ROCKWELL MEDICAL, INC.

Previous wording

Rockwell's products are vital to vulnerable patients with end-stage kidney disease. We are an established leader in manufacturing and delivering high-quality hemodialysis concentrates and dialysates, along with certain ancillary products, to dialysis providers and distributors in the United States and abroad. Rockwell provides the hemodialysis community with products controlled by a Quality Management System regulated by the U.S. Food and Drug Administration ("FDA"). Rockwell is ISO 13485 Certified and adheres to current Good Manufacturing Practices ("cGMP") and Association for Advancement of Medical Instrumentation ("AAMI") standards. Rockwell manufactures hemodialysis concentrates at its three facilities in Michigan, South Carolina, and Texas, and manufactures its dry acid concentrate mixers at its facility in Iowa.

Current wording

Rockwell's products are vital to vulnerable patients with end-stage kidney disease. We are an established leader in manufacturing and delivering high-quality hemodialysis concentrates and dialysates, along with certain ancillary products, to dialysis providers and distributors in the United States and abroad. Rockwell provides the hemodialysis community with products controlled by a Quality Management System regulated by the U.S. Food and Drug Administration ("FDA"). Rockwell is ISO 13485 Certified and adheres to current Good Manufacturing Practices ("cGMP") and Association for Advancement of Medical Instrumentation ("AAMI") standards. Rockwell manufactures hemodialysis concentrates at its facilities in Michigan and Texas, and manufactures its dry acid concentrate mixers at its facility in Iowa. The Company previously operated a manufacturing facility in South Carolina, but the Company concluded manufacturing at that facility in the third quarter of 2025 as part of its ongoing efforts to streamline operations and improve efficiency.

Previous wording

On September 18, 2023, Rockwell and DaVita, Inc. ("DaVita") entered into the Amended Agreement, which amended and restated the Product Purchase Agreement, dated July 1, 2019, as amended, under which the Company supplies DaVita with certain dialysis concentrates. Under the Amended Agreement, the Company and DaVita agreed to an increase in product pricing, effective September 1, 2023. The term of the Amended Agreement was scheduled to expire on December 31, 2024. Prior to the expiration, the Company received written notice from DaVita that DaVita intended to extend the term of the Amended Agreement through December 31, 2025 (the "Extension Term"). However, DaVita subsequently indicated that it will completely transition to another supplier by mid-2025, subject to further discussions between Rockwell and DaVita. DaVita has agreed to quarterly, non-refundable payments totaling $1.3 million to ensure supply continuity for products purchased during the six months ended June 30, 2025. These quarterly, non-refundable payments of $1.3 million were recorded as revenue during the six months ended June 30, 2025. Discussions between Rockwell and DaVita are ongoing and include a potential contract extension and/or future volume commitments by DaVita to Rockwell. There can be no assurance that these discussions will yield a successful outcome for Rockwell. We continue to supply DaVita as of the filing date of this report.

Current wording

On September 18, 2023, Rockwell and DaVita, Inc. ("DaVita") entered into the Amended Agreement, which amended and restated the Product Purchase Agreement, dated July 1, 2019, as amended, under which the Company supplies DaVita with certain dialysis concentrates. Under the Amended Agreement, the Company and DaVita agreed to an increase in product pricing, effective September 1, 2023. The term of the Amended Agreement was scheduled to expire on December 31, 2024. Prior to the expiration, the Company received written notice from DaVita that DaVita intended to extend the term of the Amended Agreement through December 31, 2025 (the "Extension Term"). However, DaVita subsequently indicated that it will completely transition to another supplier, subject to further discussions between Rockwell and DaVita. DaVita has agreed to quarterly, non-refundable payments totaling $1.7 million to ensure supply continuity for products purchased during the nine months ended September 30, 2025. These quarterly, non-refundable payments of $1.7 million were recorded as revenue during the nine months ended September 30, 2025. Discussions between Rockwell and DaVita are ongoing and include a potential contract extension and/or future volume commitments by DaVita to Rockwell. There can be no assurance that these discussions will yield a successful outcome for Rockwell. We continue to supply DaVita as of the filing date of this report, but at significantly reduced levels from 2024.

Previous wording

During the three months ended June 30, 2025, our net sales were $16.1 million compared to net sales of $25.8 million during the three months ended June 30, 2024. The decrease of $9.7 million was primarily due to a $9.9 million reduction in sales to DaVita, partially offset by an increases of $0.2 million from price increases to other existing customers and sales to new customers. For the three months ended June 30, 2025, DaVita represented 11% of net sales. Non-Product revenue was not material for either period.

