What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-12 · 51 added, 88 removed, 80 unchanged (63% of the section changed)

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our ability to continue as a going concern;

our ability to successfully negotiate a contract extension with and/or future volume commitments by DaVita;

our ability to successfully integrate acquisitions;

the size of the hemodialysis concentrates market opportunity;

our ability to successfully execute on our business strategy;

our ability to successfully execute on our business strategy, including our commercial focus;

our ability to raise additional capital;

our ability to successfully implement certain cost containment and cost-cutting measures;

our ability to achieve profitability and statements regarding our anticipated future financial condition, operating results, cash flows and business plans.

our ability to achieve and maintain profitability and statements regarding our anticipated future financial condition, operating results, cash flows and business plans.

While we believe our forward-looking statements are reasonable, you should not place undue reliance on any such forward-looking statements, which are based on information available to us on the date of this report or, if made elsewhere, as of the date made.

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Rockwell is a healthcare company that develops, manufactures, commercializes, and distributes a portfolio of hemodialysis products for dialysis providers worldwide.

Rockwell's mission is to provide dialysis clinics and the patients they serve with the highest quality products supported by the best customer service in the industry.

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

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

Rockwell is a supplier of liquid and dry, acid and bicarbonate concentrates for dialysis patients.

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

This represents a large market opportunity for which we believe Rockwell's products are well-positioned to meet the needs of patients.

We currently operate in one market segment, the hemodialysis market, which involves the manufacturing, sale and distribution of hemodialysis products to hemodialysis clinics, including dialysis concentrates, dialysis kits and other ancillary products used in the dialysis process.

Rockwell currently serves approximately 300 customers, highlighted by all five of the leading dialysis providers in the United States, including Fresenius and DaVita.

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

Dialysate concentrates accounted for 100% of our revenue for the quarter ended March 31, 2026, of which approximately 84% of our sales was to distributors and customers for use in the United States.

Our commercial organization supports the Company's vision to focus its efforts on driving Rockwell Medical toward sustainable profitability.

Our commercial team is focused on expanding revenue within our current customer base and seeking to grow revenue through the addition of new accounts to increase Rockwell's overall market share within the hemodialysis concentrates sector.

We focus on creating long-term partnerships with customers, securing appropriate pricing for our products, and delivering high-quality product to our customers for use with their patients.

Rockwell's products are vital to vulnerable patients with end-stage kidney disease.

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

Rockwell has developed a core expertise in manufacturing and delivering hemodialysis concentrates, and has built a longstanding reputation for reliability, quality, and excellent customer service.

Rockwell's commercial organization supports the Company's vision to focus its efforts on enhancing its revenue-generating business and driving the Company towards sustainable profitability.

The Company concentrates its efforts on increasing its market share, broadening its product portfolio, right-sizing its product pricing, improving gross margins, and growing the Company's business through organic and inorganic growth and other business development opportunities.

Rockwell continues to upgrade its manufacturing equipment to streamline production and improve margins, renegotiated pricing with key suppliers, and entered into several multi-year customer purchase agreements.

On September 18, 2023, Rockwell and DaVita, Inc.

("DaVita") entered into the Amended Agreement, which amended and restated the Product Purchase Agreement, dated July 1, 2019, as amended, under which the Company supplies DaVita with certain dialysis concentrates.

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

("DaVita") entered into an Amended and Restated Products Purchase Agreement (the "Amended Agreement"), under which the Company supplies DaVita with certain dialysis concentrates.

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

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

However, DaVita subsequently indicated that it will completely transition to another supplier, subject to further discussions betw een Rockwell and DaVita.

DaVita has agreed to quarterly, non-refundable payments totaling $ 1.7 million to ensure supply continuity for products purchased during the nine months ended September 30, 2025.

These quarterly, non-refundable payments of $ 1.7 million were recorded as revenue during the nine months ended September 30, 2025.

Discussions between Rockwell and DaVita are ongoing and include a potential contract extension and/or future volume commitments by DaVita to Rockwell.

