rmti-20250331

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

__________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-23661

ROCKWELL MEDICAL, INC.

(Exact name of registrant as specified in its charter)


Delaware									38-3317208
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)
30142 S. Wixom Road, Wixom, Michigan									48393
(Address of principal executive offices)									(Zip Code)

(248) 960-9009

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol

Name of each exchange on which registered:

Common Stock, par value $0.0001

RMTI

Nasdaq Capital Market

The number of shares of common stock outstanding as of May 6, 2025 was 34,174,687.

Rockwell Medical, Inc. and Subsidiaries

Index to Form 10-Q


			Page
Part I — Financial Information (unaudited)

Item 1 - Unaudited Financial Statements

Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024			3

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024			5

Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2025 and 2024			6

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024			7

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024			8

Notes to Condensed Consolidated Financial Statements			9

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations			18

Item 3 - Quantitative and Qualitative Disclosures about Market Risk			19

Item 4 - Controls and Procedures			19

Part II — Other Information

Item 1 - Legal Proceedings			19

Item 1A - Risk Factors			19

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds			19

Item 3 - Defaults Upon Senior Securities			19

Item 4 - Mine Safety Disclosures			19

Item 5 - Other Information			19

Item 6 - Exhibits			19

Signatures			20

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts)


	March 31, 2025		December 31, 2024
ASSETS
Cash and Cash Equivalents	$	11,391	$	15,662
Investments Available-for-Sale	5,940		5,940
Accounts Receivable, net	9,670		8,291

Inventory, net	5,045		5,778
Prepaid and Other Current Assets	988		1,359
Total Current Assets	33,034		37,030

Property and Equipment, net	5,394		5,785
Inventory, Non-Current	—		178
Right of Use Assets - Operating, net	2,817		3,215
Right of Use Assets - Financing, net	1,205		1,344
Intangible Assets, net	10,069		10,207
Goodwill	921		921
Other Non-Current Assets	521		528
Total Assets	$	53,961	$	59,208
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable	$	1,925	$	2,869
Accrued Liabilities	4,578		6,275
Deferred Consideration - Current	2,436		2,371
Lease Liabilities - Operating - Current	1,457		1,566
Lease Liabilities - Financing - Current	610		599
Deferred License Revenue - Current	—		46

Insurance Financing Note Payable	67		268
Customer Deposits	132		97

Total Current Liabilities	11,205		14,091

Lease Liabilities - Operating - Long-Term	1,401		1,699
Lease Liabilities - Financing - Long-Term	774		931
Term Loan - Long-Term, net of issuance costs	8,559		8,472
Deferred License Revenue - Long-Term	—		429
Deferred Consideration - Long-Term	500		1,000

Total Liabilities	22,439		26,622


	March 31, 2025		December 31, 2024
Stockholders' Equity:
Preferred Stock, $0.0001 par value, 2,000,000 shares authorized; 15,000 shares issued and outstanding at March 31, 2025 and December 31, 2024	—		—
Common Stock, $0.0001 par value; 170,000,000 shares authorized; 34,257,903 and 34,056,920 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively	3		3
Additional Paid-in Capital	430,652		430,207
Accumulated Deficit	(399,193)		(397,678)
Accumulated Other Comprehensive Income	60		54
Total Stockholders’ Equity	31,522		32,586
Total Liabilities and Stockholders’ Equity	$	53,961	$	59,208

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

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)


	Three Months Ended March 31,
	2025		2024
Net Sales	$	18,914	$	22,676
Cost of Sales	15,872		19,612
Gross Profit	3,042		3,064
Research and Product Development	—		18
Selling and Marketing	711		594
General and Administrative	3,691		3,776

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

Other Income (Expense):
Realized Gain on Available-for-Sale Investments	56		—

Interest Expense	(277)		(431)
Interest Income	66		24
Total Other Expense, net	(155)		(407)

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

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

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

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

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)


	Three Months Ended March 31,
	2025		2024
Net Loss	$	(1,515)	$	(1,731)
Reclassification of Realized Gain on Available-for-Sale Investments Included in Net Loss	(56)		—
Unrealized Gain on Available-for-Sale Investments	62		25

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

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

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except share amounts)


