ROCKWELL MEDICAL, INC. 10-K

Item 9A. Controls and Procedures. 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 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. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. 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 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 Our management is responsible for establishing and maintaining adequate internal control over financial reporting. We maintain internal control over financial reporting designed to provide reasonable, but not absolute, assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 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 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. Attestation Report of the Registered Public Accounting Firm As a non-accelerated filer, we are not required to provide an attestation report on our internal control over financial reporting issued by the Company’s independent registered public accounting firm. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2024, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 40 Table of Contents Item 9B. Other Information. (a) Appointment of Principal Accounting Officer 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. Mr. 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. Mr. Fanslau has a B.A. in Accounting from the University of Notre Dame. Mr. 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. 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 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. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 41 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. The information required by this Item 10 is incorporated herein by reference to information in our proxy statement for our 2025 Annual Meeting of Stockholders (the “2025 Proxy Statement”), which we expect to be filed with the SEC within 120 days of the end of our fiscal year ended December 31, 2024, including under headings “Election of Directors,” “Directors Continuing in Office,” “Executive Officers,” “Corporate Governance” and, as applicable, "Delinquent Section 16(a) Reports." Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics that applies to all of our directors, employees and officers, including our principal executive officer, our principal financial officer, principal accounting officer and persons performing similar functions. Our Code of Business Conduct and Ethics is available on our website at www.rockwellmed.com . To the extent required by applicable rules, future material amendments or waivers relating to the Code of Business Conduct and Ethics will be disclosed on our web site referenced in this paragraph within four business days following the date of such amendment or waiver. Item 11. Executive Compensation. The information required by this Item 11 is incorporated herein by reference to information in our 2025 Proxy Statement, including under headings “Compensation of Executive Officers” and “Director Compensation.” Item 12. 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 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 The following table summarizes our compensation plans, including individual compensation arrangements, under which our equity securities are authorized for issuance as of December 31, 2024: Plan Category Number of securities to be issued upon exercise of outstanding options and restricted stock units Weighted‑average exercise price of outstanding options Number of securities remaining available for future issuance under (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders (1) 1,848,242 $ 4.70 294,686 Equity compensation plans not approved by security holders (2) 623,204 $ 2.53 — Total 2,471,446 $ 3.98 294,686 (1) Consists of 1,263,043 stock options with a weighted average exercise price of $4.70, 584,309 restricted stock units issued at $1.72 and 890 restricted stock awards issued at $62.70. (2) Consists of 623,204 stock options with a weighted average exercise price of $2.53. Item 13. Certain Relationships and Related Transactions and Director Independence. The information required by this Item 13 is incorporated herein by reference to information in our 2025 Proxy Statement, including under headings “Independence” and “Certain Relationships and Related Party Transactions.” Item 14. Principal Accountant Fees and Services. The information required by this Item 14 is incorporated herein by reference to information in our 2025 Proxy Statement, including under heading “Independent Accountants.” 42 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules. (a) The financial statements and schedule filed herewith are set forth on the Index to Financial Statements and Schedule of the separate financial section of this annual report, which is incorporated herein by reference. (b) Exhibits The following documents are filed as part of this report or were previously filed and incorporated herein by reference to the filing indicated. 3.1 Certificate of Incorporation, dated as of August 28, 2019 (Exhibit 3.3 to the Company’s Form 8-K filed August 30, 2019). 3.2 Certificate of Amendment to Certificate of Incorporation of Rockwell Medical, Inc. related to the Reverse Stock Split, dated May 12, 2022 (Exhibit 3.1 to the Company’s Form 8-K filed on May 13, 2022). 3.3 Certificate of Designation of Preferences, Rights and Limitations of Series X Convertible Preferred Stock (Exhibit 3.1 to the Company’s Form 8-K filed on April 8, 2022). 3.4 Amended and Restated Bylaws (Exhibit 3.1 to the Company’s Form 10-Q filed November 14, 2022). 4.1 Description of Securities (Exhibit 4.2 to the Company's Form 10-K filed on April 8, 2022) 4.2 Form of Warrant (Exhibit 4.1 to the Company's Form 8-K filed on September 25, 2020). 4.3 Form of Pre-Funded Warrant (Exhibit 4.2 to the Company's Form 8-K filed on September 25, 2020). 4.4 Form of Warrant to Purchase Common Stock for Innovatus (Exhibit 4.1 to the Company's Form 8-K filed March 20, 2020). 4.5 Form of Pre-Funded Warrant (Exhibit 4.1 to the Company’s Form 8-K filed on June 2, 2022). 4.6 Form of PIPE Warrant (Exhibit 4.2 to the Company’s Form 8-K filed on June 2, 2022). 4.7 Form of PIPE Pre-Funded Warrant (Exhibit 4.3 to the Company’s Form 8-K filed on June 2, 2022). 4.8 Common Stock Purchase Warrant, dated July 10, 2023, issued to Armistice Capital Master Fund Ltd. (Exhibit 4.1 to the Company's Form 10-Q filed on August 14, 2023). 4.9 Form of January 2024 Warrant to Purchase Common Stock issued to Innovatus Life Sciences Lending Fund I, LP (Exhibit 4.1 to the Company's Form 8-K filed on January 8, 2024). 10.1 Third Amendment to and Restatement of Loan and Security Agreement, dated January 1, 2024, by and among the Company, Rockwell Transportation, Inc., Innovatus Life Sciences Lending Fund I, LP and the lenders party thereto (Exhibit 10.1 to the Company's Form 8-K filed on January 8, 2024). 10.2 Sales Agreement, dated April 8, 2022, between Rockwell Medical, Inc. and Cantor Fitzgerald & Co. (Exhibit 1.1 to the Company’s Form 8-K filed on April 8, 2022). 