What changed in this filing

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Item 1. Financial Statements

2025-05-12 compared with 2024-11-12 · 226 added, 331 removed, 406 unchanged (58% of the section changed)

4 unchanged sentences

(In thousands, except share and par value amounts)

September 30,

2025 December 31,

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Deferred Consideration - Long-Term 500 1,000

Long Term Liability - Other 14 14

Total Liabilities 22,439 26,622

September 30,

2025 December 31,

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

15,000 shares issued and outstanding at September 30, 2024 and December 31, 2023

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

Common Stock, $ 0.0001 par value;

170,000,000 shares authorized;

32,318,806 and 29,130,607 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

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

Additional Paid-in Capital 430,652 430,207

Accumulated Deficit ( 399,193 ) ( 397,678 )

Accumulated Other Comprehensive Income (Loss) 8 ( 1 )

Accumulated Other Comprehensive Income 60 54

Total Stockholders’ Equity 31,522 32,586

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(In thousands, except share and per share amounts)

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Three Months Ended March 31,

Net Sales $ 18,914 $ 22,676

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General and Administrative 3,691 3,776

Operating Income (Loss) 1,936 ( 1,737 ) 1,127 ( 6,123 )

Other Expense:

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

Other Income (Expense):

Realized Gain on Available-for-Sale Investments 56 —

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Total Other Expense, net ( 155 ) ( 407 )

Net Income (Loss) $ 1,664 $ ( 1,872 ) $ 276 $ ( 6,927 )

Basic Net Income (Loss) per Share $ 0.05 $ ( 0.07 ) $ 0.01 $ ( 0.32 )

Diluted Net Income (Loss) per Share $ 0.04 $ ( 0.07 ) $ 0.01 $ ( 0.32 )

Basic Weighted Average Shares Outstanding 31,551,805 27,521,088 30,447,588 21,526,978

Diluted Weighted Average Shares Outstanding 32,420,168 27,521,088 31,013,464 21,526,978

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

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

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

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

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AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Net Income (Loss) $ 1,664 $ ( 1,872 ) $ 276 $ ( 6,927 )

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

Unrealized Gain (Loss) on Available-for-Sale Investments 13 ( 69 ) 38 ( 90 )

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

Comprehensive Income (Loss) $ 1,677 $ ( 1,941 ) $ 285 $ ( 7,021 )

Three Months Ended March 31,

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

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

Unrealized Gain on Available-for-Sale Investments 62 25

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

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

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COMPREHENSIVE

(LOSS) INCOME TOTAL

STOCKHOLDERS'

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

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

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

Issuance of Common Stock, net of offering costs/At-The-Market — — 358,210 — 560 — — 560

Vesting of Restricted Stock Units Issued, net of taxes withheld — — 67,657 — — — — —

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

— — — — 247 — — 247

Vesting of Restricted Stock Units Issued, net of taxes withheld and cancellations — — 200,983 — — — — —

Stock-based Compensation — — — — 445 — — 445

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

Net Income — — — — — 343 — 343

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

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

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

Vesting of Restricted Stock Units Issued, net of taxes withheld — — 123,575 — — — — —

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

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

Net Income — — — — — 1,664 — 1,664

Unrealized Gain on Available-for-Sale Investments — — — — — — 13 13

Issuance of Common Stock, net of offering costs/At-the-Market Offering — — 1,282,546 — 3,630 — — 3,630

Issuance of Common Stock upon Exercise of Options — — 6,042 — 9 — — 9

Stock-based Compensation — — — — 321 — — 321

Balance as of September 30, 2024 15,000 $ — 32,318,806 $ 3 $ 426,046 $ ( 396,922 ) $ 8 $ 29,135

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

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except share amounts)

PREFERRED STOCK COMMON STOCK ADDITIONAL PAID-IN CAPITAL ACCUMULATED

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COMPREHENSIVE

INCOME (LOSS) TOTAL

STOCKHOLDERS'

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Net Loss — — — — — ( 1,731 ) — ( 1,731 )

