Sciences from June 2015 to July 2020, including most recently as Senior Vice President of Finance from January 2020 to July 2020.

Neri has a B.S.

in Business Administration from Villanova University and an MBA from Drexel University.

Neri has no familial relationships with any executive officer or director of the Company.

Effective March 19, 2025, the Company’s Controller, Nicholas Fanslau, age 40, has, in addition to his current responsibilities, assumed the role of principal accounting officer.

Fanslau will not receive any additional compensation related to this appointment.

Prior to joining the Company in April 2024, Mr.

Fanslau served in various roles of increasing responsibility at Chubb for nearly fifteen years, including as Vice President of Global Consolidations from June 2017 to May 2021 and Vice President of SEC Reporting from June 2021 to March 2024.

Fanslau has a B.A.

in Accounting from the University of Notre Dame.

Fanslau has no familial relationships with any executive officer or director of the Company.

There have been no transactions in which the Company has participated and in which Mr.

Neri had a direct or indirect material interest that would be required to be disclosed under Item 404(a) of Regulation S-K.

Fanslau had a direct or indirect material interest that would be required to be disclosed under Item 404(a) of Regulation S-K.

(b) Trading Arrangements

None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended December 31, 2023, as such terms are defined under Item 408(a) of Regulation S-K.

Director and executive officer trading arrangements

The following table provides information concerning Rule 10b5-1 trading arrangements adopted during the three months ended December 31, 2024, by any director or any executive officer who is subject to the filing requirements of Section 16 of the Securities Exchange Act of 1934.

These trading arrangements are intended to satisfy the affirmative defense of Rule 10b5-1(c).

No non-Rule 10b5-1 trading arrangements were adopted by any director or executive officer during the fourth quarter of 2024.

In addition, no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were terminated by any director or executive officer in the fourth quarter of 2024.

Name Title Adoption Date Duration (a)

Number of shares to be sold

Jesse Neri SVP and CFO 12/13/2024 April 1, 2025 - January 5, 2026 3,544.00

a Subject to compliance with Rule 10b5-1, duration could cease earlier than the final date shown above to the extent that the aggregate number of shares to be sold under the trading arrangement have been sold.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

9 unchanged sentences

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 is incorporated herein by reference to information in our 2024 Proxy Statement, including under heading “Security Ownership of Certain Beneficial Owners and Management.”

The information required by this Item 12 is incorporated herein by reference to information in our 2025 Proxy Statement, including under heading “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance Under Equity Compensation Plans.”

Securities Authorized for Issuance Under Equity Compensation Plans

63 unchanged sentences

and Evoqua Water Technologies LLC (Exhibit 10.2 to the Company's Form 10-Q filed on August 14, 2023).

10.15 Amendment No.

1 to Asset Purchase Agreement, dated July 12, 2024, by and between Rockwell Medical, Inc., and Evoqua Water Technologies LLC (Exhibit 10.1 to the Company's Form 8-K filed on July 15, 2024).

10.16+ Amended and Restated Products Purchase Agreement dated September 18, 2023 by and between Rockwell Medical, Inc.

21 unchanged sentences

10.31* Employment Agreement dated July 21, 2021 between Rockwell Medical, Inc.

and Megan Timmins.

and Megan Timmins (Exhibit 10.30 to the Company's Form 10-K filed on March 21, 2024).

10.32* Employment Agreement, dated as of October 16, 2023, between the Company and Jesse Neri (Exhibit 10.1 to Form 8-K filed on December 12, 2024).

10.33 Rockwell Medical, Inc.

Amended and Restated Clawback Policy.

Amended and Restated Clawback Policy (Exhibit 10.31 to the Company's Form 10-K filed on March 21, 2024).

10.34 Rockwell Medical, Inc.

Statement of Company Policy Prohibiting Insider Trading.

Statement of Company Policy Prohibiting Insider Trading (Exhibit 10.3 2 to the Company's Form 10-K filed on March 21, 2024).

21.1 List of Subsidiaries (Company's Form 10-K filed on March 31, 2021).

23.1# Consent of EisnerAmper LLP.

23.2# Consent of Marcum LLP.

31.1# Certification of Chief Executive Officer Pursuant to Rule 13a‑14(a).

31.2# Certification of Chief Financial Officer Pursuant to Rule 13a‑14(a).

32.1# Certification Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.

32.2# Certification Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.

101.INS XBRL Instance Document

12 unchanged sentences

/s/ Mark Strobeck

Mark Strobeck

Mark Strobeck, Ph.D.

President and Chief Executive Officer

4 unchanged sentences

SIGNATURE TITLE DATE

/s/ Mark Strobeck President, Chief Executive Officer and Director (Principal Executive Officer and Principal Financial Officer) March 21, 2024

Mark Strobeck

/s/ Jesse Neri Senior Vice President, Finance and Principal Accounting Officer March 21, 2024

/s/ Mark Strobeck President, Chief Executive Officer and Director (Principal Executive Officer) March 20, 2025

Mark Strobeck, Ph.D.

/s/ Jesse Neri Senior Vice President, Chief Financial Officer

(Principal Financial Officer) March 20, 2025

/s/ Nicholas Fanslau

Controller (Principal Accounting Officer) March 20, 2025

Nicholas Fanslau

/s/ Robert S.

Radie Director and Chairman of the Board March 20, 2025

Cooper Director March 20, 2025

/s/ Joan Lau Director March 20, 2025

/s/ Allen Nissenson Director March 21, 2024

Allen Nissenson

/s/ Robert S.

Radie Director March 21, 2024

Joan Lau, Ph.D.

Nissenson Director March 20, 2025

Nissenson, M.D.

Ravich Director March 20, 2025

3 unchanged sentences

Report of Independent Registered Public Accounting Firm - EisnerAmper LLP (PCAOB Identification Number 274 )

Report of Independent Registered Public Accounting Firm - Marcum LLP

Consolidated Balance Sheets at December 31, 202 4 and 202 3

4 unchanged sentences

Notes to the Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - EISNERAMPER LLP

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Rockwell Medical, Inc.

and Subsidiaries (the “Company”) as of December 31, 2023, and the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and the consolidated results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Rockwell Medical, Inc.

and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023,and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

2 unchanged sentences

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of the intangible asset acquired in the Evoqua asset acquisition

As described in Notes 3 and 4 to the consolidated financial statements, on July 10, 2023, the Company executed and consummated the transactions contemplated by an Asset Purchase Agreement (the “Purchase Agreement”) with Evoqua Water Technologies, LLC (“Evoqua”)(the “Evoqua Acquisition”).

At the closing of the transaction, the Company acquired assets, including an intangible asset, from Evoqua for consideration of $17.4 million and the transaction was accounted for as an asset acquisition.

The acquired intangible asset was a customer list valued on a relative fair value basis at $11.0 million on the acquisition date.

Establishing the relative fair value of the customer list intangible asset required management to first perform a fair value assessment, which was completed using a multi-period excess earnings method (“MPEEM”).

The method used to estimate the fair value of the acquired

intangible asset involved significant assumptions.

The significant assumptions applied by the Company in estimating the fair value of the acquired customer list intangible asset included cash flow projections, discount rates, and the estimated useful life of the customer relationships.

We identified the valuation of the acquired customer list intangible asset as a critical audit matter due to the significant judgement by management involved with developing the estimates to determine the fair value of the customer list intangible asset, specifically those relating to the projected cash flows, discount rates, and the estimated useful life of the customer relationships.

As such, there was a high degree of auditor judgement and subjectivity, and significant audit effort was required in performing procedures to evaluate management’s conclusions.

Evaluation of Liquidity and Going Concern given loss of Major Customer

As disclosed in Notes 2 and 3 to the consolidated financial statements, the Company received notice that its largest customer, DaVita Inc., which accounted for approximately 45% of 2024 net sales, will transition to another supplier by mid-2025.

Management has evaluated the impact of this expected loss of net sales on its ability to continue as a going concern.

Management’s plan as disclosed in Note 2 includes available cash, cash equivalents and investments available-for-sale of approximately $21.6, as of December 31, 2024, along with increasing prices with some of its customers, acquisition of new customers, projected growth of margins and cost containment activities, to meet its operating requirements for at least the next twelve months from the date of this report all of which are significant assumptions in the Company’s evaluation of going concern.

We identified the evaluation of the Company’s ability to continue as a going concern as a critical audit matter as there is especially challenging auditor judgment with respect to the assessment of available liquidity and ability to continue as a going concern for at least the next twelve months from the date of this report.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures include, among others, (i) obtaining an understanding of and evaluating the design of controls related to the valuation of the acquired customer list intangible asset;

and (ii) reading the Purchase Agreement and testing management’s process for estimating the fair value of the acquired customer list intangible asset, which included evaluating the appropriateness of the valuation models, testing the completeness, accuracy, and relevance of underlying data used in the models, and testing the reasonableness of significant assumptions, including cash flow projections, discount rates, and the estimated useful life of the customer relationships.

Evaluating the cash flow projections involved considering the current performance of the acquired assets, the consistency with external market and industry data, and whether these assumptions were consistent with other evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the significant assumptions, including discount rates and the estimated useful life of customer relationships.

These procedures included assessing the design of the controls related to the liquidity and going concern assessment with respect to the impact on future available liquidity given the loss of sales to DaVita, Inc.

We reviewed the revised 2025 forecast of purchases received from DaVita, Inc.

and sensitized managements available liquidity forecast through the first quarter of 2026 assuming no DaVita, Inc.

sales in 2025 and no price increases, new customers, growth of margins or cost containment activities from 2024, noting sufficient available liquidity for at least twelve months from the issuance of the date of this report.