10.3 Securities Purchase Agreement, dated April 6, 2022, by and between the Company and DaVita, Inc. (Exhibit 10.1 to the Company’s Form 10-Q filed on May 16, 2022). 10.4 RD Securities Purchase Agreement, dated May 30, 2022, by and between the Company and the Purchaser signatory therein (Exhibit 10.1 to the Company’s Form 8-K filed on June 2, 2022). 10.5 PIPE Securities Purchase Agreement, dated May 30, 2022, by and between the Company and the Purchaser signatory therein (Exhibit 10.2 to the Company’s Form 8-K filed on June 2, 2022). 10.6 Letter Agreement, dated July 10, 2023, by and between Rockwell Medical, Inc. and Armistice Capital Master Fund Ltd. (Exhibit 10.2 to the Company's Form 10-Q filed on August 14, 2023). 10.7 Registration Rights Agreement, dated June 2, 2022, by and between the Company and the Holder signatory thereto (Exhibit 10.3 to the Company’s Form 8-K filed on June 2, 2022). 10.8+ Licensing Agreement, dated January 7, 2002, by and among the Company, Charak LLC and Dr. Ajay Gupta (Exhibit 10.18 to the Company’s Form 10‑KSB filed April 1, 2002). 10.9 Amending Agreement, dated January 16, 2006, by and among the Company, Charak LLC and Dr. Ajay Gupta (Exhibit 10.13 to the Company’s Form 10‑KSB filed March 21, 2006). 10.10 Master Services and IP Agreement, dated October 7, 2018, by and among the Company, Charak, LLC and Dr. Ajay Gupta (Exhibit 10.34 Company's Form 10-K filed on March 18, 2019). 10.11 Amendment to License Agreement, dated October 7, 2018, by and among the Company, Charak, LLC and Dr. Ajay Gupta (Exhibit 10.35 to the Company's Form 10-K filed on March 18, 2019). 10.12 Commercialization and Technology License Agreement IV Triferic, dated October 7, 2018, by and among the Company, Charak, LLC and Dr. Ajay Gupta (Exhibit 10.36 to the Company's Form 10-K filed on March 18, 2019). 43 Table of Contents 10.13 Technology License Agreement TPN Triferic, dated October 7, 2018, by and among the Company, Charak, LLC and Dr. Ajay Gupta (Exhibit 10.37 to the Company's Form 10-K filed on March 18, 2019). 10.14 Asset Purchase Agreement dated July 10, 2023 by and between Rockwell Medical, Inc. 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. and DaVita Inc. (Exhibit 10.1 to the Company's Form 10-Q filed on November 14, 2023). 10.17* Rockwell Medical, Inc. Amended and Restated 2007 Long Term Incentive Plan, as amended effective May 21, 2015 (Appendix to the Company’s Proxy Statement for the 2015 Annual Meeting of Shareholders filed on April 13, 2015). 10.18* Form of Nonqualified Stock Option Agreement (2007 Long Term Incentive Plan) (Director Version) (Exhibit 10.22 to the Company’s Form 8‑K filed December 20, 2007). 10.19* Form of Nonqualified Stock Option Agreement (2007 Long Term Incentive Plan) (Employee Version) ( Exhibit 10.23 to the Company’s Form 8-K filed December 20, 2007). 10.20* Form of Restricted Stock Award Agreement (2007 Long Term Incentive Plan) (Director Version) (Exhibit 10.62 to the Company’s Form 10-K filed February 29, 2016). 10.21* Form of Performance Share Award Agreement March 2017 (Director Version) (Exhibit 10.65 to the Company’s Form 10-Q filed May 9, 2017). 10.22* Rockwell Medical, Inc. Amended and Restated 2018 Long Term Incentive Plan (Exhibit 10.3 to the Company’s Form 10-Q filed on August 14, 2023). 10.23* Form of Stock Option Agreement (2018 Long Term Incentive Plan) (Exhibit 10.2 to the Company’s Form 10-Q filed on November 14, 2022). 10.24* Form of Contingent Option Agreement for Directors (2018 Long Term Incentive Plan) (Exhibit 10.76 to the Company’s Form 8-K filed March 21, 2018). 10.25* Form of Restricted Stock Unit Award Agreement Employee Version (2018 Long Term Incentive Plan). 10.26* Form of Restricted Stock Unit Award Agreement Director Version (2018 Long Term Incentive Plan). 10.27* Rockwell Medical, Inc. Short Term Incentive Plan (Exhibit 10.1 to the Company’s Form 10-Q filed on November 14, 2022). 10.28* Form of Indemnification Agreement (Exhibit 10.1 to the Company’s Form 8-K filed August 30, 2019). 10.29* Stock Appreciation Right Agreement, dated September 5, 2017, by and between the Company and John G. Cooper (Exhibit 10.71 to the Company’s Form 10-Q filed November 8, 2017). 10.30* Employment Agreement, dated June 21, 2022, between Rockwell Medical, Inc. and Mark Strobeck (Exhibit 10.7 to the Company’s Form 10-Q filed on August 15, 2022). 10.31* Employment Agreement dated July 21, 2021 between Rockwell Medical, Inc. 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 (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 (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. 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 101.SCH XBRL Taxonomy Extension Schema 101.CAL XBRL Taxonomy Extension Calculation Linkbase 101.DEF XBRL Taxonomy Extension Definition Database 101.LAB XBRL Taxonomy Extension Label Linkbase 101.PRE XBRL Taxonomy Extension Presentation Linkbase 44 Table of Contents 104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL (included as Exhibit 101) * Indicates management contracts or compensatory plans or arrangements. + Certain confidential portions of this exhibit were omitted by means of marking such portions with asterisks because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed. # Filed herewith Item 16. Form 10-K Summary. None. 45 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROCKWELL MEDICAL, INC. (Registrant) By: /s/ Mark Strobeck Mark Strobeck, Ph.D. President and Chief Executive Officer Date: March 20, 2025 POWER OF ATTORNEY KNOW BY ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark Strobeck and Megan Timmins, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file, any and all documents in connection therewith, with the Securities and Exchange commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their and his or her substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE /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 Jesse Neri /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 Robert S. Radie /s/ John G. Cooper Director March 20, 2025 John G. Cooper /s/ Joan Lau Director March 20, 2025 Joan Lau, Ph.D. /s/ Allen R. Nissenson Director March 20, 2025 Allen R. Nissenson, M.D. /s/ Mark H. Ravich Director March 20, 2025 Mark H. Ravich /s/ Andrea Heslin Smiley Director March 20, 2025 Andrea Heslin Smiley 46 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS PAGE Report of Independent Registered Public Accounting Firm - EisnerAmper LLP (PCAOB Identification Number 274 ) F- 2 Consolidated Balance Sheets at December 31, 202 4 and 202 3 F- 4 Consolidated Statements of Operations for the years ended December 31, 202 4 and 202 3 F- 5 Consolidated Statements of Comprehensive Loss for the years ended December 31, 202 4 and 202 3 F- 6 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 202 4 and 202 3 F- 7 Consolidated Statements of Cash Flows for the years ended December 31, 202 4 and 202 3 F- 8 Notes to the Consolidated Financial Statements F- 9 – F-33 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Rockwell Medical, Inc. Opinion on the Financial Statements 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 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 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 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 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 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 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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. 