	PREFERRED STOCK			COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		ACCUMULATED DEFICIT		ACCUMULATED OTHER COMPREHENSIVE INCOME		TOTAL STOCKHOLDERS' EQUITY
	SHARES	AMOUNT		SHARES	AMOUNT
Balance as of January 1, 2025	15,000	$	—	34,056,920	$	3	$	430,207	$	(397,678)	$	54	$	32,586
Net Loss	—	—		—	—		—		(1,515)		—		(1,515)
Reclassification of Realized Gains on Available-for-Sale Investments	—	—		—	—		—		—		(56)		(56)
Unrealized Gain on Available-for-Sale Investments	—	—		—	—		—		—		62		62

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

Stock-based Compensation	—	—		—	—		445		—		—		445
Balance as of March 31, 2025	15,000	$	—	34,257,903	$	3	$	430,652	$	(399,193)	$	60	$	31,522


	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	—	—		—	—		—		(1,731)		—		(1,731)
Unrealized Gain on Available-for-Sale Investments	—	—		—	—		—		—		25		25

Issuance of common stock, net of offering costs/At-The-Market	—	—		358,210	—		560		—		—		560
Vesting of Restricted Stock Units Issued, net of taxes withheld	—	—		67,657	—		—		—		—		—
Issuance of Warrant in connection with the Third Amendment (Note 11)	—	—		—	—		247		—		—		247
Stock-based Compensation	—	—		—	—		251		—		—		251
Balance as of March 31, 2024	15,000	$	—	29,556,474	$	3	$	419,545	$	(398,929)	$	24	$	20,643

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

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Three Months Ended March 31,
	2025		2024
Cash Flows From Operating Activities:
Net Loss	$	(1,515)	$	(1,731)
Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities:
Depreciation and Amortization	539		545
Stock-based Compensation	445		251
Write-off of Inventory	178		—
Non-cash Lease Expense from Right of Use Assets	518		519
Amortization of Debt Financing Costs and Accretion of Debt Discount and Premium	88		219
Loss on Disposal of Assets	54		—
Realized Gain on Sale of Investments	(56)		—
Changes in Operating Assets and Liabilities:
Accounts Receivable	(1,379)		(193)

Inventory	733		(202)
Prepaid and Other Assets	378		153
Accounts Payable	(944)		403
Lease Liabilities	(389)		(395)
Accrued and Other Liabilities	(1,662)		(1,938)
Deferred License Revenue	(475)		(11)
Net Cash Used In Operating Activities	(3,487)		(2,380)
Cash Flows From Investing Activities:
Purchases of Investments Available-for-Sale	(2,938)		—
Sale of Investments Available-for-Sale	3,000		—
Purchase of Equipment	(63)		(139)

Net Cash Used In Investing Activities	(1)		(139)
Cash Flows From Financing Activities:



Payments on Insurance Financing Note Payable	(201)		(244)
Payments on Financing Lease Liabilities	(146)		(138)


Proceeds from Issuance of Common Stock	—		560

Deferred Consideration Paid in Connection with Evoqua Asset Acquisition	(436)		—




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



Net Decrease in Cash and Cash Equivalents	(4,271)		(2,341)
Cash and Cash Equivalents at Beginning of Period	15,662		8,983
Cash and Cash Equivalents at End of Period	$	11,391	$	6,642

Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest	$	190	$	234




Supplemental Disclosure of Non-cash Investing and Financing Activities:
Issuance of Warrant in connection with the Third Amendment as Debt Issuance Costs	$	—	$	247

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

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

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Rockwell provides the hemodialysis community with products controlled by a Quality Management System regulated by the U.S. Food and Drug Administration (“FDA”). Rockwell manufactures hemodialysis concentrates under current Good Manufacturing Practices ("cGMP") regulations at its three facilities in Michigan, South Carolina, and Texas, and manufactures dry acid concentrate mixers at its facility in Iowa.

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

The Company operates in a single segment.

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.

2. Liquidity and Capital Resources

As of March 31, 2025, Rockwell had approximately $17.3 million of cash, cash equivalents and investments available-for-sale, and working capital of $21.8 million. Net cash used in operating activities for the three months ended March 31, 2025 was approximately $3.5 million. Based on the currently available working capital along with the expectation of management of its ability to execute on its operational plans as discussed below, management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of the filing of this report.

The Company continues to review its operational plans and execute on the acquisition of new customers, and has implemented cost containment activities. The Company may require additional capital to sustain its operations and make the investments it needs to execute its strategic plan. In addition, the Company's plans include raising capital, if needed, by using the $21.1 million available under its at-the-market ("ATM") facility or other methods or forms of financings, subject to existing limitations. If the Company attempts to obtain additional debt or equity financing, the Company cannot assume such financing will be available on favorable terms, if at all.

