10-Q 1 rmti-20240930.htm 10-Q rmti-20240930
0001041024false12-312024Q39/30/2024P10YP7Dxbrli:sharesiso4217:USDiso4217:USDxbrli:sharesutr:sqftrmti:paymentrmti:installmentrmti:segmentxbrli:purermti:agreementrmti:purermti:facility00010410242024-01-012024-09-3000010410242024-11-0800010410242024-09-3000010410242023-12-3100010410242024-07-012024-09-3000010410242023-07-012023-09-3000010410242023-01-012023-09-300001041024us-gaap:PreferredStockMember2023-12-310001041024us-gaap:CommonStockMember2023-12-310001041024us-gaap:AdditionalPaidInCapitalMember2023-12-310001041024us-gaap:RetainedEarningsMember2023-12-310001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001041024us-gaap:RetainedEarningsMember2024-01-012024-03-3100010410242024-01-012024-03-310001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001041024us-gaap:CommonStockMemberrmti:AtTheMarketOfferingMember2024-01-012024-03-310001041024us-gaap:AdditionalPaidInCapitalMemberrmti:AtTheMarketOfferingMember2024-01-012024-03-310001041024rmti:AtTheMarketOfferingMember2024-01-012024-03-310001041024us-gaap:CommonStockMember2024-01-012024-03-310001041024us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001041024us-gaap:PreferredStockMember2024-03-310001041024us-gaap:CommonStockMember2024-03-310001041024us-gaap:AdditionalPaidInCapitalMember2024-03-310001041024us-gaap:RetainedEarningsMember2024-03-310001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-3100010410242024-03-310001041024us-gaap:RetainedEarningsMember2024-04-012024-06-3000010410242024-04-012024-06-300001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300001041024us-gaap:CommonStockMemberrmti:AtTheMarketOfferingMember2024-04-012024-06-300001041024us-gaap:AdditionalPaidInCapitalMemberrmti:AtTheMarketOfferingMember2024-04-012024-06-300001041024rmti:AtTheMarketOfferingMember2024-04-012024-06-300001041024us-gaap:CommonStockMember2024-04-012024-06-300001041024us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001041024us-gaap:PreferredStockMember2024-06-300001041024us-gaap:CommonStockMember2024-06-300001041024us-gaap:AdditionalPaidInCapitalMember2024-06-300001041024us-gaap:RetainedEarningsMember2024-06-300001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-3000010410242024-06-300001041024us-gaap:RetainedEarningsMember2024-07-012024-09-300001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300001041024us-gaap:CommonStockMemberrmti:AtTheMarketOfferingMember2024-07-012024-09-300001041024us-gaap:AdditionalPaidInCapitalMemberrmti:AtTheMarketOfferingMember2024-07-012024-09-300001041024rmti:AtTheMarketOfferingMember2024-07-012024-09-300001041024us-gaap:CommonStockMember2024-07-012024-09-300001041024us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300001041024rmti:PriorWarrantsAndPreFundedWarrantsMember2024-07-012024-09-300001041024us-gaap:PreferredStockMember2024-09-300001041024us-gaap:CommonStockMember2024-09-300001041024us-gaap:AdditionalPaidInCapitalMember2024-09-300001041024us-gaap:RetainedEarningsMember2024-09-300001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001041024us-gaap:PreferredStockMember2022-12-310001041024us-gaap:CommonStockMember2022-12-310001041024us-gaap:AdditionalPaidInCapitalMember2022-12-310001041024us-gaap:RetainedEarningsMember2022-12-310001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-3100010410242022-12-310001041024us-gaap:RetainedEarningsMember2023-01-012023-03-3100010410242023-01-012023-03-310001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001041024rmti:PreFundedWarrantsMemberus-gaap:CommonStockMember2023-01-012023-03-310001041024us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001041024us-gaap:PreferredStockMember2023-03-310001041024us-gaap:CommonStockMember2023-03-310001041024us-gaap:AdditionalPaidInCapitalMember2023-03-310001041024us-gaap:RetainedEarningsMember2023-03-310001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-3100010410242023-03-310001041024us-gaap:RetainedEarningsMember2023-04-012023-06-3000010410242023-04-012023-06-300001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001041024us-gaap:CommonStockMemberrmti:PublicOfferingMember2023-04-012023-06-300001041024rmti:PublicOfferingMember2023-04-012023-06-300001041024us-gaap:CommonStockMember2023-04-012023-06-300001041024us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001041024us-gaap:PreferredStockMember2023-06-300001041024us-gaap:CommonStockMember2023-06-300001041024us-gaap:AdditionalPaidInCapitalMember2023-06-300001041024us-gaap:RetainedEarningsMember2023-06-300001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-3000010410242023-06-300001041024us-gaap:RetainedEarningsMember2023-07-012023-09-300001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001041024rmti:PriorWarrantsAndPreFundedWarrantsMemberus-gaap:CommonStockMember2023-07-012023-09-300001041024rmti:PriorWarrantsAndPreFundedWarrantsMemberus-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001041024rmti:PriorWarrantsAndPreFundedWarrantsMember2023-07-012023-09-300001041024us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001041024us-gaap:PreferredStockMember2023-09-300001041024us-gaap:CommonStockMember2023-09-300001041024us-gaap:AdditionalPaidInCapitalMember2023-09-300001041024us-gaap:RetainedEarningsMember2023-09-300001041024us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-3000010410242023-09-300001041024rmti:AtTheMarketOfferingMemberrmti:CantorFitzgeraldCoMember2024-09-300001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2024-01-022024-01-020001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMembersrt:MaximumMember2024-01-022024-01-020001041024us-gaap:EmployeeStockOptionMember2024-07-012024-09-300001041024us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001041024us-gaap:EmployeeStockOptionMember2024-01-012024-09-300001041024us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001041024us-gaap:RestrictedStockUnitsRSUMember2024-07-012024-09-300001041024us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001041024us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001041024us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001041024us-gaap:WarrantMember2024-07-012024-09-300001041024us-gaap:WarrantMember2023-07-012023-09-300001041024us-gaap:WarrantMember2024-01-012024-09-300001041024us-gaap:WarrantMember2023-01-012023-09-300001041024us-gaap:EmployeeStockOptionMember2024-07-012024-09-300001041024us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001041024us-gaap:EmployeeStockOptionMember2024-01-012024-09-300001041024us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001041024us-gaap:ConvertiblePreferredStockMember2024-07-012024-09-300001041024us-gaap:ConvertiblePreferredStockMember2023-07-012023-09-300001041024us-gaap:ConvertiblePreferredStockMember2024-01-012024-09-300001041024us-gaap:ConvertiblePreferredStockMember2023-01-012023-09-300001041024us-gaap:RestrictedStockUnitsRSUMember2024-07-012024-09-300001041024us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001041024us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001041024us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001041024us-gaap:RestrictedStockMember2024-07-012024-09-300001041024us-gaap:RestrictedStockMember2023-07-012023-09-300001041024us-gaap:RestrictedStockMember2024-01-012024-09-300001041024us-gaap:RestrictedStockMember2023-01-012023-09-300001041024rmti:EvoquaWaterTechnologiesLLCMember2023-07-102023-07-100001041024rmti:EvoquaWaterTechnologiesLLCMember2023-07-100001041024rmti:EvoquaWaterTechnologiesLLCMember2024-07-120001041024rmti:EvoquaWaterTechnologiesLLCMember2024-07-122024-07-120001041024rmti:EvoquaWaterTechnologiesLLCMember2024-01-012024-09-300001041024rmti:EvoquaWaterTechnologiesLLCMember2024-07-012024-09-300001041024us-gaap:CustomerRelationshipsMemberrmti:EvoquaWaterTechnologiesLLCMember2023-07-102023-07-100001041024us-gaap:CustomerRelationshipsMemberrmti:EvoquaWaterTechnologiesLLCMember2023-07-100001041024us-gaap:CustomerRelationshipsMember2024-07-012024-09-300001041024us-gaap:CustomerRelationshipsMember2024-01-012024-09-300001041024us-gaap:CustomerRelationshipsMember2024-09-300001041024us-gaap:CustomerRelationshipsMember2023-07-012023-09-300001041024us-gaap:CustomerRelationshipsMember2023-01-012023-09-300001041024rmti:DaVitaHealthcarePartnersIncMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2024-07-012024-09-300001041024rmti:DaVitaHealthcarePartnersIncMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-07-012023-09-300001041024rmti:DaVitaHealthcarePartnersIncMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2024-01-012024-09-300001041024rmti:DaVitaHealthcarePartnersIncMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-09-300001041024rmti:DaVitaHealthcarePartnersIncMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-012023-12-310001041024rmti:DaVitaHealthcarePartnersIncMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2024-01-012024-09-300001041024rmti:DaVitaHealthcarePartnersIncMember2023-10-012023-12-310001041024rmti:DaVitaHealthcarePartnersIncMember2024-09-012024-09-300001041024us-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2024-07-012024-09-300001041024country:USus-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2024-07-012024-09-300001041024us-gaap:NonUsMemberus-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2024-07-012024-09-300001041024us-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2024-01-012024-09-300001041024country:USus-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2024-01-012024-09-300001041024us-gaap:NonUsMemberus-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2024-01-012024-09-300001041024rmti:DrugRevenueMember2024-07-012024-09-300001041024country:USrmti:DrugRevenueMember2024-07-012024-09-300001041024us-gaap:NonUsMemberrmti:DrugRevenueMember2024-07-012024-09-300001041024rmti:DrugRevenueMember2024-01-012024-09-300001041024country:USrmti:DrugRevenueMember2024-01-012024-09-300001041024us-gaap:NonUsMemberrmti:DrugRevenueMember2024-01-012024-09-300001041024us-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2024-07-012024-09-300001041024country:USus-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2024-07-012024-09-300001041024us-gaap:NonUsMemberus-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2024-07-012024-09-300001041024us-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2024-01-012024-09-300001041024country:USus-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