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. F-2 Table of Contents 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 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 We have served as the Company’s auditor since 2023. EISNERAMPER LLP West Palm Beach, Florida March 20, 2025 F-3 Table of Contents ROCKWELL MEDICAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and par value amounts) December 31, 2024 2023 ASSETS Cash and Cash Equivalents $ 15,662 $ 8,983 Investments Available-for-Sale 5,940 1,952 Accounts Receivable, net of a reserve of nil for 2024 and $ 81 for 2023 8,291 10,901 Inventory, net 5,778 5,871 Prepaid and Other Current Assets 1,359 1,063 Total Current Assets 37,030 28,770 Property and Equipment, net 5,785 6,402 Inventory - Non-Current 178 178 Right of Use Assets - Operating, net 3,215 2,713 Right of Use Assets - Financing, net 1,344 1,903 Intangible Assets, net 10,207 10,759 Goodwill 921 921 Other Non-Current Assets 528 527 Total Assets $ 59,208 $ 52,173 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts Payable $ 2,869 $ 4,516 Accrued Liabilities 6,275 7,149 Deferred Consideration - Current 2,371 2,500 Lease Liabilities - Operating - Current 1,566 1,381 Lease Liabilities - Finance - Current 599 558 Deferred License Revenue - Current 46 46 Insurance Financing Note Payable 268 244 Customer Deposits 97 243 Total Current Liabilities 14,091 16,637 Lease Liabilities - Operating - Long-Term 1,699 1,433 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 Deferred Consideration - Long-Term 1,000 2,500 Long Term Liability - Other — 14 Total Liabilities 26,622 30,882 Commitments and Contingencies (See Note 15) Stockholders’ Equity: 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, 34,056,920 and 29,130,607 shares issued and outstanding at December 31, 2024 and 2023, respectively 3 3 Additional Paid-in Capital 430,207 418,487 Accumulated Deficit ( 397,678 ) ( 397,198 ) Accumulated Other Comprehensive Income (Loss) 54 ( 1 ) Total Stockholders’ Equity 32,586 21,291 Total Liabilities and Stockholders’ Equity $ 59,208 $ 52,173 The accompanying notes are an integral part of the consolidated financial statements. F-4 Table of Contents ROCKWELL MEDICAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts) Years Ended December 31, 2024 2023 Net Sales $ 101,489 $ 83,612 Cost of Sales 84,005 74,908 Gross Profit 17,484 8,704 Research and Product Development 19 1,107 Selling and Marketing 2,749 2,125 General and Administrative 14,108 12,142 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 ) Net Loss Per Share Attributable to Common Stockholders - Basic and Diluted $ ( 0.03 ) $ ( 0.37 ) Weighted Average Number of Shares of Common Stock Outstanding - Basic and Diluted 31,058,539 23,322,915 The accompanying notes are an integral part of the consolidated financial statements. F-5 Table of Contents ROCKWELL MEDICAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands) Years Ended December 31, 2024 2023 Net Loss $ ( 480 ) $ ( 8,439 ) 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 ) Comprehensive Loss $ ( 425 ) $ ( 8,603 ) The accompanying notes are an integral part of the consolidated financial statements. F-6 Table of Contents ROCKWELL MEDICAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (In thousands, except share amounts) PREFERRED STOCK COMMON STOCK ADDITIONAL PAID-IN CAPITAL ACCUMULATED DEFICIT ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) TOTAL STOCKHOLDERS' EQUITY SHARES AMOUNT SHARES AMOUNT Balance as of January 1, 2023 15,000 $ — 12,163,673 $ 1 $ 402,701 $ ( 388,759 ) $ 163 $ 14,106 Net Loss — — — — — ( 8,439 ) — ( 8,439 ) Unrealized Loss on Available-for-Sale Investments — — — — — — ( 159 ) ( 159 ) Foreign Currency Translation Adjustments — — — — — — ( 5 ) ( 5 ) Vesting of Restricted Stock Units Issued, net of taxes withheld — — 125,000 — — — — — 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 Stock-based Compensation — — — — 932 — — 932 Balance as of December 31, 2023 15,000 — 29,130,607 3 418,487 ( 397,198 ) ( 1 ) 21,291 Net Loss — — — — — ( 480 ) — ( 480 ) 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 upon exercise of options — — 6,042 — 9 — — 9 Stock-based Compensation — — — — 1,292 — — 1,292 Balance as of December 31, 2024 15,000 $ — 34,056,920 $ 3 $ 430,207 $ ( 397,678 ) $ 54 $ 32,586 The accompanying notes are an integral part of the consolidated financial statements. F-7 Table of Contents ROCKWELL MEDICAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Years Ended December 31, 2024 2023 Cash Flows From Operating Activities: Net Loss $ ( 480 ) $ ( 8,439 ) Adjustments To Reconcile Net Loss To Net Cash Provided By (Used In) Operating Activities: Depreciation and Amortization 2,180 1,444 Stock-based Compensation 1,292 932 Increase in Inventory Reserves 425 1,098 Non-cash Lease Expense from Right of Use Assets 1,960 2,010 Amortization of Debt Financing Costs and Accretion of Debt Discount and Premium 426 1,107 Loss on Disposal of Assets — 1 Realized Gain on Sale of Investments ( 74 ) ( 321 ) Changes in Assets and Liabilities: Accounts Receivable, net 2,610 ( 4,642 ) Inventory ( 332 ) 1,176 Prepaid and Other Assets 374 1,410 Accounts Payable ( 1,647 ) 463 Lease Liabilities ( 1,452 ) ( 1,465 ) Accrued and Other Liabilities ( 1,034 ) ( 376 ) Deferred License Revenue ( 46 ) ( 3,810 ) Changes in Operating Assets and Liabilities ( 1,527 ) ( 7,244 ) Cash Provided By (Used In) Operating Activities 4,202 ( 9,412 ) Cash Flows From Investing Activities: Purchase of Investments Available-for-Sale ( 5,858 ) ( 5,701 ) Sale of Investments Available-for-Sale 2,003 15,301 Purchase of Equipment ( 1,011 ) ( 284 ) Cash Paid in Connection with Evoqua Asset Acquisition — ( 12,361 ) Cash Used In Investing Activities ( 4,866 ) ( 3,045 ) Cash Flows From Financing Activities: Payments on Debt — ( 2,000 ) Payments on Insurance Financing Note Payable ( 646 ) ( 992 ) 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 ) Deferred Consideration Paid in Connection with Evoqua Asset Acquisition ( 1,629 ) — Cash Provided By Financing Activities 7,348 11,342 Effect of Exchange Rate Changes on Cash and Cash Equivalents ( 5 ) ( 4 ) Increase (Decrease) In Cash and Cash Equivalents 6,679 ( 1,119 ) Cash and Cash Equivalents At Beginning Of Year 8,983 10,102 Cash and Cash Equivalents At End Of Year $ 15,662 $ 8,983 Supplemental Disclosure of Cash Flow Information: Cash Paid for Interest $ 847 $ 1,209 Supplemental Disclosure of Noncash Investing and Financing Activities: 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. F-8 Table of Contents ROCKWELL MEDICAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Description of Business Rockwell Medical, Inc. (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 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 Asset 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. See Note 4 for further detail. In addition to its primary focus on hemodialysis concentrates, Rockwell also has a proprietary parenteral iron product, Triferic ® (ferric pyrophosphate citrate ("FPC")), which is indicated to maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease. 