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

For the quarterly period ended September 30, 2022

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

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

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

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  ☒

Title of each class:

Trading Symbol

Name of each exchange on which registered:

Common Stock, par value $0.0001

RMTI

Nasdaq Capital Market

			Page
Part I — Financial Information (unaudited)
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021			3
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021			4
Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2022 and 2021			5
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021			6
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021			7
Notes to Condensed Consolidated Financial Statements			7
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3 - Quantitative and Qualitative Disclosures about Market Risk			27
Item 4 - Controls and Procedures			27
Part II — Other Information
Item 1 -    Legal Proceedings			28
Item 1A - Risk Factors			28
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds			29
Item 3 - Defaults Upon Senior Securities			29
Item 4 - Mine Safety Disclosures			29
Item 5 - Other Information			29
Item 6 -    Exhibits			30
Signatures			31

			September 30, 2022						December 31, 2021
			(Unaudited)
ASSETS
Cash and Cash Equivalents			$	12,980					$	13,280
Investments Available-for-Sale			14,584						9,158
Accounts Receivable, net			7,367						5,913
Inventory, net			5,020						4,076
Prepaid and Other Current Assets			2,407						2,861
Total Current Assets			42,358						35,288
Property and Equipment, net			2,264						2,486
Inventory, Non-Current			1,193						1,523
Right of Use Assets, net			6,928						7,737
Goodwill			921						921
Other Non-Current Assets			522						619
Total Assets			$	54,186					$	48,574
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable			$	3,051					$	3,739
Accrued Liabilities			5,887						5,090
Lease Liability - Current			1,992						2,004
Deferred License Revenue - Current			2,164						2,171
Term Loan - Net of Issuance Costs			5,131						7,381
Insurance Financing Note Payable			1,006						437
Customer Deposits			107						144
Total Current Liabilities			19,338						20,966
Lease Liability - Long-Term			5,171						5,887
Term Loan, Net of Issuance Costs			8,962						13,186
Deferred License Revenue - Long-Term			4,565						5,986
Long Term Liability - Other			14						14
Total Liabilities			38,050						46,039
Stockholders’ Equity:
Preferred Stock, $0.0001 par value, 2,000,000 shares authorized; 15,000 and nil shares issued and outstanding at September 30, 2022 and December 31, 2021			—						—
Common Stock, $0.0001 par value; 170,000,000 shares authorized; 11,152,673 and 8,544,225 shares issued and outstanding at September 30, 2022 and December 31, 2021			1						1
Additional Paid-in Capital			402,480						372,562
Accumulated Deficit			(386,399)						(370,080)
Accumulated Other Comprehensive Income			54						52
Total Stockholders’ Equity			16,136						2,535
Total Liabilities and Stockholders’ Equity			$	54,186					$	48,574

			Three Months Ended September 30, 2022						Three Months Ended September 30, 2021						Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
Net Sales			$	18,691					$	15,988					$	53,497					$	46,599
Cost of Sales			17,914						16,317						51,760						46,788
Gross Profit (Loss)			777						(329)						1,737						(189)
Research and Product Development			469						1,221						2,963						5,445
Selling and Marketing			762						1,541						1,743						4,860
General and Administrative			3,254						3,881						11,845						11,483
Operating Loss			(3,708)						(6,972)						(14,814)						(21,977)
Other (Expense) Income
Realized Gain on Investments			—						—						4						(1)
Interest Expense			(476)						(609)						(1,497)						(1,772)
Interest Income			(6)						—						(10)						17
Total Other Expense			(482)						(609)						(1,503)						(1,756)
Net Loss			$	(4,190)					$	(7,581)					$	(16,317)					$	(23,733)
Basic and Diluted Net Loss per Share			$	(0.40)					$	(0.89)					$	(1.75)					$	(2.79)
Basic and Diluted Weighted Average Shares Outstanding			10,528,148						8,534,740						9,299,788						8,520,603

			Three Months Ended September 30, 2022						Three Months Ended September 30, 2021						Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
Net Loss			$	(4,190)					$	(7,581)					$	(16,317)					$	(23,733)
Unrealized Gain (Loss) on Available-for-Sale Debt Instrument Investments			5						4						5						(4)
Foreign Currency Translation Adjustments			—						—						(3)						3
Comprehensive Loss			$	(4,185)					$	(7,577)					$	(16,315)					$	(23,734)

			PREFERRED STOCK												COMMON STOCK												ADDITIONAL PAID-IN CAPITAL						ACCUMULATED DEFICIT						ACCUMULATED OTHER COMPREHENSIVE INCOME						TOTAL STOCKHOLDERS'  (DEFICIT)
			SHARES						AMOUNT						SHARES						AMOUNT
Balance as of January 1, 2022			—						$	—					8,544,225						$	1					$	372,562					$	(370,080)					$	52					$	2,535
Net Loss			—						—						—						—						—						(7,162)						—						(7,162)
Foreign Currency Translation Adjustments			—						—						—						—						—						—						(1)						(1)
Stock-based Compensation			—						—						—						—						(179)						—						—						(179)
Balance as of March 31, 2022			—						$	—					8,544,225						$	1					$	372,383					$	(377,242)					$	51					$	(4,807)
Net Loss			—						—						—						—						—						(4,967)						—						(4,967)
Foreign Currency Translation Adjustments			—						—						—						—						—						—						(2)						(2)
Issuance of common stock, net of offering costs/Public Offering			—						—						844,613						—						14,893						—						—						14,893
Issuance of common stock, net of offering costs/At-the-Market Offering			—						—						7,500						—						15						—						—						15
Issuance of preferred stock, net of offering costs			15,000						—						—						—						14,916						—						—						14,916
Vesting of Restricted Stock Units Issued, net of taxes withheld			—						—						10,958						—						—						—						—						—
Stock-based Compensation and modification expense			—						—						—						—						97						—						—						97
Balance as of June 30, 2022			15,000						$	—					9,407,296						$	1					$	402,304					$	(382,209)					$	49					$	20,145
Net Loss			—						—						—						—						—						(4,190)						—						(4,190)
Unrealized Gain on Available-for-Sale Investments			—						—						—						—						—						—						5						5
Issuance of common stock, net of offering costs/Public Offering			—												1,745,377						—						—						—						—						—
Stock-based Compensation expense			—						—						—						—						176						—						—						176
Balance as of September 30, 2022			15,000						$	—					11,152,673						$	1					$	402,480					$	(386,399)					$	54					$	16,136