Current wording

During the three months ended September 30, 2025, net sales were $15.9 million compared to net sales of $28.3 million during the three months ended September 30, 2024. The decrease of $12.4 million was primarily due to a $13.0 million reduction in sales to DaVita, partially offset by an increases of $0.6 million from price increases to other existing customers and sales to new customers. The three months ended September 30, 2024 included $4.5 million from a special large order of premium-priced product to DaVita. DaVita represented 12% and 52% of net sales for the three months ended September 30, 2025 and 2024, respectively. Non-Product revenue was not material for either period.

Previous wording

Cost of sales for the three months ended June 30, 2025 was $13.6 million, resulting in gross profit of $2.5 million for the three months ended June 30, 2025, compared to cost of sales of $21.3 million and a gross profit of $4.6 million for the three months ended June 30, 2024. The gross profit decrease of $2.1 million was due to a decrease in product sales. Gross profit from product sales includes $0.3 million due to a price adjustment for DaVita purchases for the three months ended June 30, 2025.

Current wording

Cost of sales for the three months ended September 30, 2025 was $13.7 million, resulting in gross profit of $2.3 million for the three months ended September 30, 2025, compared to cost of sales of $22.1 million and a gross profit of $6.2 million for the three months ended September 30, 2024. The gross profit decrease of $3.9 million was primarily due to (i) $3.2 million a decrease in product sales, which includes $1.5 million from a special large order of premium-priced product to DaVita during the three months ended September 30, 2024 that did not repeat during the 2025 period, (ii) and increase of $0.2 million in severance expense and $0.3 million of other costs related to the closure of the Greer manufacturing facility and (iii) an increase of $0.6 million in additional manufacturing costs, partially offset by a price adjustment of $0.4 million for DaVita purchases for the three months ended September 30, 2025.

Previous wording

General and administrative expenses were $3.3 million for the three months ended June 30, 2025, compared to $3.4 million for the three months ended June 30, 2024. The decrease of $0.1 million was primarily driven by a $0.2 million decrease in administrative expense, partially offset by $0.1 million of increased compensation expense.

Current wording

General and administrative expenses were $3.3 million for the three months ended September 30, 2025, compared to $3.6 million for the three months ended September 30, 2024. The decrease of $0.3 million was primarily driven by a $0.2 million decrease in administrative costs and a $0.1 million decrease in professional fees.

Previous wording

Total other expense of $0.1 million and $0.2 million for the three months ended June 30, 2025 and 2024, respectively, was driven primarily by interest expense of $0.2 million in each period related to our debt facility (See Note 15 to the condensed consolidated financial statements included elsewhere in this Form 10-Q). The interest expense for the three months ended June 30, 2025 was partially offset by $0.1 million of interest income and realized gains on available-for-sale of investments of $0.1 million.

Current wording

Total other expense of $0.2 million and $0.3 million for the three months ended September 30, 2025 and 2024, respectively, was driven primarily by interest expense of $0.2 million in each period related to our debt facility (See Note 15 to the condensed consolidated financial statements included elsewhere in this Form 10-Q). The interest expense for the three months ended September 30, 2025 was partially offset by $0.1 million of interest income and realized gains on available-for-sale investments of $0.1 million.

Previous wording

Results of Operations for the Six Months Ended June 30, 2025 and 2024

Current wording

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

Previous wording

During the six months ended June 30, 2025, our net sales were $35.0 million compared to net sales of $48.5 million during the six months ended June 30, 2024. Product revenue for the six months ended June 30, 2025 was $34.7 million compared to product revenue of $48.5 million for the six months ended June 30, 2024. The decrease of $13.5 million was primarily due to a $14.6 million reduction in DaVita sales as a result of transitioning to a new supplier, partially offset by an increase of $0.8 million from price increases to other existing customers and sales to new customers. During the six months ended June 30, 2025, DaVita represented 20% of net sales. Net sales of non-product revenue were $0.3 million for the six months ended June 30, 2025 from the recognition of the remaining deferred license revenue associated with Sun Pharmaceutical Industries Ltd. ("Sun Pharma"), Jeil Pharmaceutical Co., Ltd. ("Jeil Pharma") and Drogsan Pharmaceuticals ("Drogsan Pharma"). Non-Product revenue was not material for either period.