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 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. Rockwell was incorporated in the state of Michigan in 1996 and re-domiciled to the state of Delaware in 2019. Rockwell's headquarters is located at 30142 Wixom Road, Wixom, Michigan 48393. Note 2. Liquidity and Going Concern Considerations Since inception, Rockwell has incurred significant net losses and has funded its operations primarily through revenue from commercial products, proceeds from the issuance of debt and equity securities and payments from partnerships. At December 31, 2024, Rockwell had an accumulated deficit of approximately $ 397.7 million and stockholders' equity of $ 32.6 million. 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 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 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. F-9 Table of Contents 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, 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, 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; however, current conditions in the financial and credit markets may limit the availability of funding, refinancing or increase the cost of funding. Due to the rapidly evolving nature of the global situation, it is not possible to predict the extent to which these conditions could adversely affect the Company's liquidity and capital resources in the future. Note 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Rockwell Transportation, Inc. and Rockwell Medical India Private Limited. Rockwell Medical India Private Limited was formed in 2020 for the purpose of conducting certain commercial activities in India. All intercompany balances and transactions have been eliminated in consolidation. 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 The Company recognizes revenue under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, issued by the Financial Accounting Standards Board ("FASB") . The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: • Step 1: Identify the contract with the customer • Step 2: Identify the performance obligations in the contract • Step 3: Determine the transaction price • Step 4: Allocate the transaction price to the performance obligations in the contract • Step 5: 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 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. F-10 Table of Contents Nature of goods and services The following is a description of principal activities from which the Company generates its revenue. For a discussion of significant market segments and customers, see Note 6. Product Sales The Company accounts for individual products and services separately if they are distinct (i.e., if a product or service is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration, including any discounts, is allocated between separate products and services based on their stand-alone selling prices. The stand-alone selling prices are determined based on the cost plus margin approach. Drug and dialysis concentrate products are sold directly to dialysis clinics and to wholesale distributors in both domestic and international markets. Distribution and license agreements for which upfront fees are received are evaluated upon execution or modification of the agreement to determine if the agreement creates a separate performance obligation from the underlying product sales. For all existing distribution and license agreements, the distribution and license agreement is not a distinct performance obligation from the product sales. In instances where regulatory approval of the product has not been established and the Company does not have sufficient experience with the foreign regulatory body to conclude that regulatory approval is probable, the revenue for the performance obligation is recognized over the term of the license agreement (over time recognition). 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 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. Customers typically pay for the product based on customary business practices with payment terms averaging 30 days, while a small subset of customers have payment terms averaging 60 days. Deferred License Revenue The Company received upfront fees under five distribution and license agreements that have been deferred as a contract liability and presented on the accompanying consolidated balance sheets as deferred license revenue. The amounts received from Wanbang Biopharmaceuticals Co., Ltd. (“Wanbang”), Sun Pharmaceutical Industries Ltd. ("Sun Pharma"), Jeil Pharmaceutical Co., Ltd. ("Jeil Pharma") and Drogsan Pharmaceuticals ("Drogsan Pharma") are recognized as revenue over the estimated term of the applicable distribution and license agreement as regulatory approval was not received and the Company did not have sufficient experience in China, India, South Korea and Turkey, respectively, to determine that regulatory approval was probable as of the execution of the agreement. 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 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 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. 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. 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. F-11 Table of Contents Disaggregation of revenue Revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. In thousands Year Ended December 31, 2024 Products By Geographic Area Total U.S. Rest of World Drug Revenues License Fee – Over time $ 46 $ — $ 46 Total Drug Products 46 — 46 Concentrate Products Product Sales – Point-in-time 101,443 92,258 9,185 Total Concentrate Products 101,443 92,258 9,185 Net Revenue $ 101,489 $ 92,258 $ 9,231 In thousands Year Ended December 31, 2023 Products By Geographic Area Total U.S. Rest of World Drug Revenues License Fee – Over time $ 2,338 $ — $ 2,338 Total Drug Products 2,338 — 2,338 Concentrate Products Product Sales – Point-in-time 79,802 72,871 6,931 License Fee – Over time 1,472 1,472 — Total Concentrate Products 81,274 74,343 6,931 Net Revenue $ 83,612 $ 74,343 $ 9,269 Contract balances The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers. In thousands December 31, 2024 December 31, 2023 January 1, 2023 Accounts Receivable, net $ 8,291 $ 10,901 $ 6,259 Contract Liabilities, which are included in deferred license revenue $ 475 $ 521 $ 4,331 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 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, 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 F-12 Table of Contents 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 The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks, money market mutual funds and unrestricted certificates of deposit. The Company’s cash and cash equivalents exceeds the Federal Deposit Insurance Corporation insured limits. The Company has not experienced any credit losses for amounts in excess of insured limits. Currently, the Company does not reasonably believe a significant risk of credit loss exists. Fair Value Measurement The Company applies the guidance issued with ASC 820, Fair Value Measurements , which provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Investments – Available for Sale 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 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. 