2024-01-012024-09-300001041024us-gaap:NonUsMemberus-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2024-01-012024-09-300001041024rmti:ConcentrateProductsMember2024-07-012024-09-300001041024country:USrmti:ConcentrateProductsMember2024-07-012024-09-300001041024us-gaap:NonUsMemberrmti:ConcentrateProductsMember2024-07-012024-09-300001041024rmti:ConcentrateProductsMember2024-01-012024-09-300001041024country:USrmti:ConcentrateProductsMember2024-01-012024-09-300001041024us-gaap:NonUsMemberrmti:ConcentrateProductsMember2024-01-012024-09-300001041024country:US2024-07-012024-09-300001041024us-gaap:NonUsMember2024-07-012024-09-300001041024country:US2024-01-012024-09-300001041024us-gaap:NonUsMember2024-01-012024-09-300001041024us-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2023-07-012023-09-300001041024country:USus-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2023-07-012023-09-300001041024us-gaap:NonUsMemberus-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2023-07-012023-09-300001041024us-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2023-01-012023-09-300001041024country:USus-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2023-01-012023-09-300001041024us-gaap:NonUsMemberus-gaap:TransferredOverTimeMemberrmti:DrugRevenueMember2023-01-012023-09-300001041024rmti:DrugRevenueMember2023-07-012023-09-300001041024country:USrmti:DrugRevenueMember2023-07-012023-09-300001041024us-gaap:NonUsMemberrmti:DrugRevenueMember2023-07-012023-09-300001041024rmti:DrugRevenueMember2023-01-012023-09-300001041024country:USrmti:DrugRevenueMember2023-01-012023-09-300001041024us-gaap:NonUsMemberrmti:DrugRevenueMember2023-01-012023-09-300001041024us-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2023-07-012023-09-300001041024country:USus-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2023-07-012023-09-300001041024us-gaap:NonUsMemberus-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2023-07-012023-09-300001041024us-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2023-01-012023-09-300001041024country:USus-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2023-01-012023-09-300001041024us-gaap:NonUsMemberus-gaap:TransferredAtPointInTimeMemberrmti:ConcentrateProductsMember2023-01-012023-09-300001041024us-gaap:TransferredOverTimeMemberrmti:ConcentrateProductsMember2023-07-012023-09-300001041024country:USus-gaap:TransferredOverTimeMemberrmti:ConcentrateProductsMember2023-07-012023-09-300001041024us-gaap:NonUsMemberus-gaap:TransferredOverTimeMemberrmti:ConcentrateProductsMember2023-07-012023-09-300001041024us-gaap:TransferredOverTimeMemberrmti:ConcentrateProductsMember2023-01-012023-09-300001041024country:USus-gaap:TransferredOverTimeMemberrmti:ConcentrateProductsMember2023-01-012023-09-300001041024us-gaap:NonUsMemberus-gaap:TransferredOverTimeMemberrmti:ConcentrateProductsMember2023-01-012023-09-300001041024rmti:ConcentrateProductsMember2023-07-012023-09-300001041024country:USrmti:ConcentrateProductsMember2023-07-012023-09-300001041024us-gaap:NonUsMemberrmti:ConcentrateProductsMember2023-07-012023-09-300001041024rmti:ConcentrateProductsMember2023-01-012023-09-300001041024country:USrmti:ConcentrateProductsMember2023-01-012023-09-300001041024us-gaap:NonUsMemberrmti:ConcentrateProductsMember2023-01-012023-09-300001041024country:US2023-07-012023-09-300001041024us-gaap:NonUsMember2023-07-012023-09-300001041024country:US2023-01-012023-09-300001041024us-gaap:NonUsMember2023-01-012023-09-3000010410242023-01-010001041024rmti:ConcentrateProductsMember2024-09-300001041024rmti:ConcentrateProductsMember2023-12-310001041024rmti:TrifericInventoryMemberus-gaap:InventoryValuationReserveMember2023-08-012023-08-310001041024us-gaap:MachineryAndEquipmentMember2024-09-300001041024us-gaap:MachineryAndEquipmentMember2023-12-310001041024us-gaap:OfficeEquipmentMember2024-09-300001041024us-gaap:OfficeEquipmentMember2023-12-310001041024us-gaap:LeaseholdImprovementsMember2024-09-300001041024us-gaap:LeaseholdImprovementsMember2023-12-310001041024us-gaap:OtherMachineryAndEquipmentMember2024-09-300001041024us-gaap:OtherMachineryAndEquipmentMember2023-12-310001041024rmti:BaxterHealthcareOrganizationMember2014-10-012014-10-310001041024rmti:BaxterHealthcareOrganizationMember2022-11-090001041024rmti:BaxterHealthcareOrganizationMember2023-01-012023-09-300001041024rmti:SeriesXConvertiblePreferredStockMemberus-gaap:PrivatePlacementMemberrmti:DaVitaHealthcarePartnersIncMember2022-04-060001041024rmti:ShareIssuanceTrancheOneMemberrmti:SeriesXConvertiblePreferredStockMemberus-gaap:PrivatePlacementMemberrmti:DaVitaHealthcarePartnersIncMember2022-04-062022-04-060001041024rmti:ShareIssuanceTrancheOneMemberrmti:DaVitaHealthcarePartnersIncMember2022-04-062022-04-060001041024rmti:ShareIssuanceTrancheOneMemberrmti:SeriesXConvertiblePreferredStockMemberus-gaap:PrivatePlacementMemberrmti:DaVitaHealthcarePartnersIncMember2022-06-162022-06-160001041024rmti:ShareIssuanceTrancheOneMemberrmti:DaVitaHealthcarePartnersIncMember2022-06-162022-06-160001041024rmti:SeriesXConvertiblePreferredStockMember2022-04-062022-04-060001041024rmti:SeriesXConvertiblePreferredStockMember2024-09-300001041024rmti:SeriesXConvertiblePreferredStockMember2022-04-060001041024rmti:PreFundedWarrantsMember2024-09-300001041024rmti:PreFundedWarrantsMember2023-09-300001041024us-gaap:RestrictedStockMember2024-09-300001041024us-gaap:RestrictedStockMember2023-09-300001041024rmti:ServiceBasedRestrictedStockUnitsMember2024-09-300001041024rmti:ServiceBasedRestrictedStockUnitsMember2023-09-300001041024rmti:PrivatePlacementWarrantsMember2024-09-300001041024rmti:PrivatePlacementWarrantsMember2023-09-300001041024rmti:PIPEPurchaseAgreementPreFundedWarrantMember2024-07-012024-09-300001041024rmti:PIPEPurchaseAgreementPreFundedWarrantMember2023-07-012023-09-300001041024rmti:PIPEPurchaseAgreementPreFundedWarrantMember2024-01-012024-09-300001041024rmti:PIPEPurchaseAgreementPreFundedWarrantMember2023-01-012023-09-300001041024rmti:AtTheMarketOfferingMemberrmti:CantorFitzgeraldCoMember2022-04-080001041024us-gaap:CommonStockMemberrmti:AtTheMarketOfferingMember2024-01-012024-09-300001041024rmti:AtTheMarketOfferingMemberrmti:CantorFitzgeraldCoMember2024-01-012024-09-300001041024rmti:ArmisticeWarrantAgreementMember2023-07-100001041024rmti:ArmisticeReloadWarrantAgreementMember2023-07-100001041024rmti:ArmisticeWarrantAgreementMember2023-07-102023-07-100001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2024-01-020001041024us-gaap:MeasurementInputPriceVolatilityMember2024-09-300001041024us-gaap:MeasurementInputRiskFreeInterestRateMember2024-09-300001041024us-gaap:MeasurementInputExpectedTermMember2024-09-300001041024us-gaap:MeasurementInputExpectedDividendRateMember2024-09-300001041024rmti:ServiceBasedRestrictedStockUnitsMember2024-07-012024-09-300001041024rmti:ServiceBasedRestrictedStockUnitsMember2023-07-012023-09-300001041024rmti:ServiceBasedRestrictedStockUnitsMember2024-01-012024-09-300001041024rmti:ServiceBasedRestrictedStockUnitsMember2023-01-012023-09-300001041024rmti:ServiceBasedStockOptionAwardsMember2024-07-012024-09-300001041024rmti:ServiceBasedStockOptionAwardsMember2023-07-012023-09-300001041024rmti:ServiceBasedStockOptionAwardsMember2024-01-012024-09-300001041024rmti:ServiceBasedStockOptionAwardsMember2023-01-012023-09-300001041024rmti:PerformanceBasedRestrictedStockAwardsMember2024-01-012024-09-300001041024rmti:PerformanceBasedRestrictedStockAwardsMember2023-12-310001041024rmti:PerformanceBasedRestrictedStockAwardsMember2024-09-300001041024rmti:ServiceBasedRestrictedStockUnitsMember2023-12-310001041024rmti:ServiceBasedRestrictedStockUnitsMembersrt:MinimumMember2024-01-012024-09-300001041024rmti:ServiceBasedRestrictedStockUnitsMembersrt:MaximumMember2024-01-012024-09-300001041024rmti:ServiceBasedStockOptionAwardsMembersrt:MinimumMember2024-09-300001041024rmti:ServiceBasedStockOptionAwardsMembersrt:MaximumMember2024-09-300001041024rmti:ServiceBasedStockOptionAwardsMembersrt:MinimumMember2023-09-300001041024rmti:ServiceBasedStockOptionAwardsMembersrt:MaximumMember2023-09-300001041024rmti:ServiceBasedStockOptionAwardsMembersrt:MinimumMember2023-01-012023-09-300001041024rmti:ServiceBasedStockOptionAwardsMembersrt:MaximumMember2023-01-012023-09-300001041024rmti:ServiceBasedStockOptionAwardsMembersrt:MinimumMember2024-01-012024-09-300001041024rmti:ServiceBasedStockOptionAwardsMembersrt:MaximumMember2024-01-012024-09-300001041024rmti:ServiceBasedStockOptionAwardsMember2023-12-310001041024rmti:ServiceBasedStockOptionAwardsMember2024-09-3000010410242018-10-072018-10-070001041024rmti:MasterServicesAndIpAgreementMember2023-12-310001041024rmti:MasterServicesAndIpAgreementMember2024-09-300001041024srt:MaximumMember2024-09-300001041024stpr:MIrmti:WixomMichiganPropertyOneMember2024-09-300001041024stpr:MIrmti:WixomMichiganPropertyTwoMember2024-09-300001041024stpr:MI2024-09-300001041024stpr:MIrmti:WixomMichiganPropertyTwoMember2024-01-012024-09-300001041024rmti:TexasAndSouthCarolinaMember2024-09-300001041024stpr:TX2024-09-300001041024stpr:SC2024-09-300001041024stpr:NJ2024-09-300001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2020-03-160001041024rmti:TermLoanTrancheOneMemberus-gaap:MediumTermNotesMember2020-03-160001041024rmti:TermLoanTrancheOneMemberus-gaap:MediumTermNotesMember2020-03-162020-03-160001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2020-03-162020-03-160001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2021-09-300001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2021-09-012021-09-300001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2022-11-100001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2022-11-102022-11-100001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2024-09-300001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2024-07-012024-09-300001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2023-07-012023-09-300001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2024-01-012024-09-300001041024rmti:TermLoanMemberus-gaap:MediumTermNotesMember2023-01-012023-09-300001041024rmti:A9.59NotePayableMemberus-gaap:NotesPayableToBanksMember2023-06-030001041024rmti:A9.59NotePayableMemberus-gaap:NotesPayableToBanksMember2023-06-032023-06-030001041024rmti:A7.89NotePayableMemberus-gaap:NotesPayableToBanksMember2024-06-240001041024rmti:A7.89NotePayableMemberus-gaap:NotesPayableToBanksMember2024-06-242024-06-24