			PREFERRED STOCK												COMMON STOCK												ADDITIONAL PAID-IN CAPITAL						ACCUMULATED DEFICIT						ACCUMULATED OTHER COMPREHENSIVE INCOME						TOTAL STOCKHOLDERS' EQUITY
			SHARES						AMOUNT						SHARES						AMOUNT
Balance as of January 1, 2021			—						$	—					8,506,651						$	1					$	371,518					$	(337,406)					$	57					$	34,170
Net Loss			—						—						—						—						—						(7,752)						—						(7,752)
Unrealized Loss on Available-for-Sale Investments			—						—						—						—						—						—						(7)						(7)
Foreign Currency Translation Adjustments			—						—						—						—						—						—						3						3
Stock-based Compensation			—						—						2,396						—						(236)						—						—						(236)
Balance as of March 31, 2021			—						$	—					8,509,047						$	1					$	371,282					$	(345,158)					$	53					$	26,178
Net Loss			—						—						—						—						—						(8,400)						—						(8,400)
Unrealized Loss on Available-for-Sale Investments			—						—						—						—						—						—						(1)						(1)
Vesting of Restricted Stock Units Issued, net of taxes withheld			—						—						19,260						—						(7)						—						—						(7)
Stock-based Compensation			—						—						—						—						433						—						—						433
Balance as of June 30, 2021			—						$	—					8,528,307						$	1					$	371,708					$	(353,558)					$	52					$	18,203
Net Loss			—						—						—						—						—						(7,581)						—						(7,581)
Unrealized Gain on Available-for-Sale Investments			—						—						—						—						—						—						4						4
Issued shares for services			—						—						14,090						—						107						—						—						107
Stock-based Compensation			—						—						—						—						361						—						—						361
Balance as of September 30, 2021			—						$	—					8,542,397						$	1					$	372,176					$	(361,139)					$	56					$	11,094

			Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
Cash Flows From Operating Activities:
Net Loss			$	(16,317)					$	(23,733)
Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities:
Depreciation and Amortization			422						535
Stock-based Compensation			95						558
Increase in Inventory Reserves			307						89
Amortization of Right of Use Asset			1,518						1,312
Amortization of Debt Financing Costs and Accretion of Debt Discount			276						276
(Gain) Loss on Disposal of Assets			(3)						7
Realized (Gain) Loss on Sale of Investments Available-for-Sale			(4)						1
Foreign Currency Translation Adjustment			(3)						3
Changes in Assets and Liabilities:
Increase in Accounts Receivable, net			(1,454)						(1,865)
Increase in Inventory			(921)						(554)
Decrease in Prepaid and Other Assets			2,058						1,760
(Decrease) Increase in Accounts Payable			(688)						679
Decrease in Lease Liability			(1,435)						(1,266)
Increase (Decrease) in Other Liabilities			756						(825)
Decrease in Deferred License Revenue			(1,427)						(1,485)
Changes in Assets and Liabilities			(3,111)						(3,556)
Cash Used In Operating Activities			(16,820)						(24,508)
Cash Flows From Investing Activities:
Purchase of Investments Available-for-Sale			(17,389)						(19,107)
Sale of Investments Available-for-Sale			11,972						19,286
Purchase of Equipment			(197)						(408)
Cash Used In Investing Activities			(5,614)						(229)
Cash Flows From Financing Activities:
Payments on Debt			(6,750)						—
Payments on Short Term Note Payable			(941)						(656)
Proceeds from the Issuance of Common Stock			15,016						—
Offering Costs from the Issuance of Common Stock			(106)						—
Proceeds from the Issuance of Preferred Stock			15,000						—
Offering Costs from the Issuance of Preferred Stock			(85)						—
Proceeds from the Issuance of Common Stock for payment related to services provided			—						107
Repurchase of Common Stock to Pay Employee Withholding Taxes			—						(6)
Cash Provided by (Used In) Financing Activities			22,134						(555)
Decrease in Cash and Cash Equivalents			(300)						(25,292)
Cash and Cash Equivalents at Beginning of Period			13,280						48,682
Cash and Cash Equivalents at End of Period			$	12,980					$	23,390
Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest			$	1,261					$	1,318
Supplemental Disclosure of Noncash Investing and Financing Activities:
Change in Unrealized Loss on Marketable Securities Available-for-Sale			$	5					$	(4)

Rockwell Medical, Inc. (“Rockwell Medical,” “Rockwell,” or the “Company”) is a commercial healthcare company focused on providing life-sustaining products for patients suffering from blood disorders and diseases associated with the kidney. Rockwell is a revenue-generating business and the second largest supplier of acid and bicarbonate concentrates for dialysis patients in the United States. Hemodialysis is the most common form of end-stage kidney disease treatment and is usually performed at a freestanding outpatient dialysis center, at a hospital-based outpatient center, or in a patient’s home. This represents a large market opportunity for which Rockwell's products are well-positioned to meet the needs of patients.

Rockwell manufactures hemodialysis concentrates under cGMP regulations at its three facilities in Michigan, Texas, and South Carolina totaling approximately 175,000 square feet, and manufactures mixers in its Iowa facility. Rockwell delivers the majority of its hemodialysis concentrates products and mixers to dialysis clinics throughout the United States and internationally utilizing its own delivery trucks and third-party carriers. Rockwell has developed a core expertise in manufacturing and delivering hemodialysis concentrates, and has built a longstanding reputation for reliability, quality, and excellent customer service.

Rockwell has a proprietary parenteral iron product, TRIFERIC® (ferric pyrophosphate citrate, "FPC"), which is indicated to maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease. The Company has established several international partnerships with companies seeking to develop and commercialize TRIFERIC® outside the United States and is working closely with these international partners to develop and commercialize TRIFERIC® in their respective regions.

Rockwell continues to evaluate the viability of its FPC platform and FPC's potential to treat iron deficiency and iron deficiency anemia and for acute heart failure.

Rockwell’s strategy is focused on growing the Company's revenue-generating business, which currently includes hemodialysis concentrates and international partnerships for TRIFERIC® and achieving profitability in 2024 to put the Company in a stronger and more stable financial position.

As of September 30, 2022, Rockwell had approximately $27.6 million of cash, cash equivalents and investments available-for-sale, and working capital of $23.0 million. Net cash used in operating activities for the nine months ended September 30, 2022 was approximately $16.8 million. Based on the currently available working capital and capital raises described 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.

On April 6, 2022, the Company and DaVita, Inc. ("DaVita") entered into an amendment (the "Amendment") to the Products Purchase Agreement, dated July 1, 2019, under which the Company supplies DaVita with certain dialysis concentrates. Under the Amendment, the Company and DaVita agreed to certain price increases, effective May 1, 2022, as well as the pass-through of certain inflationary costs, determined on a quarterly basis. Certain costs are subject to a cap. The Amendment also requires the Company to implement certain cost containment and cost-cutting measures. The Amendment contains certain covenants with respect to the Company’s ongoing operations, including a minimum cash covenant of $10 million, or the Company will be in default under the Products Purchase Agreement. An event of default could result in termination of that agreement.

On April 6, 2022, the Company and DaVita entered into a Securities Purchase Agreement (the “SPA”), pursuant to which the Company issued $15 million of preferred stock to DaVita in two separate tranches. The Company initially issued 7,500 shares of a newly designated series of preferred stock, which is designated “Series X Convertible Preferred Stock” (the “Series X Preferred Stock”) for gross proceeds of $7.5 million. On June 15, 2022, the Company issued to DaVita an additional 7,500 shares of Series X Preferred Stock in a second closing (the “Second Tranche”) for an additional $7.5 million. The Second Tranche was conditioned upon the Company raising an additional $15 million in capital within a certain timeline, which took place on June 2, 2022.