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 Accounts receivable are stated at invoice amounts. The carrying amount of trade accounts receivable is reduced by an allowance for credit losses that reflects our best estimate of accounts that may not be collected. The Company reviews outstanding trade accounts receivable balances and based on its assessment of expected collections, the Company estimates the portion, if any, of the balance that may not be collected based on future forecasts, historical loss information, and current economic conditions. All accounts or portions thereof deemed to be uncollectible are written off to the allowance for credit losses and credit loss expense. F-13 Table of Contents Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined on the first‑in first‑out (FIFO) method. Inventory that is not expected to be converted to cash over the next year is classified as non-current. The Company's policy is to reserve for its drug product inventory that it determines is unlikely to be sold to, or if sold, unlikely to be utilized by its customers on or before its expiration date. Property and Equipment Property and equipment is recorded at cost and is depreciated using the straight‑line method over the useful lives of the assets, which range from three to ten years . Expenditures for routine maintenance and repairs are expensed as incurred. Leasehold improvements are amortized using the straight‑line method over the shorter of the useful lives or the related lease term. Impairment of Long-lived Assets and Goodwill Long-lived assets, such as property and equipment and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Impairment losses on long-lived assets are recognized when events or changes in circumstances indicate that the undiscounted cash flows estimated to be generated by such assets are less than their carrying value and, accordingly, all or a portion of such carrying value may not be recoverable. Impairment losses are then measured by comparing the fair value of assets to their carrying amounts. For the years ended December 31, 2024 and 2023, there were no impairments of long-lived assets. Rockwell reviews goodwill and indefinite-lived intangible assets at least annually for possible impairment. Goodwill and indefinite-lived intangible assets are reviewed for possible impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit or the indefinite-lived intangible assets below their carrying values. Rockwell completed its annual impairment tests as of December 31, 2024 and 2023, and determined that no adjustment for impairment of goodwill or intangible assets was required during the years ended December 31, 2024 and 2023. Goodwill and Intangible Assets Goodwill is the excess of purchase price over the fair value of identified net assets of businesses acquired. Intangible assets with indefinite useful lives are measured at their respective fair values as of the acquisition date. 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. Definite-lived intangible assets have been capitalized and are being amortized over their useful life. Income Taxes Rockwell accounts for income taxes in accordance with the provisions of ASC 740‑10, Income Taxes. A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the year. Deferred tax liabilities or assets are recognized for the estimated future tax effects of temporary differences between book and tax accounting and operating loss and tax credit carryforwards. A valuation allowance is established for deferred tax assets if the Company determine it to be more likely than not that the deferred tax asset will not be realized. 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. The amount of unrecognized tax benefits related to current tax positions is insignificant. The Company recognizes interest and penalties accrued related to unrecognized tax benefits as income tax expense. F-14 Table of Contents Research and Product Development 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 $ 19,000 and $ 1.1 million for the years ended December 31, 2024 and 2023, respectively. Stock-Based Compensation Service-Based Stock Unit Awards The Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the grant-date fair value of the awards. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. For the years ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense on its options granted under the Company’s equity compensation plans to its directors and officers, and its employees (See Note 13). Market and Performance-Based Stock Unit Awards In addition to awards with service-based vesting conditions, the Company has granted performance share units with market and performance conditions, to certain of its executives. The fair value of awards with performance conditions are based on the fair value of the Company’s common stock on the date of grant. The fair value of awards with market conditions are based on a Monte Carlo simulation model. Assumptions and estimates utilized in the calculation of the fair value of the market awards include the risk-free interest rate, dividend yield, average closing price, expected volatility based on the historical volatility of the Company, and the remaining period of the award. The awards with performance conditions vest and result in issuance, at settlement, of common stock for each recipient based upon the recipient’s continued employment with the Company through the settlement date of the award and the Company’s achievement of specified milestones. The requisite service period of the awards with performance conditions is generally 1 - 2 years. In the case of awards with performance conditions, the Company recognizes stock-based compensation expense based on the grant date fair value of the award when achievement of the underlying performance-based targets become probable. The awards with market conditions vest and result in the issuance of common stock based upon the recipient’s continuing employment with the Company through the settlement date of the award related to the market capitalization criteria. The fair value related to the awards with market conditions is recorded as stock-based compensation expense over the period from date of grant to the settlement date regardless of whether the market capitalization is achieved. Leases 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 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. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line expense over the lease term. Variable lease expenses, if any, are recorded when incurred. In calculating the right-of-use assets and lease liabilities, the Company elected the practical expedient to combine lease and non-lease components. Additionally, the Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. Commitments and Contingencies In the normal course of business, the Company may become subject to loss contingencies, such as legal proceedings and claims arising out of its business, including government investigations. An accrual for a loss contingency is recognized when it is probable that an asset had been impaired or a liability had been incurred and the amount of loss can be reasonably estimated. The Company expenses legal costs associated with loss contingencies as they are incurred. F-15 Table of Contents Loss Per Share ASC 260, Earnings Per Share , requires dual presentation of basic and diluted earnings per share (“EPS”), with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. 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. 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, 2024 2023 Warrants to Purchase Common Stock 3,984,484 3,793,388 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 Unvested Restricted Stock Awards 891 891 Total 7,846,976 6,745,421 The following table presents the calculation of basic and diluted EPS: Years Ended December 31, 2024 2023 Numerator: Net Loss $ ( 480 ) $ ( 8,439 ) Accretion of Series X Preferred Stock ( 302 ) ( 150 ) Net Loss Attributable to Common Stockholders $ ( 782 ) $ ( 8,589 ) Denominator Weighted Average Number of Shares of Common Stock Outstanding - Basic and Diluted 31,058,539 23,322,915 Net Loss Per Share Attributable to Common Stockholders - Basic and Diluted $ ( 0.03 ) $ ( 0.37 ) Accumulated Other Comprehensive Income Accumulated other comprehensive income includes all changes in equity during a period except those that resulted from investments by or distributions to the Company’s stockholders. 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 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 F-16 Table of Contents 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 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. This ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. 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. Note 4. Asset Acquisition On July 10, 2023, the Company completed the Evoqua Asset Acquisition. 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. 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 . F-17 Table of Contents The purchase price was allocated, on a relative fair value basis, to the assets acquired at the July 10, 2023 acquisition date as follows (table in thousands): Consideration Cash Payment $ 12,233 Deferred Consideration 5,000 Transaction Costs 128 Total Consideration $ 17,361 Assets Acquired Customer Relationships Intangible Asset $ 11,035 Equipment 5,093 Inventory 1,233 Total Assets Acquired $ 17,361 The fair value of the customer relationships intangible asset was determined using a multi-period excess earnings method, a form of the income approach, which incorporates the estimated future cash flows to be generated from the customer base. Key assumptions included discounted cash flows, estimated life cycle and customer attrition rates. Customer relationships are being amortized over a period of 20 years. Given the recency of the purchase of the equipment in which the assets were recorded at relative fair value, the Company determined the fair value of the equipment using a cost approach, which considered assumptions over the equipment's current replacement cost and useful life. Inventory was purchased directly from the contract manufacturer holding the inventory, which approximated fair value. 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 ending December 31: 2025 $ 552 2026 552 2027 552 2028 552 2029 552 Thereafter 7,447 Total $ 10,207 F-18 Table of Contents Note 5. Investments - Available-for-Sale 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 Fair Value Available-for-Sale Securities Debt Securities $ 5,880 $ 60 $ — $ — $ 5,940 December 31, 2023 Amortized Cost Unrealized Gain Unrealized Loss Accrued Interest Fair Value Available-for-Sale Securities 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 . 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. Note 6. 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. 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. F-19 Table of Contents 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, 2024 2023 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. The loss of any significant accounts could have a material adverse effect on the Company's business, financial condition and results of operations. No other current customer accounted for more than 10% of sales in any of the last two years. 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 2024 and 2023. Note 7. Inventory Components of inventory, net of reserves as of December 31, 2024 and 2023 were as follows (table in thousands): December 31, 2024 December 31, 2023 Inventory - Current Portion Raw Materials $ 3,010 $ 2,250 Work in Process 367 351 Finished Goods 2,401 3,270 Total Current Inventory 5,778 5,871 Inventory - Long Term (1) 178 178 Total Inventory $ 5,956 $ 6,049 __________ 1. 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 F-20 Table of Contents studies. 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. Note 8. Property and Equipment As of December 31, 2024 and 2023, the Company’s property and equipment consisted of the following (table in thousands): December 31, 2024 December 31, 2023 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 ) 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. Note 9. Accrued Liabilities Accrued liabilities as of December 31, 2024 and 2023 consisted of the following (table in thousands): December 31, 2024 December 31, 2023 Accrued Compensation and Benefits $ 2,744 $ 2,413 Accrued Unvouchered Receipts 1,417 1,663 Accrued Manufacturing Expense 602 1,064 Accrued Workers Compensation 176 254 Other Accrued Liabilities 1,336 1,755 Total Accrued Liabilities $ 6,275 $ 7,149 Note 10. Deferred License Revenue In October 2014, the Company entered into an exclusive distribution agreement with Baxter, which had a term of 10 years, and received an upfront fee of $ 20 million. Under the exclusive distribution agreement, Baxter distributed and commercialized Rockwell’s hemodialysis concentrates products and provided customer service and order delivery to nearly all U.S. customers. 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 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. To ensure that customer needs continued to be met after January 1, 2023, Rockwell agreed to provide certain services to a group of Baxter's customers until March 31, 2023, and Baxter and Rockwell worked together to transition customers’ purchases of Rockwell’s hemodialysis concentrates through that date. 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 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. F-21 Table of Contents Note 11. Insurance Financing Note Payable 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. Principal and interest payments related to this note began on July 3, 2023 and are paid on a straight-line amortization over nine months with the final payment due on March 3, 2024. 