Unrealized Loss on Available-for-Sale Investments — — — — — — ( 3 ) ( 3 )

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

Issuance of Common Stock upon Exercise of Pre-Funded Warrants — — 389,000 — — — — —

Issuance of Warrants related to Debt Financing — — — — — — — —

Stock-based Compensation — — — — 193 — — 193

Balance as of March 31, 2023 15,000 — 12,552,673 1 402,894 ( 390,509 ) 156 12,542

Net Loss — — — — — ( 3,305 ) — ( 3,305 )

Unrealized Loss on Available-for-Sale Investments — — — — — — ( 18 ) ( 18 )

Foreign Currency Translation Adjustments — — — — — — ( 1 ) ( 1 )

Issuance of Common Stock, net of offering costs/Public Offering — — 4,118,000 1 — — — 1

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

Issuance of common stock, net of offering costs/At-The-Market — — 358,210 — 560 — — 560

Vesting of Restricted Stock Units Issued, net of taxes withheld — — 67,657 — — — — —

Stock-based Compensation — — — — 309 — — 309

Balance as of June 30, 2023 15,000 — 16,795,673 2 403,203 ( 393,814 ) 137 9,528

Net Loss — — — — — ( 1,872 ) — ( 1,872 )

Unrealized Loss on Available-for-Sale Investments — — — — — — ( 69 ) ( 69 )

Issuance of Common Stock in Connection with Exercise of the Prior Warrant and Pre-Funded Warrants, net of offering costs — — 11,693,990 1 13,718 — — 13,719

Issuance of Warrant in connection with the Third Amendment (Note 11) — — — — 247 — — 247

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

Balance as of September 30, 2023 15,000 $ — 28,489,663 $ 3 $ 417,133 $ ( 395,686 ) $ 68 $ 21,518

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

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

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(In thousands)

Nine Months Ended

September 30, 2024 Nine Months Ended

September 30, 2023

Three Months Ended March 31,

Cash Flows From Operating Activities:

Net Income (Loss) $ 276 $ ( 6,927 )

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

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

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

Depreciation and Amortization 539 545

Stock-based Compensation 445 251

Increase in Inventory Reserves 314 1,098

Write-off of Inventory 178 —

Non-cash Lease Expense from Right of Use Assets 518 519

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Deferred License Revenue ( 475 ) ( 11 )

Net Cash Provided By (Used In) Operating Activities 3,337 ( 9,369 )

Net Cash Used In Operating Activities ( 3,487 ) ( 2,380 )

Cash Flows From Investing Activities:

Purchase of Investments Available-for-Sale ( 5,921 ) ( 3,752 )

Purchases of Investments Available-for-Sale ( 2,938 ) —

Sale of Investments Available-for-Sale 3,000 —

Purchase of Equipment ( 63 ) ( 139 )

Cash Paid in Connection with Evoqua Asset Acquisition

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

Cash Flows From Financing Activities:

Payments on Debt — ( 500 )

Payments on Insurance Financing Note Payable ( 201 ) ( 244 )

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Proceeds from Issuance of Common Stock — 560

Offering Costs from Issuance of Common Stock — ( 43 )

Deferred Consideration Paid in Connection with Evoqua Asset Acquisition

Net Cash Provided By Financing Activities 4,556 12,084

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

Net Increase (Decrease) in Cash and Cash Equivalents 3,355 ( 2,343 )

Net Cash (Used In) Provided By Financing Activities ( 783 ) 178

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

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

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

Right of Use Assets - Operating Obtained in Exchange for Lease Liabilities - Operating $ 1,984 $ —

Change in Unrealized Gain (Loss) on Investments Available-for-Sale $ 13 $ ( 90 )

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

Proceeds from Issuance of Common Stock Upon Exercise of Options in Accounts Receivable, net $ 9 $ —

Change in Unrealized Gain on Investments Available-for-Sale $ 5 $ 25

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

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Rockwell Medical, Inc.