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 September 30, 2024
or
☐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)
Delaware38-3317208
(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 SymbolName of each exchange on which registered:
Common Stock, par value $0.0001RMTI
Nasdaq Capital Market
The number of shares of common stock outstanding as of November 8, 2024 was 32,318,806.





Rockwell Medical, Inc. and Subsidiaries
Index to Form 10-Q
Page
2




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)
September 30,
2024		December 31,
2023
ASSETS
Cash and Cash Equivalents$12,338 $8,983 
Investments Available-for-Sale5,934 1,952 
Accounts Receivable, net8,886 10,901 
Inventory, net5,888 5,871 
Prepaid and Other Current Assets1,171 1,063 
Total Current Assets34,217 28,770 
Property and Equipment, net5,795 6,402 
Inventory, Non-Current178 178 
Right of Use Assets - Operating, net3,598 2,713 
Right of Use Assets - Financing, net1,482 1,903 
Intangible Assets, net10,345 10,759 
Goodwill921 921 
Other Non-Current Assets548 527 
Total Assets$57,084 $52,173 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable$2,607 $4,516 
Accrued Liabilities6,290 7,149 
Deferred Consideration - Current2,274 2,500 
Lease Liabilities - Operating - Current1,554 1,381 
Lease Liabilities - Financing - Current587 558 
Deferred License Revenue - Current46 46 
Insurance Financing Note Payable469 244 
Customer Deposits351 243 
Total Current Liabilities14,178 16,637 
Lease Liabilities - Operating - Long-Term2,098 1,433 
Lease Liabilities - Financing - Long-Term1,085 1,530 
Term Loan - Long-Term, net of issuance costs8,383 8,293 
Deferred License Revenue - Long-Term441 475 
Deferred Consideration - Long-Term1,750 2,500 
Long Term Liability - Other14 14 
Total Liabilities27,949 30,882 
3