/s/ EisnerAmper LLP

3 unchanged sentences

March 20, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - MARCUM LLP

To the Stockholders and Board of Directors of

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Rockwell Medical Inc.

and Subsidiaries (the “Company”) as of December 31, 2022, the related consolidated statement of operations, comprehensive loss, changes in stockholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2022, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Marcum LLP

(PCAOB ID 688)

We served as the Company’s auditor from 2018 to 2023.

Chicago, Illinois

March 30, 2023

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts)

2023 December 31,

Cash and Cash Equivalents $ 15,662 $ 8,983

Investments Available-for-Sale 5,940 1,952

Accounts Receivable, net of a reserve of $ 81 for 2023 and $ 33 for 2022

Accounts Receivable, net of a reserve of nil for 2024 and $ 81 for 2023

Inventory, net 5,778 5,871

10 unchanged sentences

LIABILITIES AND STOCKHOLDERS’ EQUITY

Insurance Financing Note Payable $ 244 $ 503

Accounts Payable $ 2,869 $ 4,516

2 unchanged sentences

Lease Liabilities - Operating - Current 1,566 1,381

Lease Liabilities - Financing, Current 558 522

Lease Liabilities - Finance - Current 599 558

Deferred License Revenue - Current 46 46

Term Loan, Current - Net of Issuance Costs and Premium Accretion — 1,631

Insurance Financing Note Payable 268 244

Customer Deposits 97 243

1 unchanged sentence

Lease Liabilities - Operating - Long-Term 1,699 1,433

Lease Liabilities - Financing - Long-Term 1,530 2,088

Term Loan - Long-Term, Net of Issuance Costs and Premium Accretion 8,293 7,555

Lease Liabilities - Finance - Long-Term 931 1,530

Term Loan - Long-Term, Net of Issuance Costs 8,472 8,293

Deferred License Revenue - Long-Term 429 475

5 unchanged sentences

Preferred Stock, $ 0.0001 par value, 2,000,000 shares authorized, 15,000 shares issued and outstanding at December 31, 2024 and 2023

Common Stock, $ 0.0001 par value, 170,000,000 shares authorized, 29,130,607 and 12,163,673 shares issued and outstanding at December 31, 2023 and 2022

Common Stock, $ 0.0001 par value, 170,000,000 shares authorized, 34,056,920 and 29,130,607 shares issued and outstanding at December 31, 2024 and 2023, respectively

Additional Paid-in Capital 430,207 418,487

Accumulated Deficit ( 397,678 ) ( 397,198 )

Accumulated Other Comprehensive (Loss) Income ( 1 ) 163

Accumulated Other Comprehensive Income (Loss) 54 ( 1 )

Total Stockholders’ Equity 32,586 21,291

12 unchanged sentences

General and Administrative 14,108 12,142

Operating Loss ( 6,670 ) ( 16,780 )

Operating Income (Loss) 608 ( 6,670 )

Other Expense:

13 unchanged sentences

Net Loss $ ( 480 ) $ ( 8,439 )

Unrealized (Loss) Gain on Available-for-Sale Investments ( 159 ) 114

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

Unrealized Gain (Loss) on Available-for-Sale Investments 85 ( 159 )

Foreign Currency Translation Adjustments ( 5 ) ( 5 )

16 unchanged sentences

Vesting of Restricted Stock Units Issued, net of taxes withheld — — 125,000 — — — — —

Issuance of Common Stock, net of Issuance Costs / Public offering — — 844,613 — 14,893 — — 14,893

Issuance of Common Stock in connection with exercise of Prior Warrant and Pre-Funded Warrants, net of offering costs — — 16,200,990 2 13,718 — — 13,720

Issuance of Common Stock, net of Issuance Costs / At-the-market offerings — — 640,944 — 1,136 — — 1,136

Issuance of Preferred Stock, net of offering costs 15,000 — — — 14,916 — — 14,916

Issuance of Common Stock upon exercise of Pre-Funded Warrants — — 2,756,377 — — — — —

Stock-based Compensation — — — — 932 — — 932

1 unchanged sentence

Net Loss — — — — — ( 480 ) — ( 480 )

Unrealized Loss on Available-for-Sale Investments — — — — — — ( 159 ) ( 159 )

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

Unrealized Gain on Available-for-Sale Investments — — — — — — 85 85

Foreign Currency Translation Adjustments — — — — — — ( 5 ) ( 5 )

Fair Value of Warrant Related to Debt Financing — — — — 247 — — 247

Issuance of common stock, net of offering costs/At-The-Market — — 4,718,923 — 10,172 — — 10,172

Vesting of Restricted Stock Units Issued, net of taxes withheld — — 201,348 — — — — —

Issuance of Common Stock in connection with exercise of Prior Warrant and Pre-Funded Warrants, net of offering costs — — 16,200,990 2 13,718 — — 13,720

Issuance of Common Stock, net of Issuance Costs / At-the-market offerings — — 640,944 — 1,136 — — 1,136

Issuance of common stock upon exercise of options — — 6,042 — 9 — — 9

Stock-based Compensation — — — — 1,292 — — 1,292

8 unchanged sentences

Net Loss $ ( 480 ) $ ( 8,439 )

Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities:

Adjustments To Reconcile Net Loss To Net Cash Provided By (Used In) Operating Activities:

Depreciation and Amortization 2,180 1,444

3 unchanged sentences

Amortization of Debt Financing Costs and Accretion of Debt Discount and Premium 426 1,107

Loss (Gain) on Disposal of Assets 1 ( 3 )

Loss on Disposal of Assets — 1

Realized Gain on Sale of Investments ( 74 ) ( 321 )

8 unchanged sentences

Changes in Operating Assets and Liabilities ( 1,527 ) ( 7,244 )

Cash Used In Operating Activities ( 9,412 ) ( 16,929 )

Cash Provided By (Used In) Operating Activities 4,202 ( 9,412 )

Cash Flows From Investing Activities:

7 unchanged sentences

Payments on Insurance Financing Note Payable ( 646 ) ( 992 )

Payments on Financing Lease Liabilities ( 522 ) ( 482 )

Payments on Finance Lease Liabilities ( 558 ) ( 522 )

Proceeds from Issuance of Common Stock 10,181 14,861

Offering Costs from Issuance of Common Stock — ( 5 )

Proceeds from Issuance of Preferred Stock — 15,000

Offering Costs from Issuance of Preferred Stock — ( 85 )

Deferred Consideration Paid in Connection with Evoqua Asset Acquisition

Cash Provided By Financing Activities 7,348 11,342

Effect of Exchange Rate Changes on Cash and Cash Equivalents ( 5 ) ( 4 )

Decrease In Cash and Cash Equivalents ( 1,119 ) ( 3,178 )

Increase (Decrease) In Cash and Cash Equivalents 6,679 ( 1,119 )

Cash and Cash Equivalents At Beginning Of Year 8,983 10,102

3 unchanged sentences

Supplemental Disclosure of Noncash Investing and Financing Activities:

Change in Unrealized (Loss) Gain on Marketable Securities Available-for-Sale $ ( 159 ) $ 114

Increase in Prepaid Assets from Insurance Financing Note Payable $ 733 $ 503

Fair Value of Warrants issued related to Debt Financing $ — $ 501

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 $ 2,012 $ —

Change in Unrealized Gain (Loss) on Investments Available-for-Sale $ 60 $ ( 159 )

Deferred Consideration from Evoqua Asset Acquisition $ — $ 5,000

Increase in Prepaid Assets from Insurance Financing Note Payable $ 670 $ 733

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

4 unchanged sentences

Rockwell Medical, Inc.

(the "Company", "Rockwell", "we", or "us") is a healthcare company that develops, manufactures, commercializes, and distributes a portfolio of hemodialysis products for dialysis providers worldwide.

Rockwell is a revenue-generating business and the second largest supplier of liquid and powder acid and bicarbonate concentrates for dialysis patients in the United States.

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

(the "Company", "Rockwell", or "Rockwell Medical") is a healthcare company that develops, manufactures, commercializes, and distributes a portfolio of hemodialysis products for dialysis providers worldwide.

Rockwell is a leading supplier of liquid and dry, acid and bicarbonate concentrates for dialysis patients in the United States.

Hemodialysis is the most common form of end-stage kidney disease treatment and is usually performed at freestanding outpatient dialysis centers, at hospital-based outpatient centers, at skilled nursing facilities, or in 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 at its facilities in Michigan, South Carolina and Texas totaling approximately 175,000 square feet, and manufactures its dry acid concentrate mixers at its facility in Iowa.

Rockwell manufactures hemodialysis concentrates at its facilities in Michigan, South Carolina and Texas and manufactures its 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.

On July 10, 2023, the Company executed and consummated the transactions contemplated by an Asset Purchase Agreement (the "Purchase Agreement") with Evoqua Water Technologies LLC ("Evoqua") (the "Evoqua Acquisition").

Subject to the terms and conditions of the Purchase Agreement, at the closing of the transaction (the "Closing"), the Company purchased customer relationships, equipment and inventory from Evoqua, which were related to its manufacturing and selling of hemodialysis concentrates products, all of which are manufactured under a contract manufacturing agreement with a third-party organization.

2 unchanged sentences

While Rockwell has discontinued commercialization of Triferic in the United States, the Company had established international partnerships with companies and sought to develop and commercialize Triferic outside the United States and was working closely with these international partners to develop and commercialize Triferic in their respective regions.