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

Rockwell is the largest supplier of liquid bicarbonate concentrates and the second largest supplier of acid and dry 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 manufactures hemodialysis concentrates at its facilities in Michigan, South Carolina, and Texas totaling approximately 175,000 square feet, and manufactures its dry acid concentrate mixers at its facility in Iowa.

Additionally, in July 2023, the Company purchased customer relationships, equipment and inventory from Evoqua Water Technologies LLC ("Evoqua") related to the manufacturing and sale of hemodialysis concentrates products, all of which are manufactured under a contract manufacturing agreement with a third-party organization in Minnesota.

(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 in freestanding outpatient dialysis centers, hospital-based outpatient centers, skilled nursing facilities, or a patient’s home.

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

Food and Drug Administration (“FDA”).

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

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

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Liquidity and Capital Resources

As of September 30, 2024, Rockwell had approximately $ 18.3 million of cash, cash equivalents and investments available-for-sale, and working capital of $ 20.0 million.

Net cash provided by operating activities for the nine months ended September 30, 2024 was approximately $ 3.3 million.

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

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

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

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The Company may require additional capital to sustain its operations and make the investments it needs to execute its strategic plan.

Additionally, the Company's operational plans include raising capital, if needed, by using the remaining $ 4.5 million available under its at-the-market ("ATM") facility or other methods or forms of financings, subject to existing limitations.

In addition, the Company's plans include raising capital, if needed, by using the $ 21.1 million available under its at-the-market ("ATM") facility or other methods or forms of financings, subject to existing limitations.

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

The Company is subject to certain covenants and cure provisions under its Loan Agreement 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 15 for further detail).

As of September 30, 2024, the Company is in compliance with all covenants.

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

trade tariffs and trade disputes with other countries, instability in the global capital and credit markets, 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.

The Company is subject to certain covenants and cure provisions under its Loan Agreement (as defined below in Note 15) with Innovatus Life Sciences Lending Fund I, LP ("Innovatus"), which was amended on January 2, 2024 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 15 for further detail).

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

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

In addition, 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.

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

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

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

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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

The condensed consolidated balance sheet at September 30, 2024, and the condensed consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows for the three and nine months ended September 30, 2024 and 2023 are unaudited, but include all adjustments, consisting of normal recurring adjustments the Company considers necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented.

The results for the three and nine months ended September 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024 or for any future interim period.

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

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

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

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Actual results could differ from those estimates.

Income (Loss) Per Share

Basic and diluted net income (loss) per share for the three and nine months ended September 30, 2024 and 2023 was calculated as follows:

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

Loss Per Share

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

Three Months Ended

September 30, Nine Months Ended

September 30,

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

Net Income (Loss) $ 1,664 $ ( 1,872 ) $ 276 $ ( 6,927 )

Undistributed Earnings to Participating Securities ( 233 ) — ( 40 ) —

Net Income (Loss) Attributable to Common Stockholders $ 1,431 $ ( 1,872 ) $ 236 $ ( 6,927 )

Basic Weighted Average Number of Shares of Common Stock Outstanding 31,551,805 27,521,088 30,447,588 21,526,978

Incremental Shares Attributable to the Assumed Exercise of Outstanding Options to Purchase Common Stock 489,193 — 271,382 —

Incremental Shares Attributable to the Assumed Vesting of Unvested Restricted Stock Units 318,046 — 282,340 —

Incremental Shares Attributable to the Assumed Exercise of Warrants 61,124 — 12,154 —

Diluted Weighted Average Number of Shares of Common Stock Outstanding 32,420,168 27,521,088 31,013,464 21,526,978

Basic Net Income (Loss) per Share Attributable to Common Stockholders $ 0.05 $ ( 0.07 ) $ 0.01 $ ( 0.32 )

Diluted Net Income (Loss) per Share Attributable to Common Stockholders $ 0.04 $ ( 0.07 ) $ 0.01 $ ( 0.32 )

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

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

Weighted Average Number of Shares of Common Stock Outstanding - Basic and Diluted 34,107,640 29,327,204

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

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

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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

Three Months Ended March 31,

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

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

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

The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

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

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.