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

We continue to supply DaVita as of the filing date of this report, but at significantly reduced levels from 2024.

In the second quarter of 2025, Rockwell entered into a product purchase agreement with Innovative Renal Care ("IRC"), one of the largest dialysis service providers in the United States.

Under the terms of the agreement, Rockwell will supply IRC with liquid and dry, acid and bicarbonate hemodialysis concentrates, as well as the Company's DAMX45 dry acid concentrate mix system, which is 510(k) approved to be used exclusively with Rockwell's CitraPure and Dri-Sate dry acid concentrate powders.

This multimillion-dollar agreement contains utilization commitments will remain in effect for three years, with the option to extend for an additional one-year period.

Results of Operations for the Three Months Ended September 30, 2025 and 2024

The following table summarizes our operating results for the periods presented below (dollars in thousands):

Three Months Ended September 30,

2025 % of Revenue 2024 % of Revenue % Change

Net Sales $ 15,927 $ 28,316 (44) %

Cost of Sales 13,655 86 % 22,077 78 % (38) %

Gross Profit 2,272 14 % 6,239 22 % (64) %

Selling and Marketing 531 3 % 726 3 % (27) %

General and Administrative 3,325 21 % 3,577 13 % (7) %

Operating (Loss) Income $ (1,584) (10) % $ 1,936 6 % (182) %

During the three months ended September 30, 2025, net sales were $15.9 million compared to net sales of $28.3 million during the three months ended September 30, 2024.

The decrease of $12.4 million was primarily due to a $13.0 million reduction in sales to DaVita, partially offset by an increases of $0.6 million from price increases to other existing customers and sales to new customers.

The three months ended September 30, 2024 included $4.5 million from a special large order of premium-priced product to DaVita.

DaVita represented 12% and 52% of net sales for the three months ended September 30, 2025 and 2024, respectively.

Non-Product revenue was not material for either period.

Cost of sales for the three months ended September 30, 2025 was $13.7 million, resulting in gross profit of $2.3 million for the three months ended September 30, 2025, compared to cost of sales of $22.1 million and a gross profit of $6.2 million for the three months ended September 30, 2024.

The gross profit decrease of $3.9 million was primarily due to (i) $3.2 million a decrease in product sales, which includes $1.5 million from a special large order of premium-priced product to DaVita during the three months ended September 30, 2024 that did not repeat during the 2025 period, (ii) and increase of $0.2 million in severance expense and $0.3 million of other costs related to the closure of the Greer manufacturing facility and (iii) an increase of $0.6 million in additional manufacturing costs, partially offset by a price adjustment of $0.4 million for DaVita purchases for the three months ended September 30, 2025.

Selling and Marketing Expense

Selling and marketing expenses for the three months ended September 30, 2025 were $0.5 million compared to $0.7 million during the three months ended September 30, 2024.

The decrease was primarily due to lower compensation expense.

General and Administrative Expense

General and administrative expenses were $3.3 million for the three months ended September 30, 2025, compared to $3.6 million for the three months ended September 30, 2024.

The decrease of $0.3 million was primarily driven by a $0.2 million decrease in administrative costs and a $0.1 million decrease in professional fees.

Other Expense

Total other expense of $0.2 million and $0.3 million for the three months ended September 30, 2025 and 2024, respectively, was driven primarily by interest expense of $0.2 million in each period related to our debt facility (See Note 15 to the condensed consolidated financial statements included elsewhere in this Form 10-Q).

The interest expense for the three months ended September 30, 2025 was partially offset by $0.1 million of interest income and realized gains on available-for-sale investments of $0.1 million.

Results of Operations for the Nine Months Ended September 30, 2025 and 2024

Subsequently, DaVita indicated that it would completely transition to another supplier, subject to further discussions between Rockwell and DaVita.

Additionally, DaVita agreed to quarterly, non-refundable payments totaling $ 2.0 million to ensure supply continuity for products purchased during the year ended December 31, 2025.

These quarterly, non-refundable payments of $ 0.9 million was recorded as revenue during the three months ended March 31, 2025.