During the year ended December 31, 2023, the ongoing Triferic development effort was terminated resulting in an acceleration of the corresponding deferred license revenue (see Note 10) and a reserve on the non-current inventory (see Note 7).

During the year ended December 31, 2023, the Triferic development effort was terminated resulting in an acceleration of the corresponding deferred license revenue (see Note 10) and a reserve on the non-current inventory (see Note 7).

Additionally, Rockwell continues to evaluate the viability of its FPC platform and FPC's potential to treat iron deficiency, iron deficiency anemia, and acute heart failure.

5 unchanged sentences

As of December 31, 2024, Rockwell had approximately $ 21.6 million of cash, cash equivalents and investments available-for-sale, and working capital of $ 22.9 million.

Net cash used in operating activities for the year ended December 31, 2023 was $ 9.4 million.

Management evaluated it's going concern by reviewing the Company's operational plans which include executing on the projected financial information including price increases, acquisition of new customers, projected growth of margins and cost containment activities.

Net cash provided by operating activities for the year ended December 31, 2024 was $ 4.2 million.

Management evaluated its going concern by reviewing the Company's operational plans which include executing on the projected financial information including expected purchases by DaVita (see Note 3 and Note 6), price increases, acquisition of new customers, projected growth of margins and cost containment activities.

Based on the currently available working capital and expectation of the ability of management to execute on the Company's operational plans noted above, 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.

Additionally, the Company's plans include raising capital, if needed, by using the $ 11 million remaining on its ATM facility or other methods or forms of financings, subject to existing limitations.

Additionally, the Company's plans may include raising capital, if needed, by using the $ 21.1 million remaining on its ATM facility or other methods or forms of financings, subject to existing limitations.

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

The Company is subject to certain covenants and cure provisions under its Loan Agreement (as defined below in Note 17) with Innovatus Life Sciences Lending Fund I, LP ("Innovatus"), which, on January 2, 2024, was amended to include, among other things, an interest only period for 30 months, or up to 36 months if certain conditions are met, and to extend the maturity date to January 1, 2029 (See Note 17 for further detail).

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

As of December 31, 2024, the Company is in compliance with all covenants.

Global Economic Conditions - Risks and Uncertainties

The global macroeconomic environment is uncertain, and could be negatively affected by, among other things, increased U.S.

trade tariffs and trade disputes with other countries, instability in the global capital and credit markets, supply chain weaknesses, and instability in the geopolitical environment, including as a result of the Russian invasion of Ukraine, Israel-Hamas conflict and other political tensions, and the occurrence of natural disasters and public health crises.

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

trade policies, including tariffs and other trade restrictions or the threat of such actions, instability in the global capital and credit markets, recent bank failures in the United States, supply chain weaknesses, and instability in the geopolitical environment, including as a result of the Russian invasion of Ukraine, the Middle East conflict and other political tensions, and the occurrence of natural disasters and public health crises.

Such challenges have caused, and may continue to cause, recession fears, rising interest rates, foreign exchange volatility and inflationary pressures.

At this time, the Company is unable to quantify the potential effects of this economic instability on our future operations.

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

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

8 unchanged sentences

All intercompany balances and transactions have been eliminated in consolidation.

Reclassification

Certain prior year amounts have been reclassified to conform to the current year presentation, including the reclassification of lease right-of-use assets into Right of Use Assets - Operating, Net and Right of Use Assets - Financing, Net and lease liabilities into Lease Liabilities - Operating, Current, Lease Liabilities - Financing, Current, Lease Liabilities - Operating, Long-Term, and Lease Liabilities - Financing, Long-Term.

Additionally, amounts from the Changes in Lease Liabilities were reclassified to Payments on Financing Lease Liabilities on the statement of cash flows.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period.

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, impairments of long‑lived assets, and deferred consideration.

Revenue Recognition

7 unchanged sentences

Recognize revenue when the company satisfies a performance obligation

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by Rockwell from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight related to contracts with customers are accounted for as a fulfillment cost and are included in cost of sales when control of the goods transfers to the customer.

11 unchanged sentences

Conversely, when regulatory approval already exists or is probable, revenue is recognized at the point in time that control of the product transfers to the customer.

For the majority of the Company’s international customers, the Company recognizes revenue at the shipping point, which is generally the Company’s plant or warehouse.

For other business, the Company recognizes revenue based on when the customer takes control of the product.

For the majority of the Company’s international customers, the Company recognizes revenue when the customer takes control at the shipping point, which is generally the Company’s plant or warehouse.

For other customers, the Company recognizes revenue based on when the customer takes control of the product upon delivery.

The amount of revenue recognized is based on the purchase order less returns and adjusted for any rebates, discounts, chargebacks or other amounts paid to customers estimated at the time of sale.

6 unchanged sentences

("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 year ended December 31, 2023, the amounts received from Wanbang were accelerated out of deferred license revenue and into revenue upon notice that the development effort was terminated.

The amounts received from Baxter Healthcare Corporation (“Baxter”) were deferred and recognized as revenue at the point in time the estimated product sales under the agreement occurred.

During the year ended December 31, 2023, all remaining deferred revenue relating to the Baxter agreement was recognized as revenue.

During the year ended December 31, 2023, all remaining deferred revenue relating to the distribution and license agreements with Wanbang and Baxters was recognized as revenue.

For additional information related to the Company's deferred license revenue, see Note 10.

Product Purchase Agreements

On September 18, 2023, the Company and its long-time partner, DaVita, Inc.

("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 and a one-time payment of $ 0.4 million to Rockwell on or after December 1, 2023, which was recorded as revenue recognized during the year ended December 31, 2023.

The term of the Amended Agreement will expire on December 31, 2024.

DaVita will have the right, in its sole discretion upon written notice to the Company given no later than September 30, 2024, to further extend the term through December 31, 2025.

In the event of such an extension, product pricing will be increased for the extended term.

In addition, DaVita is required to provide the Company with nine-month purchasing forecasts and a commitment to purchase at least the forecasted amounts.

In the event that DaVita does not meet its forecasts, it is required to pay the Company for the amount forecasted, purchase additional product, or the Company

may terminate the Amended Agreement.

Upon expiration or termination of the Amended Agreement, and upon request by DaVita, the Company has agreed to provide transition services to DaVita during a transition period.

Product Purchase Agreement

On September 18, 2023, Rockwell and DaVita entered into 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.

The term of the Amended Agreement expired 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").

Product pricing was increased for the Extension Term.

However, DaVita subsequently indicated that it will completely transition to another supplier by mid-2025, subject to further discussions between Rockwell and DaVita, which are ongoing and include a potential contract extension and/or future volume commitments by DaVita to Rockwell.

There can be no assurances that these discussions will yield a successful outcome for Rockwell.

Disaggregation of revenue

4 unchanged sentences

Drug Revenues

Product Sales - Point-in-time $ — $ — $ —

License Fee – Over time $ 46 $ — $ 46

2 unchanged sentences

Product Sales – Point-in-time 101,443 92,258 9,185

License Fee – Over time 1,472 1,472 —

Total Concentrate Products 101,443 92,258 9,185

4 unchanged sentences

Drug Revenues

Product Sales - Point-in-time $ 903 $ 561 $ 342

License Fee – Over time $ 2,338 $ — $ 2,338

11 unchanged sentences

There were no other material contract assets recorded on the consolidated balance sheets as of December 31, 2024 and 2023.

The Company does not generally accept returns of its concentrate products and no reserve for returns of concentrate products was established as of December 31, 2023 or 2022.

The contract liabilities primarily relate to upfront fees under distribution and license agreements with Baxter, Wanbang, Sun Pharma, Jeil Pharma, and Drogan Pharma.

The Company does not generally accept returns of its concentrate products and no material reserve for returns of concentrates products was established as of December 31, 2024 or 2023.

The contract liabilities primarily relate to upfront fees under distribution and license agreements with Wanbang, Sun Pharma, Jeil Pharma, and Drogsan Pharma.

Transaction price allocated to remaining performance obligations

For each of the years ended December 31, 2023 and 2022, the Company recognized $ 3.8 million as revenue from amounts classified as contract liabilities (i.e., deferred license revenue) as of December 31, 2022 and 2021, respectively.

For each of the years ended December 31, 2024 and 2023, the Company recognized $ 46,000 and $ 3.8 million as revenue from amounts classified as contract liabilities (i.e., deferred license revenue) as of December 31, 2023 and 2022, respectively.

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 $ 0.0 million and $ 0.5 million as of December 31, 2024 and 2023, respectively.

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.

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.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S.

Actual results could differ from those estimates.

The most significant accounting estimates inherent in the preparation of the financial statements include estimates associated with fair value and classification of warrants, revenue recognition, allowance for credit losses, inventory reserves, accrued expenses, deferred license revenue, stock-based compensation, valuations and impairments of long-lived assets, and accounting for income taxes.

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.

Cash and Cash Equivalents

14 unchanged sentences

The Company determines the appropriate classification of its investments in equity and debt securities at the time of purchase and reevaluates such determination at each balance sheet date.

Marketable equity securities that are bought and held principally for the purpose of selling them in the near term are reported at fair value, with unrealized gains and losses recognized in earnings.

Marketable equity securities that are bought principally for the purpose of selling them in the near term are reported at fair value, with unrealized gains and losses recognized in earnings.

Marketable debt securities classified as available for sale securities are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income (loss) and reported in stockholders’ equity.

All of the Company's investments available-for-sale are subject to periodic impairment review.

The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other than temporary.

The Company may be exposed to credit losses through its available-for-sale debt securities.