In December 2023, the Financial Accounting Standards Board ("FASB") issued the Accounting Standards Update ("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.

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

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

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

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

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

Asset Acquisition

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

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

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 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 three and nine months ended September 30, 2024, the Company paid the first installment of the first deferred payment of $ 0.6 million.

The remaining installments due within the next twelve months are included as Deferred Consideration - Current on the Company's condensed 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 Accounting Standards Codification ("ASC") 805, Business Combinations .

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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 flow, estimated life cycle and customer attrition rates.

Customer relationships are being amortized over a period of 20 years.

Given that the acquired equipment had been recently purchased and recorded at 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 three and nine months ended September 30, 2024, the Company recorded amortization of its customer relationship intangible asset of $ 0.1 million and $ 0.4 million, respectively, resulting in a net intangible asset of $ 10.3 million as of September 30, 2024.

During the three and nine months ended September 30, 2023, the Company recorded amortization of its customer relationship intangible asset of $ 0.1 million.

Estimated future amortization expense on the Company's customer relationships intangible asset as of September 30, 2024 is as follows (table in thousands):

Year ending December 31:

2024 (remainder of year) $ 138

Thereafter 7,999

Total $ 10,345

Revenue Recognition

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

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

("DaVita"), at approximately 52 % and 50 % of total net product sales for the three months ended September 30, 2024 and 2023, respectively, and 47 % and 50 % of total net product sales for the nine months ended September 30, 2024 and 2023, respectively.

Rockwell's accounts receivable from this customer were approximately 40 % of the total net consolidated accounts receivable balance at each of September 30, 2024 and December 31, 2023.

See below and Note 10 for additional information regarding the Company's contracts with DaVita.

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

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

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

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

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

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

See below for additional information regarding the Company's contract with DaVita.

Product Sales

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

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

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

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

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

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

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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 condensed consolidated balance sheets as deferred license revenue.

The amounts received from Wanbang Biopharmaceuticals Co., Ltd.

(“Wanbang”), Sun Pharmaceutical Industries Ltd.

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

The amounts received from Sun Pharmaceutical Industries Ltd.

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

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

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.

nine months ended September 30, 2023, all remaining deferred revenue relating to the Wanbang and Baxter agreements was recognized as revenue.

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

Product Purchase Agreements

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

Under the Amended Agreement, the Company and DaVita agreed to an increase in product pricing, effective September 1, 2023 and a one-time payment of $ 0.4 million to Rockwell on or after December 1, 2023, which was recorded as revenue recognized during the fourth quarter of 2023.

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

While the Company received written notice from DaVita in September 2024 that notified the Company that DaVita extends the term of the Amended Agreement through December 31, 2025 ("Extension Term"), there can be no assurance of any further extensions.

Product pricing will be increased for the Extension Term.

DaVita has indicated to Rockwell that DaVita expects volumes to decline during the Extension Term.

DaVita is required to provide a twelve-month binding forecast on or before December 15, 2024.

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

otherwise, the Company may terminate the Amended Agreement.

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

As of the date of this filing, the Company has received no such notification.

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

All license agreements have been terminated.

Product Purchase Agreement

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

concentrates.

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

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

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

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

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

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

Discussion between Rockwell and DaVita are ongoing.

Disaggregation of revenue

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

In thousands Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024

In thousands Three Months Ended March 31, 2025

Products By Geographic Area Total U.S.

Rest of World Total U.S.

Rest of World

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Net Revenue $ 18,914 $ 16,436 $ 2,478

In thousands Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

In thousands Three Months Ended March 31, 2024

Products By Geographic Area Total U.S.

Rest of World Total U.S.

Rest of World

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Product Sales – Point-in-time 22,665 20,934 1,731

License Fee – Over time — — — 1,472 1,472 —

Total Concentrate Products 22,665 20,934 1,731

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

In thousands September 30, 2024 December 31, 2023 January 1, 2023

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

Accounts Receivable, net $ 9,670 $ 8,291 $ 10,901

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

There were no other material contract assets recorded on the condensed consolidated balance sheets as of September 30, 2024 and December 31, 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 September 30, 2024 or December 31, 2023.