While DaVita did significantly reduce its product purchases from Rockwell, it did not completely transition its business to a different supplier.

On December 31, 2025, the Company and DaVita entered into a second amendment (the "Second Amendment") to the Amended Agreement which extended the term of the Amended Agreement by one additional year to December 31, 2026 (the "Second Extension Term").

The Second Amendment also provides for a price increase on the products sold under the Amended Agreement for the Second Extension Term.

Results of Operations for the Three Months Ended March 31, 2026 and 2025

The following table summarizes our operating results for the periods presented below (dollars in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

2026 % of Revenue 2025 % of Revenue % Change

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Gross Profit 2,897 17 % 3,042 16 % (5) %

Research and Product Development — — % 18 — % (100) %

Selling and Marketing 567 3 % 711 4 % (20) %

General and Administrative 3,810 22 % 3,691 20 % 3 %

Operating (Loss) Income $ (4,293) (9) % $ 1,127 2 %

During the nine months ended September 30, 2025, net sales were $50.9 million compared to net sales of $76.8 million during the nine months ended September 30, 2024.

Product revenue for the nine months ended September 30, 2025 was $50.6 million compared to product revenue of $76.8 million for the nine months ended September 30, 2024.

The decrease of $25.9 million was primarily due to a $27.9 million reduction in DaVita sales as a result of DaVita transitioning to a new supplier, partially offset by an increase of $2.0 million from price increases to other existing customers and sales to new customers.

The three months ended September 30, 2024 included $5.4 million from a special large order of premium-priced product to DaVita.

DaVita represented 17% and 47% of net sales during the nine months ended September 30, 2025 and 2024, respectively.

Net sales of non-product revenue were $0.3 million for the nine months ended September 30, 2025 from the recognition of the remaining deferred license revenue associated with Sun Pharmaceutical Industries Ltd.

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

("Jeil Pharma") and Drogsan Pharmaceuticals ("Drogsan Pharma").

Non-Product revenue was not material for either period.

Cost of sales for the nine months ended September 30, 2025 was $43.1 million, resulting in gross profit of $7.8 million for the nine months ended September 30, 2025, compared to cost of sales of $63.0 million and a gross profit of $13.9 million for the nine months ended September 30, 2024.

The gross profit decrease of $6.1 million was primarily due to (i) a $5.5 million decrease in product sales, which includes $1.6 million from a special large order of premium-priced product to DaVita during the nine months ended September 30, 2024 that did not repeat during the 2025 period, (ii) an increase of $0.4 million in severance expense and $0.4 million of other costs related to the closure of the Greer manufacturing facility and (iii) an increase of $1.6 million in manufacturing costs, partially offset by a price adjustment of $1.7 million for DaVita purchases for the nine months ended September 30, 2025.

Gross profit from non-product sales consists of $0.1 million associated with recognition of the remaining deferred license revenue associated with Sun Pharma, Jeil Pharma and Drogsan Pharma during the nine months ended September 30, 2025.

Research and Product Development Expense

Research and product development expenses were immaterial for the each of nine months ended September 30, 2025 and 2024 due to the decision to pause all research and development related to Triferic in 2023.

Operating Loss $ (1,480) (8) % $ (1,360) (8) % 9 %

During the three months ended March 31, 2026, net sales were $17.3 million compared to net sales of $18.9 million during the three months ended March 31, 2025.

The decrease of $1.6 million was primarily due to a $3.9 million reduction in sales to DaVita, which included a $0.9 million price adjustment in 2025 that did not repeat in 2026, partially offset by an increase of $2.6 million from price increases to other existing customers and sales to new customers.

Net sales of non-product revenue were $0.3 million for the three months ended March 31, 2025 from the recognition of the remaining deferred revenue associated with Triferic licenses.

DaVita represented 7% and 27% of net sales for the three months ended March 31, 2026 and 2025, respectively.

Cost of Sales and Gross Profit

Cost of sales for the three months ended March 31, 2026 was $14.4 million, resulting in gross profit of $2.9 million for the three months ended March 31, 2026, compared to cost of sales of $15.9 million and a gross profit of $3.0 million for the three months ended March 31, 2025.