September 30,
2024		December 31,
2023
Stockholders’ Equity:
Preferred Stock, $0.0001 par value, 2,000,000 shares authorized; 15,000 shares issued and outstanding at September 30, 2024 and December 31, 2023
— — 
Common Stock, $0.0001 par value; 170,000,000 shares authorized; 32,318,806 and 29,130,607 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
3 3 
Additional Paid-in Capital426,046 418,487 
Accumulated Deficit(396,922)(397,198)
Accumulated Other Comprehensive Income (Loss)8 (1)
Total Stockholders’ Equity29,135 21,291 
Total Liabilities and Stockholders’ Equity$57,084 $52,173 

The accompanying notes are an integral part of the condensed consolidated financial statements.
4

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
Three Months Ended September 30, 2024Three Months Ended September 30, 2023Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
Net Sales$28,316 $23,771 $76,824 $61,519 
Cost of Sales22,077 21,569 62,971 55,685 
Gross Profit6,239 2,202 13,853 5,834 
Research and Product Development— 494 18 939 
Selling and Marketing726 556 1,906 1,584 
General and Administrative3,577 2,889 10,802 9,434 
Operating Income (Loss)1,936 (1,737)1,127 (6,123)
Other Expense:
Realized Gain on Available-for-Sale Investments— 220 51 220 
Interest Expense(302)(411)(965)(1,193)
Interest Income30 56 63 169 
Total Other Expense, net(272)(135)(851)(804)
Net Income (Loss)$1,664 $(1,872)$276 $(6,927)
Basic Net Income (Loss) per Share$0.05 $(0.07)$0.01 $(0.32)
Diluted Net Income (Loss) per Share$0.04 $(0.07)$0.01 $(0.32)
Basic Weighted Average Shares Outstanding31,551,805 27,521,088 30,447,588 21,526,978 
Diluted Weighted Average Shares Outstanding32,420,168 27,521,088 31,013,464 21,526,978 


The accompanying notes are an integral part of the condensed consolidated financial statements.
5

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
Three Months Ended September 30, 2024Three Months Ended September 30, 2023Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
Net Income (Loss)$1,664 $(1,872)$276 $(6,927)
Reclassification of Realized Gain on Available-for-Sale Investments Included in Net Income— — (25)— 
Unrealized Gain (Loss) on Available-for-Sale Investments13 (69)38 (90)
Foreign Currency Translation Adjustments— — (4)(4)
Comprehensive Income (Loss)$1,677 $(1,941)$285 $(7,021)

The accompanying notes are an integral part of the condensed consolidated financial statements.
6

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands, except share amounts)
PREFERRED STOCKCOMMON STOCKADDITIONAL PAID-IN CAPITALACCUMULATED
DEFICIT		ACCUMULATED
OTHER
COMPREHENSIVE
(LOSS) INCOME		TOTAL
STOCKHOLDERS'
 EQUITY
SHARESAMOUNTSHARESAMOUNT
Balance as of January 1, 202415,000 $— 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, 202415,000 — 29,556,474 3 419,545 (398,929)24 20,643 
Net Income— — — — — 343 — 343 
Reclassification of Realized Gains on Available-for-Sale Debt Instrument Investments Included in Net Income— — — — — — (25)(25)
Foreign Currency Translation Adjustments— — — — — — (4)(4)
Issuance of Common Stock, net of offering costs/At-the-Market Offering— — 1,350,169 — 2,203 — — 2,203 
Vesting of Restricted Stock Units Issued, net of taxes withheld— — 123,575 — — — — — 
Stock-based Compensation — — — — 338 — — 338 
Balance as of June 30, 202415,000 — 31,030,218 3 422,086 (398,586)(5)23,498 
Net Income— — — — — 1,664 — 1,664 
Unrealized Gain on Available-for-Sale Investments— — — — — — 13 13 
Issuance of Common Stock, net of offering costs/At-the-Market Offering— — 1,282,546 — 3,630 — — 3,630 
Issuance of Common Stock upon Exercise of Options— — 6,042 — 9 — — 9 
Stock-based Compensation — — — — 321 — — 321 
Balance as of September 30, 202415,000 $— 32,318,806 $3 $426,046 $(396,922)$8 $29,135 

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

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands, except share amounts)
PREFERRED STOCKCOMMON STOCKADDITIONAL PAID-IN CAPITALACCUMULATED
DEFICIT		ACCUMULATED
OTHER
COMPREHENSIVE
INCOME		TOTAL
STOCKHOLDERS'
EQUITY
SHARESAMOUNTSHARESAMOUNT
Balance as of January 1, 202315,000 $— 12,163,673 $1 $402,701 $(388,759)$163 $14,106 
Net Loss— — — — — (1,750)— (1,750)
Unrealized Loss on Available-for-Sale Investments— — — — — — (3)(3)
Foreign Currency Translation Adjustments— — — — — — (4)(4)
Issuance of Common Stock upon Exercise of Pre-Funded Warrants— — 389,000 — — — — — 
Issuance of Warrants related to Debt Financing— — — — — — — — 
Stock-based Compensation— — — — 193 — — 193 
Balance as of March 31, 202315,000 — 12,552,673 1 402,894 (390,509)156 12,542 
Net Loss— — — — — (3,305)— (3,305)
Unrealized Loss on Available-for-Sale Investments— — — — — — (18)(18)
Foreign Currency Translation Adjustments— — — — — — (1)(1)
Issuance of Common Stock, net of offering costs/Public Offering— — 4,118,000 1 — — — 1 
Vesting of Restricted Stock Units Issued, net of taxes withheld— — 125,000 — — — — — 
Stock-based Compensation— — — — 309 — — 309 
Balance as of June 30, 202315,000 — 16,795,673 2 403,203 (393,814)137 9,528 
Net Loss— — — — — (1,872)— (1,872)
Unrealized Loss on Available-for-Sale Investments— — — — — — (69)(69)
Issuance of Common Stock in Connection with Exercise of the Prior Warrant and Pre-Funded Warrants, net of offering costs— — 11,693,990 1 13,718 — — 13,719 
Stock-based Compensation— — — — 212 — — 212 
Balance as of September 30, 202315,000 $— 28,489,663 $3 $417,133 $(395,686)$68 $21,518 

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

7

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30, 2024		Nine Months Ended
September 30, 2023
Cash Flows From Operating Activities:
Net Income (Loss)$276 $(6,927)
Adjustments To Reconcile Net Income (Loss) To Net Cash Provided By (Used In) Operating Activities:
Depreciation and Amortization1,637 894 
Stock-based Compensation910 714 
Increase in Inventory Reserves314 1,098 
Non-cash Lease Expense from Right of Use Assets1,446 1,529 
Amortization of Debt Financing Costs and Accretion of Debt Discount and Premium337 276 
Loss on Disposal of Assets— 1 
Realized Gain on Sale of Investments(51)(220)
Changes in Operating Assets and Liabilities:
Accounts Receivable2,024 (3,102)
Inventory(331)1,561 
Prepaid and Other Assets541 875 
Accounts Payable(1,909)(124)
Lease Liabilities(1,072)(1,113)
Accrued and Other Liabilities(751)(1,033)
Deferred License Revenue(34)(3,798)
Net Cash Provided By (Used In) Operating Activities3,337 (9,369)
Cash Flows From Investing Activities:
Purchase of Investments Available-for-Sale(5,921)(3,752)
Sale of Investments Available-for-Sale2,003 11,301 
Purchase of Equipment(616)(241)
Cash Paid in Connection with Evoqua Asset Acquisition
— (12,361)
Net Cash Used In Investing Activities(4,534)(5,053)
Cash Flows From Financing Activities:
Payments on Debt— (500)
Payments on Insurance Financing Note Payable(445)(748)
Payments on Financing Lease Liabilities(416)(388)
Proceeds from Issuance of Common Stock6,393 13,763 
Offering Costs from Issuance of Common Stock— (43)
Deferred Consideration Paid in Connection with Evoqua Asset Acquisition
(976)— 
Net Cash Provided By Financing Activities4,556 12,084 
Effect of Exchange Rate Changes on Cash and Cash Equivalents(4)(5)
Net Increase (Decrease) in Cash and Cash Equivalents3,355 (2,343)
Cash and Cash Equivalents at Beginning of Period8,983 10,102 
Cash and Cash Equivalents at End of Period$12,338 $7,759 
Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest$645 $929 
Supplemental Disclosure of Non-cash 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$1,984 $— 
Change in Unrealized Gain (Loss) on Investments Available-for-Sale $13 $(90)
Increase in Prepaid Assets from Insurance Financing Note Payable$670 $733 
Proceeds from Issuance of Common Stock Upon Exercise of Options in Accounts Receivable, net$9 $— 
The accompanying notes are an integral part of the condensed consolidated financial statements.