Current wording

During the nine months ended September 30, 2025, net sales were $50.9 million compared to net sales of $76.8 million during the nine months ended September 30, 2024. Product revenue for the nine months ended September 30, 2025 was $50.6 million compared to product revenue of $76.8 million for the nine months ended September 30, 2024. The decrease of $25.9 million was primarily due to a $27.9 million reduction in DaVita sales as a result of DaVita transitioning to a new supplier, partially offset by an increase of $2.0 million from price increases to other existing customers and sales to new customers. The three months ended September 30, 2024 included $5.4 million from a special large order of premium-priced product to DaVita. DaVita represented 17% and 47% of net sales during the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Cost of sales for the six months ended June 30, 2025 was $29.4 million, resulting in gross profit of $5.5 million for the six months ended June 30, 2025, compared to cost of sales of $40.9 million and a gross profit of $7.6 million for the six months ended June 30, 2024. The gross profit decrease of $2.1 million was due to a decrease in product sales. Gross profit from product sales includes $1.3 million due to a price adjustment for DaVita purchases for the six months ended June 30, 2025. Gross profit from non-product sales consists of $0.1 million associated with recognition of the remaining deferred license revenue associated with Sun Pharma, Jeil Pharma and Drogsan Pharma during the six months ended June 30, 2025.

Current wording

Cost of sales for the nine months ended September 30, 2025 was $43.1 million, resulting in gross profit of $7.8 million for the nine months ended September 30, 2025, compared to cost of sales of $63.0 million and a gross profit of $13.9 million for the nine months ended September 30, 2024. The gross profit decrease of $6.1 million was primarily due to (i) a $5.5 million decrease in product sales, which includes $1.6 million from a special large order of premium-priced product to DaVita during the nine months ended September 30, 2024 that did not repeat during the 2025 period, (ii) an increase of $0.4 million in severance expense and $0.4 million of other costs related to the closure of the Greer manufacturing facility and (iii) an increase of $1.6 million in manufacturing costs, partially offset by a price adjustment of $1.7 million for DaVita purchases for the nine months ended September 30, 2025. Gross profit from non-product sales consists of $0.1 million associated with recognition of the remaining deferred license revenue associated with Sun Pharma, Jeil Pharma and Drogsan Pharma during the nine months ended September 30, 2025.

Previous wording

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

Current wording

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

Previous wording

Selling and marketing expenses were $1.3 million and $1.2 million for the six months ended June 30, 2025 and 2024, respectively. The increase of $0.1 million is primarily due to higher employee compensation expenses.

Current wording

Selling and marketing expenses were $1.8 million and $1.9 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease of $0.1 million is primarily due to lower employee compensation expenses.

Previous wording

General and administrative expenses were $7.0 million for the six months ended June 30, 2025, compared with $7.2 million for the six months ended June 30, 2024. The decrease of $0.2 million was primarily driven by decreases of (i) $0.3 million in professional fees and (ii) $0.3 million in administrative costs, partially offset by an increase of $0.4 million of compensation expense.

Current wording

General and administrative expenses were $10.3 million for the nine months ended September 30, 2025, compared to $10.8 million for the nine months ended September 30, 2024. The decrease of $0.5 million was primarily driven by decreases of (i) $0.5 million in administrative costs and (ii) $0.4 million in professional fees, partially offset by an increase of $0.4 million of stock-based compensation expense.

Previous wording

Total other expense of $0.3 million and $0.6 million for the six months ended June 30, 2025 and 2024, respectively, was driven primarily by interest expense of $0.5 million in each period related to our debt facility (See Note 15 to the condensed consolidated financial statements included elsewhere in this Form 10-Q). The six months ended June 30, 2025 was partially offset by $0.1 million of interest income, as well as realized gains on available-for-sale of investments of $0.1 million.

Current wording

Total other expense of $0.5 million and $0.9 million for the nine months ended September 30, 2025 and 2024, respectively, was driven primarily by interest expense of $0.7 million in each period related to our debt facility (See Note 15 to the condensed consolidated financial statements included elsewhere in this Form 10-Q). The nine months ended September 30, 2025 was partially offset by $0.2 million of interest income, as well as realized gains on available-for-sale investments of $0.2 million.

Previous wording

As of June 30, 2025, we had approximately $18.4 million of cash, cash equivalents and investments available-for-sale, and net working capital of $20.7 million. Based on the currently available net working capital along with the expectation of management of its ability to execute on its operational plans as discussed below, management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of the filing of this report.

Current wording

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.

Previous wording

Additionally, the Company's operational plans include raising capital, if needed, by using the $21.1 million remaining availability under its at-the-market ("ATM") facility or other methods or forms of financings, subject to existing limitations. Under the ATM, we have the ability to control the timing and floor price at which capital is raised.

Current wording

Additionally, the Company's operational plans include raising capital, if needed, by using the $13.1 million remaining availability under its at-the-market ("ATM") facility or other methods or forms of financings, subject to existing limitations. Under the ATM, we have the ability to control the timing and floor price at which capital is raised.

Previous wording

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

Current wording

The Company is subject to certain covenants and cure provisions under its Loan and Security Agreement (the "Loan Agreement") with Innovatus Life Sciences Lending Fund I, LP. As of September 30, 2025, the Company was in compliance with all covenants. On January 2, 2024, the Loan Agreement was amended to include, among other things, an interest-only period for 30 months, or up to 36 months if certain conditions are met, and extend the maturity date to January 1, 2029 (See Note 15 to the accompanying condensed consolidated financial statements).

Previous wording

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 of this economic instability on our future operations. 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.

Current wording

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 of this economic instability on our future operations. 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.

Previous wording

On July 4, 2025, the U.S. enacted P.L. 119-21, a U.S. federal statute passed by the 119th United States Congress that includes tax and spending policies (the “Act”), which contains a broad range of tax reform provisions affecting businesses, including extending or reinstating certain provisions of the 2017 Tax Cuts and Jobs Act, tax relief measures, modifications of certain energy tax credits granted under the Inflation Reduction Act and limits on various tax deductions, among other key provisions. The Company is currently evaluating the full effects of the Act and does not anticipate the Act to have a material impact on its condensed consolidated financial statements. As the Act was signed into law after the close of the second quarter, the impacts are not included in the Company’s operating results for the six months ended June 30, 2025.

Current wording

On July 4, 2025, the U.S. enacted P.L. 119-21, a U.S. federal statute passed by the 119th United States Congress that includes tax and spending policies (the “Act”), which contains a broad range of tax reform provisions affecting businesses, including extending or reinstating certain provisions of the 2017 Tax Cuts and Jobs Act, tax relief measures, modifications of certain energy tax credits granted under the Inflation Reduction Act and limits on various tax deductions, among other key provisions. The Company evaluated the Act and concluded it will not have a material impact on its condensed consolidated financial statements.

Previous wording

Net cash used in operating activities was $1.6 million for the six months ended June 30, 2025 compared to net cash used in operating activities of $0.9 million for the six months ended June 30, 2024. The increase in cash used in operating activities during the current period as compared to cash used in operating activities in the prior period was primarily due to (i) an increase in net loss of approximately $1.6 million, partially offset by (ii) a decrease in cash used in changes in current balance sheet accounts in the ordinary course of business of approximately $0.4 million and (iii) non-cash adjustments of $0.5 million.

Current wording

Net cash used in operating activities was $3.0 million for the nine months ended September 30, 2025 compared to net cash provided by operating activities of $3.3 million for the nine months ended September 30, 2024. The change in cash used in operating activities during the current period as compared to cash provided by operating activities in the prior period was primarily due to increases in (i) net loss of approximately $5.0 million and (ii) cash used in changes in current balance sheet accounts in the ordinary course of business of approximately $1.5 million, partially offset by (iii) non-cash adjustments of $0.3 million.

Previous wording

Cash Provided By (Used In) Investing Activities

Current wording

Cash Used In Investing Activities

Previous wording

Net cash used in financing activities was $1.4 million during the six months ended June 30, 2025 compared to net cash provided by financing activities of $2.2 million for the six months ended June 30, 2024. Net cash used in financing activities during the six months ended June 30, 2025 was primarily due to the cash paid in connection with the Evoqua Asset Acquisition deferred consideration obligation of $0.9 million, $0.3 million of payments on finance lease liabilities and $0.3 million of payments under the insurance financing note payable. Net cash provided by financing activities for the six months ended June 30, 2024 was primarily due to the gross proceeds from the issuance of common stock in connection with the ATM facility of $2.8 million.

Current wording

Net cash provided by financing activities was $5.3 million during the nine months ended September 30, 2025 compared to net cash provided by financing activities of $4.6 million for the nine months ended September 30, 2024. Net cash provided by financing activities during the nine months ended September 30, 2025 was primarily due to the gross proceeds from the issuance of common stock in connection with the ATM facility of $7.8 million, as defined and described in Note 11 to the condensed consolidated financial statements, partially offset by the cash paid in connection with the Evoqua Asset Acquisition of $1.6 million, as defined and described in Note 5 to the condensed consolidated financial statements. Net cash provided by financing activities for the nine months ended September 30, 2024 was primarily due to the gross proceeds from the issuance of common stock in connection with the ATM facility of $6.4 million, partially offset by the cash paid in connection with the Evoqua Asset Acquisition of $1.0 million.