Item 9A. Controls and Procedures
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
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defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025. 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, 2025. 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 accepted 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, 2025. 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, 2025.
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, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information .
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Except as set forth below, the information required by this Item 10 is incorporated herein by reference to information in our proxy statement for our 2026 Annual Meeting of Stockholders (the “2026 Proxy Statement”), which we expect to be filed with the SEC within 120 days of the end of our fiscal year ended December 31, 2025, 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.
Except as set forth below, the information required by this Item 11 is incorporated herein by reference to information in our 2026 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 2026 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, 2025:
Plan Category Number of securities to be issued upon exercise of outstanding options and restricted stock units and awards 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)
4,537,911 $ 2.67 1,944,938
Equity compensation plans not approved by security holders (2)
613,204 $ 2.52 —
Total 5,151,115 $ 2.64 1,944,938
(1) Consists of 2,663,360 stock options with a weighted average exercise price of $2.67, 1,156,660 restricted stock units issued at $1.11, 717,000 restricted stock units - market condition issued at $0.86 and 891 restricted stock awards issued at $62.70.
(2) Consists of 613,204 stock options with a weighted average exercise price of $2.52.
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 2026 Proxy Statement, including under headings “Independence” and “Certain Relationships and Related Party Transactions.”
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Item 14. Principal Accountant Fees and Services.
The information required by this Item 14 is incorporated herein by reference to information in our 2026 Proxy Statement, including under heading “Independent Accountants.”
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 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).
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10.9 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).
10.10+ 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).
10.11* Form of Performance Share Award Agreement March 2017 (Director Version) (Exhibit 10.65 to the Company’s Form 10-Q filed May 9, 2017).
10.12* Rockwell Medical, Inc. Amended and Restated 2018 Long Term Incentive Plan (Exhibit 10. 1 to the Company’s Form 10-Q filed on August 14, 202 5 ).
10.13* 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).
10.14* 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).
10.15* Form of Restricted Stock Unit Award Agreement Employee Version (2018 Long Term Incentive Plan).
10.16* Form of Restricted Stock Unit Award Agreement Director Version (2018 Long Term Incentive Plan).
10.17* Performance Stock Unit Award Agreement (Exhibit 10.2 to the Company's Form 10-Q filed on August 14, 2025).
10.18* Rockwell Medical, Inc. Short Term Incentive Plan (Exhibit 10.1 to the Company’s Form 10-Q filed on November 14, 2022).
10.19* Form of Indemnification Agreement (Exhibit 10.1 to the Company’s Form 8-K filed August 30, 2019).
10.20* 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).
10.21* 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).
10.22* 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).
10.23* 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).
10.24* Employment Agreement, dated as of August 31, 2022, as amended, between the Company and Heather Hunter (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on September 29, 2025).
10.25*# Consulting Agreement dated as of February 1, 2026 between the Company and Joseph Dawson.
19.1 Rockwell Medical, Inc. Statement of Company Policy Prohibiting Insider Trading (Exhibit 10.32 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.
97.1 Rockwell Medical, Inc. Amended and Restated Clawback Policy (Exhibit 10.31 to the Company's Form 10-K filed on March 21, 2024).
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
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
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Item 16. Form 10-K Summary.
None.
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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 26, 2026
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 26, 2026
Mark Strobeck, Ph.D.
/s/ Jesse Neri Senior Vice President, Chief Financial Officer
(Principal Financial Officer) March 26, 2026
Jesse Neri
/s/ Nicholas Fanslau
Controller (Principal Accounting Officer) March 26, 2026
Nicholas Fanslau
/s/ Robert S. Radie Director and Chairman of the Board March 26, 2026
Robert S. Radie
/s/ John G. Cooper Director March 26, 2026
John G. Cooper
/s/ Joseph Dawson Director March 26, 2026
Joseph Dawson
/s/ Joan Lau Director March 26, 2026
Joan Lau, Ph.D.
/s/ Allen R. Nissenson Director March 26, 2026
Allen R. Nissenson, M.D.
/s/ Mark H. Ravich Director March 26, 2026
Mark H. Ravich
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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, 2025 and 2024
F- 4
Consolidated Statements of Operations for the years ended December 31, 2025 and 2024
F- 5
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2025 and 2024
F- 6
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025 and 2024
F- 7
Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024
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, 2025 and 2024, 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, 2025 and 2024, 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.
Revenue – Chargeback Accrual
As disclosed in Note 3 to the financial statements, the Company records variable consideration estimated at the time of sale, for chargebacks in connection with new distributor relationships in 2025. The amount accrued for chargebacks as of December 31, 2025 is approximately $1.0 million. Management’s estimate of the chargeback accrual is based on estimated inventory levels held by the distributor in the channel that are expected to be sold
F-2
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through to specific customers, impacted by the contractual end customer selling price for each product versus the distributor acquisition cost.