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. Note 12. Stockholders’ Equity Preferred Stock 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. If the Company’s common stock trades above $ 22.00 for a period of 30 calendar days, the accretion will thereafter cease. 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 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 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. Since the Series X Preferred Stock may be redeemed if certain assets are sold at the option of the holder, but is not mandatorily redeemable and the sale of the assets that would allow for redemption is within the control of the Company, the preferred stock has been classified as permanent equity and initially recognized at fair value of $ 15 million (the proceeds on the date of issuance) less issuance costs of $ 0.1 million, resulting in an initial value of $ 14.9 million. The Company will assess at each reporting period whether conditions have changed to now meet the mandatory redemption definition which could trigger liability classification. As of December 31, 2024 and 2023, there were 2,000,000 shares of preferred stock, $ 0.0001 par value per share, authorized and 15,000 shares of preferred stock issued and outstanding. Common Stock 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. F-22 Table of Contents 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, Common Stock and Common Stock Equivalents: 2024 2023 Common Stock 34,056,920 29,130,607 Options to Purchase Common Stock 1,886,247 1,328,621 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 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. 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. Warrants 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”). The purchase price of each Pre-Funded 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 Warrant was $ 0.0001 per share. 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, 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 . 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. (“Armistice”), which held a warrant (the “Prior Warrant”) to purchase 9,900,990 shares of common stock of the Company (the “Common Stock”) with an exercise price of $ 1.39 per share, offering Armistice the opportunity to exercise the Prior Warrant for cash, provided the Prior Warrant was exercised for cash on or prior to 5:00 P.M. Eastern Time on July 10, 2028 (the “End Date”). 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 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. Armistice exercised the Prior Warrant on July 10, 2023, and the Company received gross proceeds of approximately $ 13.8 million. F-23 Table of Contents 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 % Note 13. Stock-Based Compensation The Board of Directors adopted the 2018 Long-Term Incentive Plan (“2018 LTIP”) on January 29, 2018 as a replacement for the Company's prior 2007 Long Term Incentive Plan. As of December 31, 2024, the maximum number of shares of common stock with respect to which awards may be issued under the 2018 LTIP, as amended and restated, was 2,618,182 . As of December 31, 2024, the 2018 LTIP had 294,686 shares of common stock available for grant. The Compensation Committee of the Board of Directors (the “Committee”) is responsible for the administration of the 2018 LTIP, including the grant of stock based awards and other financial incentives including performance based incentives to employees, non‑employee directors and consultants. The Company's stock option agreements under the 2018 LTIP allow for the payment of the exercise price of vested stock options either through cash remittance in exchange for newly issued shares, or through non‑cash exchange of previously issued shares held by the recipient for at least six months in exchange for our newly issued shares. The 2018 LTIP also allows for the retention of shares in payment of the exercise price and income tax withholding. The latter method results in no cash being received by the Company but also results in a lower number of total shares being outstanding subsequently as a direct result of this exchange of shares. Shares returned to the Company in this manner are retired. The Company recognized total stock-based compensation expense during the years ended December 31, 2024 and 2023 as follows (table in thousands): Year Ended December 31, 2024 2023 Service Based Awards: Restricted Stock Units $ 673 $ 375 Stock Option Awards 619 557 Total $ 1,292 $ 932 Performance Based Restricted Stock Awards A summary of the Company’s performance based restricted stock awards during the year ended December 31, 2024 is as follows: Performance Based Restricted Stock Awards Number of Shares Weighted Average Grant-Date Fair Value Unvested at January 1, 2024 891 $ 62.70 Unvested at December 31, 2024 891 $ 62.70 F-24 Table of Contents Performance-based restricted stock awards are measured based on their fair value on the date of grant and amortized over the vesting period of 20 months. As of December 31, 2024, there is no unrecognized stock-based compensation expense related to performance-based restricted stock awards. Service Based Restricted Stock Units A summary of the Company’s service based restricted stock units during the year ended December 31, 2024 is as follows: Service Based Restricted Stock Units Number of Shares Weighted Average Grant-Date Fair Value Unvested at January 1, 2024 258,885 $ 1.83 Granted 541,656 $ 1.77 Vested ( 216,232 ) $ 2.15 Unvested at December 31, 2024 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 The fair value of the service based stock option awards granted for the years ended December 31, 2024 and 2023 were based on the following assumptions: December 31, 2024 2023 Exercise Price $ 1.39 - $ 3.49 $ 1.37 - $ 2.83 Expected Stock Price Volatility 81.8 % 81.6 % - 81.8 % Risk-free Interest Rate 4.08 % - 4.45 % 3.41 % - 4.84 % Term (Years) 5.61 - 5.62 4.0 - 6.0 A summary of the Company’s service based stock option activity for the year ended December 31, 2024 is as follows: Service Based Stock Option Awards Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in $1,000's) Outstanding at January 1, 2024 1,328,621 $ 5.22 Granted 584,410 $ 1.46 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 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. As of December 31, 2024, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $ 0.6 million which is expected to be recognized over the next 2.8 years. F-25 Table of Contents Note 14. License Agreements 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 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 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 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. The Company was liable to pay Charak royalties on net sales by the Company of products developed under the license at a specified rate until December 31, 2021. From January 1, 2022 until February 1, 2034, the Company is liable to pay Charak a base royalty at a reduced rate on net sales and an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis. The Company shall also pay to Charak a percentage of any sublicense income received during the term of the IV Agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis. Also pursuant to the Charak MSA, the Company and Charak entered into a Technology License Agreement TPN Triferic, dated as of October 7, 2018 (the “TPN Agreement”), pursuant to which Charak granted the Company an exclusive, sub-licensable, royalty-bearing license to SFP for the purpose of commercializing worldwide certain TPN products incorporating SFP. The license grant under the TPN Agreement continues 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. During the term of the TPN Agreement, the Company is liable to pay Charak a base royalty on net sales and an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis. 