8

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1.  Description of Business
Rockwell Medical, Inc. (the "Company", "Rockwell", "we", or "us") is a healthcare company that develops, manufactures, commercializes, and distributes a portfolio of hemodialysis products for dialysis providers worldwide.

Rockwell is the largest supplier of liquid bicarbonate concentrates and the second largest supplier of acid and dry bicarbonate concentrates for dialysis patients in the United States. Hemodialysis is the most common form of end-stage kidney disease treatment and is usually performed at freestanding outpatient dialysis centers, at hospital-based outpatient centers, at skilled nursing facilities, or in a patient’s home.

Rockwell manufactures hemodialysis concentrates at its facilities in Michigan, South Carolina, and Texas totaling approximately 175,000 square feet, and manufactures its dry acid concentrate mixers at its facility in Iowa. Additionally, in July 2023, the Company purchased customer relationships, equipment and inventory from Evoqua Water Technologies LLC ("Evoqua") related to the manufacturing and sale of hemodialysis concentrates products, all of which are manufactured under a contract manufacturing agreement with a third-party organization in Minnesota.

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 September 30, 2024, Rockwell had approximately $18.3 million of cash, cash equivalents and investments available-for-sale, and working capital of $20.0 million. Net cash provided by operating activities for the nine months ended September 30, 2024 was approximately $3.3 million. 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. Additionally, the Company's operational plans include raising capital, if needed, by using the remaining $4.5 million available under its at-the-market ("ATM") facility or other methods or forms of financings, subject to existing limitations. If the Company attempts to obtain additional debt or equity financing, the Company cannot assume such financing will be available on favorable terms, if at all.

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

In addition, the global macroeconomic environment is uncertain, and could be negatively affected by, among other things, increased U.S. trade tariffs and trade disputes with other countries, instability in the global capital and credit markets, recent bank failures in the United States, supply chain weaknesses, and instability in the geopolitical environment, including as a result of the Russian invasion of Ukraine, the Middle East conflict and other political tensions, and the occurrence of natural disasters and public health crises. 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.
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 September 30, 2024, and the condensed consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows for the three and nine months ended September 30, 2024 and 2023 are unaudited, but include all adjustments, consisting of normal recurring adjustments the Company considers necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented. The results for the three and nine months ended September 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024 or for any future interim period. The condensed consolidated balance sheet at December 31, 2023 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, 2023 and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed with the SEC on March 21, 2024. 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.

Income (Loss) Per Share
Basic and diluted net income (loss) per share for the three and nine months ended September 30, 2024 and 2023 was calculated as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(In thousands, except share and per share amounts)2024202320242023
Numerator:
Net Income (Loss)$1,664 $(1,872)$276 $(6,927)
Less: Undistributed Earnings to Participating Securities(233)— (40)— 
Net Income (Loss) Attributable to Common Stockholders$1,431 $(1,872)$236 $(6,927)
Denominator:
Basic Weighted Average Number of Shares of Common Stock Outstanding31,551,805 27,521,088 30,447,588 21,526,978 
Incremental Shares Attributable to the Assumed Exercise of Outstanding Options to Purchase Common Stock489,193 — 271,382 — 
Incremental Shares Attributable to the Assumed Vesting of Unvested Restricted Stock Units318,046 — 282,340 — 
Incremental Shares Attributable to the Assumed Exercise of Warrants61,124 — 12,154 — 
Diluted Weighted Average Number of Shares of Common Stock Outstanding32,420,168 27,521,088 31,013,464 21,526,978 
Basic Net Income (Loss) per Share Attributable to Common Stockholders$0.05 $(0.07)$0.01 $(0.32)
Diluted Net Income (Loss) per Share Attributable to Common Stockholders$0.04 $(0.07)$0.01 $(0.32)
Basic income (loss) per share (“EPS”) is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, using the more dilutive of the two- class method and the if-converted method in the period of earnings. The two class method is an earnings allocation method that determines income (loss) per share (when there are earnings) for common stock and participating securities. The if-converted method assumes all convertible securities are converted into common stock. Diluted EPS excludes all dilutive potential shares of common stock if their effect is anti-dilutive.
The Company’s potentially dilutive securities include stock options, restricted stock awards and units, convertible preferred stock and warrants. The following table includes the potential shares of common stock that were excluded from the computation of diluted EPS per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Warrants to Purchase Common Stock3,793,388 4,045,278 3,793,388 4,045,278 
Options to Purchase Common Stock268,978 1,367,493 284,296 1,367,493 
Convertible Preferred Stock— 1,363,636 — 1,363,636 
Unvested Restricted Stock Units— 287,400 — 287,400 
Unvested Restricted Stock Awards891 891 891 891 
Total4,063,2577,064,698 4,078,5757,064,698 
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 November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is in the process of determining the effect this ASU will have on the disclosures contained in the notes to the consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which updates income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is in the process of determining the effect this ASU will have on the disclosures contained in the notes to the consolidated financial statements.
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.  Asset Acquisition
On July 10, 2023, the Company executed and consummated the transactions contemplated by an Asset Purchase Agreement (the “Purchase Agreement”) with Evoqua (the "Evoqua Acquisition"). Subject to the terms and conditions of the Purchase Agreement, at the closing of the transaction (the “Closing”), the Company purchased customer relationships, equipment and inventory from Evoqua, which were related to its manufacturing and selling of hemodialysis concentrates products, all of which are manufactured under a contract manufacturing agreement with a third-party organization.
Pursuant to the Purchase Agreement, total consideration was $17.4 million, comprising a cash payment at Closing of $12.4 million (inclusive of transaction costs) and two $2.5 million deferred payments. On July 12, 2024, the Company and Evoqua executed an amendment to the Purchase Agreement (the "First Amendment"), which stipulated that the first deferred payment would be partially offset by $0.3 million to reimburse the Company for certain expenses incurred following the close of the Evoqua Acquisition and split the first deferred payment into four quarterly installments to be paid through April 2025. The First Amendment also split the second deferred payment into four quarterly installments to be paid from July 2025 through April 2026. During the three and nine months ended September 30, 2024, the Company paid the first installment of the first deferred payment of $0.6 million. The remaining installments due within the next twelve months are included as Deferred Consideration - Current on the Company's condensed consolidated balance sheets.
The transaction was accounted for as an asset acquisition, as the acquired assets did not meet the definition of a business as defined by Accounting Standards Codification ("ASC") 805, Business Combinations.
9