On April 8, 2022, the Company entered into a sales agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (the “Agent”), pursuant to which the Company may offer and sell from time to time up to $12,200,000 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 (the “Securities Act”), pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-259923) (the “Registration Statement”), which was originally filed with the Securities and Exchange Commission (“SEC”) on September 30, 2021 and declared effective by the SEC on October 8, 2021, the base prospectus contained within the Registration Statement, and a prospectus supplement that was filed with the SEC on April 8, 2022. During the three months ended September 30, 2022, the Company did not make any sales pursuant to the Sales Agreement. Approximately $12.2 million remains available for sale under the ATM facility.

On May 30, 2022, the Company entered into a Securities Purchase Agreement (the “RD Purchase Agreement”) with the purchaser named therein (the “Purchaser”), pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “Offering”), 844,613 shares of its common stock at price of $1.39 per share, and prefunded warrants to purchase up to an aggregate of 7,788,480 shares of common stock (the “Pre-Funded Warrants” and the shares of common stock underlying the Pre-Funded Warrants, the “Warrant Shares”). The purchase price of each Pre-Funded Warrant was equal to the price at which a share of common stock was sold to the public in the Offering, minus $0.0001, and the exercise price of each Pre-Funded Warrant is $0.0001 per share.

Also on May 30, 2022, concurrently with the Offering, the Company entered into a Securities Purchase Agreement with the Purchaser (the “PIPE Purchase Agreement”) relating to the offering and sale (the “Private Placement”) of warrants to purchase up to a total of 9,900,990 shares of common stock and pre-funded warrants to purchase up to a total of 1,267,897 shares of common stock (the “PIPE Warrants”). Each warrant was sold at a price of $0.125 per underlying warrant share and is exercisable at an exercise price of $1.39 per share. The purchase price of each Pre-Funded Warrant was equal to the price at which a share of common stock was sold to the public in the Offering, minus $0.0001, and the exercise price of each prefunded warrant is $0.0001 per share. The Offering and the Private Placement closed on June 2, 2022. The net proceeds to the Company from the Offering and the Private Placement were approximately $14.9 million, after deducting fees and expenses.

The Company may require additional capital to sustain its operations and make the investments it needs to execute its strategic plan. 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.

Currently, because the Company's public float is less than $75 million, it is subject to the baby shelf limitations under its current registration statement on Form S-3, which limit the amount the Company may offer under the Form S-3. This could limit its ability to raise capital under this registration statement.

On May 9, 2022, the stockholders of the Company authorized the Board of Directors to effect a reverse stock split of all outstanding shares of common stock. The Board of Directors subsequently approved the implementation of a reverse stock split as a ratio of one-for-eleven shares, which became effective on May 13, 2022. The Company’s outstanding stock options were also adjusted to reflect the one-for-eleven reverse stock split of the Company’s common stock. Outstanding stock options were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased. The reverse stock split resulted in an adjustment to the Series X convertible preferred stock conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion. All share and per share data in these condensed consolidated financial statements and related notes hereto have been retroactively adjusted to account for the effect of the reverse stock split for the three and nine month periods ended September 30, 2022 and 2021, respectively, and the balance sheet at September 30, 2022 and December 31, 2021.

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 expenses during the reporting period. Actual results could differ from those estimates.

The Company accounts for its leases under Accounting Standards Codification (“ASC”) 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Variable lease expenses, if any, are recorded when incurred.

In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term.

ASC 260, Earnings Per Share, requires dual presentation of basic and diluted earnings per share (“EPS”), with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that are then sharing in the earnings of the entity.

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, common stock warrants, unvested restricted stock units and stock options are considered to be potentially dilutive securities but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive, and therefore, basic and diluted net loss per share were the same for all periods presented.

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share for the nine months ended September 30, 2022 and 2021, respectively, because to do so would be anti-dilutive (in common equivalent shares):

			As of September 30,
			2022						2021
Options to purchase common stock			1,311,691						533,784
Unvested restricted stock awards			891						7,118
Unvested restricted stock units			125,000						31,116
Preferred stock conversion to common stock			1,363,636						—
Warrants to purchase common stock			17,507,268						2,402,442
Total			20,308,486						2,974,460

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 August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies the accounting for convertible instruments by eliminating the requirement to separate embedded conversion features from the host contract when the conversion features are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or do not result in substantial premiums accounted for as paid-in capital. By removing the separation model, a convertible debt instrument will be reported as a single liability instrument with no separate accounting for embedded conversion features. This new standard also removes certain settlement conditions required for contracts to qualify for equity classification and simplifies the diluted earnings per share calculations by requiring an entity use the if-converted method and the effect of potential share settlement be included in diluted earnings per share calculations. This new standard will be effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of adopting this standard on the consolidated financial statements.

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the new 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 us 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.

The following is a description of principal activities from which the Company generates its revenue.

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 concentrates 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 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 control of the product transfers to the customer.

The Company received upfront fees under five distribution and license agreements that have been deferred as a contract liability.  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 regulatory approval was probable as of the execution of the agreement.  The amounts received from Baxter Healthcare Corporation (“Baxter”) are recognized as revenue at the point in time the estimated product sales under the agreement occur. 

For the business under the Company’s Distribution Agreement with Baxter (the “Baxter Agreement”) and 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. There were no such adjustments for the periods reported. Customers typically pay for the product based on customary business practices with payment terms averaging 30 days, while distributor payment terms average 45 days.

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

In thousands of U.S. dollars ($)			Three Months Ended September 30, 2022																		Nine Months Ended September 30, 2022
Products By Geographic Area			Total						U.S.						Rest of World						Total						U.S.						Rest of World
Drug Revenues
Product Sales – Point-in-time			$	193					$	193					$	—					$	834					$	561					$	273
License Fee – Over time			65						—						65						192						—						192
Total Drug Products			258						193						65						1,026						561						465
Concentrates Products
Product Sales – Point-in-time			17,953						16,619						1,334						51,035						46,334						4,701
License Fee – Over time			480						480						—						1,436						1,436						—
Total Concentrate Products			18,433						17,099						1,334						52,471						47,770						4,701
Net Revenue			$	18,691					$	17,292					$	1,399					$	53,497					$	48,331					$	5,166

In thousands of U.S. dollars ($)			Three Months Ended September 30, 2021																		Nine Months Ended September 30, 2021
Products By Geographic Area			Total						U.S.						Rest of World						Total						U.S.						Rest of World
Drug Revenues
Product Sales – Point-in-time			$	217					$	217					$	—					$	656					$	656					$	—
License Fee – Over time			62						—						62						179						—						179
Total Drug Products			279						217						62						835						656						179
Concentrates Products
Product Sales – Point-in-time			15,224						13,541						1,683						44,308						39,768						4,540
License Fee – Over time			485						485						—						1,456						1,456						—
Total Concentrate Products			15,709						14,026						1,683						45,764						41,224						4,540
Net Revenue			$	15,988					$	14,243					$	1,745					$	46,599					$	41,880					$	4,719

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

In thousands of U.S. dollars ($)			September 30, 2022						December 31, 2021
Receivables, which are included in "Trade and other receivables"			$	7,367					$	5,913
Contract liabilities			$	6,729					$	8,157

There were no impairment losses recognized related to any receivables arising from the Company’s contracts with customers for the three and nine months ended September 30, 2022 and 2021.