Unrealized losses or impairments resulting from the amortized cost basis of any available-for-sale debt security exceeding its fair value are evaluated for identification of credit and non-credit related factors.

Any difference between the fair value of the debt security and the amortized cost basis not attributable to credit related factors are reported in other comprehensive income.

A credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings.

When evaluating the investments for impairment at each reporting period, the Company reviews factors such as the extent of the unrealized loss, current and future economic market conditions and the economic and financial condition of the issuer and any changes thereto.

Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold.

Accounts Receivable

22 unchanged sentences

Intangible assets with indefinite useful lives are measured at their respective fair values as of the acquisition date.

Goodwill was $ 0.9 million as of December 31, 2023 and December 31, 2022.

Goodwill was $ 0.9 million at both December 31, 2024 and 2023.

Definite-lived intangible assets consist of our customer list associated with the Evoqua Asset Acquisition and license fees related to the technology, intellectual property and marketing rights for Triferic covered under certain issued patents.

5 unchanged sentences

The effects of tax positions are generally recognized in the financial statements consistent with amounts reflected in returns filed, or expected to be filed, with taxing authorities.

For tax positions that the Company considers to be uncertain,

current and deferred tax liabilities are recognized, or assets derecognized, when it is probable that an income tax liability has been incurred and the amount of the liability is reasonably estimable, or when it is probable that a tax benefit, such as a tax credit or loss carryforward, will be disallowed by a taxing authority.

For tax positions that the Company considers to be uncertain, current and deferred tax liabilities are recognized, or assets derecognized, when it is probable that an income tax liability has been incurred and the amount of the liability is reasonably estimable, or when it is probable that a tax benefit, such as a tax credit or loss carryforward, will be disallowed by a taxing authority.

The amount of unrecognized tax benefits related to current tax positions is insignificant.

2 unchanged sentences

The Company recognizes research and product development expenses as incurred.

The Company incurred product development and research costs related to the commercial development, patent approval and regulatory approval of new products aggregating approximately $ 1.1 million and $ 3.1 million for the years ended December 31, 2023 and 2022, respectively.

The Company incurred product development and research costs related to the commercial development, patent approval and regulatory approval of new products aggregating approximately $ 19,000 and $ 1.1 million for the years ended December 31, 2024 and 2023, respectively.

Stock-Based Compensation

14 unchanged sentences

The Company accounts for its leases under ASC 842, Leases .

Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheets as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate.

Under this guidance, arrangements meeting the definition of a lease are classified as operating or finance leases and are recorded on the consolidated balance sheets as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate.

Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use assets are amortized over the lease term.

7 unchanged sentences

The Company expenses legal costs associated with loss contingencies as they are incurred.

Restatement of Loss Per Share

Loss per share for the year ended December 31, 2022 was recalculated and restated and is presented on a comparable basis with the year ended December 31, 2023.

In the first quarter of 2023, the Company determined it should have included pre-funded warrants issued in the second quarter of 2022 in the loss per share calculation in accordance with ASC 260-10-45-13, which treats shares of common stock exercisable for little to no consideration as included in the denominator of both the basic and diluted earnings per share calculations.

While the Company has determined the impact of including the pre-funded warrants in the loss per share calculations does not have a material impact on previously issued financial statements, the Company has recalculated and restated amounts presented on a comparative and consistent basis with current period results.

The table below summarizes previously reported and restated amounts on a comparative basis.

Year Ended December 31,

As Previously Reported:

Net Loss Per Share Attributable to Common Stockholders - Basic and Diluted $ ( 1.89 )

Weighted Average Number of Shares of Common Stock Outstanding - Basic and Diluted 9,866,844

Net Loss Per Share Attributable to Common Stockholders - Basic and Diluted $ ( 1.31 )

Weighted Average Number of Shares of Common Stock Outstanding - Basic and Diluted 14,304,512

Loss Per Share

1 unchanged sentence

Basic EPS excludes dilution.

Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issued common stock were exercised or converted into common stock or resulted in the issuance of common stock that are then shared in the earnings of the entity.

Basic net loss per share of common stock excludes dilution and is computed by dividing the net loss, less accretion of the Series X Preferred Stock, by the weighted average number of shares outstanding during the period.

Diluted net loss per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that are then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive.

The Company has only incurred losses, therefore, basic and diluted net loss per share is the same.

Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that are then shared in the earnings of the entity.

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.

Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, using the more dilutive of the two-class method and the if-converted method in the period of earnings.

The two-class method is an earnings allocation method that determines income (loss) per share (when there are earnings) for common stock and participating securities.

The if-converted method assumes all convertible securities are converted into common stock.

Diluted EPS excludes all dilutive potential shares of common stock if their effect is anti-dilutive.

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

These securities were excluded from the computations of diluted net loss per share for the years ended December 31, 2023 and 2022, as the effect would be to reduce the net loss per share.

The following table includes the potential shares of common stock, presented based on amounts outstanding at each period end, that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

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

As of December 31,

Warrants to Purchase Common Stock 3,984,484 3,793,388

Convertible Preferred Stock 1,363,636 1,363,636

Options to Purchase Common Stock 1,886,247 1,328,621

Convertible Preferred Stock 1,391,045 1,363,636

Unvested Restricted Stock Units 584,309 258,885

1 unchanged sentence

Total 7,846,976 6,745,421

Included within the weighted average shares of common stock outstanding for the year ended December 31, 2022 are 6,300,000 shares of common stock issuable upon the exercise of Pre-Funded Warrants (See Note 12), as the warrants were exercisable at any time for nominal consideration and, as such, the shares were considered outstanding for the purpose of calculating basic and diluted net loss per share attributable to common stockholders.

There were no unexercised Pre-Funded Warrants as of December 31, 2023.

The following table presents the calculation of basic and diluted EPS:

8 unchanged sentences

Accumulated other comprehensive income refers to revenues, expenses, gains and losses that are included in comprehensive income, but excluded from net income as these amounts are recorded directly as an adjustment to stockholders’ equity.

Accumulated other comprehensive income consists of unrealized gains and losses on available‑for‑sale investment debt securities and foreign currency translation adjustments.

Accumulated other comprehensive income consists of unrealized gains and losses on available‑for‑sale investment in debt securities and foreign currency translation adjustments.

Adoption of Recent Accounting Pronouncements and New Accounting Pronouncements

The Company continually assesses any new accounting pronouncements to determine their applicability.

When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) , which introduced an impairment model that is based on expected credit losses, rather than incurred losses, to estimate credit losses on certain types of financial instruments (e.g., loan commitments).

The expected credit losses should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments, over the contractual term.

Financial instruments with similar risk characteristics may be grouped together when estimating expected credit losses.

In addition, ASC 326 requires expected credit related losses for trade accounts receivable, as well as available-for-sale debt securities, which are to be recorded through an allowance for credit losses, while non-credit related losses will continue to be recognized through other comprehensive income.

The Company adopted the new guidance, as of January 1, 2023, and it did not have a material impact on the consolidated financial statements.

When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study

to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

The amendments in this ASU are effective

for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is in the process of determining the effect this ASU will have on the consolidated financial statements.

The Company adopted ASU 2023-07 on January 1, 2024, and the information presented in Note 6 reflects the enhanced disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which updates income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

1 unchanged sentence

The amendments in this ASU are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The Company is in the process of determining the effect this ASU will have on the consolidated financial statements.

In November 2024, the FASB issued ASC 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expense s, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations.

This new standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements.

The Company is currently assessing the impact this ASU will have on the consolidated financial statements and footnote disclosures.

Asset Acquisition

1 unchanged sentence

At the Closing, the Company purchased customer relationships, equipment and inventory from Evoqua, which were related to manufacturing and selling of hemodialysis concentrates products, all of which are manufactured under a contract manufacturing agreement with a third-party organization.

Pursuant to the Purchase Agreement, total consideration was $ 17.4 million, comprising a cash payment at Closing of $ 12.4 million (inclusive of transaction costs) and two $ 2.5 million deferred payments, the first to be paid on the one-year anniversary of the Closing, which is included as a current liability on the Company's consolidated balance sheet, and the second to be paid on the second anniversary of the Closing (collectively, the "deferred consideration").

On July 12, 2024, the Company and Evoqua executed an amendment to the Purchase Agreement (the "First Amendment"), which stipulated that the first deferred payment would be partially offset by $ 0.3 million to reimburse the Company for certain expenses incurred following the close of the Evoqua Asset Acquisition and split the first deferred payment into four quarterly installments to be paid through April 2025.

The First Amendment also split the second deferred payment into four quarterly installments to be paid from July 2025 through April 2026.

During the year ended December 31, 2024, the Company paid the first two installments of the first deferred payment totaling $ 1.3 million.

The remaining installments due within the next twelve months are included as Deferred Consideration - Current on the Company's consolidated balance sheets.

The transaction was accounted for as an asset acquisition, as the acquired assets did not meet the definition of a business as defined by ASC 805, Business Combinations .

16 unchanged sentences

During the year ended December 31, 2024, the Company recorded amortization of its customer relationship intangible asset of $ 0.6 million, resulting in a net intangible asset of $ 10.2 million as of December 31, 2024.