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The purchase price was allocated, on a relative fair value basis, to the assets acquired at the July 10, 2023 acquisition date as follows (table in thousands):
Consideration
Cash Payment$12,233 
Deferred Consideration5,000 
Transaction Costs128 
Total Consideration$17,361 
Assets Acquired
Customer Relationships Intangible Asset$11,035 
Equipment5,093 
Inventory1,233 
Total Assets Acquired$17,361 
The fair value of the customer relationships intangible asset was determined using a multi-period excess earnings method, a form of the income approach, which incorporates the estimated future cash flows to be generated from the customer base. Key assumptions included discounted cash flow, estimated life cycle and customer attrition rates. Customer relationships are being amortized over a period of 20 years. Given that the acquired equipment had been recently purchased and recorded at fair value, the Company determined the fair value of the equipment using a cost approach, which considered assumptions over the equipment's current replacement cost and useful life. Inventory was purchased directly from the contract manufacturer holding the inventory, which approximated fair value.
During the three and nine months ended September 30, 2024, the Company recorded amortization of its customer relationship intangible asset of $0.1 million and $0.4 million, respectively, resulting in a net intangible asset of $10.3 million as of September 30, 2024. During the three and nine months ended September 30, 2023, the Company recorded amortization of its customer relationship intangible asset of $0.1 million.
Estimated future amortization expense on the Company's customer relationships intangible asset as of September 30, 2024 is as follows (table in thousands):
Year ending December 31:
2024 (remainder of year)$138 
2025552 
2026552 
2027552 
2028552 
Thereafter7,999 
Total$10,345 
5.  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% and one customer, DaVita, Inc. ("DaVita"), at approximately 52% and 50% of total net product sales for the three months ended September 30, 2024 and 2023, respectively, and 47% and 50% of total net product sales for the nine months ended September 30, 2024 and 2023, respectively. Rockwell's accounts receivable from this customer were approximately 40% of the total net consolidated accounts receivable balance at each of September 30, 2024 and December 31, 2023. See below and Note 10 for additional information regarding the Company's contracts with DaVita.
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 at the shipping point, which is generally the Company's plant or warehouse. For other business, the Company recognizes revenue based on when the customer takes control of the product. The amount of revenue recognized is based on the purchase order less returns and adjusted for any rebates, discounts, chargebacks or other amounts paid to customers estimated at the time of sale. Customers typically pay for the product based on customary business practices with payment terms averaging 30 days, while a small subset of customers have payment terms averaging 60 days.
Deferred License Revenue
The Company received upfront fees under five distribution and license agreements that have been deferred as a contract liability and presented on the accompanying condensed consolidated balance sheets as deferred license revenue.  The amounts received from Wanbang Biopharmaceuticals Co., Ltd. (“Wanbang”), Sun Pharmaceutical Industries Ltd. ("Sun Pharma"), Jeil Pharmaceutical Co., Ltd. ("Jeil Pharma") and Drogsan Pharmaceuticals ("Drogsan Pharma") are recognized as revenue over the estimated term of the applicable distribution and license agreement as regulatory approval was not received and the Company did not have sufficient experience in China, India, South Korea and Turkey, respectively, to determine that regulatory approval was probable as of the execution of the agreement. The amounts received from Baxter Healthcare Corporation (“Baxter”) were deferred and recognized as revenue at the point in time the estimated product sales under the agreement occurred. During the
nine months ended September 30, 2023, all remaining deferred revenue relating to the Wanbang and Baxter agreements was recognized as revenue. For additional information related to the Company's deferred license revenue, see Note 10.
Product Purchase Agreements
On September 18, 2023, the Company and its long-time partner, DaVita, a leading provider of kidney care, entered into an Amended and Restated Products Purchase Agreement (the "Amended Agreement"), which amends and restates the Product Purchase Agreement, dated July 1, 2019, as amended, under which the Company supplies DaVita with certain dialysis concentrates. Under the Amended Agreement, the Company and DaVita agreed to an increase in product pricing, effective September 1, 2023 and a one-time payment of $0.4 million to Rockwell on or after December 1, 2023, which was recorded as revenue recognized during the fourth quarter of 2023. The term of the Amended Agreement will expire on December 31, 2024. While the Company received written notice from DaVita in September 2024 that notified the Company that DaVita extends the term of the Amended Agreement through December 31, 2025 ("Extension Term"), there can be no assurance of any further extensions. Product pricing will be increased for the Extension Term. DaVita has indicated to Rockwell that DaVita expects volumes to decline during the Extension Term. DaVita is required to provide a twelve-month binding forecast on or before December 15, 2024. In the event that DaVita does not meet its forecasts, it is required to pay the Company for the amount forecasted or purchase additional product; otherwise, the Company may terminate the Amended Agreement. Upon expiration or termination of the Amended Agreement, and upon request by DaVita, the Company has agreed it would provide transition services to DaVita during a transition period. As of the date of this filing, the Company has received no such notification.

Disaggregation of revenue
Revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.
In thousandsThree Months Ended September 30, 2024Nine Months Ended September 30, 2024
Products By Geographic AreaTotalU.S.Rest of WorldTotalU.S.Rest of World
Drug Revenues
License Fee – Over time$11 $— $11 $34 $— $34 
Total Drug Products11 — 11 34 — 34 
Concentrate Products
Product Sales – Point-in-time28,305 26,247 2,058 76,790 70,390 6,400 
Total Concentrate Products28,305 26,247 2,058 76,790 70,390 6,400 
Net Revenue$28,316 $26,247 $2,069 $76,824 $70,390 $6,434 

In thousandsThree Months Ended September 30, 2023Nine Months Ended September 30, 2023
Products By Geographic AreaTotalU.S.Rest of WorldTotalU.S.Rest of World
Drug Revenues
License Fee – Over time$2,197 $— $2,197 $2,327 $— $2,327 
Total Drug Products2,197 — 2,197 2,327 — 2,327 
Concentrate Products
Product Sales – Point-in-time21,574 19,741 1,833 57,720 52,326 5,394 
License Fee – Over time— — — 1,472 1,472 — 
Total Concentrate Products21,574 19,741 1,833 59,192 53,798 5,394 
Net Revenue$23,771 $19,741 $4,030 $61,519 $53,798 $7,721 
Contract balances
The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.
In thousandsSeptember 30, 2024December 31, 2023January 1, 2023
Accounts Receivable, net$8,886 $10,901 $6,259 
Contract Liabilities, which are included in deferred license revenue$487 $521 $4,331 
There were no other material contract assets recorded on the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023.  The Company does not generally accept returns of its concentrate products and no material reserve for returns of concentrates products was established as of September 30, 2024 or December 31, 2023. 
The contract liabilities primarily relate to upfront fees under distribution and license agreements with Wanbang, Sun Pharma, Jeil Pharma, and Drogsan Pharma.
Transaction price allocated to remaining performance obligations
For the nine months ended September 30, 2024 and 2023, the Company recognized an immaterial amount and $3.8 million as revenue from amounts classified as contract liabilities (i.e., deferred license revenue) as of December 31, 2023 and 2022, respectively.
Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, totaled $0.5 million as of September 30, 2024. The amount relates primarily to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products. The Company applies the practical expedient in ASC 606, paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
6.  Investments - Available-for-Sale
Investments available-for-sale consisted of the following as of September 30, 2024 and December 31, 2023 (table in thousands):
September 30, 2024
Amortized CostUnrealized GainUnrealized LossAccrued InterestFair Value
Available-for-Sale Securities
Debt securities$5,921 $13 $— $— $5,934 

December 31, 2023
Amortized CostUnrealized GainUnrealized LossAccrued InterestFair Value
Available-for-Sale Securities
Debt securities$1,948 $4 $— $— $1,952 
The fair value of investments available-for-sale are determined using quoted market prices from daily exchange-traded markets based on the closing price as of the balance sheet date and are classified as a Level 1 measurement under ASC 820, Fair Value Measurements.
During the nine months ended September 30, 2024, the Company sold the investments outstanding as of December 31, 2023 for a realized gain of $0.1 million, which is included in realized gain on available-for-sale investments on the condensed consolidated statements of operations.
10