For the three and nine months ended September 30, 2022 and September 30, 2021, the Company did not recognize any material bad-debt expense. There were no material contract assets recorded on the condensed consolidated balance sheet as of September 30, 2022 and December 31, 2021.  The Company does not generally accept returns of its concentrates products and no material reserve for returns of concentrates products was established as of September 30, 2022 or December 31, 2021. 

The contract liabilities primarily relate to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products

For the three and nine months ended September 30, 2022, revenue recognized from performance obligations related to prior periods was not material.

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 $6.7 million as of September 30, 2022. The amount relates primarily to upfront payments and consideration received from customers in advance of the customer assuming control of the related products. The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations having original expected durations of one year or less. The Baxter Agreement includes minimum commitments of product sales over the duration of the agreement. Unfulfilled minimum commitments related to the Baxter Agreement are product sales of $3.8 million as of September 30, 2022, which is amortized ratably through expiration of the Baxter Agreement on October 2, 2024.

Investments available-for-sale consisted of the following as of September 30, 2022 and December 31, 2021 (table in thousands):

			September 30, 2022
			Amortized Cost						Unrealized Gain						Unrealized Loss						Accrued Interest						Fair Value
Available-for-Sale Securities
Bonds			$	14,578					$	6					$	(1)					$	1					$	14,584

			December 31, 2021
			Amortized Cost						Unrealized Gain						Unrealized Loss						Accrued Interest						Fair Value
Available-for-Sale Securities
Bonds			$	9,143					$	1					$	—					$	14					$	9,158

The fair value of investments available-for-sale are determined using quoted market prices from daily exchange-traded markets based on the closing price as of the balance sheet date and are classified as a Level 1 measurement under ASC 820 Fair Value Measurements.

As of September 30, 2022 and December 31, 2021, the amortized cost and estimated fair value of our available-for-sale securities were due within one year.

Components of inventory, net of reserves, as of September 30, 2022 and December 31, 2021 are as follows (table in thousands):

			September 30, 2022						December 31, 2021
Raw Materials			$	4,074					$	3,434
Work in Process			336						201
Finished Goods			1,803						1,964
Total			$	6,213					$	5,599

As of September 30, 2022, the Company classified $1.2 million of inventory as non-current, all of which was related to the active pharmaceutical ingredient and raw materials for TRIFERIC®. As of September 30, 2022, the total TRIFERIC® inventory net of reserve was $1.2 million.

The $1.2 million net value of TRIFERIC® inventory consisted of $0.3 million of TRIFERIC® API with an estimated useful life extending through 2023, and $0.9 million of raw materials for TRIFERIC® with an estimated useful life of 25 years.

As of September 30, 2022 and December 31, 2021, the Company’s property and equipment consisted of the following (table in thousands):

			September 30, 2022						December 31, 2021
Leasehold Improvements			$	1,257					$	1,204
Machinery and Equipment			5,985						5,864
Information Technology & Office Equipment			1,845						1,845
Laboratory Equipment			660						676
			9,747						9,589
Accumulated Depreciation			(7,483)						(7,103)
Property and Equipment, net			$	2,264					$	2,486

Depreciation expense for both the three months ended September 30, 2022 and 2021 was $0.1 million. Depreciation expense for nine months end September 30, 2022 and 2021 was $0.4 million and $0.5 million, respectively.

			September 30, 2022						December 31, 2021
Accrued Research & Development Expense			$	65					$	366
Accrued Compensation and Benefits			3,006						1,791
Accrued Unvouchered Receipts			581						796
Accrued Workers Compensation			294						382
Other Accrued Liabilities			1,941						1,755
Total Accrued Liabilities			$	5,887					$	5,090

In October 2014, the Company entered into the Baxter Agreement, which has a term of 10 years and received an upfront fee of $20 million. The upfront fee was recorded as deferred revenue and is 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. The Company recognized revenue of approximately $0.5 million and $1.4 million for the three and nine months ended September 30, 2022, respectively. The Company recognized revenue of approximately $0.5 million and $1.5 million for the three and nine month ended September 30, 2021, respectively. Deferred revenue related to the Baxter Agreement totaled $3.8 million as of September 30, 2022 and $5.2 million as of December 31, 2021.

In 2016, the Company entered into a distribution agreement with Wanbang (the "Wanbang Agreement") and received an upfront fee of $4.0 million. The upfront fee was recorded as deferred revenue and is being recognized as revenue based on the agreement term. The Company recognized revenue of approximately $0.1 million and $0.2 million during each of the three and nine months ended September 30, 2022 and 2021, respectively. Deferred revenue related to the Wanbang Agreement totaled $2.3 million as of September 30, 2022 and $2.5 million as of December 31, 2021.

In January 2020, the Company entered into license and supply agreements with Sun Pharma (the "Sun Pharma Agreements"), for the rights to commercialize TRIFERIC® (dialysate) (ferric pyrophosphate citrate) in India. In consideration for the license, the Company received an upfront fee of $0.1 million. The upfront fee was recorded as deferred revenue and is being recognized as revenue based on the agreement term. The Company recognized revenue of approximately $2,500 and $7,500 for each of the three and nine months ended September 30, 2022 and 2021, respectively. Deferred revenue related to the Sun Pharma Agreement totaled $72,500 and $80,000 as of September 30, 2022 and December 31, 2021, respectively.

In September 2020, the Company entered into a license and supply agreements with Jeil Pharma (the "Jeil Pharma Agreements"), for the rights to commercialize TRIFERIC® (dialysate) (ferric pyrophosphate citrate) in South Korea. In consideration for the license, the Company received an upfront fee of $0.2 million. In May 2022, Jeil Pharma obtained regulatory approval in South Korea and paid the Company $0.2 million in consideration of reaching the milestone. The upfront fee and milestone payments were recorded as deferred revenue and are being recognized as revenue based on the agreement term. The Company recognized revenue of $5,200 and $13,000 for the three and nine months ended September 30, 2022, respectively, and $2,500 and $7,500 for the three and nine months ended September 30, 2021, respectively. Deferred revenue related to the Jeil Pharma Agreement totaled approximately $0.4 million and $0.2 million as of September 30, 2022 and December 31, 2021 respectively.