During the year ended December 31, 2023, 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 December 31, 2024 is as follows (table in thousands):

Year ended December 31:

Year ending December 31:

Thereafter 7,447

1 unchanged sentence

Investments - Available-for-Sale

Investments available-for-sale consisted of the following as of December 31, 2023 and 2022 (tables in thousands):

Investments available-for-sale consisted of the following as of December 31, 2024 and 2023 (table in thousands):

December 31, 2024

Amortized Cost Unrealized Gain Unrealized Loss Accrued Interest Income Fair Value

Amortized Cost Unrealized Gain Unrealized Loss Accrued Interest Fair Value

Available-for-Sale Securities

Bonds $ 1,948 $ 4 $ — $ — $ 1,952

Debt Securities $ 5,880 $ 60 $ — $ — $ 5,940

December 31, 2023

Amortized Cost Unrealized Gain Unrealized Loss Accrued Interest Income Fair Value

Amortized Cost Unrealized Gain Unrealized Loss Accrued Interest Fair Value

Available-for-Sale Securities

Bonds $ 11,315 $ 75 $ — $ — $ 11,390

Debt Securities $ 1,948 $ 4 $ — $ — $ 1,952

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 December 31, 2023 and 2022, our available-for-sale securities were due in one year or less.

Significant Market Segments and Customers

During the year ended December 31, 2024, the Company sold the investments outstanding as of December 31, 2023 for a realized gain of $ 0.1 million, which is included in realized gain on available-for-sale investments on the consolidated statements of operations.

As of December 31, 2024, the Company's remaining available-for-sale securities are U.S.

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

Segment Reporting, Significant Market Segments and Customers

Operating segments are defined as components of an entity about which discrete financial information is evaluated regularly by the Company's Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and assess performance.

Rockwell operates in one market segment, the hemodialysis market, which involves the manufacture, sale and distribution of hemodialysis products to hemodialysis clinics, including pharmaceutical, dialysis concentrates, dialysis kits and other ancillary products used in the dialysis process.

Rockwell's customer mix is diverse, with most customer sales concentrations under 10%, however, two customers, DaVita and Baxter, accounted for approximately 47 % and nil , respectively, of Rockwell's total net product sales in 2023 and 46 % and 29 %, respectively, of its total net product sales in 2022.

Rockwell's accounts receivable from DaVita and Baxter were $ 2.1 million and nil , respectively, as of December 31, 2023 and $ 1.9 million and $ 2.3 million, respectively, as of December 31, 2022.

For additional information regarding the Company's contracts with DaVita and Baxter, see Notes 3 and 10, respectively.

Accordingly, the Company has one reportable segment.

The Company has a single management team that reports to the Chief Executive Officer, the Company's CODM, who comprehensively manages the entire Company.

The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance for the segment and decides how to allocate resources based on net loss that also is reported on the statements of operations and comprehensive loss as net loss.

The CODM uses net loss to monitor budget and forecast versus actual results in assessing segment performance, as well as cash forecast models, in order to evaluate operating results and performance in deciding how to allocate resources.

The measure of segment assets is reported on the balance sheets as total assets.

The Company’s significant segment expenses for its one segment for the year ended December 31, 2024, and 2023 consisted of the following (table in thousands):

Years Ended December 31,

Net Sales $ 101,489 $ 83,612

Cost of Sales 84,005 74,908

Gross Profit 17,484 8,704

Employee Compensation 9,452 8,067

Administrative Costs 7,424 7,307

Operating Income (Loss) 608 ( 6,670 )

Other Expense:

Realized Gain on Investments 74 321

Interest Expense ( 1,254 ) ( 2,301 )

Interest Income 92 211

Total Other Expense, net ( 1,088 ) ( 1,769 )

Net Loss $ ( 480 ) $ ( 8,439 )

Significant Market Segments and Customers

Rockwell's customer mix is diverse, with most customer sales concentrations under 10%, however, one customer, DaVita, accounted for approximately 45 % of Rockwell's total net product sales in 2024 and 47 % of its total net product sales in 2023.

Rockwell's accounts receivable from DaVita were approximately 20 % and 19 % of the total net consolidated accounts receivable balance as of December 31, 2024 and 2023, respectively.

For additional information regarding the Company's contracts with DaVita, see Notes 3 and 10.

DaVita is important to Rockwell's business, financial condition and results of operations.

2 unchanged sentences

The majority of Rockwell's international sales in each of the last two years were sales to domestic distributors that were resold to end users outside the United States.

Rockwell's sales to foreign customers and distributors accounted for approximately 9 % of its total sales in each of 2023 and 2022.

Components of inventory, net of reserves as of December 31, 2023 and 2022 are as follows (table in thousands):

Rockwell's sales to foreign customers and distributors accounted for approximately 9 % of its total sales in 2024 and 2023.

Components of inventory, net of reserves as of December 31, 2024 and 2023 were as follows (table in thousands):

2024 December 31,

6 unchanged sentences

Total Inventory $ 5,956 $ 6,049

Represents inventory related to Triferic raw materials.

This Triferic inventory is expected to be utilized for the Company's international partnerships.

In September 2022, the Company discontinued its New Drug Applications ("NDAs") for Triferic (dialysate) and Triferic AVNU in the United States.

In 2023, the Company reserved $ 1.1 million of long-term inventory as a result of the termination of the Wanbang development effort.

As of December 31, 2023 and 2022, Rockwell had total Concentrate inventory aggregating $ 5.9 million and $ 5.8 million, respectively, against which Rockwell had reserved $ 25,000 and $ 25,000 , respectively.

Represents inventory related to Triferic raw materials, which is expected to be utilized for the Company's international

partnerships, net of a reserve of $ 1.1 million related to the termination of the development of Triferic in Wanbang in

August 2023 as a result of the failure to demonstrate efficacy when compared with a placebo in its phase III clinical

As of December 31, 2024 and 2023, Rockwell had total current concentrate inventory aggregating $ 6.2 million and $ 5.9 million, respectively, against which Rockwell had reserved $ 0.5 million and an immaterial amount, respectively.

Property and Equipment

1 unchanged sentence

2024 December 31,

Leasehold Improvements $ 1,423 $ 1,256

Machinery and Equipment $ 11,973 $ 11,131

Information Technology & Office Equipment 1,845 1,845

Leasehold Improvements 1,562 1,423

Laboratory Equipment 807 807

Total Property and Equipment 16,187 15,206

Accumulated Depreciation and Amortization ( 10,402 ) ( 8,804 )

Net Property and Equipment $ 6,402 $ 2,194

Property and Equipment, net $ 5,785 $ 6,402

Depreciation and amortization expense for the years ended December 31, 2024 and 2023 was $ 1.6 million and $ 1.2 million, respectively.

6 unchanged sentences

Accrued Workers Compensation 176 254

Accrued Research & Development Expense — 43

Other Accrued Liabilities 1,336 1,755

4 unchanged sentences

The upfront fee was recorded as deferred license revenue and was 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 distribution agreement.

On November 9, 2022, Rockwell paid Baxter a fee, which was reflected as a reduction to revenue on the consolidated statements of operations, and was payable in two equal installments on January 1, 2023 and April 1, 2023, to reacquire its distribution rights to its hemodialysis concentrates products from Baxter and terminated the distribution agreement.

On November 9, 2022, Rockwell incurred a fee to Baxter, which was reflected as a reduction to revenue on the consolidated statements of operations, and was payable in two equal installments on January 1, 2023 and April 1, 2023, to reacquire its distribution rights to its hemodialysis concentrates products from Baxter and terminated the distribution agreement.

Exclusivity and other provisions associated with the distribution agreement terminated November 9, 2022 and the remaining operational elements of the agreement terminated December 31, 2022.

1 unchanged sentence

Following the reacquisition of these rights, Rockwell is now unrestricted in its ability to sell its hemodialysis concentrates products to dialysis clinics throughout the United States and around the world.

The Company recognized $ 2.5 million of revenue associated with the upfront fee during the year ended December 31, 2022, and recognized the remaining revenue of $ 1.5 million during the year ended December 31, 2023.

The remaining agreements with Sun Pharam, Jeil Pharmaceutical, and Drogan Pharmaceuticals comprise the current and long-term portions of deferred license revenue on the consolidated balance sheet as of December 31, 2023.

The Company recognized the remaining deferred revenue of $ 1.5 million during the year ended December 31, 2023.

The remaining agreements with Sun Pharma, Jeil Pharmaceutical, and Drogsan Pharmaceuticals comprise the current and long-term portions of deferred license revenue on the consolidated balance sheets as of December 31, 2024 and 2023.

Insurance Financing Note Payable

On July 3, 2022, the Company entered into a short-term note payable for $ 2.0 million, bearing interest at 5.40 % per annum to finance various insurance policies.

Principal and interest payments related to this note began on July 3, 2022 and are paid on a straight-line amortization over nine months , and the final payment was due on March 3, 2023.

As of December 31, 2022, the Company's insurance note payable balance was $ 0.5 million and was paid fully in 2023.

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 will be paid in 10 equal monthly payments of $ 0.1 million, with the final payment due on April 3, 2025.

As of December 31, 2024, the balance of the insurance financing note payable was $ 0.3 million.

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

1 unchanged sentence

As of December 31, 2023, the Company's insurance note payable balance was $ 0.2 million.

During the year ended December 31, 2024, the Company's insurance financing note payable balance was paid in full.

Stockholders’ Equity

Reverse Stock Split

On May 9, 2022, the stockholders of the Company authorized the Board of Directors to effect a reverse stock split of all outstanding shares of common stock.

The Board of Directors subsequently approved the implementation of a reverse stock split as a ratio of one-for-eleven shares, which became effective on May 13, 2022.

The Company’s outstanding stock options were also adjusted to reflect the one-for-eleven reverse stock split of the Company’s common stock.

Outstanding stock options were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased.

The reverse stock split resulted in an adjustment to the Series X convertible preferred stock conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion.