The Company is subject to certain covenants and cure provisions under its Loan Agreement (as defined below in Note 15) with Innovatus Life Sciences Lending Fund I, LP ("Innovatus"), which was amended on January 2, 2024 to include, among other things, an interest-only period for 30 months, or up to 36 months if certain conditions are met, and to extend the maturity date to January 1, 2029 (See Note 15 for further detail). The Company has satisfied those conditions and will now make interest-only payments for the full 36 months. As of March 31, 2025, the Company is in compliance with all covenants.

In addition, the global macroeconomic environment is uncertain, and could be negatively affected by, among other things, changes in U.S. trade policies, including tariffs and other trade restrictions or the threat of such actions, instability in the global capital and credit markets, recent bank failures in the United States, supply chain weaknesses, and instability in the geopolitical environment, including as a result of the Russian invasion of Ukraine, the Middle East conflict and other political tensions, and the occurrence of natural disasters and public health crises. Such challenges have caused, and may continue to cause, recession fears, rising interest rates, foreign exchange volatility and inflationary pressures. 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 or 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.

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the U. S. Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements.

The condensed consolidated balance sheet at March 31, 2025, and the condensed consolidated statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for the three months ended March 31, 2025 and 2024 are unaudited, but include all adjustments, consisting of normal recurring adjustments the Company considers necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented. The results for the three months ended March 31, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025 or for any future interim period. The condensed consolidated balance sheet at December 31, 2024 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2024 and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as filed with the SEC on March 20, 2025. The Company’s consolidated subsidiaries consist of its wholly-owned subsidiaries, Rockwell Transportation, Inc. and Rockwell Medical India Private Limited.

The accompanying condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the condensed 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 financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant accounting estimates inherent in the preparation of the financial statements include estimates associated with revenue recognition, and impairments of long-lived assets.

Loss Per Share

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


	Three Months Ended March 31,
(In thousands, except share and per share amounts)		2025		2024
Numerator:
Net Loss		$	(1,515)	$	(1,731)


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

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





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

Basic income (loss) per share (“EPS”) is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, using the more dilutive of the two- class method and the if-converted method in the period of earnings. The two-class method is an earnings allocation method that determines income (loss) per share (when there are earnings) for common stock and participating securities. The if-converted method assumes all convertible securities are converted into common stock. Diluted EPS excludes all dilutive potential shares of common stock if their effect is anti-dilutive.

The Company’s potentially dilutive securities include stock options, restricted stock awards and units, convertible preferred stock and warrants. The following table includes the potential shares of common stock that were excluded from the computation of diluted EPS attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:


	Three Months Ended March 31,
		2025	2024
Warrants to Purchase Common Stock		3,984,484	3,984,484
Options to Purchase Common Stock		1,884,476	1,876,031
Convertible Preferred Stock		1,391,045	1,363,636
Unvested Restricted Stock Units		383,326	441,218
Unvested Restricted Stock Awards		891	891
Total		7,644,222	7,666,260

Adoption of Recent Accounting Pronouncements

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

In December 2023, the Financial Accounting Standards Board ("FASB") issued the Accounting Standards Update ("ASU") 2023-09, Improvements to Income Tax Disclosures, which updates income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. The Company is currently assessing the impact this ASU will have on the consolidated financial statements and footnote disclosures.

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

4. Revenue Recognition

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers, issued by the FASB. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

•Step 1: Identify the contract with the customer

•Step 2: Identify the performance obligations in the contract

•Step 3: Determine the transaction price

•Step 4: Allocate the transaction price to the performance obligations in the contract

•Step 5: Recognize revenue when the company satisfies a performance obligation

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

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

Nature of goods and services

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

Rockwell's customer mix is diverse, with most customer sales concentrations under 10%. For the three months ended March 31, 2025, revenues from sales to two customers, DaVita, Inc. ("DaVita") and Fresenius Medical Care North America ("Fresenius") were approximately 27% and 10% of total revenues for the period, respectively. For the three months ended March 31, 2024, revenues from DaVita and Fresenius were approximately 44% and 7% of total revenues for the period, respectively. At March 31, 2025, DaVita, Nipro Medical Corporation ("Nipro") and Fresenius represented 17%, 16%, and 10% of the total net consolidated accounts receivable balance, respectively. At December 31, 2024, DaVita represented 20% of the total net consolidated accounts receivable balance. See below for additional information regarding the Company's contract with DaVita.