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
As of September 30, 2024, the Company's remaining available-for-sale securities are all due within one year.
7.  Inventory
Components of inventory, net of reserves, as of September 30, 2024 and December 31, 2023 were as follows (table in thousands):
September 30,
2024		December 31,
2023
Inventory - Current Portion
Raw Materials$2,152 $2,250 
Work in Process319 351 
Finished Goods3,417 3,270 
Total Current Inventory5,888 5,871 
Inventory - Long Term (1)
178 178 
Total Inventory$6,066 $6,049 
__________
1.Represents inventory related to Triferic raw materials, which is expected to be utilized for the Company's international partnerships, net of a reserve of $1.1 million related to the termination of the development of Triferic in Wanbang in August 2023 as a result of the failure to demonstrate efficacy when compared with a placebo in its phase III clinical studies.
As of September 30, 2024 and December 31, 2023, Rockwell had total current concentrate inventory aggregating $6.2 million and $5.9 million, respectively, against which Rockwell had reserved $0.3 million and $25,000 at September 30, 2024 and December 31, 2023, respectively.
8.  Property and Equipment
As of September 30, 2024 and December 31, 2023, the Company’s property and equipment consisted of the following (table in thousands):
September 30,
2024		December 31,
2023
Machinery and Equipment$11,598 $11,131 
Information Technology & Office Equipment1,845 1,845 
Leasehold Improvements1,542 1,423 
Laboratory Equipment807 807 
   Total Property and Equipment15,792 15,206 
Accumulated Depreciation and Amortization(9,997)(8,804)
Property and Equipment, net$5,795 $6,402 
Depreciation and amortization expense for each of the three months ended September 30, 2024 and 2023 was $0.4 million. Depreciation and amortization expense for the nine months ended September 30, 2024 and 2023 was $1.2 million and $0.8 million, respectively.
11

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
9.  Accrued Liabilities
Accrued liabilities as of September 30, 2024 and December 31, 2023 consisted of the following (table in thousands):
September 30,
2024		December 31,
2023
Accrued Compensation and Benefits$2,654 $2,413 
Accrued Unvouchered Receipts2,214 1,663 
Accrued Workers Compensation340 254 
Accrued Manufacturing Expense— 1,064 
Other Accrued Liabilities1,082 1,755 
Total Accrued Liabilities$6,290 $7,149 
10.  Deferred License Revenue
In October 2014, the Company entered into an exclusive distribution agreement with Baxter, which had a term of 10 years, and received an upfront fee of $20 million. Under the exclusive distribution agreement, Baxter distributed and commercialized Rockwell’s hemodialysis concentrates products and provided customer service and order delivery to nearly all U.S. customers. The upfront fee was recorded as deferred license revenue and was being recognized based on the proportion of product shipments to Baxter in each period, compared with total expected sales volume over the term of the distribution agreement. On November 9, 2022, Rockwell incurred a fee to Baxter, which was reflected as a reduction to revenue on the consolidated statements of operations, and was payable in two equal installments on January 1, 2023 and April 1, 2023, to reacquire its distribution rights to its hemodialysis concentrates products from Baxter and terminated the distribution agreement. Exclusivity and other provisions associated with the distribution agreement terminated November 9, 2022 and the remaining operational elements of the agreement terminated December 31, 2022. To ensure that customer needs continued to be met after January 1, 2023, Rockwell agreed to provide certain services to a group of Baxter's customers until March 31, 2023, and Baxter and Rockwell worked together to transition customers’ purchases of Rockwell’s hemodialysis concentrates through that date. Following the reacquisition of these rights, Rockwell is now unrestricted in its ability to sell its hemodialysis concentrates products to dialysis clinics throughout the United States and around the world. The Company recognized the remaining revenue of $1.5 million during the nine months ended September 30, 2023.
The remaining agreements with Sun Pharma, Jeil Pharmaceutical, and Drogsan Pharmaceuticals comprise the current and long-term portions of deferred license revenue on the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023.
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. On April 6, 2022, the Company issued 7,500 shares of Series X Preferred Stock for gross proceeds of $7.5 million. On June 16, 2022, the Company issued an additional 7,500 shares of the Series X Preferred Stock to DaVita for gross proceeds of $7.5 million.

The Series X Preferred Stock was issued for a price of $1,000 per share (the "Face Amount"), subject to accretion at a rate of 1% per annum, compounded annually. If the Company’s common stock trades above $22.00 for a period of 30 calendar days, the accretion will thereafter cease. As of September 30, 2024, the Series X Preferred Stock accreted a total of $0.3 million.

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

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

As of each of September 30, 2024 and December 31, 2023, there were 2,000,000 shares of preferred stock, $0.0001 par value per share, authorized and 15,000 shares of preferred stock issued and outstanding.
Common Stock
As of September 30, 2024 and 2023, the Company reserved for issuance the following shares of common stock related to the potential exercise of employee stock options, unvested restricted stock, convertible preferred stock, pre-funded warrants and all other warrants (collectively, "common stock equivalents"):
As of September 30,
Common Stock and Common Stock Equivalents:20242023
Common Stock32,318,806 28,489,663 
Common Stock Issuable upon Exercise of Pre-funded Warrants— — 
Common Stock and Pre-funded Stock Warrants32,318,806 28,489,663 
Options to Purchase Common Stock1,874,729 1,367,493 
Unvested Restricted Stock Awards891 891 
Unvested Restricted Stock Units534,309 287,400 
Convertible Preferred Stock1,391,045 1,363,636 
Warrants to Purchase Common Stock3,984,484 4,045,278 
Total40,104,264 35,554,361 
During the three months ended September 30, 2024 and 2023, nil and 1,793,000 Pre-Funded Warrants were exercised, respectively. During the nine months ended September 30, 2024 and 2023, nil and 6,300,000 Pre-Funded Warrants were exercised, respectively.
Controlled Equity Offering

On April 8, 2022, the Company entered into the Sales Agreement (the "ATM facility") with Cantor Fitzgerald & Co. as Agent, pursuant to which the Company may offer and sell from time to time up to $12.2 million of shares of Company’s common stock through the Agent. The offering and sale of such shares has been registered under the Securities Act of 1933, as amended.

During the nine months ended September 30, 2024, 2,990,925 shares were sold pursuant to the Sales Agreement for net proceeds of $6.4 million. Approximately $4.5 million remains available for sale under the ATM facility.
Private Placement
On July 10, 2023, the Company entered into a letter agreement (the “Letter Agreement”) with Armistice Capital Master Fund Ltd. (“Armistice”), which held a warrant (the “Prior Warrant”) to purchase 9,900,990 shares of common stock of the Company (the “Common Stock”) with an exercise price of $1.39 per share, offering Armistice the opportunity to exercise the Prior Warrant for cash, provided the Prior Warrant was exercised for cash on or prior to 5:00 P.M. Eastern Time on July 10, 2028 (the “End Date”). In addition, Armistice would receive a “reload” warrant (the “Reload Warrant”) to purchase 3,750,000 shares of Common Stock with an exercise price of $5.13 per share, the closing price as reported by the Nasdaq Capital Market
on July 7, 2023. The Reload Warrant may be exercised at all times prior to the 54 months' anniversary of its issuance date. The Prior Warrant and the Reload Warrant both provide that a holder (together with its affiliates) may not exercise any portion of the Prior Warrant or the Reload Warrant to the extent that the holder would own more than 9.99% of the Company’s outstanding Common Stock immediately after exercise, as such percentage ownership is determined in accordance with the terms of such warrant. To the extent the exercise of the Prior Warrant would result in Armistice holding more than 9.99% of the Company’s outstanding Common Stock, such shares of Common Stock in excess of 9.99% will be held in abeyance.
Armistice exercised the Prior Warrant on July 10, 2023, and the Company received gross proceeds of approximately $13.8 million.