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

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

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

Transaction price allocated to remaining performance obligations

For the nine months ended September 30, 2024 and 2023, the Company recognized an immaterial amount 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 $ 0.5 million as of September 30, 2024.

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

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

Intangible Assets and Deferred Consideration

Intangible Assets

Our customer relationship intangible asset relates to customer relationships acquired in connection with an acquisition executed on July 10, 2023 with Evoqua Water Technologies LLC ("Evoqua") (the "Evoqua Asset Acquisition").

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

March 31, 2025

Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Customer Relationships 20 years $ 11,035 $ ( 966 ) $ 10,069

December 31, 2024

Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount

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

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

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

Year ending December 31:

2025 (remainder of year) $ 414

Thereafter 7,447

Total $ 10,069

Deferred Consideration

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

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

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Investments - Available-for-Sale

Investments available-for-sale consisted of the following as of September 30, 2024 and December 31, 2023 (table in thousands):

September 30, 2024

Amortized Cost Unrealized Gain Unrealized Loss Accrued Interest Fair Value

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

March 31, 2025

Amortized Cost Unrealized Gain Fair Value

Available-for-Sale Securities

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December 31, 2024

Amortized Cost Unrealized Gain Unrealized Loss Accrued Interest Fair Value

Amortized Cost Unrealized Gain Fair Value

Available-for-Sale Securities

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

During the nine months ended September 30, 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 condensed consolidated statements of operations.

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

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

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

Segment Reporting

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.

Accordingly, the Company has one reportable segment.

The Company has a single management team that reports to its 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.

ROCKWELL MEDICAL, INC.

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Notes to Condensed Consolidated Financial Statements

As of September 30, 2024, the Company's remaining available-for-sale securities are all due within one year.

Components of inventory, net of reserves, as of September 30, 2024 and December 31, 2023 were as follows (table in thousands):

September 30,

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

Three Months Ended March 31,

Net Sales $ 18,914 $ 22,676

Cost of Sales 15,872 19,612

Gross Profit 3,042 3,064

Employee Compensation 2,678 2,287

Administrative Costs 1,724 2,101

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

Other Expense:

Realized Gain on Investments 56 —

Interest Expense ( 277 ) ( 431 )

Interest Income 66 24

Total Other Expense, net ( 155 ) ( 407 )

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

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

2025 December 31,

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Total Inventory $ 5,045 $ 5,956

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 studies.

As of September 30, 2024 and December 31, 2023, Rockwell had total current concentrate inventory aggregating $ 6.2 million and $ 5.9 million, respectively, against which Rockwell had reserved $ 0.3 million and $ 25,000 at September 30, 2024 and December 31, 2023, respectively.

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

(See Note 4, Deferred License Revenue section).

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

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

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Property and Equipment

As of September 30, 2024 and December 31, 2023, the Company’s property and equipment consisted of the following (table in thousands):

September 30,

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

2025 December 31,

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Property and Equipment, net $ 5,394 $ 5,785

Depreciation and amortization expense for each of the three months ended September 30, 2024 and 2023 was $ 0.4 million.

Depreciation and amortization expense for the nine months ended September 30, 2024 and 2023 was $ 1.2 million and $ 0.8 million, respectively.

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Accrued Liabilities

Accrued liabilities as of September 30, 2024 and December 31, 2023 consisted of the following (table in thousands):

September 30,

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

2025 December 31,

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Accrued Unvouchered Receipts 1,294 1,417

Accrued Workers Compensation 340 254

Accrued Manufacturing Expense 602 602

Accrued Workers Compensation 158 176

Other Accrued Liabilities 1,126 1,336

Total Accrued Liabilities $ 4,578 $ 6,275

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.

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 revenue of $ 1.5 million during the nine months ended September 30, 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 condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023.

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.

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

On June 16, 2022, the Company issued an additional 7,500 shares of the Series X Preferred Stock to DaVita for gross proceeds of $ 7.5 million.