Product Sales

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 that have been deferred as a contract liability and presented on the accompanying condensed consolidated balance sheets as deferred license revenue. The amounts received from Sun Pharmaceutical Industries Ltd. ("Sun Pharma"), Jeil Pharmaceutical Co., Ltd. ("Jeil Pharma") and Drogsan Pharmaceuticals ("Drogsan Pharma") are recognized as revenue over the estimated term of the applicable distribution and license agreement as regulatory approval was not received and the Company did not have sufficient experience in China, India, South Korea and Turkey, respectively, to determine that regulatory approval was probable as of the execution of the agreement. During the three months ended March 31, 2025, all remaining deferred revenue relating to Sun Pharma, Jeil Pharma, and Drogsan Pharma was recognized, resulting in $0.3 million of revenue recorded. All license agreements have been terminated.

Product Purchase Agreement

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

concentrates. Under the Amended Agreement, the Company and DaVita agreed to an increase in product pricing, effective September 1, 2023. The term of the Amended Agreement was scheduled to expire on December 31, 2024. Prior to the expiration, the Company received written notice from DaVita, notifying the Company that DaVita intended to extend the term of the Amended Agreement through December 31, 2025 (the "Extension Term"). However, DaVita subsequently indicated that it will completely transition to another supplier by mid-2025, subject to further discussion between Rockwell and DaVita. DaVita has agreed to a one-time, non-refundable payment of $0.9 million to ensure supply continuity for products purchased during the three months ended March 31, 2025. This $0.9 million one-time, non-refundable payment was recorded as revenue during the three months ended March 31, 2025. Discussion between Rockwell and DaVita are ongoing.

Disaggregation of revenue

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


In thousands	Three Months Ended March 31, 2025
Products By Geographic Area		Total		U.S.		Rest of World
Drug Revenues

License Fee – Over time		$	325	$	—	$	325
Total Drug Products		325		—		325
Concentrate Products
Product Sales – Point-in-time		18,589		16,436		2,153

Total Concentrate Products		18,589		16,436		2,153
Net Revenue		$	18,914	$	16,436	$	2,478


In thousands	Three Months Ended March 31, 2024
Products By Geographic Area		Total		U.S.		Rest of World
Drug Revenues

License Fee – Over time		$	11	$	—	$	11
Total Drug Products		11		—		11
Concentrate Products
Product Sales – Point-in-time		22,665		20,934		1,731

Total Concentrate Products		22,665		20,934		1,731
Net Revenue		$	22,676	$	20,934	$	1,742

Contract balances

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


In thousands	March 31, 2025		December 31, 2024		January 1, 2024
Accounts Receivable, net	$	9,670	$	8,291	$	10,901
Contract Liabilities, which are included in deferred license revenue	$	—	$	475	$	521

There were no other material contract assets recorded on the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024. The Company does not generally accept returns of its concentrate products and no material reserve for returns of concentrates products was established as of March 31, 2025 or December 31, 2024.

Transaction price allocated to remaining performance obligations

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, was nil as of March 31, 2025.

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.

5. Intangible Assets and Deferred Consideration

Intangible Assets

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

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


	March 31, 2025
	Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount

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


	December 31, 2024
	Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount

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

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

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


Year ending December 31:
2025 (remainder of year)	$	414
2026	552
2027	552
2028	552
2029	552
Thereafter	7,447
Total	$	10,069

Deferred Consideration

A portion of the purchase price of the Evoqua Asset Acquisition was deferred on the acquisition date, with payment terms extending through April 2026. As of March 31, 2025, a deferred consideration liability of $2.9 million, which encompasses both Deferred Consideration - Current and Deferred Consideration - Long-Term, is presented on the accompanying condensed consolidated balance sheet.

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

6. Investments - Available-for-Sale

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


	March 31, 2025
	Amortized Cost		Unrealized Gain		Fair Value
Available-for-Sale Securities
Debt Securities	$	5,875	$	65	$	5,940


	December 31, 2024
	Amortized Cost		Unrealized Gain		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.

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

As of March 31, 2025, the Company's remaining available-for-sale securities are U.S. Department of the Treasury bonds and are all due within one year.