The gross profit decrease of $0.1 million was primarily due to (i) a $0.9 million decline due to a price adjustment for DaVita purchases for the three months ended March 31, 2025 that did not repeat in 2026, (ii) a $0.9 million increase as a result of lower manufacturing costs due to a decrease in production headcount and overhead and (iii) a decrease of $0.1 million in gross profit related to the recognition of remaining deferred revenue associated with Triferic licenses in the three months ended March 31, 2025.

Selling and Marketing Expense

Selling and marketing expenses were $1.8 million and $1.9 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease of $0.1 million is primarily due to lower employee compensation expenses.

Selling and marketing expenses for the three months ended March 31, 2026 were $0.6 million compared to $0.7 million during the three months ended March 31, 2025.

The decrease was due to $0.1 million of lower compensation expense as a result of lower headcount.

General and Administrative Expense

General and administrative expenses were $10.3 million for the nine months ended September 30, 2025, compared to $10.8 million for the nine months ended September 30, 2024.

The decrease of $0.5 million was primarily driven by decreases of (i) $0.5 million in administrative costs and (ii) $0.4 million in professional fees, partially offset by an increase of $0.4 million of stock-based compensation expense.

General and administrative expenses were $3.8 million for the three months ended March 31, 2026, compared to $3.7 million for the three months ended March 31, 2025.

The increase of $0.1 million was driven by higher compensation expense.

Other Expense

Total other expense of $0.5 million and $0.9 million for the nine months ended September 30, 2025 and 2024, respectively, was driven primarily by interest expense of $0.7 million in each period related to our debt facility (See Note 15 to the condensed consolidated financial statements included elsewhere in this Form 10-Q).

The nine months ended September 30, 2025 was partially offset by $0.2 million of interest income, as well as realized gains on available-for-sale investments of $0.2 million.

Total other expense of $0.1 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively, was driven primarily by interest expense of $0.2 million in each period related to our debt facility (See Note 15 to the condensed consolidated financial statements included elsewhere in this Form 10-Q).

The interest expense for the three months ended March 31, 2026 was partially offset by $0.1 million of realized gains on available-for-sale investments.

Liquidity and Capital Resources

As of September 30, 2025, we had approximately $23.7 million of cash, cash equivalents and investments available-for-sale, and net working capital of $27.9 million.

Based on the currently available net working capital along with the

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

As of March 31, 2026, we had approximately $23.9 million of cash, cash equivalents and investments available-for-sale, and net working capital of $27.1 million.

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

Additionally, the Company's operational plans include raising capital, if needed, by using the $13.1 million remaining availability under its at-the-market ("ATM") facility or other methods or forms of financings, subject to existing limitations.

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and (ii) strategic transactions, including potential alliances and collaborations focused on markets outside the United States, as well as potential combinations (including by merger or acquisition) or other corporate transactions.

We believe our ability to fund our activities in the long term will be highly dependent upon (i) our ability to execute on the growth strategy of our hemodialysis concentrates business and maintain sales with existing customers, (ii) our ability to achieve sustained profitability, and (iii) our ability to identify, develop, in-license, or acquire new products in developing our renal care product portfolio.

We believe our ability to fund our activities in the long term will be highly dependent upon (i) our ability to execute on the growth strategy of our hemodialysis concentrates business and maintain sales with existing customers, (ii) our ability to achieve sustained profitability and (iii) our ability to identify, develop, in-license, or acquire new products in developing our product portfolio.

All of these strategies are subject to significant risks and uncertainties such that there can be no assurance we will be successful in achieving them.

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The Company is subject to certain covenants and cure provisions under its Loan and Security Agreement (the "Loan Agreement") with Innovatus Life Sciences Lending Fund I, LP.

As of September 30, 2025, the Company was in compliance with all covenants.

As of March 31, 2026, the Company was in compliance with all covenants.