All share and per share data in these consolidated financial statements and related notes hereto have been retroactively adjusted to account for the effect of the reverse stock split.

Preferred Stock

On April 6, 2022, the Company and DaVita entered into the Securities Purchase Agreement ("SPA"), which provided for the issuance by the Company of up to $ 15 million of preferred stock to DaVita.

On April 6, 2022, the Company issued 7,500 shares of Series X Preferred Stock for gross proceeds of $ 7.5 million.

On June 2, 2022, the Company met the conditions for the Second Tranche through a Registered Direct and Private Placement Offering by raising $ 15 million in additional capital.

As a result, on June 16, 2022, the Company issued an additional 7,500 shares of the Series X Preferred Stock to DaVita for gross proceeds of $ 7.5 million (by virtue of this transaction, DaVita rises to the level of related party).

On April 6, 2022, the Company and DaVita entered into the Securities Purchase Agreement (the "SPA"), which provided for the issuance by the Company of up to $ 15 million of preferred stock to DaVita, which was issued to DaVita during 2022 and, by virtue, made DaVita a related party.

The Series X Preferred Stock was issued for a price of $ 1,000 per share (the "Face Amount"), subject to accretion at a rate of 1 % per annum, compounded annually.

1 unchanged sentence

As of December 31, 2024, the Series X Preferred Stock accreted a total of $ 0.3 million.

The Series X Convertible Preferred Stock is convertible to common stock at 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).

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).

As a result, each share of Series X Preferred Stock will initially convert into approximately 91 shares of common stock.

DaVita’s right to convert to common stock is subject to a beneficial ownership limitation, which is initially set at 9.9 % of the outstanding common stock, which limitation may be reset (not to exceed 19.9 %) at DaVita’s option and upon providing prior written notice to the Company.

In addition, any debt financing is limited by the terms of our Securities Purchase Agreement with DaVita.

Specifically, until DaVita owns less than 50 % of its investment, 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.

In addition, any debt financing is limited by the terms of our SPA with DaVita.

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 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 line.

3 unchanged sentences

As of December 31, 2024 and 2023, there were 170,000,000 shares of common stock, $ 0.0001 par value per share, authorized and 34,056,920 and 29,130,607 shares issued and outstanding, respectively.

As of December 31, 2023 and 2022, 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, pre-funded warrants and all other warrants (collectively, "common stock equivalents"):

As of December 31, 2024 and 2023, 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 all other warrants (collectively, "common stock equivalents"):

As of December 31,

1 unchanged sentence

Common Stock 34,056,920 29,130,607

Common stock issuable upon exercise of pre-funded warrants — 6,300,000

Common stock and pre-funded stock warrants 29,130,607 18,463,673

Warrants to Purchase Common Stock 3,793,388 10,196,268

Convertible Preferred Stock 1,363,636 1,363,636

Options to Purchase Common Stock 1,886,247 1,328,621

Unvested Restricted Stock Units 258,885 125,000

Unvested Restricted Stock Awards 891 891

Unvested Restricted Stock Units 584,309 258,885

Convertible Preferred Stock 1,391,045 1,363,636

Warrants to Purchase Common Stock 3,984,484 3,793,388

Total 41,903,896 35,876,028

Controlled Equity Offering

On April 8, 2022, the Company entered into the Sales Agreement (the "ATM facility") with Cantor Fitzgerald & Co.

On April 8, 2022, the Company entered into the Sales Agreement with Cantor Fitzgerald & Co.

as Agent, pursuant to which the Company may offer and sell from time to time up to $ 12.2 million of shares of Company’s common stock through the Agent.

In May 2022, the Company sold 7,500 shares of its common stock pursuant to the Sales Agreement for gross proceeds of $ 15,135 , at a weighted average selling price of approximately $ 2.02 per share.

The Company paid $ 378 in commissions and offering fees related to the sale of shares of common stock.

During the quarter ended December 31, 2023, 640,944 shares were sold pursuant to the Sales Agreement for net proceeds of $ 1.1 million.

This agreement expired on October 8, 2024 and, upon the effectiveness of the new registration statement on October 21, 2024, was deemed terminated.

On November 13, 2024, in connection with the new registration statement, the Company filed a prospectus supplement covering the offer and sale of an aggregate offering price of up to $ 25.0 million of shares of the Company's common stock through the Agent (as amended, the "ATM facility").

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

During the year ended December 31, 2024, 4,718,923 shares were sold pursuant to the Sales Agreement for net proceeds of $ 10.2 million.

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

Registered Direct Offering

On May 30, 2022, the Company entered into the Registered Direct Purchase Agreement with the Purchaser, pursuant to which the Company issued and sold, in a registered direct offering (the “Offering”), 844,613 shares of its common stock at price of $ 1.39 per share, and pre-funded warrants to purchase up to an aggregate of 7,788,480 shares of common stock (the “Pre-Funded Warrants” and the shares of common stock underlying the Pre-Funded Warrants, the “Warrant Shares”).

1 unchanged sentence

The Registered Direct Purchase Agreement contains customary representations and warranties and agreements of the Company and the Purchaser and customary indemnification rights and obligations of the parties.

During the year ended December 31, 2023, all of the remaining 6,300,000 Pre-Funded Warrants to purchase common stock were exercised at an exercise price of $ 0.0001 per share, which resulted in gross proceeds to the Company of $ 630 .

During the year ended December 31, 2023, 6,300,000 Pre-Funded Warrants to purchase common stock were exercised at an exercise price of $ 0.0001 per share, which resulted in gross proceeds to the Company of $ 630 .

Private Placement

Also on May 30, 2022, concurrent with the Offering, the Company entered into the private investment in public equity "PIPE" Purchase Agreement relating to the offering and sale (the “Private Placement”) of warrants to purchase up to a total of 9,900,990 shares of common stock (the "PIPE Warrants") and pre-funded warrants to purchase up to a total of 1,267,897 shares of common stock (the “Pre-Funded PIPE Warrants”).

Each warrant was sold at a price of $ 0.125 per underlying warrant share and was exercisable at an exercise price of $ 1.39 per share.

The purchase price of each Pre-Funded PIPE Warrant was equal to the price at which a share of common stock was sold to the public in the Offering, minus $ 0.0001 , and the exercise price of each Pre-Funded PIPE Warrant was $ 0.0001 per share.

As of December 31, 2022, all Pre-Funded PIPE Warrants were exercised.

The Offering and the Private Placement closed on June 2, 2022.

The net proceeds to the Company from the Offering and the Private Placement were approximately $ 14.9 million, after deducting fees and expenses.

Subject to certain ownership limitations, the PIPE Warrants are exercisable upon issuance.

The Company has accounted for the common stock related to the Offering and Private Placement as equity on the accompanying consolidated balance sheet as of December 31, 2022.

The amount allocated to common stock was $ 2.0 million.

This allocation is equal to the total proceeds of $ 15.0 million less the amount allocated to Warrants of $ 12.9 million and is also net of the direct and incremental costs associated with the Offering and Private Placement of $ 0.1 million.

The Black-Scholes pricing model was used to calculate the value of Warrants relating to the Offering and Private Placement.

As of December 31, 2023, no Pre-Funded Warrants remained outstanding.

On July 10, 2023, the Company entered into a letter agreement (the “Letter Agreement”) with Armistice Capital Master Fund Ltd.

2 unchanged sentences

In addition, Armistice would receive a “reload” warrant (the “Reload Warrant”) to purchase 3,750,000 shares of Common Stock with an exercise price of $ 5.13 per share, the closing price as reported by the Nasdaq Capital Market on July 7, 2023.

The terms of the Reload Warrant and Letter Agreement provide for customary resale registration rights.

The Reload Warrant may be exercised at all times prior to the 54 months month anniversary of its issuance date.

The Reload Warrant may be exercised at all times prior to the 54 months' anniversary of its issuance date.

The Prior Warrant and the Reload Warrant both provide that a holder (together with its affiliates) may not exercise any portion of the Prior Warrant or the Reload Warrant to the extent that the holder would own more than 9.99 % of the Company’s outstanding Common Stock immediately after exercise, as such percentage ownership is determined in accordance with the terms of such warrant.

To the extent the exercise of the Prior Warrant would result in Armistice holding more than 9.99 % of the Company’s outstanding Common Stock, such shares of Common Stock in excess of 9.99 % will be held in abeyance.

The Letter Agreement amended the Prior Warrant to extend the expiration date thereof to one year following the original expiration date set forth therein.

Armistice exercised the Prior Warrant on July 10, 2023, and the Company received gross proceeds of approximately $ 13.8 million.

Third Amendment

As discussed in Note 17, on January 2, 2024, the Company entered into the Third Amendment of its Loan and Security Agreement with Innovatus.

In connection with the execution of the Third Amendment, the Company issued to Innovatus a warrant to purchase 191,096 shares of the Company’s common stock with an exercise price of $ 1.83 per share.

The warrant may be exercised on a cashless basis and is immediately exercisable through January 2, 2029.

The number of shares of common stock for which the warrant is exercisable and the exercise price are subject to certain proportional adjustments as set forth in the Third Amendment.

The warrant is equity-classified with a fair value of approximately $ 0.2 million at issuance, which was treated as a debt issuance cost and will be amortized through interest expense over the remaining contractual term of the Term Loan.

The fair value of the warrant at the issuance date was calculated using the Black-Scholes pricing model and include the following assumptions:

Expected Stock Price Volatility 85.00 %

Risk-free Interest Rate 3.93 %

Term (years) 5.0

Dividend Yield 0 %

Stock-Based Compensation

12 unchanged sentences

Stock Option Awards 619 557

Performance based awards:

Restricted stock awards — ( 390 )

Total $ 1,292 $ 932

10 unchanged sentences

Unvested at January 1, 2024

258,885 $ 1.83

Granted 541,656 $ 1.77

Forfeited ( 54,180 ) $ 1.37

Vested ( 216,232 ) $ 2.15

Unvested at December 31, 2024

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 - 3 years.

As of December 31, 2023, the unrecognized stock-based compensation expense was $ 0.2 million which is expected to be recognized over the next 14 months.

584,309 $ 1.72

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

The vesting periods range from 1 to 3 years.

As of December 31, 2024, the unrecognized stock-based compensation expense was $ 0.5 million which is expected to be recognized over the next 1.2 years.

Service Based Stock Option Awards

14 unchanged sentences

Outstanding at January 1, 2024

1,328,621 $ 5.22

Granted 584,410 $ 1.46

Expired ( 146,230 ) $ 22.76

Forfeited ( 16,052 ) $ 1.84

Exercised ( 6,042 ) $ 1.49

Expired ( 4,690 ) $ 50.52

Outstanding at December 31, 2024

1,886,247 $ 3.98 8.0 $ 960

Exercisable at December 31, 2024

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.

695,749 $ 7.78 7.2 $ 286

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.

The weighted average grant date fair value for service based stock option awards during the years ended December 31, 2024 and 2023 was $ 1.03 and $ 1.09 , respectively.

2 unchanged sentences

Product License Agreements

The Company is a party to a Licensing Agreement between the Company and Charak, LLC (“Charak”) dated January 7, 2002 (the “2002 Agreement”) that grants the Company exclusive worldwide rights to certain patents and information related to our Triferic product.

The Company is a party to a Licensing Agreement between the Company and Charak, LLC (“Charak”) dated January 7, 2002 (the “2002 Agreement”), that grants the Company exclusive worldwide rights to certain patents and information related to its Triferic product.

On October 7, 2018, the Company entered into a Master Services and IP Agreement (the “Charak MSA”) with Charak and Dr.

Ajay Gupta, a former Officer of the Company.

Pursuant to the MSA, the parties entered into three additional agreements described below related to the license of certain soluble ferric pyrophosphate (“SFP”) intellectual

property owned by Charak, as well as the Employment Agreement (defined below).

As of December 31, 2023 and 2022, the Company has accrued $ 85,400 and $ 87,900 , respectively, relating to certain IP reimbursement expenses and certain sublicense royalty fees as an accrued liability on the consolidated balance sheets.

Pursuant to the MSA, the parties entered into three additional agreements described below related to the license of certain soluble ferric pyrophosphate (“SFP”) intellectual property owned by Charak, as well as an employment agreement.

As of December 31, 2023 the Company had accrued $ 0.1 million relating to certain IP reimbursement expenses and certain sublicense royalty fees, which was included within accrued liabilities on the consolidated balance sheets.

During the year ended December 31, 2024, the Company evaluated the accrual and determined that the estimated liability was no longer required and, as a result, the accrual was written off as of December 31, 2024.

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 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 is required to pay Charak a percentage of any sublicense income during the term of the agreement, which cannot 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 be no 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.

Additionally, the Company is required to pay Charak a percentage of any sublicense income during the term of the agreement, which cannot 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 can be no 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.

Also pursuant to the Charak MSA, the Company and Charak entered into a Commercialization and Technology License Agreement IV Triferic, dated as of October 7, 2018 (the “IV Agreement”), under which Charak granted the Company an exclusive, sub-licensable, royalty-bearing license to SFP for the purpose of commercializing certain intravenous-delivered products incorporating SFP for the treatment of iron disorders worldwide for a term that expires on the later of February 1, 2034 or upon the expiration or termination of a valid claim of a licensed patent.

6 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 yet considered probable, and no milestone payments have been accrued at December 31, 2023.

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

Commitments and Contingencies

1 unchanged sentence

In its evaluation of risk, the Company evaluates options and alternatives to mitigating such risks.

For certain insurable risks, Rockwell may acquire insurance policies to protect against potential losses or to partially insure against certain risks.

For the Company's subsidiary, Rockwell Transportation, Inc., Rockwell maintains a partially self-insured workers' compensation policy.

Under the policy, its self‑insurance retention is $ 350,000 per occurrence and $ 618,000 in aggregate coverage for the policy year ending June 1, 2024.

The total amount at December 31, 2023 by which retention limits exceed the claims paid and accrued is approximately $ 535,000 for the policy year ending July 1, 2023.

For certain insurable risks, Rockwell acquires insurance policies to protect against potential losses or to partially insure against certain risks.

For the Company's subsidiary, Rockwell Transportation, Inc., Rockwell previously maintained a partially self-insured workers' compensation policy.

Under the policy, its self‑insurance retention was $ 350,000 per occurrence and $ 618,000 in aggregate coverage for the policy year ending June 1, 2024.

There were no claims paid or accrued as of December 31, 2024 for the policy year ended June 1, 2024.

Estimated loss and additional future claims of approximately $ 176,000 have been reserved and accrued for the year ended December 31, 2024.

6 unchanged sentences

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 seven years .

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.

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

As a result of the modification, the operating lease right of use asset and lease liabilities increased by $ 1.5 million.

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.

In addition, Rockwell occupies 4,100 square feet of office space in Hackensack, New Jersey under a lease expiring on October 31, 2024.

This lease was subleased on December 15, 2021 with an expiration date of October 31, 2024.

In addition, Rockwell occupied 4,100 square feet of office space in Hackensack, New Jersey.

This lease was subleased on December 15, 2021 and expired on October 31, 2024.

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

14 unchanged sentences

Financing Cash Flows from Finance Leases $ 558 $ 522

Right of use assets obtained in exchange for operating lease liabilities $ — $ 768

Weighted-average Remaining Lease Term – Operating Leases 2.4 2.3

8 unchanged sentences

Year Ended December 31, 2028 57 —

Year Ended December 31, 2028 2 —

Total 3,503 1,653

1 unchanged sentence

Operating and Finance Lease Liabilities $ 3,265 $ 1,530

$ 2,814 $ 2,088

Loan and Security Agreement

On March 16, 2020, Rockwell and Rockwell Transportation, Inc., as Borrowers, entered into a Loan and Security Agreement (the "Loan Agreement") with Innovatus Life Sciences Lending Fund I, LP ("Innovatus"), as collateral agent and the lenders party thereto, pursuant to which Innovatus, as a lender, agreed to make certain term loans to the Company in the aggregate principal amount of up to $ 35.0 million (the "Term Loans").

On March 16, 2020, the Company and Rockwell Transportation, Inc., as Borrowers, entered into a Loan and Security Agreement (the "Loan Agreement") with Innovatus, as collateral agent and the lenders party thereto, pursuant to which Innovatus, as a lender, agreed to make certain term loans to the Company in the aggregate principal amount of up to $ 35.0 million (the "Term Loans").

Funding of the first $ 22.5 million tranche was completed on March 16, 2020.

4 unchanged sentences

In connection with each funding of the Term Loans, the Company was required to issue to Innovatus a warrant (the “Warrants”) to purchase a number of shares of the Company’s common stock equal to 3.5 % of the principal amount of the relevant Term Loan funded divided by the exercise price.

In connection with the first tranche of the Term Loans, the Company issued a Warrant to Innovatus, exercisable for, after considering the impact of the reverse stock split as further described in Note 12, an aggregate of 43,388 shares of the Company’s common stock at an exercise price of $ 18.15 per share.

In connection with the first tranche of the Term Loans, the Company issued a Warrant to Innovatus, exercisable for an aggregate of 43,388 shares of the Company’s common stock at an exercise price of $ 18.15 per share.

The Warrant may be exercised on a cashless basis and is immediately exercisable through the seventh anniversary of the applicable funding date.

The number of shares of common stock for which the Warrant is exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in such Warrant.

The number of shares of common stock for which the Warrant is exercisable and the

associated exercise price are subject to certain proportional adjustments as set forth in such Warrant.

The Company evaluated the warrant under ASC 470, Debt , and recognized an additional debt discount of approximately $ 0.5 million based on the relative fair value of the base instruments and warrants.

The Company calculated the fair value of the warrant using the Black-Scholes model.

The Term Loan was scheduled to mature on March 16, 2025, and bear interest at the greater of (i) Prime Rate (as defined in the Loan Agreement) and (ii) 4.75 %, plus 4.00 % with an initial interest rate of 8.75 % per annum and an effective interest rate of 12.50 % as of December 31, 2023.

The Term Loan was scheduled to mature on March 16, 2025, and bore interest at the greater of (i) Prime Rate (as defined in the Loan Agreement) and (ii) 4.75 %, plus 4.00 % with an initial interest rate of 8.75 % per annum.

The Company had 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 the year ended December 31, 2023, interest expense amounted to $ 1.2 million.

On January 2, 2024, the Company entered into the Third Amendment to and Restatement of the Loan and Security Agreement (the "Third Amendment") with Innovatus, dated January 1, 2024.

The Third Amendment provides for the continuation of term loans initially borrowed under the Loan Agreement amounting to $ 8.0 million as of January 1, 2024.

The Company will make interest-only payments on the Term Loans for 36 months as certain conditions in the Third Amendment were met.

The Company will make equal monthly payments of principal, together with applicable interest, in arrears, starting on February 1, 2027.

The Term Loans will mature on January 1, 2029, unless earlier repaid.