We identified the chargeback accrual as a critical audit matter due to the significant judgment and estimation required by management to determine the accrual. As a result there is especially challenging auditor judgment required with respect to measurement uncertainty, in connection with the calculation of the chargeback accrual given certain assumptions used including sell through trends of the distributor and the lack of significant historical evidence available to predict future activity in 2026. This in turn led to a high degree of auditor subjectivity and significant audit effort was required in performing our procedures and evaluating audit evidence relating to estimates made by management.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included assessing the design and implementation of controls relating to the chargeback accrual. We evaluated the estimated inventory levels in the distribution channel expected to be sold through to specific customers, considered the underlying contracts for the distributor acquisition cost, and inspected external information from the distributor including the contractual end customer selling price for each product as well as the sell through activity to date. We performed an analysis of the Company’s accrual using our independent assumptions. We further evaluated the chargeback accrual by analyzing actual monthly sale and chargeback trends and by comparing the recorded accrual to subsequent amounts ultimately charged back by the distributor.
/s/ EisnerAmper LLP
We have served as the Company’s auditor since 2023.
EISNERAMPER LLP
Iselin, New Jersey
March 26, 2026
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and par value amounts)
December 31,
2025 2024
ASSETS
Cash and Cash Equivalents $ 10,711 $ 15,662
Investments Available-for-Sale 14,286 5,940
Accounts Receivable, net 8,143 8,291
Inventory, net 3,424 5,778
Prepaid and Other Current Assets 1,599 1,359
Total Current Assets 38,163 37,030
Property and Equipment, net 4,629 5,785
Inventory - Non-Current — 178
Right of Use Assets - Operating, net 2,569 3,215
Right of Use Assets - Finance, net 651 1,344
Intangible Assets, net 9,656 10,207
Goodwill 921 921
Other Non-Current Assets 556 528
Total Assets $ 57,145 $ 59,208
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable $ 1,999 $ 2,869
Accrued Liabilities 4,337 6,275
Deferred Consideration - Current 1,000 2,371
Lease Liabilities - Operating - Current 1,155 1,566
Lease Liabilities - Finance - Current 469 599
Deferred License Revenue - Current — 46
Insurance Financing Note Payable 264 268
Customer Deposits 356 97
Total Current Liabilities 9,580 14,091
Lease Liabilities - Operating - Long-Term 1,454 1,699
Lease Liabilities - Finance - Long-Term 304 931
Term Loans - Long-Term, Net of Issuance Costs 8,826 8,472
Deferred License Revenue - Long-Term — 429
Deferred Consideration - Long-Term — 1,000
Total Liabilities 20,164 26,622
Commitments and Contingencies (See Note 14)
Stockholders’ Equity:
Preferred Stock, $ 0.0001 par value, 2,000,000 shares authorized, 15,000 shares issued and outstanding at both December 31, 2025 and 2024
— —
Common Stock, $ 0.0001 par value, 170,000,000 shares authorized, 39,405,302 and 34,056,920 shares issued and outstanding at December 31, 2025 and 2024, respectively
4 3
Additional Paid-in Capital 439,838 430,207
Accumulated Deficit ( 402,992 ) ( 397,678 )
Accumulated Other Comprehensive Income 131 54
Total Stockholders’ Equity 36,981 32,586
Total Liabilities and Stockholders’ Equity $ 57,145 $ 59,208
The accompanying notes are an integral part of the consolidated financial statements.
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
Years Ended December 31,
2025 2024
Net Sales $ 69,258 $ 101,489
Cost of Sales 57,563 84,005
Gross Profit 11,695 17,484
Research and Product Development — 19
Selling and Marketing 2,354 2,749
General and Administrative 14,032 14,108
Operating (Loss) Income ( 4,691 ) 608
Other Income (Expense):
Realized Gain on Available-for-Sale Investments 267 74
Interest Expense ( 1,124 ) ( 1,254 )
Interest Income 234 92
Total Other Expense, net ( 623 ) ( 1,088 )
Net Loss $ ( 5,314 ) $ ( 480 )
Net Loss Per Share Attributable to Common Stockholders - Basic and Diluted $ ( 0.15 ) $ ( 0.03 )
Weighted Average Number of Shares of Common Stock Outstanding - Basic and Diluted 35,974,231 31,058,539
The accompanying notes are an integral part of the consolidated financial statements.
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
Years Ended December 31,
2025 2024
Net Loss $ ( 5,314 ) $ ( 480 )
Reclassification of Realized Gain on Available-for-Sale Investments Included in Net Loss ( 267 ) ( 25 )
Unrealized Gain on Available-for-Sale Investments 344 85
Foreign Currency Translation Adjustments — ( 5 )
Comprehensive Loss $ ( 5,237 ) $ ( 425 )
The accompanying notes are an integral part of the consolidated financial statements.
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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, 2024 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 — — — — — — ( 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 Offering — — 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
Net Loss — — — — — ( 5,314 ) — ( 5,314 )
Reclassification of Realized Gain on Available-for-Sale Investments — — — — — — ( 267 ) ( 267 )
Unrealized Gain on Available-for-Sale Investments — — — — — — 344 344
Issuance of Common Stock, net of Offering Costs/At-the-Market Offering — — 4,964,636 1 7,799 — — 7,800
Vesting of Restricted Stock Units Issued, net of Taxes Withheld — — 373,433 — — — — —
Issuance of Common Stock Upon Exercise of Options — — 10,313 16 — — 16
Stock-based Compensation — — — — 1,816 — — 1,816
Balance as of December 31, 2025 15,000 $ — 39,405,302 $ 4 $ 439,838 $ ( 402,992 ) $ 131 $ 36,981
The accompanying notes are an integral part of the consolidated financial statements.