Third Amendment

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 will be amortized through interest expense over the remaining contractual term of the Term Loan.

The fair value of the warrant at the issuance date was calculated using the Black-Scholes pricing model and include the following assumptions:

Expected Stock Price Volatility85.00%
Risk-free Interest Rate3.93%
Term (years)5.0
Dividend Yield0%
12.  Stock-Based Compensation
The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2024 and 2023 as follows (table in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Service-based awards:
Restricted Stock Units$163 $112 $440 $276 
Stock Option Awards158 100 470 438 
Total$321 $212 $910 $714 
Performance Based Restricted Stock Awards
A summary of the Company’s performance based restricted stock awards during the nine months ended September 30, 2024 is as follows:
Performance Based Restricted Stock AwardsNumber of SharesWeighted Average
Grant-Date
Fair Value
Unvested at January 1, 2024891 $62.70 
Unvested at September 30, 2024891 $62.70 
12

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Performance-based restricted stock awards are measured based on their fair value on the date of grant and amortized over the vesting period of 20 months. As of September 30, 2024, there is no unrecognized stock-based compensation expense related to performance based restricted stock awards.
Service Based Restricted Stock Units
A summary of the Company’s service-based restricted stock units during the nine months ended September 30, 2024 is as follows:
Service Based Restricted Stock UnitsNumber of SharesWeighted Average
Grant-Date
Fair Value
Unvested at January 1, 2024258,885 $1.97 
Granted466,656 1.58 
Vested(191,232)2.18 
Unvested at September 30, 2024534,309 $1.48 
The fair value of service based restricted stock units are measured based on their fair value on the date of grant and amortized over the vesting period. The vesting periods range from 1 to 3 years. As of September 30, 2024, the unrecognized stock-based compensation expense was $0.5 million, which is expected to be recognized over the next 1.4 years.
Service Based Stock Option Awards
The fair value of the service-based stock option awards granted for the nine months ended September 30, 2024 and 2023 were based on the following assumptions:
Nine Months Ended
September 30, 2024		Nine Months Ended
September 30, 2023
Exercise Price
$1.39 - $1.80
$1.37 - $2.83
Expected Stock Price Volatility
81.8%
81.6% - 81.8%
Risk-free Interest Rate
4.31% - 4.45%
3.41% - 3.46%
Term (years)
5.61 - 5.62
5.6 - 6
A summary of the Company’s service-based stock option activity for the nine months ended September 30, 2024 is as follows:
Service Based Stock Option AwardsShares
Underlying
Options		Weighted
Average Exercise
Price		Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic Value
(in $1,000's)
Outstanding at January 1, 20241,328,621 $5.22 
Granted569,160 1.40 
Exercised(6,042)1.49 
Forfeited(15,073)1.83 
Expired(1,937)4.79 
Outstanding at September 30, 20241,874,729 $4.10 8.2$4,068 
Exercisable at September 30, 2024632,600 $8.73 7.2$1,105 
13

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The aggregate intrinsic value is calculated as the difference between the closing price of the Company's common stock at the date indicated and the exercise price of the stock options that had strike prices below the closing price.
The weighted average grant date fair value for service based stock option awards granted during the nine months ended September 30, 2024 and 2023 was $0.99 and $1.03, respectively.
As of September 30, 2024, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $0.7 million, which is expected to be recognized over the next 2.9 years.
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 of September 30, 2024 and December 31, 2023, the Company has accrued $0.1 million relating to certain IP reimbursement expenses and certain sublicense royalty fees, which is included within accrued liabilities on the condensed consolidated balance sheets.
Pursuant to the Charak MSA, the aforementioned parties entered into an Amendment, dated as of October 7, 2018 (the “Charak Amendment”), to the 2002 Agreement, under which Charak granted the Company an exclusive, worldwide, non-transferable license to commercialize SFP for the treatment of patients with renal failure. The Charak Amendment amends the royalty payments due to Charak under the 2002 Agreement such that the Company is liable to pay Charak royalties on net sales by the Company of products developed under the license, which includes the Company’s Triferic product, at a specified rate until December 31, 2021 and thereafter at a reduced rate from January 1, 2022 until February 1, 2034. Additionally, the Company is required to pay Charak a percentage of any sublicense income during the term of the agreement, which cannot be less than a minimum specified percentage of net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and can be no less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis.
Also pursuant to the Charak MSA, the Company and Charak entered into a Commercialization and Technology License Agreement IV Triferic dated as of October 7, 2018 (the “IV Agreement”), under which Charak granted the Company an exclusive, sub-licensable, royalty-bearing license to SFP for the purpose of commercializing certain intravenous-delivered products incorporating SFP for the treatment of iron disorders worldwide for a term that expires on the later of February 1, 2034 or upon the expiration or termination of a valid claim of a licensed patent. The Company was liable to pay Charak royalties on net sales by the Company of products developed under the license at a specified rate until December 31, 2021. From January 1, 2022 until February 1, 2034, the Company is liable to pay Charak a base royalty at a reduced rate on net sales and an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis. The Company shall also pay to Charak a percentage of any sublicense income received during the term of the IV Agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis.
Also pursuant to the Charak MSA, the Company and Charak entered into a Technology License Agreement TPN Triferic dated as of October 7, 2018 (the “TPN Agreement”), pursuant to which Charak granted the Company an exclusive, sub-licensable, royalty-bearing license to SFP for the purpose of commercializing worldwide certain TPN products incorporating SFP. The license grant under the TPN Agreement continues for a term that expires on the later of February 1, 2034 or upon the expiration or termination of a valid claim of a licensed patent. During the term of the TPN Agreement, the Company is liable to pay Charak a base royalty on net sales and an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis. The Company shall also pay to Charak a percentage of any sublicense income received during the term of the TPN Agreement, which amount shall not be less than a minimum royalty on net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and not be less than a lower rate of
14

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis.
The potential milestone payments are not yet considered probable, and no milestone payments have been accrued as of September 30, 2024 and December 31, 2023.
14.  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 the nine months ended September 30, 2024, the lease for the Wixom facilities was extended by three years to August 2027, which was accounted for as a modification. As a result of the modification, the operating lease right of use asset and lease liabilities increased by $1.5 million. Rockwell also occupies two other manufacturing facilities, a 51,000-square foot facility in Grapevine, Texas under a lease expiring in December 2025, and a 57,000-square foot facility in Greer, South Carolina under a lease expiring February 2026. In addition, Rockwell occupied 4,100 square feet of office space in Hackensack, New Jersey. This lease was subleased on December 15, 2021 and expired on October 31, 2024.
The following summarizes quantitative information about the Company’s operating and finance leases (table in thousands):
Three Months Ended September 30, 2024Three Months Ended September 30, 2023Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
Operating Leases
Operating Lease Cost$418 $422 $1,179 $1,281 
Variable Lease Cost126 112 376 336 
Operating Lease Expense544 534 1,555 1,617 
Finance Leases
Amortization of Right-of-use Assets139 142 421 424 
Interest on Lease Obligations28 36 89 113 
Finance Lease Expense167 178 510 537 
Short-term Lease Rent Expense5 4 16 12 
Total Rent Expense$716 $716 $2,081 $2,166 
Other Information
Operating Cash Flows from Operating Leases$449 $461 $1,312 $1,363 
Operating Cash Flows from Finance Leases$28 $37 $89 $114 
Financing Cash Flows from Finance Leases$140 $130 $416 $388 
Weighted-average Remaining Lease Term – Operating Leases2.62.52.62.5
Weighted-average Remaining Lease Term – Finance Leases2.73.72.73.7
Weighted-average Discount Rate – Operating Leases6.3 %6.5 %6.3 %6.5 %
Weighted-average Discount Rate – Finance Leases6.4 %6.4 %6.4 %6.4 %
Future minimum rental payments under operating and finance lease agreements are as follows (in thousands):
Operating