Effective on January 1, 2024, the Term Loans bore interest equal to the sum of (i) the greater of (a) Prime Rate (as defined in the Third Amendment) and (b) 7.50 % plus (ii) 3.50 %.

At the Company's option, 2.00 % of the interest due on any applicable interest payment date during the interest-only period may be paid in-kind by adding such amount to the then outstanding principal balance of the Term Loans.

The Term Loans may be voluntarily prepaid in full (but not partially) at any time, upon at least seven business days’ prior notice.

In connection with any voluntary prepayment or satisfaction of the Term Loans prior to the maturity date (including any acceleration), the Company will pay all accrued and unpaid interest and all other amounts due in connection with the Term Loans, together with:

(x) a prepayment fee (the “Prepayment Fee”) equal to:

(i) 6.0 % of the principal amount of the Term Loans prepaid if the payment is made before January 1, 2025, (ii) 2.0 % of the principal amount of the Term Loans prepaid if the payment is made after January 1, 2025 but on or before January 1, 2026, (iii) 1.0 % of the principal amount of the Term Loans prepaid if the payment is made after January 1, 2026 but on or before January 1, 2027, 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.

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.

The Third Amendment Final Fee shall be due and payable at maturity if it has not previously been paid in full in connection with a prepayment of the Term Loans.

The Third Amendment was treated as a modification for accounting purposes.

The Third Amendment contains various financial covenants and customary representations and warranties and affirmative and negative covenants, subject to exceptions as described in the Third Amendment.

The Company's ability to comply with the covenants under the Third Amendment may be adversely affected by events beyond its control.

If the Company is unable to comply with the covenants under the Third Amendment, it would pursue all available cure options in order to regain compliance.

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 December 31, 2024, 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.

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.

The warrant is equity-classified with a fair value of $ 0.2 million at issuance, which was treated as a debt issuance cost and will be amortized through interest expense over the remaining contractual term of the Term Loan.

For additional information, see Note 12.

The effective interest rate is 11.0 % as of December 31, 2024.

For the years ended December 31, 2024 and 2023, interest expense amounted to $ 1.0 million and $ 1.2 million, respectively.

As of December 31, 2024, the outstanding balance of the Term Loan was $ 8.5 million, net of unamortized issuance costs and discount of $ 0.5 million and unrecognized premium accretion of $ 0.2 million, and including $ 0.1 million related to a fee resulting from the Third Amendment, 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.

There can be no assurances that the Company can maintain compliance with the covenants under the Loan Agreement, which may result in an event of default.

The Company's ability to comply with these covenants may be adversely affected by events beyond its control.

For example, the Loan Agreement contains certain financial covenants relating to sales and, as a result of geopolitical and other factors, the Company may not be able to satisfy such covenants in the future.

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.

The Company previously failed to satisfy a revenue covenant for the period ended December 31, 2020 and then subsequently agreed to an appropriate remedy during the applicable cure period.

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.

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

The financial statements for December 31, 2023 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.

In September 2021, the Company entered into an amendment to the Loan Agreement in which the Company, in exchange for Innovatus lowering the sales covenants, agreed to (i) prepay an aggregate principal amount of $ 7.5 million in ten

installments commencing on December 1, 2021;

(ii) 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) 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.

On November 10, 2022, the Company entered into a Second Amendment to the Loan and Security Agreement (the “Second Amendment”) dated as of November 14, 2022 with Innovatus.

Pursuant to the Second Amendment, the Company (i) prepaid an additional aggregate principal amount of $ 5.0 million in Term Loans in one installment on November 14, 2022;

and (ii) paid interest only payments until September 2023, at which time it resumed scheduled debt payments.

The financial covenant related to the sales of Triferic was replaced with the trailing 6 months revenue of our concentrates products.

The Company's ability to comply with the covenants under the Loan Agreement may be adversely affected by events beyond its control.

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.

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.

However, as of December 31, 2023, the Company was in compliance with its covenants under the Loan Agreement.

On January 2, 2024, the Company's Loan Agreement was amended to include, among other things, an interest-only period for 30 months, or up to 36 months if certain conditions are met, and extend the maturity date to January 1, 2029.

(See Note 19 for further detail).

As of December 31, 2023, the outstanding balance of the Term Loan was $ 8.3 million, net of unamortized issuance costs, discount of $ 0.4 million, and including $ 0.7 million of premium accretion.

The following table reflects the schedule of principal payments on the Term Loan as of December 31, 2023 after giving effect to the January 2, 2024 amendment (in thousands):

The following table reflects the schedule of principal payments on the Term Loan as of December 31, 2024 (in thousands):

Year Principal Payments

2029 (Inclusive of Final Fee) 1,259

Total Debt Maturities 9,222

Unamortized Issuance Costs, Discount and Premium, net ( 750 )

Term Loan - Long-Term, net of issuance costs $ 8,472

and foreign components of pretax loss are as follows:

Year Ended December 31,

Pretax (Loss) Income

$ ( 480 ) $ ( 8,444 )

Total $ 8,000

Total Pretax Loss $ ( 480 ) $ ( 8,439 )

A reconciliation of income tax expense at the statutory rate to income tax expense at our effective tax rate is as follows (dollars in thousands):

27 unchanged sentences

In assessing the potential for realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized upon the generation of future taxable income during the periods in which those temporary differences become deductible.

The Company recognized no income tax expense or benefit for the years ended December 31, 2023 and 2022.

The Company recognized no income tax expense or benefit for the years ended December 31, 2024 and 2023 as a result of a full valuation allowance against the net deferred tax assets as of December 31, 2024 and 2023.

The valuation allowance decreased by $ 4.7 million during the year ended December 31, 2024.

Considered together with the Company's limited history of operating income and its net losses in 2024 and 2023, management has placed a full valuation allowance against the net deferred tax assets as of December 31, 2024 and 2023.

Rockwell accounts for its uncertain tax positions in accordance with ASC 740‑10, Income Taxes and the amount of unrecognized tax benefits related to tax positions is not significant at December 31, 2023 and 2022.

The Company accounts for its uncertain tax positions in accordance with ASC 740‑10, Income Taxes and the amount of unrecognized tax benefits related to tax positions is not significant at December 31, 2024 and 2023.

The Company has not been under tax examination in any jurisdiction for the years ended December 31, 2024 and 2023.

The Company completed an audit by the Internal Revenue Services for the 2021 tax year resulting in no adjustments.

Tax examination years of 2022 and 2023 remain open.

A recent IRC Section 382 study has not been performed, which could limit the value of the Company's net operating losses.

Subsequent Events

Third Amendment to Loan Agreement

On January 2, 2024, the Company and Rockwell Transportation, Inc.

entered into the Third Amendment to and Restatement of the Loan and Security Agreement (the "A&R Loan Agreement") with Innovatus, dated January 1, 2024 (the "A&R Effective Date").

The A&R Loan Agreement provides for the continuation of term loans initially borrowed under the Loan Agreement amounting to $ 8.0 million as of the A&R Effective Date.

The Company will make interest-only payments on the Term Loans for 30 months, or up to 36 months if certain conditions are met.

The Term Loans will mature on the fifth anniversary of the A&R Effective Date, unless earlier repaid.

The Term Loans will bear interest at the greater of (i) Prime Rate (as defined in the A&R Loan Agreement) and (ii) 7.50 %, plus 3.50 %.

The Term Loans may be voluntarily prepaid in full (but not partially) at any time, upon at least seven business days’ prior notice.

In connection with any voluntary prepayment or satisfaction of the Term Loans prior to the maturity date

(including any acceleration), the Company will pay all accrued and unpaid interest and all other amounts due in connection with the Term Loans, together with (x) a prepayment fee (the “Prepayment Fee”) equal to:

(i) 6.0 % of the principal amount of the Term Loans prepaid if the payment is made before the first anniversary of the A&R Effective Date;

(ii) 2.0 % of the principal amount of the Term Loans prepaid if the payment is made after the first anniversary of the A&R Effective Date but on or before the second anniversary of the A&R Effective Date;

(iii) 1.0 % of the principal amount of the Term Loans prepaid if the payment is made after the second anniversary of the A&R Effective Date but on or before the third anniversary of the A&R Effective Date;

or (iv) 0 % of the principal amount of the Term Loans prepaid if the payment is made after the third anniversary of the A&R Effective Date through maturity, and (y) an additional fee equal to 4.375 % of the funded amount of the Term Loans 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.

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.

The Final Fee shall be due and payable at maturity if it has not previously been paid in full in connection with a prepayment of the Term Loans.

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

Proceeds were used for working capital purposes.

The A&R Loan Agreement contains customary representations and warranties and affirmative and negative covenants, subject to exceptions as described in the A&R Loan Agreement.

The A&R 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.

The A&R Loan Agreement also includes a financial covenant that requires that the Company to maintain minimum liquidity of the greater of (x) the Company’s three-month cash burn or (y) the sum of $ 1.5 million and the aggregate amount of finance lease payments required to be made during the succeeding 12 months (or during a continuing event of default, the aggregate amount of finance lease payments required to be made during the entire term of such capital leases).

In connection with the execution of the A&R Loan Agreement, on January 2, 2024, the Company issued to Innovatus a warrant to purchase 191,096 shares of the Company’s common stock with an exercise price of $ 1.83 per share.

The warrant may be exercised on a cashless basis, and is immediately exercisable through the January 2, 2029.

The number of shares of common stock for which the warrant is exercisable and the exercise price are subject to certain proportional adjustments as set forth in the warrant.

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-K

Item 9A. Controls and Procedures