In June 2021, the Company entered into license and supply agreements with Drogsan Pharma (the "Drogsan Agreements"), for the rights to commercialize TRIFERIC® (dialysate) and TRIFERIC® AVNU in Turkey. In consideration for the license, the Company received an upfront fee of $0.15 million. The upfront fee was recorded as deferred revenue and will be recognized as revenue based on the agreement term. The Company recognized revenue of $3,750 and $11,250 for each of the three and nine months ended September 30, 2022 and 2021, respectively. Deferred revenue related to the Drogsan Agreements totaled approximately $0.13 million and $0.15 million as of September 30, 2022 and December 31, 2021, respectively.

On May 9, 2022, the stockholders of the Company authorized the Board of Directors to effect a reverse stock split of all outstanding shares of common stock. The Board of Directors subsequently approved the implementation of a reverse stock split as a ratio of one-for-eleven shares, which became effective on May 13, 2022. The Company’s outstanding stock options were also adjusted to reflect the one-for-eleven reverse stock split of the Company’s common stock. Outstanding stock options were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased.

On April 6, 2022, the Company and DaVita entered into 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 2, 2022, the Company met the conditions for the Second Tranche through a Registered Direct and Private Placement Offering by raising $15 million in additional capital. As a result, 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.

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, 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 mandatorily redemptive definition which could trigger liability classification.

As of September 30, 2022 and December 31, 2021, there were 2,000,000 shares of preferred stock, $0.0001 par value per share, authorized and 15,000 and nil shares of preferred stock issued and outstanding, respectively.

As of September 30, 2022 and December 31, 2021, there were 170,000,000 shares of common stock, $0.0001 par value per share, authorized and 11,152,673 and 8,544,225 shares issued and outstanding, respectively.

The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2022 and 2021 as follows (table in thousands):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Service-based awards:
Restricted stock units			$	46					$	81					$	84					$	263
Stock option awards			130						315						401						1,050
			176						396						485						1,313
Performance-based awards:
Restricted stock awards			—						—						(391)						(391)
Stock option awards			—						(35)						—						(364)
			—						(35)						(391)						(755)
Total			$	176					$	361					$	94					$	558

			Number of Shares						Weighted Average Grant-Date Fair Value
Unvested at January 1, 2022			7,118						$	62.70
Forfeited			(6,227)						$	62.70
Unvested at September 30, 2022			891						$	62.70

A summary of the Company’s restricted stock awards during the nine months ended September 30, 2021 is as follows:

			Number of Shares						Weighted Average Grant-Date Fair Value
Unvested at January 1, 2021			13,345						$	62.70
Forfeited			(6,227)						$	62.70
Unvested at September 30, 2021			7,118						$	62.70

The fair value of 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, 2022, unvested restricted stock awards of 891 were related to performance-based awards. The forfeited performance-based restricted stock awards of 6,227 was due to the resignation of the Company's Chief Development Officer on March 25, 2022. These forfeited awards reduced stock-based compensation expense by $0.4 million. As of September 30, 2021, unvested restricted stock awards of 7,118 were related to performance-based awards. The forfeited performance-based restricted stock awards of 6,227 was due to the termination of the Company's former Chief Science Officer on January 19, 2021. These forfeited awards reduced stock-based compensation expense by $0.4 million.

A summary of the Company’s service-based restricted stock units during the nine months ended September 30, 2022 is as follows:

			Number of Shares						Weighted Average Grant-Date Fair Value
Unvested at January 1, 2022			29,289						$	12.87
Granted			125,000						1.47
Vested			(23,515)						11.33
Forfeited			(5,774)						19.00
Unvested at September 30, 2022			125,000						$	1.47

A summary of the Company’s service-based restricted stock units during the nine months ended September 30, 2021 is as follows:

			Number of Shares						Weighted Average Grant-Date Fair Value
Unvested at January 1, 2021			24,136						$	28.60
Granted			28,186						9.90
Vested			(20,134)						26.18
Forfeited			(1,073)						52.91
Unvested at September 30, 2021			31,115						$	12.87

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. Stock-based compensation expense of $46,193 and $83,607 was recognized for the three and nine months ended September 30, 2022, respectively. Stock-based compensation expense of $0.1 million and $0.3 million was recognized for the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, the unrecognized stock-based compensation expense was $0.1 million, which is expected to be recognized over an estimated weighted average remaining term of less than 1 year.

			September 30, 2022
Exercise price			$1.28 - $1.66
Expected stock price volatility			76.2% - 78.5%
Risk-free interest rate			1.97% - 3.44%
Term (years)			5.5 - 6

			Shares Underlying Options						Weighted Average Exercise Price						Weighted Average Remaining Contractual Term						Aggregate Intrinsic Value
Outstanding at January 1, 2022			528,591						$	32.01					7.5						$	—
Granted			898,659						1.49						5.5						—
Forfeited			(30,093)						15.11						—						—
Expired			(85,466)						82.09						—						—
Outstanding at September 30, 2022			1,311,691						$	8.23					9.1						$	—
Exercisable at September 30, 2022			243,973						$	29.31					6.9						$	—

			Shares Underlying Options						Weighted Average Exercise Price						Weighted Average Remaining Contractual Term						Aggregate Intrinsic Value
Outstanding at January 1, 2021			519,814						$	50.05					6.6						$	—
Granted			170,197						9.79						6.0						—
Forfeited			(35,025)						25.30						—						—
Expired			(121,202)						78.76						—						—
Outstanding at September 30, 2021			533,784						$	32.45					7.7						$	—
Exercisable at September 30, 2021			230,858						$	54.56					5.8						$	—

The aggregate intrinsic value in the table above is calculated as the difference between the closing price of the Company's common stock and the exercise price of the stock options that had strike prices below the closing price.

During the nine months ended September 30, 2022, the Company granted stock options to purchase up to 898,659 shares of common stock to certain employees. During the nine months ended September 30, 2022, 30,093 shares were forfeited and 85,466 shares expired. Forfeitures are recorded in the period of occurrence; compensation expense is adjusted accordingly.

Stock-based compensation expense recognized for service-based stock options was $0.1 million and $0.4 million for the three and nine months ended September 30, 2022, respectively. Stock-based compensation expense recognized for service-based stock options was $0.3 million and $1.0 million for the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $1.4 million, which is expected to be recognized over an estimated weighted average remaining term of 3.6 years.

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 our 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, 2022, the Company has accrued $85,400 relating to certain IP reimbursement expenses and certain sublicense royalty fees and is included within accrued liabilities on the condensed consolidated balance sheet.

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 shall pay Charak a percentage of any sublicense income during the term of the 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 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 I.V. TRIFERIC®, dated as of October 7, 2018 (the “IV Agreement”), under which Charak granted the Company an exclusive, sublicensable, 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 is 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, sublicensable, royalty-bearing license to SFP for the purpose of commercializing worldwide certain TPN products incorporating SFP. The license grant under the TPN Agreement continues for a term that expires on the later of February 1, 2034 or upon the expiration or termination of a valid claim of a licensed patent. During the term of the TPN Agreement, the Company is liable to pay Charak a base royalty on net sales and an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis. The Company shall also pay to Charak a percentage of any sublicense income received during the term of the TPN Agreement, which amount shall not be less than a minimum royalty on net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis.