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended December 31,
2025 2024
Cash Flows From Operating Activities:
Net Loss $ ( 5,314 ) $ ( 480 )
Adjustments To Reconcile Net Loss To Net Cash (Used In) Provided By Operating Activities:
Depreciation and Amortization 2,192 2,180
Stock-based Compensation 1,816 1,292
Write-off of Inventory 178 —
Change in Inventory Reserves ( 425 ) 425
Non-cash Lease Expense from Right of Use Assets 2,141 1,960
Amortization of Debt Financing Costs and Accretion of Debt Discount and Premium 354 426
Loss on Disposal of Assets 57 —
Realized Gain on Sale of Investments ( 267 ) ( 74 )
Gain on Early Termination of Lease Liability ( 24 ) —
Provision for Credit Losses 246 —
Changes in Assets and Liabilities:
Accounts Receivable ( 98 ) 2,610
Inventory 2,779 ( 332 )
Prepaid and Other Assets 392 374
Accounts Payable ( 870 ) ( 1,647 )
Lease Liabilities ( 1,662 ) ( 1,452 )
Accrued and Other Liabilities ( 1,679 ) ( 1,034 )
Deferred License Revenue ( 475 ) ( 46 )
Changes in Operating Assets and Liabilities ( 1,613 ) ( 1,527 )
Net Cash (Used In) Provided by Operating Activities ( 659 ) 4,202
Cash Flows From Investing Activities:
Purchases of Investments Available-for-Sale ( 24,202 ) ( 5,858 )
Proceeds from Sales of Investments Available-for-Sale 16,200 2,003
Purchases of Equipment ( 542 ) ( 1,011 )
Net Cash Used In Investing Activities ( 8,544 ) ( 4,866 )
Cash Flows From Financing Activities:
Payments on Insurance Financing Note Payable ( 664 ) ( 646 )
Payments on Finance Lease Liabilities ( 529 ) ( 558 )
Proceeds from Issuance of Common Stock 7,816 10,181
Deferred Consideration Paid in Connection with Evoqua Asset Acquisition
( 2,371 ) ( 1,629 )
Net Cash Provided By Financing Activities 4,252 7,348
Effect of Exchange Rate Changes on Cash and Cash Equivalents — ( 5 )
Net (Decrease) Increase in Cash and Cash Equivalents ( 4,951 ) 6,679
Cash and Cash Equivalents at Beginning of Year 15,662 8,983
Cash and Cash Equivalents at End of Year $ 10,711 $ 15,662
Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest $ 772 $ 847
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 $ 1,006 $ 2,012
De-recognition of Lease Liability - Finance and Right of Use Asset - Finance Upon Early Termination $ 228 $ —
Change in Unrealized Gain on Investments Available-for-Sale $ 77 $ 60
Increase in Prepaid Assets from Insurance Financing Note Payable $ 660 $ 670
The accompanying notes are an integral part of the consolidated financial statements.
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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 and Texas, and manufactures its dry acid concentrate mixers at its facility in Iowa. The Company previously operated a manufacturing and warehouse facility in South Carolina, but the Company concluded manufacturing at that facility in the third quarter of 2025 as part of its ongoing efforts to streamline operations and improve efficiency. Rockwell delivers its hemodialysis concentrates products and mixers to dialysis clinics throughout the United States and internationally utilizing its own delivery trucks and third-party carriers.
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
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, 2025, Rockwell had an accumulated deficit of approximately $ 403.0 million and stockholders' equity of $ 37.0 million. As of December 31, 2025, Rockwell had approximately $ 25.0 million of cash, cash equivalents and investments available-for sale, and working capital of $ 28.6 million. Net cash used in operating activities for the year ended December 31, 2025 was $ 0.7 million.
Management evaluated its going concern by reviewing the Company's operational plans which include executing on projected financial performance, 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 $ 13.1 million remaining on 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 (as defined below in Note 16) 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 16 for further detail). The Company satisfied those conditions and will now make interest-only payments for the full 36 months. As of December 31, 2025, 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, 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
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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. Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements
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 revenues and expenses during the reporting period. Actual results could differ from those estimates.
Restructuring and Other Charges
During the year ended December 31, 2025, the Company concluded manufacturing at its facility in Greer, South Carolina as part of its ongoing efforts to streamline operations and improve efficiency. As a result, the Company incurred severance expense and other closure-related costs during the year ended December 31, 2025 of $ 1.0 million which were included in cost of sales on the accompanying consolidated statements of operations. No impairment losses were recorded, as the plant's assets were either fully depreciated or transferred to other operating locations. The closure is not expected to have a significant impact on the Company's future operations, and the restructuring costs associated with these activities were substantially completed by December 31, 2025.
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.
Certain distributors deduct distribution service fees from amounts due to the Company. These fees, along with chargebacks arising from contracted pricing arrangements with certain end customers, are recorded as reductions of revenue. Chargebacks represent the difference between the distributor’s acquisition cost and the lower contracted price offered to the end customer, and are estimated and recorded as a reduction of revenue at the time of the initial sale to the distributor. Chargeback
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estimates represent variable consideration and are determined based on contractual pricing arrangements, historical chargeback activity and expected sales to eligible end customers.