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 as Series X Preferred Stock 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 September 30, 2024, the Series X Preferred Stock accreted a total of $ 0.3 million.

As of March 31, 2025, 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).

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

Specifically, until DaVita owns less than 50 % of its investment, the Company may only incur additional debt in the form of a purchase money loan, a working capital line of up to $ 5 million, or 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.

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

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 each of September 30, 2024 and December 31, 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.

As of September 30, 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, pre-funded warrants and all other warrants (collectively, "common stock equivalents"):

As of September 30,

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

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

As of March 31,

Common Stock and Common Stock Equivalents:

Common Stock 34,257,903 29,556,474

Common Stock Issuable upon Exercise of Pre-funded Warrants — —

Common Stock and Pre-funded Stock Warrants 32,318,806 28,489,663

Options to Purchase Common Stock 1,884,476 1,876,031

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Total 41,902,125 37,222,734

During the three months ended September 30, 2024 and 2023, nil and 1,793,000 Pre-Funded Warrants were exercised, respectively.

During the nine months ended September 30, 2024 and 2023, nil and 6,300,000 Pre-Funded Warrants were exercised, respectively.

Controlled Equity Offering

On April 8, 2022, the Company entered into the Sales Agreement (the "ATM facility") 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.

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

(the "Agent"), pursuant to which the Company may offer and sell from time to time shares of Company’s common stock through

the Agent pursuant to the Company’s shelf registration statement on Form S-3 (No.

333-259923) filed with the SEC on September 30, 2021 (the “Prior Registration Statement”).

This Prior Registration Statement 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 under the Sales Agreement (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 nine months ended September 30, 2024, 2,990,925 shares were sold pursuant to the Sales Agreement for net proceeds of $ 6.4 million.

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

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

Private Placement

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.

Third Amendment

Warrant Issuance

In connection with the execution of the Third Amendment, as defined and described in Note 15 , on January 2, 2024, the Company issued to Innovatus a warrant to purchase 191,096 shares of the Company’s common stock with an exercise price of $ 1.83 per share.

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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 %

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 is being amortized through interest expense over the remaining contractual term of the Term Loans, as defined and described in Note 15.

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Stock-Based Compensation

The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2024 and 2023 as follows (table in thousands):

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Service Based Awards:

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Performance Based Restricted Stock Awards

A summary of the Company’s performance based restricted stock awards during the nine months ended September 30, 2024 is as follows:

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

Performance Based Restricted Stock Awards Number of Shares Weighted Average

Unvested at January 1, 2025 891 $ 62.70

Unvested at September 30, 2024 891 $ 62.70

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Unvested at March 31, 2025 891 $ 62.70

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

As of September 30, 2024, there is no unrecognized stock-based compensation expense related to performance based restricted stock awards.

As of March 31, 2025, 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 nine months ended September 30, 2024 is as follows:

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

Service Based Restricted Stock Units Number of Shares Weighted Average

Unvested at January 1, 2025 584,309 $ 1.72

Granted 466,656 1.58

Vested ( 200,983 ) 1.91

Unvested at September 30, 2024 534,309 $ 1.48

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

The vesting periods range from 1 to 3 years.

As of September 30, 2024, the unrecognized stock-based compensation expense was $ 0.5 million, which is expected to be recognized over the next 1.4 years.

Unvested at March 31, 2025 383,326 $ 1.62

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

The vesting periods range from one to three years .

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

Service Based Stock Option Awards

The fair value of the service-based stock option awards granted for the nine months ended September 30, 2024 and 2023 were based on the following assumptions:

Nine Months Ended

September 30, 2024 Nine Months Ended

September 30, 2023

Exercise Price $ 1.39 - $ 1.80

$ 1.37 - $ 2.83

Expected Stock Price Volatility 81.8 %

81.6 % - 81.8 %

Risk-free Interest Rate 4.31 % - 4.45 %

3.41 % - 3.46 %

Term (years) 5.61 - 5.62

A summary of the Company’s service-based stock option activity for the nine months ended September 30, 2024 is as follows:

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

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Service Based Stock Option Awards Shares

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

Granted 569,160 1.40

Exercised ( 6,042 ) 1.49

Forfeited ( 1,500 ) 2.79

Expired ( 271 ) 2.06

Outstanding at September 30, 2024 1,874,729 $ 4.10 8.2 $ 4,068

Exercisable at September 30, 2024 632,600 $ 8.73 7.2 $ 1,105

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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

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 granted during the nine months ended September 30, 2024 and 2023 was $ 0.99 and $ 1.03 , respectively.