The potential milestone payments are not yet considered probable, and no milestone payments have been accrued at September 30, 2022.

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 2024. 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 under a lease expiring on October 31, 2024. This lease was subleased on December 15, 2021 with an expiration date of October 31, 2024.

At September 30, 2022, the Company had operating and finance lease liabilities of $7.2 million and right-of-use assets of $6.9 million, which are included in the consolidated balance sheet.

At December 31, 2021, the Company had operating lease liabilities of $7.9 million and right-of-use assets of $7.7 million, which are included in the consolidated balance sheet.

			Three Months Ended September 30, 2022						Three Months Ended September 30, 2021						Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
Operating leases
Operating lease cost			$	410					$	457					$	1,289					$	1,309
Variable lease cost			101						94						287						286
Operating lease expense			511						551						1,576						1,595
Finance leases
Amortization of right-of-use assets			141						73						424						184
Interest on lease obligations			44						22						136						55
Finance lease expense			185						95						560						239
Short-term lease rent expense			5						4						14						12
Total rent expense			$	701					$	650					$	2,150					$	1,846
Other information
Operating cash flows from operating leases			$	427					$	444					$	1,338					$	1,298
Operating cash flows from finance leases			$	44					$	22					$	136					$	56
Financing cash flows from finance leases			$	121					$	59					$	359					$	152
Right of use assets exchanged for operating lease liabilities			$	768					$	718					$	768					$	4,089
Right of use assets exchanged for finance lease liabilities			$	—					$	588					$	—					$	1,365
Weighted-average remaining lease term – operating leases			3.2						3.7						3.2						3.7
Weighted-average remaining lease term – finance leases			4.7						5.5						4.7						5.5
Weighted-average discount rate – operating leases			6.4		%				6.3		%				6.4		%				6.3		%
Weighted-average discount rate – finance leases			6.4		%				5.9		%				6.4		%				5.9		%

			Operating						Finance
Year ending December 31, 2022 (remaining)			$	434					$	165
Year ending December 31, 2023			1,692						669
Year ending December 31, 2024			1,404						672
Year ending December 31, 2025			937						676
Year ending December 31, 2026			310						666
Remaining future payments			120						311
Total			$	4,897					$	3,159
Less present value discount			(467)						(426)
Operating and finance lease liabilities			$	4,430					$	2,733

In connection with each funding of the Term Loans, the Company is required to issue to Innovatus a warrant (the “Warrants”) to purchase a number of shares of the Company’s common stock equal to 3.5% of the principal amount of the relevant Term Loan funded divided by the exercise price, which will be based on the lower of (i) the volume weighted average closing price of the Company’s stock for the 5-trading day period ending on the last trading day immediately preceding the execution of the Loan Agreement or (ii) the closing price on the last trading day immediately preceding the execution of the Loan Agreement (or for the second and third tranches only at the lower of (i) $18.15 per share or (ii) the volume weighted average closing price of the Company’s stock for the 5-trading day period ending on the last trading day immediately preceding the relevant Term Loan funding). The Warrants may be exercised on a cashless basis and are immediately exercisable through the seventh anniversary of the applicable funding date. The number of shares of common stock for which each Warrant is exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in such Warrant. In connection with the first tranche of the Term Loans, the Company issued a Warrant to Innovatus, exercisable for an aggregate of 43,388 shares of the Company’s common stock at an exercise price of $18.15 per share. The Company evaluated the warrant under ASC 470, Debt, and recognized an additional debt discount of approximately $0.5 million based on the relative fair value of the base instruments and warrants. The Company calculated the fair value of the warrant using the Black-Scholes model.

			Principal Payments
2022			$	1,000
2023			6,000
2024			6,000
2025			2,000
			$	15,000

On June 2, 2022, the Company entered into a short-term note payable for $1.5 million, bearing interest at 5.40% per annum to finance various insurance policies. Principal and interest payments related to this note began on July 3, 2022 and were paid on a straight-line amortization over 9 months with the final payment due on March 3, 2023. As of September 30, 2022, the Company's insurance note payable balance was $1.0 million.

On October 28, 2022, 480,000 Pre-Funded Warrants to purchase common stock pursuant the SPA entered into on May 30, 2022 were exercised. The exercise price of each Pre-Funded Warrant is $0.0001 per share and resulted in gross proceeds of $48.00 (See Note 10 for more detail on the SPA).

On November 9, 2022, Rockwell reacquired its distribution rights to its hemodialysis concentrates products from Baxter and has agreed to terminate the exclusive distribution agreement dated October 2, 2014. Exclusivity and other provisions associated with the distribution agreement terminated November 9, 2022 and the remaining operational elements of the agreement terminate December 31, 2022. Under the exclusive distribution agreement, Baxter distributed and commercialized Rockwell’s hemodialysis concentrates products and provided customer service and order delivery to nearly all United States customers. Following the reacquisition of these rights, Rockwell will now be able to sell its hemodialysis concentrates products to dialysis clinics throughout the United States and around the world.

Rockwell will pay Baxter a fee for the reacquisition of its distribution rights. This fee will be payable in two equal installments on January 1, 2023 and April 1, 2023. To ensure that customer needs continue to be met after January 1, 2023, Baxter and Rockwell are working closely together to transition customers’ purchases of Rockwell’s hemodialysis concentrates from Baxter to Rockwell.

On November 10, 2022, the Company entered into a Second Amendment to the Loan and Security Agreement (the “Second Amendment”) dated as of November 14, 2022 with Innovatus, which amended the Loan Agreement. Pursuant to the Second Amendment, the Company (i) shall prepay an aggregate principal amount of $5.0 million in Term Loans (as defined in the Loan Agreement) in one installment on November 14, 2022; (ii) shall pay interest only payments until September 2023 at which time will resume scheduled debt payments.

Separation of Chief Financial Officer

On November 10, 2022, the Board of Directors of Rockwell terminated the employment of Russell Skibsted as Chief Financial Officer of the Company, effective immediately. The termination of employment of Mr. Skibsted by the Company without cause entitles Mr. Skibsted to severance in accordance with the Employment Agreement, dated September 15, 2020, by and between the Company and Mr. Skibsted (the “Employment Agreement”). The severance benefits under the Employment Agreement are subject to the execution and non-revocation of a release of claims in favor of the Company. In connection with Mr. Skibsted’s termination, the Board of Directors appointed Mark Strobeck, the Company’s Chief Executive Officer, as interim principal financial officer.

The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes in “Item 1. Condensed Consolidated Financial Statements”. References in this report to “Rockwell,” the “Company,” “we,” “our” and “us” are references to Rockwell Medical, Inc. and its subsidiaries.

We make forward-looking statements in this report and may make such statements in future filings with the Securities and Exchange Commission, or SEC.  We may also make forward-looking statements in our press releases or other public or shareholder communications.  Our forward-looking statements are subject to risks and uncertainties and include information about our current expectations and possible or assumed future results of our operations. When we use words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “could,” “plan,” “potential,” “predict,” “forecast,” “project,” “intend,” or similar expressions, or make statements regarding our intent, belief, or current expectations, we are making forward-looking statements. Our forward looking statements also include, without limitation, statements about our liquidity and capital resources; our ability to continue as a going concern; our ability to develop Ferric Pyrophosphate Citrate (“FPC”) for other indications; our ability to successfully execute on our business strategy and development of new indications; our ability to raise additional capital; our ability to renegotiate certain terms of our supply contracts; our ability to successfully implement certain cost containment and cost-cutting measures; our ability to achieve profitability and statements regarding our anticipated future financial condition, operating results, cash flows and business plans.

While we believe our forward-looking statements are reasonable, you should not place undue reliance on any such forward-looking statements, which are based on information available to us on the date of this report or, if made elsewhere, as of the date made.  Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different.  Factors that might cause such a difference include, without limitation, the risks and uncertainties discussed in this report, “Item 1A — Risk Factors” in our Form 10-K for the year ended December 31, 2021 and from time to time in our other reports filed with the SEC, including in this Form 10-Q.

Other factors not currently anticipated may also materially and adversely affect our results of operations, cash flow and financial position.  There can be no assurance future results will meet expectations.  Forward-looking statements speak only as of the date of this report and we expressly disclaim any intent to update or alter any statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.

Rockwell Medical is a commercial healthcare company focused on providing life-sustaining products for patients suffering from blood disorders and diseases associated with the kidney.

Rockwell is a revenue-generating business and the second largest supplier of acid and bicarbonate concentrates for dialysis patients in the United States. Hemodialysis is the most common form of end-stage kidney disease treatment and is usually performed at a freestanding outpatient dialysis center, at a hospital-based outpatient center, or in a patient’s home. This represents a large market opportunity for which Rockwell's products are well-positioned to meet the needs of patients.

Rockwell manufactures hemodialysis concentrates under cGMP regulations at its three facilities in Michigan, Texas, and South Carolina totaling approximately 175,000 square feet, and manufactures mixers in its Iowa facility. Rockwell delivers the majority of its hemodialysis concentrates products and mixers to dialysis clinics throughout the United States and internationally utilizing its own delivery trucks and third-party carriers. Rockwell has developed a core expertise in manufacturing and delivering hemodialysis concentrates, and has built a longstanding reputation for reliability, quality, and excellent customer service.

Rockwell has a proprietary parenteral iron product, TRIFERIC® (ferric pyrophosphate citrate, "FPC"), which is indicated to maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease. While Rockwell has discontinued commercialization of TRIFERIC® in the United States, the Company has established several international partnerships with companies seeking to develop and commercialize TRIFERIC® outside the United States and is working closely with these international partners to develop and commercialize TRIFERIC® in their respective regions.

Rockwell continues to evaluate the viability of its FPC platform and FPC's potential to treat iron deficiency and iron deficiency anemia and for acute heart failure.

Rockwell’s strategy is focused on growing the Company's revenue-generating business, which currently includes hemodialysis concentrates and international partnerships for TRIFERIC® and achieving profitability in 2024 to put the Company in a stronger and more stable financial position.

Hemodialysis Concentrates Business: Rockwell is the second largest supplier of life-sustaining hemodialysis concentrates products to dialysis clinics in the United States. Our hemodialysis concentrates products are used to sustain a patient's life by removing toxins and balancing electrolytes in a dialysis patient’s bloodstream. A key element of our dialysis business strategy going forward is to improve the strength of our concentrates business. We believe we can achieve this by growing our business through the addition of new customers, expanding our territory coverage, increasing the efficiency by which Rockwell produces its products, and pricing our products appropriately to drive profitability.

Prior to the second quarter of 2022, Rockwell's concentrates business operated at a loss. This loss was accelerated due to inflation, which has increased our manufacturing and operating costs. We undertook discussions with our largest customers to renegotiate our existing supply contracts to improve the profitability of this business line. On April 6, 2022, we amended our agreement with our long-time partner, DaVita, Inc. ("DaVita"), a leading provider of kidney care, to enable us to stabilize our concentrates business. The amended agreement provides a stronger financial arrangement which encompasses pricing, cost share, cost cutting, and joint efforts to improve supply chain, all of which is intended to drive Rockwell’s concentrates business to operate profitably in the future. In addition to the amended agreement, DaVita invested $15 million in preferred stock in two equal tranches. The first tranche of $7.5 million was funded on April 7, 2022. The second tranche of $7.5 million was funded on June 16, 2022. We continue to review our entire supply chain to identify opportunities for improvement, prioritizing initiatives that will have the largest impact on long-term efficiency, profitability, and growth.

On November 9, 2022, Rockwell reacquired its distribution rights to its hemodialysis concentrates products from Baxter and has agreed to terminate the exclusive distribution agreement dated October 2, 2014. Exclusivity and other provisions associated with the distribution agreement terminated November 9, 2022 and the remaining operational elements of the agreement terminate December 31, 2022. Under the exclusive distribution agreement, Baxter distributed and commercialized Rockwell’s hemodialysis concentrates products in the United States and certain other countries. Rockwell manufactured all hemodialysis concentrates products and provided customer service and order delivery to nearly all U.S. customers. Following the reacquisition of these rights, Rockwell will now be able to sell its hemodialysis concentrates products directly to dialysis clinics throughout the United States and around the world. Additionally, Rockwell will now be able to independently price its products, eliminate costs associated with manufacturing covenants, improve manufacturing efficiencies, realize the full benefits from those improvements, and develop, in-license, or acquire new products to develop a broader kidney care products portfolio. This is expected to improve Rockwell's overall profitability and set the Company on a positive growth trajectory. Collectively, this affords Rockwell the opportunity to expand its leadership position within a large market opportunity, which currently is valued at $380 million and is anticipated to grow to approximately $500 million by 2026 in the United States alone.

Rockwell will pay Baxter a fee for the reacquisition of its distribution rights. This fee will be payable in two equal installments on January 1, 2023 and April 1, 2023. To ensure that customer needs continue to be met after January 1, 2023, Baxter and Rockwell are working closely together to transition customers’ purchases of Rockwell’s hemodialysis concentrates from Baxter to Rockwell.

TRIFERIC®: Our first two branded products from our FPC platform, TRIFERIC® (dialysate) and TRIFERIC® AVNU (intravenous), are indicated to maintain hemoglobin in patients undergoing hemodialysis. We began commercializing TRIFERIC® and TRIFERIC® AVNU in the United States in the second half of 2019 and in early 2021, respectively. In addition, Rockwell established six international partnerships to develop and commercialize TRIFERIC® in China, India, Korea, Turkey, Peru and Chile.