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.
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 three distribution and license agreements, which were recognized as revenue over the estimated term of the applicable distribution and license agreement as regulatory approval was not received and the Company did not have sufficient experience in China, India, South Korea and Turkey to determine that regulatory approval was probable as of the execution of the agreement. During the year ended December 31, 2025, all remaining deferred revenue relating to the distribution and license agreements was recognized, resulting in $ 0.3 million of revenue recorded. All license agreements have been terminated.
Product Purchase Agreement
On September 18, 2023, Rockwell and DaVita, Inc. ("DaVita") entered into an Amended and Restated Products Purchase Agreement (the "Amended Agreement"), 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. Prior to the expiration of the Amended Agreement on December 31, 2024, the Company received written notice, notifying the Company that DaVita intended to extend the term of the Amended Agreement through December 31, 2025 with an increase in product pricing. DaVita subsequently indicated that it planned to transition to another supplier by mid-2025, subject to further discussions between Rockwell and DaVita. DaVita agreed to quarterly, non-refundable payments totaling $ 2.0 million during the year ended December 31, 2025 to ensure supply continuity during the transition period for products purchased. These quarterly, non-refundable payments totaled $ 2.0 million and were recorded as revenue during the year ended December 31, 2025. On December 23, 2025, DaVita and the Company extended
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the term of the Amended Agreement through December 31, 2026 (the "Extension Term") with an increase in product pricing during the Extension Term.
Disaggregation of revenue
Revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.
In thousands Year Ended December 31, 2025
Products By Geographic Area Total U.S. Rest of World
License Fee – Over Time $ 325 $ — $ 325
Concentrate Product Sales - Point-in-Time 68,933 60,358 8,575
Net Revenue $ 69,258 $ 60,358 $ 8,900
In thousands Year Ended December 31, 2024
Products By Geographic Area Total U.S. Rest of World
License Fee – Over Time $ 46 $ — $ 46
Concentrate Product Sales - Point-in-Time 101,443 92,258 9,185
Net Revenue $ 101,489 $ 92,258 $ 9,231
Contract balances
The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.
In thousands December 31, 2025 December 31, 2024 January 1, 2024
Accounts Receivable, net $ 8,143 $ 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 consolidated balance sheets as of December 31, 2025 and 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 December 31, 2025 or 2024.
Transaction price allocated to remaining performance obligations
Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, totaled nil as of both December 31, 2025 and 2024. 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.
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,
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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 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, and is presented net of estimated chargebacks. 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.
Inventory
Inventory is stated at the lower of cost or net realizable value. Cost is determined on the first‑in first‑out 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 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.
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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, 2025 and 2024, 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, 2025 and 2024, and determined that no adjustment for impairment of goodwill or indefinite lived assets was required during the years ended December 31, 2025 and 2024.
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, 2025 and 2024.
Definite-lived intangible assets consist of our customer list associated with the Evoqua Asset Acquisition. 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 Company accounts for uncertain tax positions in accordance with ASC 740, Income Taxes. The Company evaluates its tax positions for all open tax years and recognizes tax benefits when it is more likely than not (i.e., a likelihood of greater than 50 percent), based on the technical merits, that the position will be sustained upon examination by the applicable taxing authority. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that do not meet the recognition threshold are not recognized in the financial statements. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Accrued interest and penalties are included in the related tax liability on the balance sheet.
Research and Product Development
The Company recognizes research and product development expenses as incurred. The Company did not incur any product development and research costs in 2025 and minimal product development and research costs in 2024.
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, 2025 and 2024, 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 12).
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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 one to two 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 condition 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.
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 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.
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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:
As of December 31,
2025 2024
Warrants to Purchase Common Stock 3,984,484 3,984,484
Options to Purchase Common Stock 3,276,564 1,886,247
Convertible Preferred Stock 1,405,001 1,391,045
Unvested Restricted Stock Units 1,156,660 584,309
Unvested Restricted Stock Units - Market Condition 717,000 —
Unvested Restricted Stock Awards 891 891
Total 10,540,600 7,846,976
The following table presents the calculation of basic and diluted EPS:
Years Ended December 31,
2025 2024
Numerator:
Net Loss $ ( 5,314 ) $ ( 480 )
Accretion of Series X Preferred Stock ( 153 ) ( 302 )
Net Loss Attributable to Common Stockholders $ ( 5,467 ) $ ( 782 )
Denominator
Weighted Average Number of Shares of Common Stock Outstanding - Basic and Diluted 35,974,231 31,058,539
Net Loss Per Share Attributable to Common Stockholders - Basic and Diluted $ ( 0.15 ) $ ( 0.03 )
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss 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 loss refers to revenues, expenses, gains and losses that are included in comprehensive income, but excluded from net loss as these amounts are recorded directly as an adjustment to stockholders’ equity. As of December 31, 2025, accumulated other comprehensive loss consists of (i) unrealized gain on available‑for‑sale investments of $ 0.1 and (ii) foreign currency translation adjustments of nil.
Adoption of Recent Accounting Pronouncements and New Accounting Pronouncements
The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change.
Recently Adopted Accounting Pronouncements
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 adopted ASU 2023-09 for the year ended December 31, 2025 and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. For additional information, see Note 17.
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New Accounting Pronouncements
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.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which simplifies the estimation of credit losses on current accounts receivable and contract assets by allowing the election of a practical expedient to assume that the current conditions as of the consolidated balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. The guidance in this ASU is effective for fiscal years beginning after December 15, 2025 and for interim periods within those fiscal years. Early adoption is permitted. If adopted in an interim period, entities are required to apply the new guidance as of the beginning of the annual reporting period that includes such interim period. The Company is currently assessing the impact this ASU will have on the consolidated financial statements and footnote disclosures.
Note 4. Intangible Assets and Deferred Consideration
Intangible Assets
Our customer relationship intangible asset relates to customer relationships acquired in connection with an acquisition (the "Evoqua Asset Acquisition") executed on July 10, 2023 with Evoqua Water Technologies LLC ("Evoqua").
The details of our intangible assets subject to amortization are set forth below (in thousands):
December 31, 2025
Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Customer Relationships 20 years $ 11,035 $ ( 1,379 ) $ 9,656
December 31, 2024
Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Customer Relationships 20 years $ 11,035 $ ( 828 ) $ 10,207
During the year ended December 31, 2025, the Company recorded amortization of its customer relationship intangible asset of $ 0.6 million, resulting in a net intangible asset of $ 9.7 million as of December 31, 2025. During the year ended December 31, 2024, the Company recorded amortization of its customer relationship intangible asset of $ 0.6 million.
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Estimated future amortization expense on the Company's customer relationships intangible asset as of December 31, 2025 is as follows (table in thousands):
Year ending December 31:
2026 $ 552
2027 552
2028 552
2029 552
2030 552
Thereafter 6,896
Total $ 9,656
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. The Company made payments totaling $ 2.4 million and $ 1.3 million for during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, a deferred consideration liability of $ 1.0 million is presented in Deferred Consideration - Current on the accompanying consolidated balance sheets.
Note 5 . Investments - Available-for-Sale
Investments available-for-sale consisted of the following as of December 31, 2025 and 2024 (table in thousands):
December 31, 2025
Amortized Cost Unrealized Gain Unrealized Loss Accrued Interest Fair Value
Available-for-Sale Securities
Debt Securities $ 14,149 $ 137 $ — $ — $ 14,286
December 31, 2024
Amortized Cost Unrealized Gain Unrealized Loss Accrued Interest Fair Value
Available-for-Sale Securities
Debt Securities $ 5,880 $ 60 $ — $ — $ 5,940
The fair value of investments available-for-sale are determined using quoted market prices from daily exchange-traded markets based on the closing price as of the balance sheet date and are classified as a Level 1 measurement under ASC 820, Fair Value Measurements .
As of December 31, 2025 and 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 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.
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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 consolidated balance sheets as total assets.
The Company’s significant segment expenses for its one segment for the years ended December 31, 2025 and 2024 consisted of the following (table in thousands):
Year Ended December 31,
2025 2024
Net Sales $ 69,258 $ 101,489
Cost of Sales 57,563 84,005
Gross Profit 11,695 17,484
Employee Compensation 10,140 9,452
Administrative Costs 6,246 7,424
Operating (Loss) Income ( 4,691 ) 608
Other Income (Expense):
Realized Gain on Available-for-Sale Investments 267 74
Interest Expense ( 1,124 ) ( 1,254 )
Interest Income 234 92
Total Other Expense, net ( 623 ) ( 1,088 )
Net Loss $ ( 5,314 ) $ ( 480 )
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 16 % of Rockwell's total net product sales in 2025 and 45 % of its total net product sales in 2024. Rockwell's accounts receivable from DaVita were approximately 14 % and 20 % of the total net consolidated accounts receivable balance as of December 31, 2025 and 2024, respectively. For additional information regarding the Company's contracts with DaVita, see Note 3. No other current customer accounted for more than 10% of sales in any of the last two years, however one other customer accounted for 17 % of the Company's total net consolidated account receivable balance as of December 31, 2025.
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 12 % and 9 % of its total sales in 2025 and 2024, respectively.
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Note 7. Inventory
Components of inventory, net of reserves as of December 31, 2025 and 2024 were as follows (table in thousands):
December 31,
2025 December 31,
2024
Inventory - Current Portion
Raw Materials $ 1,848 $ 3,010
Work in Process 199 367
Finished Goods 1,377 2,401
Total Current Inventory 3,424 5,778
Inventory - Long Term (1)
— 178
Total Inventory $ 3,424 $ 5,956
__________
(1) Represents inventory related to Triferic raw materials, which was expected to be utilized for the Company's international partnerships. During the year ended December 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 consolidated statement of operations.
As of December 31, 2025 and 2024, Rockwell had total current concentrate inventory aggregating $ 3.4 million and $ 6.2 million, respectively, against which Rockwell had reserved $ 25.0 thousand and $ 0.5 million, respectively.
Note 8. Property and Equipment
As of December 31, 2025 and 2024, the Company’s property and equipment consisted of the following (table in thousands):
December 31,
2025 December 31,
2024
Machinery and Equipment $ 11,340 $ 11,973
Information Technology & Office Equipment 1,717 1,845
Leasehold Improvements 1,567 1,562
Laboratory Equipment 726 807
Total Property and Equipment 15,350 16,187
Accumulated Depreciation and Amortization ( 10,721 ) ( 10,402 )
Property and Equipment, net $ 4,629 $ 5,785
Depreciation and amortization expense for both of the years ended December 31, 2025 and 2024 was $ 1.6 million .
Note 9. Accrued Liabilities
Accrued liabilities as of December 31, 2025 and 2024 consisted of the following (table in thousands):
December 31,
2025 December 31,
2024
Accrued Compensation and Benefits $ 2,558 $ 2,744
Accrued Unvouchered Receipts 814 1,417
Accrued Manufacturing Expense — 602
Accrued Workers Compensation 84 176
Other Accrued Liabilities 881 1,336
Total Accrued Liabilities $ 4,337 $ 6,275
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Note 10. Insurance Financing Note Payable
On June 3, 2025, the Company entered into a short-term note payable with a principal amount of $ 0.7 million, bearing interest at a rate of 7.14 % 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, 2025 and are being paid in 10 equal monthly payments of $ 0.1 million, with the final payment due on April 3, 2026. As of December 31, 2025, the Company's insurance financing note payable balance was $ 0.3 million.
On June 4, 2024, the Company entered into a short-term note payable with a principal amount of $ 0.7 million, bearing interest at a rate of 7.89 % per annum to finance various insurance policies. Principal and interest payments related to this note began on July 3, 2024 and were paid on a straight-line amortization over 10 months, with the final payment due on April 3, 2025. As of December 31, 2024, the Company's insurance note payable balance was $ 0.3 million. During the year ended December 31, 2025, the Company's insurance financing note payable balance was paid in full.
Note 11. 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 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 December 31, 2025, a total of $ 0.5 million of the Series X Preferred Stock had been accreted.
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 as the sale of the assets that would allow for redemption is within the control of the Company, the preferred stock has been classified as permanent equity and initially recognized at fair value of $ 15 million (the proceeds on the date of issuance) less issuance costs of $ 0.1 million, resulting in an initial value of $ 14.9 million. The Company will assess at each reporting period whether conditions have changed to now meet the mandatory redemption definition which could trigger liability classification.
As of December 31, 2025 and 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.
Common Stock
As of December 31, 2025 and 2024, there were 170,000,000 shares of common stock, $ 0.0001 par value per share, authorized and 39,405,302 and 34,056,920 shares issued and outstanding, respectively.
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As of December 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 December 31,
Common Stock and Common Stock Equivalents: 2025 2024
Common Stock 39,405,302 34,056,920
Options to Purchase Common Stock 3,276,564 1,886,247
Unvested Restricted Stock Awards 891 891
Unvested Restricted Stock Units 1,156,660 584,309
Convertible Preferred Stock 1,405,001 1,391,045
Unvested Restricted Stock Units - Market Condition 717,000 —
Warrants to Purchase Common Stock 3,984,484 3,984,484
Total 49,945,902 41,903,896
Controlled Equity Offering
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 year ended December 31, 2025, 4,964,636 shares were sold pursuant to the Sales Agreement for gross proceeds of $ 8.0 million, net of offering costs of $ 0.2 million, for net proceeds of $ 7.8 million. Approximately $ 13.1 million remains available for sale under the ATM facility.
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.
Warrant Issuance
In connection with the execution of the Third Amendment, as defined and described in Note 16, on January 2, 2024, the Company issued to Innovatus a warrant to purchase 191,096 shares of the Company’s common stock with an exercise price of $ 1.83 per share. The warrant may be exercised on a cashless basis and is immediately exercisable through 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, as defined and described in Note 16.
On July 10, 2023, the Company entered into a letter agreement (the “Letter Agreement”) with Armistice Capital Master Fund Ltd. (“Armistice”), in which 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 Reload Warrant provides that a holder (together with its affiliates) may not exercise any portion of 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.
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Note 12. 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, 2025, 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 7,618,182 . As of December 31, 2025, the 2018 LTIP had 1,944,938 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, 2025 and 2024 as follows (table in thousands):
Year Ended December 31,
2025 2024
Service Based Awards:
Restricted Stock Units $ 968 $ 673
Stock Option Awards 848 619
Total $ 1,816 $ 1,292
Performance Based Restricted Stock Awards
A summary of the Company’s performance based restricted stock awards during the year ended December 31, 2025 is as follows:
Performance Based Restricted Stock Awards Number of Shares Weighted Average
Grant-Date
Fair Value
Unvested at January 1, 2025
891 $ 62.70
Unvested at December 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 December 31, 2025, there is no unrecognized stock-based compensation expense related to performance-based restricted stock awards.
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Service Based Restricted Stock Units
A summary of the Company’s service based restricted stock units during the year ended December 31, 2025 is as follows:
Service Based Restricted Stock Units Number of Shares Weighted Average
Grant-Date Fair Value
Unvested at January 1, 2025
584,309 $ 1.72
Granted 1,025,000 $ 1.07
Forfeited ( 417,649 ) $ 1.85
Vested ( 35,000 ) $ 1.07
Unvested at December 31, 2025
1,156,660 $ 1.11
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 December 31, 2025, the unrecognized stock-based compensation expense was $ 0.7 million, which is expected to be recognized over the next 1.2 years.
Restricted Stock Units - Market Condition
During the year ended December 31, 2025, the Company granted 717,000 restricted stock units with a market condition ("RSU-MC") under its Amended and Restated 2018 Long Term Incentive Plan with a grant date fair value of $ 0.6 million. The RSU-MCs are subject to both service and market based vesting conditions.
The RSU-MCs will vest, subject to the recipient's continued employment through the vesting date, if the average closing price of the Company's common stock equals or exceeds $ 2.14 per share for any consecutive 60 -day trading period occurring prior to the third anniversary of the grant date. Except in the event of a change in control or termination due to death or disability, no portion of the award will vest before the first anniversary of the grant date. The RSU-MCs qualify as equity instruments and are accounted for under ASC 718, Compensation, Stock Compensation ("ASU 718").
The unrecognized stock-based compensation expense in connection with the RSU-MCs was $ 0.5 million at December 31, 2025, which is expected to be recognized over the next 2.4 years.
The fair value of RSU-MCs was measured on the date of grant using the Monte Carlo Simulation valuation model based on the following assumptions:
Exercise price
$ 0.86
Expected stock price volatility
93.00 %
Risk-free interest rate
3.95 %
Term (years)
2.64
Service Based Stock Option Awards
The fair value of the service based stock option awards granted for the years ended December 31, 2025 and 2024 were based on the following assumptions:
December 31,
2025 2024
Exercise Price $ 0.87 - $ 1.26
$ 1.39 - $ 3.49
Expected Stock Price Volatility 90.4 %
81.8 % - 81.8 %
Risk-free Interest Rate 3.74 % - 4.14 %
4.08 % - 4.45 %
Term (Years) 5.50 - 5.86
5.61 - 5.62
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A summary of the Company’s service based stock option activity for the year ended December 31, 2025 is as follows:
Service Based Stock Option Awards Shares
Underlying
Options Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual
Term (Years) Aggregate
Intrinsic
Value
(in $1,000's)
Outstanding at January 1, 2025
1,886,247 $ 3.98 $ —
Granted 1,595,000 $ 1.06
Exercised ( 10,313 ) $ 1.48
Forfeited ( 139,146 ) $ 1.30
Expired ( 55,224 ) $ 6.38
Outstanding at December 31, 2025
3,276,564 $ 2.64 8.0 $ —
Exercisable at December 31, 2025
1,170,397 $ 5.10 6.5 $ —
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 per share grant date fair value for service based stock option awards during the years ended December 31, 2025 and 2024 was $ 0.86 and $ 1.03 , respectively.
As of December 31, 2025, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $ 0.9 million which is expected to be recognized over the next 2.3 years.
Note 13. 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.
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
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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 considered probable, and no milestone payments have been accrued as of December 31, 2025 and 2024.
Note 14. 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, 2025 for the policy year ended June 1, 2024. Estimated loss and additional future claims of approximately $ 84,000 have been reserved and accrued for as of December 31, 2025.
As of December 31, 2025, approximately $ 0.4 million was held in cash collateral and escrow by the insurance carrier for workers’ compensation insurance. At December 31, 2025, 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 15. 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.
Rockwell also occupies a 51,000 square foot facility in Grapevine, Texas, under a lease expiring in February 2031. The lease, which previously expired in December 2025, was extended by 62 months to February 2031.
The Company previously operated in a 57,000 square foot facility in Greer, South Carolina, but the Company concluded manufacturing at that facility in the third quarter of 2025 as part of its ongoing efforts to streamline operations and improve efficiency. The lease expired in February 2026. The Company recognized a gain of $ 24,000 related to the early termination of this lease during the year ended December 31, 2025, resulting from the derecognition of the related right-of-use asset and lease liability.
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During the year ended December 31, 2025, Rockwell entered into a lease for a 16,800 -square foot storage facility in Allentown, Pennsylvania, that expires in April 2030, resulting in the recognition of a right-of-use asset and corresponding lease liability of approximately $ 1.0 million on the consolidated balance sheets.
The following summarizes quantitative information about the Company’s operating and finance leases (tables in thousands):
For the year ended December 31,
2025 2024
Operating Leases
Operating Lease Cost $ 1,868 $ 1,608
Variable Lease Cost 555 508
Operating Lease Expense 2,423 2,116
Finance Leases
Amortization of Right-of-use Assets 488 559
Interest on Lease Obligations 73 114
Finance Lease Expense 561 673
Short-term Lease Rent Expense 21 21
Total Lease Expense $ 3,005 $ 2,810
Other Information
Operating Cash Flows from Operating Leases $ 1,872 $ 1,753
Operating Cash Flows from Finance Leases $ 103 $ 114
Financing Cash Flows from Finance Leases $ 529 $ 558
December 31,
2025 2024
Other Information
Weighted-average Remaining Lease Term – Operating Leases 2.7 2.4
Weighted-average Remaining Lease Term – Finance Leases 1.7 2.5
Weighted-average Discount Rate – Operating Leases 9.6 % 6.3 %
Weighted-average Discount Rate – Finance Leases 6.8 % 6.4 %
Future minimum rental payments under operating and finance lease agreements are as follows (table in thousands):
Operating Finance
Year Ending December 31, 2026 $ 1,316 $ 504
Year Ending December 31, 2027 912 311
Year Ending December 31, 2028 328 —
Year Ending December 31, 2029 283 —
Year Ending December 31, 2030 96 —
Total 2,935 815
Less Present Value Discount ( 326 ) ( 42 )
Operating and Finance Lease Liabilities $ 2,609 $ 773
Note 16. 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. The Company is no longer eligible to draw on additional tranches.
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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 issued 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 Loans 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 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 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.
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 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 %. 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) 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 (ii) 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 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, 2025, the Company was in compliance with all covenants under the Third Amendment.
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 in being amortized through interest expense over the remaining contractual term of the Term Loans. For additional information, see Note 11.
The effective interest rate used to amortize the debt issuance cost relating to these warrants is 11.0 % as of December 31, 2025. As of December 31, 2025, the outstanding balance of the Term Loans was $ 8.8 million, net of aggregate unamortized issuance costs, discounts, and premium of $ 1.3 million. For both of the years ended December 31, 2025 and 2024, interest expense, including paid-in-kind interest, amounted to $ 1.1 million.
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The Loan Agreement is secured by all assets of the Company and Rockwell Transportation, Inc. and contains customary representations and warranties and covenants, subject to customary carve outs, and initially included financial covenants related to liquidity and sales of Triferic.
The following table reflects the schedule of principal payments on the Term Loans as of December 31, 2025 (in thousands):
Year Principal Payments
2026 $ —
2027 3,852
2028 4,202
2029 (Inclusive of Final Fee) 1,335
Total Debt Maturities 9,389
Unamortized Issuance Costs and Discount ( 563 )
Term Loans, net $ 8,826
Note 17. Income Taxes
The U.S. and foreign components of pretax loss are as follows:
Year Ended December 31,
2025 2024
Pretax Loss
U.S. $ ( 5,314 ) $ ( 480 )
Foreign — —
Total Pretax Loss $ ( 5,314 ) $ ( 480 )
A reconciliation of income tax expense at the statutory rate to income tax expense at our effective tax rate is as follows (table in thousands):
Year Ended December 31,
2025 2024
Tax Expense Computed at Federal Statutory Rate $ ( 1,116 ) 21.0 % $ ( 101 ) 21.0 %
State and Local Income Tax, net of Federal Income Tax Effect ( 69 ) 1.3 % ( 6 ) 1.3 %
Effect of Change in Valuation Allowance 1,185 ( 22.3 ) % 107 ( 22.3 ) %
Total Income Tax Expense $ — — % $ — — %
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The details of the net deferred tax asset are as follows (dollars in thousands):
December 31,
2025 2024
Deferred tax assets:
Net Operating Loss Carryforward $ 72,886 $ 71,423
Stock Based Compensation 3,230 4,584
General Business Credit 6,872 6,872
Research & Experimental Expenses 219 338
Inventories 27 474
Deferred Interest 2,150 1,909
Accrued Expenses 68 84
Deferred License Revenue — 106
Other Deferred Tax Assets 244 65
Total Deferred Tax Assets 85,696 85,855
Deferred Tax Liabilities:
Goodwill & Intangible Assets 363 327
Prepaid Expenses 208 205
Book over Tax Depreciation 7 60
Total Deferred Tax Liabilities 578 592
Net Deferred Tax Asset Before Valuation Allowance 85,118 85,263
Valuation Allowance ( 85,118 ) ( 85,263 )
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 $ 326.4 million of which approximately $ 192.1 million began expiring in 2025 and will continue to expire through 2040.
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, 2025 and 2024 as a result of a full valuation allowance against the net deferred tax assets as of December 31, 2025 and 2024. The valuation allowance decreased by $ 0.1 million during the year ended December 31, 2025. Considered together with the Company's limited history of operating income and its net losses in 2025 and 2024, management has placed a full valuation allowance against the net deferred tax assets as of December 31, 2025 and 2024.
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, 2025 and 2024. The Company has not been under tax examination in any jurisdiction for the years ended December 31, 2025 and 2024. The Company completed an audit by the Internal Revenue Services for the 2021 tax year resulting in no adjustments. Tax examination years of 2022 through 2024 remain open. A recent IRC Section 382 study has not been performed, which could limit the value of the Company's net operating losses. No income taxes have been paid or refunded during the tax year.
Note 18. Subsequent Events
Subsequent to December 31, 2025 and prior to the issuance of these financial statements, the Company renewed operating lease for its 51,000 square foot manufacturing facility in Grapevine, Texas. The related lease expired in December 2025. The renewed lease has a term from January 1, 2026 to February 28, 2031 and provides for aggregate minimum lease payments of approximately $ 3.3 million. The Company will recognize the related right-of-use asset and lease liability upon lease commencement in 2026.
F-30
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.