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 as of December 31, 2024. F-26 Table of Contents Note 15. Commitments and Contingencies Insurance The Company evaluates various kinds of risk that it is exposed to in its business. In its evaluation of risk, the Company evaluates options and alternatives to mitigating such risks. 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. As of December 31, 2024, approximately $ 0.4 million was held in cash collateral and escrow by the insurance carrier for workers’ compensation insurance. At December 31, 2024, amounts held in cash collateral and escrow are included in prepaid expenses and other non-current assets in the consolidated financial statements. Litigation The Company may be involved in certain routine legal proceedings from time to time before various courts and governmental agencies. The Company cannot predict the final disposition of such proceedings. The Company regularly reviews legal matters and record provisions for claims considered probable of loss. The resolution of these pending proceedings is not expected to have a material effect on its operations or consolidated financial statements in the period in which they are resolved. Note 16. Leases Rockwell leases its production facilities and administrative offices as well as certain equipment used in its operations including leases on transportation equipment used in the delivery of its products. The lease terms range from monthly to six years . Rockwell occupies a 51,000 square foot facility and a 17,500 square foot facility in Wixom, Michigan under a lease expiring in August 2027. 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 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. F-27 Table of Contents The following summarizes quantitative information about the Company’s operating and finance leases (dollars in thousands): For the year ended December 31, 2024 2023 Operating leases Operating Lease Cost $ 1,608 $ 1,672 Variable Lease Cost 508 497 Operating Lease Expense 2,116 2,169 Finance leases Amortization of Right-Of-Use Assets 559 565 Interest on Lease Obligations 114 147 Finance Lease Expense 673 712 Short-term Lease Rent Expense 21 17 Total Rent Expense $ 2,810 $ 2,898 Other information Operating Cash Flows from Operating Leases $ 1,753 $ 1,777 Operating Cash Flows from Finance Leases $ 114 $ 147 Financing Cash Flows from Finance Leases $ 558 $ 522 Weighted-average Remaining Lease Term – Operating Leases 2.4 2.3 Weighted-average Remaining Lease Term – Finance Leases 2.5 3.5 Weighted-average Discount Rate – Operating Leases 6.3 % 6.5 % Weighted-average Discount Rate – Finance Leases 6.4 % 6.4 % Future minimum rental payments under operating and finance lease agreements are as follows (table in thousands): Operating Finance Year ending December 31, 2025 $ 1,716 $ 676 Year ending December 31, 2026 1,075 666 Year Ended December 31, 2027 655 311 Year Ended December 31, 2028 57 — Total 3,503 1,653 Less Present Value Discount ( 238 ) ( 123 ) Operating and Finance Lease Liabilities $ 3,265 $ 1,530 Note 17. Loan and Security Agreement 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. The Company is no longer eligible to draw on additional tranches, which were tied to the achievement of certain milestones. Net draw down proceeds were $ 21.2 million with closing costs of $ 1.3 million. The Company also owes an additional fee equal to 4.375 % of the funded amount of the Term Loans, or $ 1.0 million (such additional fee, the “Final Fee”) at maturity. The Company is accreting up to this Final Fee premium with a charge against interest expense on the accompanying consolidated statements of operations. 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 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 F-28 Table of Contents 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 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. 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. F-29 Table of Contents The Loan Agreement is secured by all assets of the Company and Rockwell Transportation, Inc. and contains customary representations and warranties and covenants, subject to customary carve outs, and initially included financial covenants related to liquidity and sales of Triferic. The following table reflects the schedule of principal payments on the Term Loan as of December 31, 2024 (in thousands): Year Principal Payments 2025 $ — 2026 1,373 2027 $ 3,295 2028 3,295 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 Note 18. Income Taxes The U.S. and foreign components of pretax loss are as follows: Year Ended December 31, 2024 2023 Pretax (Loss) Income U.S. $ ( 480 ) $ ( 8,444 ) Foreign — 5 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): Year Ended December 31, 2024 2023 Tax Benefit Computed of Pretax Loss $ ( 101 ) $ ( 1,772 ) Changes in Tax Laws — — Foreign Income Tax Expense — — Effect of Change in Valuation Allowance 101 1,772 Total Income Tax Expense $ — $ — F-30 Table of Contents The details of the net deferred tax asset are as follows (dollars in thousands): December 31, 2024 2023 Deferred tax assets: Net Operating Loss Carryforward $ 71,423 $ 72,612 Stock Based Compensation 4,584 7,856 General Business Credit 6,872 6,872 Research & Experimental Expenses 338 459 Inventories 474 398 Accrued Expenses 84 144 Deferred License Revenue 106 118 Other Deferred Tax Assets 1,974 1,989 Total Deferred Tax Assets 85,855 90,448 Deferred Tax Liabilities: Goodwill & Intangible Assets 327 259 Prepaid Expenses 205 181 Book over Tax Depreciation 60 35 Total Deferred Tax Liabilities 592 475 Subtotal 85,263 89,973 Valuation Allowance ( 85,263 ) ( 89,973 ) Net Deferred Tax Asset $ — $ — Deferred tax assets result primarily from net operating loss carryforwards. For federal tax purposes, we have net operating loss carryforwards of approximately $ 320.7 million of which approximately $ 192.1 million began expiring in 2024 and will continue to expire through 2039. 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, 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. 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. F-31