As of September 30, 2024, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $ 0.7 million, which is expected to be recognized over the next 2.9 years.

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

License Agreements

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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 of September 30, 2024 and December 31, 2023, the Company has accrued $ 0.1 million relating to certain IP reimbursement expenses and certain sublicense royalty fees, which is included within accrued liabilities on the condensed consolidated balance sheets.

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.

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

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

ROCKWELL MEDICAL, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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 September 30, 2024 and December 31, 2023.

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.

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

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

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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 the nine months ended September 30, 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.

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

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

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

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

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

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

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

Operating Leases

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Short-term Lease Rent Expense 5 5

Total Rent Expense $ 716 $ 716 $ 2,081 $ 2,166

Total Lease Expense $ 721 $ 720

Other Information

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Year ending December 31, 2028 57 —

Total 3,049 1,485

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The Company is accreting up to this Final Fee premium with a charge against interest expense on the accompanying condensed 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 each funding of the Term Loans, the Company was required to issue to Innovatus a warrant (each a “Warrant”, and together 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.

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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 Term Loans were 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.

In September 2021, the Company entered into an amendment to the Loan Agreement in which the Company, in exchange for Innovatus lowering the sales covenants, agreed to:

(i) prepay an aggregate principal amount of $ 7.5 million in ten installments commencing on December 1, 2021;

(ii) pay an additional prepayment premium of 5 % on prepaid amounts if the Company elected to prepay all outstanding Term Loans on or before September 24, 2023;

and (iii) maintain minimum liquidity of no less than $ 5.0 million if the aggregate principal amount of Term Loans was greater than $ 15 million pursuant to the liquidity covenant in the Loan Agreement.

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

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

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

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

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.

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 "Effective Date").

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 30 months, or up to 36 months if certain conditions are met.

The Company will make equal monthly payments of principal, together with applicable interest, in arrears, starting either August 1, 2026 or February 1, 2027, depending on whether the interest only period is extended to 36 months after the Effective Date.

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

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 February 1, 2027.

The Term Loans will mature on January 1, 2029.

Effective on January 1, 2024, the Term Loans bear 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 %.

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

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

The Term Loans will be

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

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

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

However, as of September 30, 2024, the Company was in compliance with all covenants under the Third Amendment.

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

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

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

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

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.

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

For additional information, see Note 11.

The effective interest rate is 11.5 % as of September 30, 2024.

For the three months ended September 30, 2024 and 2023, interest expense amounted to $ 0.2 million and $ 0.3 million, respectively.

For the nine months ended September 30, 2024 and 2023, interest expense amounted to $ 0.7 million and $ 0.9 million, respectively.

As of September 30, 2024, the outstanding balance of the Term Loan was $ 8.4 million, net of unamortized issuance costs and discount of $ 0.6 million, and including $ 0.8 million of premium accretion, $ 0.1 million related to a fee resulting from the Third Amendment, and paid-in-kind interest of $ 0.1 million.

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

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

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

The 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 September 30, 2024 (in thousands):

September 30, 2024

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

March 31, 2025

2025 (remaining) $ —

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

Term Loan - Long-Term, net of issuance costs $ 8,383

Term Loan - Long-Term, net $ 8,559

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

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

ROCKWELL MEDICAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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

During the nine months ended September 30, 2024, the Company's insurance financing note payable balance was paid in full.

On June 24, 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 September 30, 2024, the balance of the insurance financing note payable was $ 0.5 million.

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

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

What changed 10-Q

Item 1. Financial Statements