Note 7. Segment Reporting

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

The CODM assesses performance for the segment and decides how to allocate resources based on net loss that also is reported on the statements of operations and comprehensive loss as net loss. The CODM uses net loss to monitor budget and forecast versus actual results in assessing segment performance, as well as cash forecast models, in order to evaluate operating results and performance in deciding how to allocate resources. The measure of segment assets is reported on the balance sheets as total assets.

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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


	Three Months Ended March 31,
	2025		2024

Net Sales	$	18,914	$	22,676
Cost of Sales	15,872		19,612
Gross Profit	3,042		3,064
Employee Compensation	2,678		2,287
Administrative Costs	1,724		2,101
Operating Loss	(1,360)		(1,324)

Other Expense:
Realized Gain on Investments	56		—
Interest Expense	(277)		(431)
Interest Income	66		24
Total Other Expense, net	(155)		(407)

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

8. Inventory

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


	March 31, 2025		December 31, 2024
Inventory - Current Portion
Raw Materials	$	2,708	$	3,010
Work in Process	330		367
Finished Goods	2,007		2,401
Total Current Inventory	5,045		5,778
Inventory - Long Term (1)	—		178
Total Inventory	$	5,045	$	5,956

__________

1.Represents inventory related to Triferic raw materials, which was expected to be utilized for the Company's international partnerships. (See Note 4, Deferred License Revenue section). During the three months ended March 31, 2025, the Company wrote off this remaining inventory balance, resulting in an expense of $0.2 million recorded within cost of sales in the condensed consolidated statement of operations.

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

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

9. Property and Equipment

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


	March 31, 2025		December 31, 2024
Machinery and Equipment	$	11,896	$	11,973
Information Technology & Office Equipment	1,845		1,845
Leasehold Improvements	1,564		1,562
Laboratory Equipment	807		807
Total Property and Equipment	16,112		16,187
Accumulated Depreciation and Amortization	(10,718)		(10,402)
Property and Equipment, net	$	5,394	$	5,785

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

10. Accrued Liabilities

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


	March 31, 2025		December 31, 2024
Accrued Compensation and Benefits	$	1,398	$	2,744
Accrued Unvouchered Receipts	1,294		1,417
Accrued Manufacturing Expense	602		602
Accrued Workers Compensation	158		176
Other Accrued Liabilities	1,126		1,336
Total Accrued Liabilities	$	4,578	$	6,275

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 March 31, 2025, the Series X Preferred Stock accreted a total of $0.3 million.

The Series X Convertible Preferred Stock is convertible to common stock at a rate equal to the Face Amount, divided by a conversion price of $11.00 per share (subject to adjustment for future stock splits, reverse stock splits and similar recapitalization events). 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 to refinance existing debt, unless DaVita consents.

Additionally, the Series X Preferred Stock has a deemed liquidation event and redemption clause which could be triggered if the sale of all or substantially all of the Company's assets relating to the Company's dialysis concentrates business

line. Since the Series X Preferred Stock may be redeemed if certain assets are sold at the option of the holder, but is not mandatorily redeemable and the sale of the assets that would allow for redemption is within the control of the Company, the preferred stock has been classified as permanent equity and initially recognized at fair value of $15 million (the proceeds on the date of issuance) less issuance costs of $0.1 million, resulting in an initial value of $14.9 million. The Company will assess at each reporting period whether conditions have changed to now meet the mandatory redemption definition which could trigger liability classification.

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

Common Stock

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


	As of March 31,
Common Stock and Common Stock Equivalents:	2025	2024
Common Stock	34,257,903	29,556,474


Options to Purchase Common Stock	1,884,476	1,876,031
Unvested Restricted Stock Awards	891	891
Unvested Restricted Stock Units	383,326	441,218
Convertible Preferred Stock	1,391,045	1,363,636

Warrants to Purchase Common Stock	3,984,484	3,984,484
Total	41,902,125	37,222,734

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 three months ended March 31, 2025, no shares were sold pursuant to the Sales Agreement. Approximately $21.1 million remains available for sale under the ATM facility.

Warrant Issuance

In connection with the execution of the Third Amendment, as defined and described in Note 15, on January 2, 2024, the Company issued to Innovatus a warrant to purchase 191,096 shares of the Company’s common stock with an exercise price of $1.83 per share. 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 is being amortized through interest expense over the remaining contractual term of the Term Loa

SEC Form 10-Q filed by Rockwell Medical Inc.