Rockwell undertook a strategic review of TRIFERIC®'s viability in the United States. TRIFERIC® was launched into a very competitive marketplace with well-entrenched products and a lack of consensus regarding unmet medical needs for dialysis patients with anemia. Due to its limited market adoption, unfavorable reimbursement, and absence of interest from other companies to license or acquire TRIFERIC® despite Rockwell's significant effort to partner the program, the Company discontinued its New Drug Applications (“NDAs”) for TRIFERIC® and TRIFERIC® AVNU in the United States. Sustaining

TRIFERIC® commercially in the United States resulted in a loss to Rockwell of approximately $2 million to $3 million, annually. The decision to discontinue the NDAs was not made lightly as the Company realizes the direct impact this action has on patients currently using the products. TRIFERIC® and its approved presentations were not discontinued for safety reasons.

Rockwell will continue to support its partners outside the United States. Rockwell has six international partnerships in China, India, Korea, Turkey, Peru, and Chile with organizations who have exclusive license agreements to develop and commercialize TRIFERIC® outside the United States.  Partnering in these regions allows us to better leverage the development, regulatory, commercial presence and expertise of business partners to increase sales of our products throughout the world. We believe there is still significant opportunity for TRIFERIC® internationally and will work diligently to support our partners, which requires minimal financial commitment from Rockwell and provides us with potential for near- and long-term revenue. We continue to pursue international licensing opportunities in other countries and regions.

Research and Development Pipeline:

FPC for Home Infusion is Rockwell's follow-up to TRIFERIC® and utilizes the FPC platform in the home infusion setting.

In late 2021, Rockwell filed an Investigational New Drug (“IND”) application with the United States Food and Drug Administration (“FDA”) for the treatment of iron deficiency anemia in patients, who are receiving medications in the home infusion setting. During the second quarter 2022, Rockwell provided the FDA with supplemental data to be used in Rockwell’s clinical studies and to clinically support the Company’s IND application for home infusion. The FDA placed this program on Clinical Hold and requested that additional data related to the microbiology and short-term stability of this formulation be provided to support the application. During the third quarter of 2022, Rockwell conducted a microbiological and short-term stability study of FPC for Home Infusion, in accordance with FDA guidance, to support the Company’s IND application. Preliminary results from the microbiology and short-term stability study indicated that the program would likely not meet the FDA’s requirements to support the IND application and would require significant capital expenditure and resources to support additional re-formulation work and conduct a Phase 2 study. As a result, Rockwell has put development work associated with FPC for Home Infusion on hold.

Rockwell is also exploring FPC’s impact on the treatment of hospitalized acute heart failure patients, which affects more than one million people in the United States annually. We believe that FPC may deliver rapidly bioavailable iron to the heart and improve cardiac energetics during hospitalization. This effect could help patients recover faster potentially resulting in shorter hospital stays and fewer 30-day re-admissions. If realized, these outcomes could translate into a meaningful reduction in healthcare costs and human suffering. Rockwell submitted a pre-IND meeting request to the FDA and expects to meet with the FDA before the end of this year. Depending on the feedback from FDA, Rockwell will determine the path forward for this program.

On May 9, 2022, the Company's stockholders authorized the Company's Board of Directors to effect a reverse stock split of all outstanding shares of common stock, warrants and options. The Board of Directors subsequently approved the implementation of a reverse stock split as a ratio of one-for-eleven shares, which became effective on May 13, 2022. The Company’s outstanding stock options were also adjusted to reflect the one-for-eleven reverse stock split of the Company’s common stock. Outstanding stock options were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased. The reverse stock split resulted in an adjustment to the Series X convertible preferred stock conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion. All share and per share data in these condensed consolidated financial statements and related notes hereto have been retroactively adjusted to the account for the effect of the reverse stock split for the three- and nine-month periods ended September 30, 2022 and 2021, respectively, and the balance sheet at September 30, 2022 and December 31, 2021.

			For the Three Months Ended September 30,
			2022						% of Revenue						2021						% of Revenue						% Change
Net Sales			$	18,691											$	15,988											16.9		%
Cost of Sales			17,914						95.8		%				16,317						102.1		%				9.8
Gross Profit (Loss)			777						4.2						(329)						(2.1)						(336.2)
Research and Product Development			469						2.5						1,221						7.6						(61.6)
Selling and Marketing			762						4.1						1,541						9.6						(50.6)
General and Administrative			3,254						17.4						3,881						24.3						(16.2)
Operating Loss			$	(3,708)					(19.8)		%				$	(6,972)					(43.6)		%				(46.8)		%

During the three months ended September 30, 2022, our net sales were $18.7 million compared to net sales of $16.0 million during the three months ended September 30, 2021. The increase of $2.7 million was primarily due to the restructuring of our supply contract with DaVita and increased pricing to other customers.

Cost of sales during the three months ended September 30, 2022 was $17.9 million, resulting in gross profit of $0.8 million during the three months ended September 30, 2022, compared to cost of sales of $16.3 million and a gross loss of $0.3 million during the three months ended September 30, 2021. Gross profit increased by $1.1 million primarily due to the restructuring of our supply contract with DaVita and increased pricing to other customers. As a result, the Company expects an improvement in margins for the remainder of 2022.

Research and product development expenses were $0.5 million and $1.2 million for the three months ended September 30, 2022 and 2021, respectively. Research and product development expenses decreased by $0.7 million due to greater cash management over project costs, a reduction in headcount and shifting our project timelines as noted above in the "Overview and Recent Developments" section above.

Selling and marketing expenses were $0.8 million during the three months ended September 30, 2022, compared with $1.5 million during the three months ended September 30, 2021. The decrease of $0.7 million is due to reduced marketing spend for our TRIFERIC® products and previous headcount reduction. See "Overview and Recent Developments" for more detail.

General and administrative expenses were $3.3 million during the three months ended September 30, 2022, compared with $3.9 million during the three months ended September 30, 2021. The decrease is primarily due to greater cash management and the reduced usage of outside agencies.

Other income for the three months ended September 30, 2022 and 2021 was negligible. Other expense for the three months ended September 30, 2022 was $0.5 million of interest expense related to our debt facility (see Note 14 to the condensed consolidated financial statements included elsewhere in this Form 10-Q for more information on our debt facility). Other expense for the three months ended September 30, 2021 was $0.6 million of interest expense related to our debt facility.

			For the Nine Months Ended September 30,
			2022						% of Revenue						2021						% of Revenue						% Change
Net Sales			$	53,497											$	46,599											14.8		%
Cost of Sales			51,760						96.8		%				46,788						100.4		%				10.6
Gross Profit (Loss)			1,737						3.2						(189)						(0.4)						(1,019.0)
Research and Product Development			2,963						5.5						5,445						11.7						(45.6)
Selling and Marketing			1,743						3.3						4,860						10.4						(64.1)
General and Administrative			11,845						22.1						11,483						24.6						3.2
Operating Loss			$	(14,814)					(27.7)		%				$	(21,977)					(47.2)		%				(32.6)		%