On January 2, 2024, the Loan Agreement was amended to include, among other things, an interest-only period for 30 months, or up to 36 months if certain conditions are met, and extend the maturity date to January 1, 2029 (See Note 15 to the accompanying condensed consolidated financial statements).

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

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

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 conflicts and other political tensions, and the occurrence of natural disasters and public health crises.

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

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The Company evaluated the Act and concluded it will not have a material impact on its condensed consolidated financial statements.

Cash (Used In) Provided By Operating Activities

Net cash used in operating activities was $3.0 million for the nine months ended September 30, 2025 compared to net cash provided by operating activities of $3.3 million for the nine months ended September 30, 2024.

The change in cash used in operating activities during the current period as compared to cash provided by operating activities in the prior period was primarily due to increases in (i) net loss of approximately $5.0 million and (ii) cash used in changes in current balance sheet accounts in the ordinary course of business of approximately $1.5 million, partially offset by (iii) non-cash adjustments of $0.3 million.

Cash Used In Operating Activities

Net cash used in operating activities was $0.2 million for the three months ended March 31, 2026 compared to net cash used in operating activities of $3.5 million for the three months ended March 31, 2025.

The decrease in cash used in operating activities during the current period as compared to the prior period was primarily due to a decrease in cash used in changes in current balance sheet accounts in the ordinary course of business of approximately $3.5 million, partially offset by increases in cash used from (i) net loss of approximately $0.1 million and (ii) non-cash adjustments of $0.1 million.

Cash Used In Investing Activities

Net cash used in investing activities was $4.4 million during the nine months ended September 30, 2025 compared to net cash used in investing activities of $4.5 million for the nine months ended September 30, 2024.

Net cash used in investing activities during the nine months ended September 30, 2025 and 2024 was primarily driven by net cash payments from purchases and sales of our available-for-sale investments during each period of $4.0 million and $3.9 million, respectively.

Cash Provided By Financing Activities

Net cash provided by financing activities was $5.3 million during the nine months ended September 30, 2025 compared to net cash provided by financing activities of $4.6 million for the nine months ended September 30, 2024.

Net cash provided by financing activities during the nine months ended September 30, 2025 was primarily due to the gross proceeds from the issuance of common stock in connection with the ATM facility of $7.8 million, as defined and described in Note 11 to the condensed consolidated financial statements, partially offset by the cash paid in connection with the Evoqua Asset Acquisition of $1.6 million, as defined and described in Note 5 to the condensed consolidated financial statements.

Net cash provided by financing activities for the nine months ended September 30, 2024 was primarily due to the gross proceeds from the issuance of common stock in connection with the ATM facility of $6.4 million, partially offset by the cash paid in connection with the Evoqua Asset Acquisition of $1.0 million.

Net cash used in investing activities was $0.1 million during the three months ended March 31, 2026.

Net cash used in investing activities was immaterial for the three months ended March 31, 2025.

Net cash used in investing activities during the three months ended March 31, 2026 and 2025 was primarily driven by (i) purchases of property and equipment, net of $0.4 million and $0.1 million, respectively, partially offset by (ii) net cash proceeds from purchases and sales of our available-for-sale investments during each period of $0.1 million.

Cash Used In Financing Activities

Net cash used in financing activities was $0.8 million during both of the three months ended March 31, 2026 and 2025.

Net cash used in financing activities during the three months ended March 31, 2026 and 2025 was primarily due to (i) the cash paid in connection with the Evoqua Asset Acquisition deferred consideration obligation of $0.5 million and $0.4 million, respectively, (ii) $0.2 million of payments under the insurance financing note payable during each period and (iii) $0.1 million of payments on finance lease liabilities during each period.

Contractual Obligations and Other Commitments

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See Note 13 to the condensed consolidated financial statements included elsewhere in this Form 10-Q for additional disclosures.

There have been no other material changes from the contractual obligations and other commitments disclosed in Notes 14 and 15 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no other material changes from the contractual

obligations and other commitments disclosed in Notes 13 and 14 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Critical Accounting Policies and Significant Judgments and Estimates

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis