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United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
__________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                              to                              
Commission File Number: 000-23661
ROCKWELL MEDICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware38-3317208
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
30142 S. Wixom Road, Wixom, Michigan
48393
(Address of principal executive offices)(Zip Code)
(248) 960-9009
(Registrant’s telephone number, including area code)


Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes      No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
 Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes 
  No
Securities registered pursuant to Section 12(b) of the Act:
Title of each class:Trading SymbolName of each exchange on which registered:
Common Stock, par value $0.0001RMTINasdaq Global Market
The number of shares of common stock outstanding as of May 14, 2021 was 93,628,731.



Rockwell Medical, Inc. and Subsidiaries
Index to Form 10-Q
Page
3
4
5
6
7
8
27
36
36
37
37
44
45
2


PART I – FINANCIAL INFORMATION
Item 1.  Financial Statements
ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
March 31,
2021
December 31,
2020
(Unaudited)
ASSETS
Cash and Cash Equivalents$35,675 $48,682 
Investments Available-for-Sale10,464 9,997 
Accounts Receivable, net6,597 4,171 
Inventory, net4,117 3,913 
Prepaid and Other Current Assets2,389 2,706 
Total Current Assets59,242 69,469 
Property and Equipment, net2,472 2,642 
Inventory, Non-Current1,325 1,176 
Right of Use Assets, net4,860 2,911 
Goodwill921 921 
Other Non-Current Assets629 629 
Total Assets$69,449 $77,748 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable$3,307 $4,155 
Accrued Liabilities4,032 5,013 
Lease Liability - Current1,417 1,167 
Deferred License Revenue - Current2,170 2,175 
Customer Deposits135 152 
Other Current Liability - Related Party171 131 
Total Current Liabilities11,232 12,793 
Lease Liability - Long-Term3,522 1,821 
Term Loan, Net of Issuance Costs21,041 20,949 
Deferred License Revenue - Long-Term7,476 8,015 
Total Liabilities43,271 43,578 
Commitments and Contingencies (See Note 14)
Stockholders’ Equity:
Preferred Stock, $0.0001 par value, 2,000,000 shares authorized; no shares issued and outstanding at March 31, 2021 and December 31, 2020
  
Common Stock, $0.0001 par value; 170,000,000 shares authorized; 93,599,519 and 93,573,165 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively
9 9 
Additional Paid-in Capital371,274 371,510 
Accumulated Deficit(345,158)(337,406)
Accumulated Other Comprehensive Income53 57 
Total Stockholders’ Equity26,178 34,170 
Total Liabilities and Stockholders’ Equity$69,449 $77,748 
The accompanying notes are an integral part of the condensed consolidated financial statements.
3


ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
Three Months Ended March 31, 2021Three Months Ended March 31, 2020
Net Sales$15,473 $15,857 
Cost of Sales15,072 14,744 
Gross Profit401 1,113 
Research and Product Development1,809 1,822 
Selling and Marketing1,851 2,073 
General and Administrative3,923 5,273 
Operating Loss(7,182)(8,055)
Other (Expense) Income
Realized Gain on Investments 2 
Interest Expense(581)(102)
Interest Income11 171 
Total Other (Expense) Income(570)71 
Net Loss$(7,752)$(7,984)
Basic and Diluted Net Loss per Share$(0.08)$(0.12)
Basic and Diluted Weighted Average Shares Outstanding93,591,053 67,518,240 
The accompanying notes are an integral part of the condensed consolidated financial statements.
4


ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Dollars in Thousands)
Three Months Ended March 31, 2021Three Months Ended March 31, 2020
Net Loss$(7,752)$(7,984)
Unrealized Loss on Available-for-Sale Debt Instrument Investments(7)(7)
Foreign Currency Translation Adjustments3 6 
Comprehensive Loss$(7,756)$(7,985)
The accompanying notes are an integral part of the condensed consolidated financial statements.
5


ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in Thousands)
COMMON STOCKADDITIONAL PAID-IN CAPITALACCUMULATED
DEFICIT
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME
TOTAL
STOCKHOLDERS'
EQUITY
SHARESAMOUNT
Balance as of January 1, 202193,573,165 $9 $371,510 $(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 Compensation26,354 — (236)— — (236)
Balance as of March 31, 202193,599,519 $9 $371,274 $(345,158)$53 $26,178 

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

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in Thousands)
COMMON STOCKADDITIONAL PAID-IN CAPITALACCUMULATED
DEFICIT
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME
TOTAL
STOCKHOLDERS'
EQUITY
SHARESAMOUNT
Balance as of January 1, 202065,378,890 $7 $326,777 $(306,516)$52 $20,320 
Net Loss— — — (7,984)— (7,984)
Unrealized Loss on Available-for-Sale Investments— — — — (7)(7)
Foreign Currency Translation Adjustments— — — — 6 6 
Issuance of common stock, net of offering costs/Bought Deal3,670,212 — 8,003 — — 8,003 
Issuance of Warrants related to Debt Financing— — 501 — — 501 
Stock-based Compensation— — 935 — — 935 
Balance as of March 31, 202069,049,102 $7 $336,216 $(314,500)$51 $21,774 
The accompanying notes are an integral part of the condensed consolidated financial statements.

6


ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
For the three months ended March 31, 2021 and 2020
20212020
Cash Flows From Operating Activities:
Net Loss$(7,752)$(7,984)
Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities:
Depreciation and Amortization202 209 
Stock-based Compensation(236)935 
Increase in Inventory Reserves71  
Amortization of Right of Use Asset412 391 
Amortization of Debt Financing Costs and Accretion of Debt Discount92 15 
Loss on Disposal of Assets6  
Realized (Gain) on Sale of Investments Available-for-Sale (2)
Foreign Currency Translation Adjustment3 6 
Changes in Assets and Liabilities:
Increase in Accounts Receivable, net(2,426)(384)
Increase in Inventory(424)(828)
Decrease in Prepaid and Other Assets317 1,093 
 (Decrease) Increase in Accounts Payable(848)105 
Increase (Decrease) in Settlement Payable (47)
Decrease in Lease Liability(410)(339)
 (Decrease) Increase in Other Liabilities(958)738 
Decrease in Deferred License Revenue(544)(446)
Changes in Assets and Liabilities(5,293)(108)
Cash Used In Operating Activities(12,495)(6,538)
Cash Flows From Investing Activities:
Purchase of Investments Available-for-Sale(7,212)(8,872)
Sale of Investments Available-for-Sale6,738 11,661 
Purchase of Equipment(38)(203)
Cash (Used In) Provided By Investing Activities(512)2,586 
Cash Flows From Financing Activities:
Proceeds from Term Loan 22,500 
Debt Issuance Costs (374)
Payments on Short Term Note Payable (573)
Proceeds from the Issuance of Common Stock / Public Offering 8,148 
Offering Costs from the Issuance of Common Stock / Public Offering (144)
Cash Provided By Financing Activities 29,557 
(Decrease) Increase in Cash and Cash Equivalents(13,007)25,605 
Cash and Cash Equivalents at Beginning of Period48,682 11,795 
Cash and Cash Equivalents at End of Period$35,675 $37,400 
Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest$485 $81 
Supplemental Disclosure of Noncash Investing and Financing Activities:
Change in Unrealized Loss on Marketable Securities Available-for-Sale$(7)$(7)
Issuance Costs related to Debt Financing, not yet paid$ $957 
Fair Value of Warrants issued related to Debt Financing$ $501 
The accompanying notes are an integral part of the condensed consolidated financial statements.
7


ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1.  Description of Business
    
Rockwell Medical, Inc. ("Rockwell Medical," "Rockwell" or the "Company") is a commercial-stage, biopharmaceutical company developing and commercializing our next-generation parenteral iron technology platform, ferric pyrophosphate citrate (“FPC”), which we believe has the potential to lead to transformative treatments for iron deficiency in multiple disease states, that we believe could reduce healthcare costs and improve patients’ lives. We are also one of the two major suppliers of life saving hemodialysis concentrate products to kidney dialysis clinics in the United States.

We have two novel, FDA approved therapies, Triferic and Triferic AVNU, which are the first two products developed from our FPC platform. We are marketing both products to kidney dialysis centers for their patients receiving dialysis. In 2021, we intend to advance our FPC platform strategy by starting a Phase II trial for the treatment of iron deficiency anemia in patients outside of dialysis, who are receiving intravenous medications in the home infusion setting. In our R&D pipeline, we are also exploring FPC’s impact in the treatment of hospitalized patients with acute heart failure, with the potential to begin another Phase 2 trial in these patients in 2022.

We are the second largest supplier of hemodialysis concentrates in the United States generating $60 million in annual revenue. The Company's reputation for excellent service, quality, and reliability is based on over 25 years of service to kidney dialysis centers. Our 300 dedicated employees, as well as a management team with experience in manufacturing, logistics, pharmaceutical development and commercialization gives us a solid foundation upon which to grow.
2.  Liquidity and Capital Resources
Since inception, Rockwell has incurred significant net losses and has funded its operations primarily through revenue from commercial products, proceeds from the issuance of debt and equity securities and payments from partnerships. At March 31, 2021, Rockwell had an accumulated deficit of approximately $345.2 million and stockholders' equity of $26.2 million. As of March 31, 2021, Rockwell had approximately $46.1 million of cash, cash equivalents and investments available-for-sale, and working capital of $48.0 million. Net cash used in operating activities for the three months ended March 31, 2021 was approximately $12.5 million. Based on the currently available working capital, management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of the filing of this report.

The Company expects it will require additional capital to sustain its operations and make the investments it needs to execute its strategic plan, including the commercialization of Triferic (dialysate) and Triferic AVNU in dialysis, generating additional data for Triferic in dialysis, developing FPC for iron deficiency anemia in patients undergoing home infusion and for progressing our pipeline development program of new indications for its FPC platform. If the Company is unable to generate sufficient revenue from sales of its commercial products and from partnerships, the Company will need to obtain additional equity or debt financing. If the Company attempts to obtain additional debt or equity financing, the Company cannot assume that such financing will be available on favorable terms, if at all.

In addition, the Company is subject to certain covenants and cure provisions under its Loan Agreement with Innovatus. As of the date of this report, the Company is in compliance with all covenants. (See Note 15 for further detail).

The COVID-19 pandemic and resulting domestic and global disruptions have adversely affected Rockwell's business and operations, including, but not limited to, our sales and marketing efforts, research and development activities, and the operations of third parties upon whom the Company relies. Quarantines, shelter-in-place, executive and similar government orders and the recent surge in infections domestically may continue to negatively impact Rockwell's sales and marketing activities, particularly if its sales representatives are unable to interact with current and potential customers to the same extent as before onset of the COVID-19 pandemic. The Company's international business development activities may also continue to be negatively impacted by COVID-19, especially with the recent surge in infections internationally, ongoing international travel restrictions and quarantines or shelter-in-place orders.

The COVID-19 pandemic, the domestic and international surge in infections and resulting global disruptions have caused significant volatility in financial and credit markets. Rockwell has utilized a range of financing methods to fund its operations in the past; however, current conditions in the financial and credit markets may limit the availability of funding,
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
refinancing or increase the cost of funding. Due to the rapidly evolving nature of the global situation, it is not possible to predict the extent to which these conditions could adversely affect the Company's liquidity and capital resources in the future.
3.  Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements

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

The condensed consolidated balance sheet at March 31, 2021, condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020, condensed consolidated statements of comprehensive loss for the three months ended March 31, 2021 and 2020, condensed consolidated statement of changes in stockholders' equity for the three months ended March 31, 2021 and 2020, and condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020 are unaudited, but include all adjustments, consisting of normal recurring adjustments, that the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021 or for any future interim period. The condensed consolidated balance sheet at December 31, 2020 has been derived from audited financial statements, however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2020 and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 as filed with the SEC on March 31, 2021. The Company’s consolidated subsidiaries consisted of its wholly-owned subsidiaries, Rockwell Transportation, Inc. and Rockwell Medical India Private Limited.

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

Certain reclassifications have been made to the 2020 financial statements and notes to conform to the 2021 presentation.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Leases
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.
Loss Per Share
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
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
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 of common stock excludes dilution and is computed by dividing the net loss by the weighted average number of shares outstanding during the period. Diluted net loss per share of common stock 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 then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive. The Company has only incurred losses, therefore, basic and diluted net loss per share is the same. Securities that could potentially dilute net income per share in the future that were not included in the computation of diluted loss per share were as follows:
As of March 31,
20212020
Options to purchase common stock6,142,586 8,191,963 
Unvested restricted stock awards78,300 146,800 
Unvested restricted stock units237,724 1,461,588 
Warrants to purchase common stock26,426,863 3,248,054 
Total32,885,473 13,048,405 
Adoption of Recent Accounting Pronouncements
The Company continually assesses new accounting pronouncements to determine their applicability. When it is determined that 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 that there are sufficient controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change.
4.  Revenue Recognition

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.
Nature of goods and services
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.
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Drug and dialysis concentrate products are sold directly to dialysis clinics and to wholesale distributors in both domestic and international markets. Distribution and license agreements for which upfront fees are received are evaluated upon execution or modification of the agreement to determine if the agreement creates a separate performance obligation from the underlying product sales.  For all existing distribution and license agreements, the distribution and license agreement is not a distinct performance obligation from the product sales.  In instances where regulatory approval of the product has not been established and the Company does not have sufficient experience with the foreign regulatory body to conclude that regulatory approval is probable, the revenue for the performance obligation is recognized over the term of the license agreement (over time recognition). Conversely, when regulatory approval already exists or is probable, revenue is recognized at the point in time that control of the product transfers to the customer.
The Company received upfront fees under four 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") and Jeil Pharmaceutical Co., Ltd. ("Jeil 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 and South Korea, respectively, to determine that 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 that 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 or receipt 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.
Disaggregation of revenue
Revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.
In thousands of U.S. dollars ($) Three Months Ended March 31, 2021
Products By Geographic AreaTotalU.S.Rest of World
Drug Revenues
Product Sales – Point-in-time$225 $225 $ 
License Fee – Over time58  58 
Total Drug Products283 225 58 
Concentrate Products
Product Sales – Point-in-time14,705 13,201 1,504 
License Fee – Over time485 485  
Total Concentrate Products15,190 13,686 1,504 
Net Revenue$15,473 $13,911 $1,562 
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
In thousands of U.S. dollars ($)Three Months Ended March 31, 2020
Products By Geographic AreaTotalU.S.Rest of World
Drug Revenues
Product Sales – Point-in-time$199 $199 $ 
License Fee – Over time56  56 
Total Drug Products255 199 56 
Concentrate Products
Product Sales – Point-in-time15,112 13,506 1,606 
License Fee – Over time490 490  
Total Concentrate Products15,602 13,996 1,606 
Net Revenue$15,857 $14,195 $1,662 
Contract balances
The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.
In thousands of U.S. dollars ($)March 31, 2021December 31, 2020
Receivables, which are included in "Trade and other receivables"$6,597 $4,171 
Contract liabilities$9,646 $10,190 
There were no material losses recognized related to any receivables arising from the Company’s contracts with customers for the three months ended March 31, 2021 and 2020.
For the three months ended March 31, 2021 and March 31, 2020, 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 March 31, 2021 and December 31, 2020.  The Company does not generally accept returns of its concentrate products and no material reserve for returns of concentrate products was established as of March 31, 2021 or December 31, 2020. 
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
Transaction price allocated to remaining performance obligations
For the three months ended March 31, 2021, 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 $9.6 million as of March 31, 2021. The amount relates primarily to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products. The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have 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 $6.7 million as of March 31, 2021, which is amortized ratably through expiration of the Baxter Agreement on October 2, 2024.
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
5.  Investments - Available-for-Sale
Investments available-for-sale consisted of the following as of March 31, 2021 and December 31, 2020 (table in thousands):
March 31, 2021
Amortized CostUnrealized GainUnrealized LossAccrued Interest IncomeFair Value
Available-for-Sale Securities
Bonds$10,441 $2 $(1)$22 $10,464 
December 31, 2020
Amortized CostUnrealized GainUnrealized LossAccrued InterestFair Value
Available-for-Sale Securities
Bonds$9,987 $3 $ $7 $9,997 
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 March 31, 2021 and December 31, 2020, the amortized cost and estimated fair value of our available-for-sale securities were due within one year.
6.  Inventory
Components of inventory, net of reserves, as of March 31, 2021 and December 31, 2020 are as follows (table in thousands):
March 31,
2021
December 31,
2020
Raw Materials$3,152 $3,112 
Work in Process312 172 
Finished Goods1,978 1,805 
Total$5,442 $5,089 
As of March 31, 2021, the Company classified $1.3 million of inventory as non-current, all of which was related to Triferic or the active pharmaceutical ingredient and raw materials for Triferic. As of March 31, 2021, the total Triferic inventory was $2.5 million, against which the Company had reserved $0.8 million.
The $1.7 million net value of Triferic inventory consisted of $0.3 million of Triferic (dialysate) finished goods with expiration dates ranging from September 2021 to December 2023, $0.5 million of Triferic API with estimated remaining shelf life extending beyond 2021, and $0.9 million of raw materials for Triferic with estimated remaining shelf life extending beyond 2025.
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
7.  Property and Equipment
As of March 31, 2021 and December 31, 2020, the Company’s property and equipment consisted of the following (table in thousands):
March 31,
2021
December 31,
2020
Leasehold Improvements$1,196 $1,196 
Machinery and Equipment5,480 5,475 
Information Technology & Office Equipment1,830 1,831 
Laboratory Equipment676 676 
9,182 9,178 
Accumulated Depreciation(6,710)(6,536)
Property and Equipment, net$2,472 $2,642 
Depreciation expense for the three months ended March 31, 2021 and 2020 totaled $0.2 million.
8.  Accrued Liabilities
Accrued liabilities as of March 31, 2021 and December 31, 2020 consisted of the following (table in thousands):
March 31,
2021
December 31,
2020
Accrued Research & Development Expense$331 $232 
Accrued Compensation and Benefits1,334 2,500 
Accrued Unvouchered Receipts661 755 
Accrued Workers Compensation436 395 
Other Accrued Liabilities1,270 1,131 
Total Accrued Liabilities$4,032 $5,013 
9.  Deferred Revenue
In October 2014, the Company entered into the Baxter Agreement with Baxter 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 Baxter Agreement, which expires in October 2024. The Company recognized revenue of approximately $0.5 million for each of the three months ended March 31, 2021 and 2020. Deferred revenue related to the Baxter Agreement totaled $6.7 million as of March 31, 2021 and $7.2 million as of December 31, 2020.
If a “Refund Trigger Event” occurs under the Baxter Agreement prior to December 31, 2021, Rockwell would be obligated to repay 25% of the upfront fee.
In 2016, the Company entered into a distribution and license 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 approximately $0.1 million revenue for both the three months ended March 31, 2021 and 2020, respectively. Deferred revenue related to the Wanbang Agreement totaled $2.7 million as of March 31, 2021 and December 31, 2020.

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. Under the terms of the Sun Pharma Agreements, Sun Pharma will be the exclusive development and commercialization partner for Triferic (dialysate) in India, and the Company will supply the product to Sun Pharma. In consideration for the license, the Company received an upfront fee of $0.1 million, and will be eligible for milestone payments and royalties on net sales. A Joint Alliance Committee, comprised of members from the Company and Sun Pharma, will guide the development and execution for Triferic (dialysate) in India. Sun Pharma will be responsible for all clinical and regulatory approval, as well as commercialization activities. The
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
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 for each of the three months ended March 31, 2021 and 2020. Deferred revenue related to the Sun Pharma Agreement totaled $87,500 and $90,000 as of March 31, 2021 and December 31, 2020, 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. Under the terms of the Jeil Pharma Agreements, Jeil Pharma will be the exclusive development and commercialization partner for Triferic (dialysate) in South Korea, and the Company will supply the product to Jeil Pharma. In consideration for the license, the Company received an upfront fee of $0.2 million, and will be eligible for milestone payments and royalties on net sales. A Joint Alliance Committee, comprised of members from the Company and Jeil Pharma, will guide the development and execution for Triferic (dialysate) in South Korea. Jeil Pharma will be responsible for all clinical and regulatory approval, as well as commercialization activities. The upfront fee was recorded as deferred revenue and is being recognized as revenue based on the agreement term. The Company recognized revenue of $2,500 and nil during the three months ended March 31, 2021 and 2020, respectively. Deferred revenue related to the Jeil Pharma Agreement totaled $0.2 million as of March 31, 2021 and December 31, 2020.
10.  Stockholders’ Equity

Preferred Stock
As of March 31, 2021 and December 31, 2020, there were 2,000,000 shares of preferred stock, $0.0001 par value per share, authorized and no shares of preferred stock issued or outstanding.
Common Stock
As of March 31, 2021 and December 31, 2020, there were 170,000,000 shares of common stock, $0.0001 par value per share, authorized and 93,599,519 and 93,573,165 shares issued and outstanding, respectively.
Controlled Equity Offering (or "At the Market" Offering)
On March 22, 2019, the Company entered into a sales agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (the “Agent”), pursuant to which the Company may offer and sell from time to time shares of the Company’s common stock through the Agent. The offering and sale of up to $40.0 million of the 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. 333-227363), which was originally filed with the SEC on September 14, 2018 and declared effective by the SEC on October 1, 2018, the base prospectus contained within the registration statement, and a prospectus supplement that was filed with the SEC on March 22, 2019.
Sales of the shares, if any, pursuant to the Sales Agreement, may be made in sales deemed to be an “at the market" offering as defined in Rule 415(a) of the Securities Act, including sales made directly through the Nasdaq Global Market or on any other existing trading market for the Company’s common stock. The Company intends to use the proceeds from the offering for working capital and other general corporate purposes. The Company may suspend or terminate the Sales Agreement at any time.

During the three months ended March 31, 2021, the Company has not sold shares of its common stock pursuant to the Sales Agreement. Approximately $32.3 million remains available for sale under this facility.

The Company is not required to sell any shares at any time during the term of the facility. The Company's ability to sell common stock under the facility may be limited by several factors including, among other things, the trading volume of its common stock and certain black-out periods that the Company may impose upon the facility, among other things.
11.  Stock-Based Compensation
The Company recognized total stock-based compensation expense during the three months ended March 31, 2021 and 2020 as follows (table in thousands):
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Three Months Ended
March 31,
20212020
Service-based awards:
Restricted stock awards$ $ 
Restricted stock units$104 $238 
Stock option awards391 440 
495 678 
Performance-based awards:
Restricted stock awards(391) 
Restricted stock units 171 
Stock option awards(340)86 
(731)257 
Total$(236)$935 
Restricted Stock
A summary of the Company’s restricted stock awards during the three months ended March 31, 2021 is as follows:
Number of SharesWeighted Average
Grant-Date
Fair Value
Unvested at January 1, 2021146,800 $5.70 
Forfeited(68,500)$5.70 
Unvested at March 31, 202178,300 $5.70 
A summary of the Company’s restricted stock awards during the three months ended March 31, 2020 is as follows:
Number of SharesWeighted Average
Grant-Date
Fair Value
Unvested at January 1, 2020146,800 $5.70 
Unvested at March 31, 2020146,800 $5.70 
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 March 31, 2021, unvested restricted stock awards of 78,300 were related to performance-based awards. The forfeited performance-based restricted stock awards of 68,500 is 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.
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Service-Based Restricted Stock Units
A summary of the Company’s service-based restricted stock units during the three months ended March 31, 2021 is as follows:
Number of SharesWeighted Average
Grant-Date
Fair Value
Unvested at January 1, 2021265,494 $2.60 
Granted10,050 2.09 
Vested(26,354)2.50 
Forfeited(11,466)4.81 
Unvested at March 31, 2021237,724 $2.49 

A summary of the Company’s service-based restricted stock units during the three months ended March 31, 2020 is as follows:
Number of SharesWeighted Average
Grant-Date
Fair Value
Unvested at January 1, 2020463,786 $4.26 
Granted16,304 2.61 
Forfeited(7,460)4.15 
Vested  
Unvested at March 31, 2020472,630 $4.21 
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 $0.1 million and $0.2 million was recognized during the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, 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.
Performance-Based Restricted Stock Units
As of March 31, 2021, there were no outstanding performance-based restricted stock units.
Number of SharesWeighted Average
Grant-Date
Fair Value
Unvested at January 1, 2020988,958 $4.48 
Unvested at March 31, 2020988,958 $4.48 
Service-Based Stock Options
The fair value of the service-based stock options granted for the three months ended March 31, 2021 were based on the following assumptions:
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
March 31,
2021
Exercise price
$1.03 - $1.75
Expected stock price volatility
75.8% - 77.4%
Risk-free interest rate
0.47% - 1.06%
Term (years)6
A summary of the Company’s service-based stock option activity for the three months ended March 31, 2021 is as follows:
Shares
Underlying
Options
Weighted
Average Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
Outstanding at January 1, 20215,717,956 $4.55 6.6$ 
Granted84,395 1.60 6.0— 
Forfeited(183,931)2.49 — — 
  Expired(225,834)7.66 — — 
Outstanding at March 31, 20215,392,586 $4.45 6.1$ 
Exercisable at March 31, 20212,762,976 $6.68 3.2$ 
A summary of the Company’s service-based stock option activity for the three months ended March 31, 2020 is as follows:
Shares
Underlying
Options
Weighted
Average Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
Outstanding at January 1, 20208,210,024 $7.06 5.1$107,000 
Granted51,148 2.30 9.9 
  Forfeited(457,334)(7.02)— — 
Outstanding at March 31, 20207,803,838 $7.03 5.1$2,000 
Exercisable at March 31, 20206,146,337 $7.97 4.1$ 
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 three months ended March 31, 2021, the Company granted stock options to purchase up to 84,395 shares of common stock to certain employees. During the three months ended March 31, 2021, 183,931 shares were forfeited. Forfeitures are recorded in the period of occurrence; compensation expense is adjusted accordingly.
Stock-based compensation expense recognized for service-based stock options was $0.4 million for each of the three months ended March 31, 2021 and 2020. As of March 31, 2021, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $1.6 million, which is expected to be recognized over an estimated weighted average remaining term of 2.0 years.
Performance-Based Stock Options
A summary of the performance-based stock options for the three months ended March 31, 2021 is as follows:
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Number of SharesWeighted Average
Exercise
Price
Outstanding at January 1, 2021750,000 $2.20 
Outstanding at March 31, 2021750,000 $2.20 
Exercisable at March 31, 2021 $ 
A summary of the performance-based stock options for the three months ended March 31, 2020 is as follows:
Number of SharesWeighted Average
Exercise
Price
Outstanding at January 1, 2020388,125 $4.70 
Outstanding at March 31, 2020388,125 $4.70 
Exercisable at March 31, 2020 $ 
Stock-based compensation expense recognized for performance-based stock options was ($0.3) million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively. The reduction in stock-based compensation expense was due to the performance criteria of certain performance-based options granted to officers of the Company becoming non-probable as of March 31, 2021. The Company will continue to assess the probability of the performance criteria until such time the criteria becomes probably and the performance-based stock option vests or continues to be non-probable and the performance-based stock option expires. As of March 31, 2021, there was no unrecognized stock-based compensation expense related to unvested performance-based stock options.
12.  Related Party Transactions
Product License Agreements
The Company is a party to a Licensing Agreement with 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. The Charak MSA provided for a payment of $1.0 million to Dr. Gupta, payable in four quarterly installments of $250,000 each on October 15, 2018, January 15, 2019, April 15, 2019 and July 15, 2019, and reimbursement for certain legal fees incurred in connection with the Charak MSA. The Company paid all four of the quarterly installments totaling $1.0 million and accrued $0.1 million for the reimbursement of certain legal expenses during the year ended December 31, 2019. As of December 31, 2020, the Company has fulfilled its reimbursement obligation of certain legal expenses. As of March 31, 2021, the Company accrued $0.2 million relating to certain IP reimbursement expenses and certain sublicense royalty fees as a related party payable 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 sub-licensee 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 sub-licensee in jurisdictions where there exists no valid claim, on a country-by-country basis.
19


ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Also pursuant to the Charak MSA, the Company and Charak entered into a Commercialization and Technology License Agreement I.V. Triferic® (now Triferic AVNU), dated as of October 7, 2018 (the “IV Agreement”), under which Charak granted the Company an exclusive, sub-licensable, royalty-bearing license to SFP for the purpose of commercializing certain intravenous-delivered products incorporating SFP for the treatment of iron disorders worldwide for a term that expires on the later of February 1, 2034 or upon the expiration or termination of a valid claim of a licensed patent. The Company 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 sub-licensee 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 sub-licensee 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 parenteral nutritional ("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 sub-licensee 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 sub-licensee in jurisdictions where there exists no valid claim, on a country-by-country basis.
13.  Leases
The Company leases its production facilities and administrative offices as well as certain equipment used in our operations including leases on transportation equipment used in the delivery of its products. The lease terms range from monthly to five years. The Company occupies a 51,000 square foot facility and a 17,500 square foot facility in Wixom, Michigan under a lease expiring in August 2021. The Company 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 2023. In addition, the Company occupies 4,100 square feet of office space in Hackensack, New Jersey under a lease expiring on July 1, 2024. This lease is currently being offered for sublease.
At March 31, 2021, the Company had operating and finance lease liabilities of $4.9 million and right-of-use assets of $4.9 million, which are included in the consolidated balance sheet.
At December 31, 2020, the Company had operating lease liabilities of $3.0 million and right-of-use assets of $2.9 million, which are included in the consolidated balance sheet.
The following summarizes quantitative information about the Company’s operating leases (table in thousands):
20


ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Three Months Ended March 31, 2021Three Months Ended March 31, 2020
Operating leases
Operating lease cost$419 $443 
Variable lease cost102 189 
Operating lease expense521 632 
Finance leases
Amortization of right-of-use assets45  
Interest on lease obligations13  
Finance lease expense58  
Short-term lease rent expense4 4 
Total rent expense$583 $636 
Other information
Operating cash flows from operating leases$425 $445 
Operating cash flows from finance leases$13 $ 
Financing cash flows from finance leases$37 $ 
Right of use assets exchanged for operating lease liabilities$1,896 $ 
Right of use assets exchanged for finance lease liabilities$460 $ 
Weighted-average remaining lease term – operating leases3.62.6
Weighted-average remaining lease term – finance leases5.70.0
Weighted-average discount rate – operating leases6.3 %6.8 %
Weighted-average discount rate – finance leases5.4 % %
Future minimum rental payments under operating lease agreements are as follows (in thousands):
OperatingFinance
Year ending December 31, 2021 (remaining)$1,107 $199 
Year ending December 31, 20221,083 269 
Year ending December 31, 2023740 272 
Year ending December 31, 2024555 270 
Year ending December 31, 2025455 269 
Remaining future payments79 272 
Total$4,019 $1,551 
Less present value discount(417)(214)
Operating and finance lease liabilities$3,602 $1,337 
14.  Commitments and Contingencies
Litigation
SEC Investigation
As a follow up to certain prior inquiries, the Company received a subpoena from the SEC during the Company’s quarter ended September 30, 2018 requesting, among other things, certain information and documents relating to the status of the Company’s request to the Centers for Medicare & Medicaid Services (the "CMS") for separate reimbursement
21


ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
status for Triferic (dialysate), the Company’s reserving methodology for expiring Triferic inventory, and the basis for the Board’s termination of the former Chief Executive Officer, Robert Chioini, and former Chief Financial Officer, Thomas Klema, in 2018. The Company is cooperating with the SEC and is responding to the SEC’s requests for documents and information.
15. Loan and Security Agreement

In March 2020, Rockwell Medical, Inc. and Rockwell Transportation, Inc., as Borrowers, entered into a Loan and Security Agreement (the "Loan Agreement") with Innovatus Life Sciences Lending Fund I, LP ("Innovatus"), as collateral agent and the lenders party thereto, pursuant to which Innovatus, as a lender, agreed to make certain term loans to the Company in the aggregate principal amount of up to $35.0 million (the "Term Loans"). Funding of the first $22.5 million tranche was completed on March 16, 2020. The Company is no longer eligible to draw on a second tranche of $5.0 million, which was tied to the achievement of certain milestones by a specific date. The Company may be eligible to draw on a third tranche of $7.5 million upon the achievement of certain additional milestones, including the achievement of certain Triferic sales thresholds. Net draw down proceeds were $21.2 million with closing costs of $1.3 million.

The Company is entitled to make interest-only payments for thirty months, or up to thirty-six months if certain conditions are met. The Term Loans will mature on March 16, 2025, and will bear interest at the greater of (i) Prime Rate (as defined in the Loan Agreement) and (ii) 4.75%, plus 4.00% with an initial interest rate of 8.75% per annum and an effective interest rate of 10.9%. The Company has the option, under certain circumstances, to add 1.00% of such interest rate amount to the then outstanding principal balance in lieu of paying such amount in cash. For the three months ended March 31, 2021 and 2020, interest expense amounted to $0.5 million and $0.1 million, respectively.

The Loan Agreement is secured by all assets of the Company and Rockwell Transportation, Inc. Proceeds are being used for working capital purposes. The Loan Agreement contains customary representations and warranties and covenants, subject to customary carve outs, and includes financial covenants related to liquidity and trailing twelve months sales of Triferic, with the latter beginning with the period ending December 31, 2020. The Company cannot assure you that we can maintain compliance with the covenants under our Loan Agreement, which may result in an event of default. The Company's ability to comply with these covenants may be adversely affected by events beyond its control. For example, the Loan Agreement contains certain financial covenants relating to sales and, as a result of the ongoing COVID-19 pandemic and its effect on the Company's sales activities, among other factors, the Company may not be able to satisfy such covenants in the future. If the Company is unable to comply with the covenants under the Loan Agreement, it would pursue all available cure options in order to regain compliance. However, the Company may not be able to mutually agree with Innovatus on appropriate remedies to cure a breach of a covenant, which could give rise to an event of default. If the Company is unable to avoid an event of default, any required repayments could have an adverse effect on its liquidity. As of March 31, 2021, the Company is in compliance with all the reporting and financial covenants.

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) $1.65 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 477,273 shares of the Company’s common stock at an exercise price of $1.65 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.

As of March 31, 2021, the outstanding balance of the Term Loan was $21.0 million, net of unamortized issuance costs and unaccreted discount of $1.5 million.

The following table reflects the schedule of principal payments on the Term Loan as of March 31, 2021 (in thousands):
22


ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Principal Payments
2021$ 
20222,250 
20239,000 
20249,000 
20252,250 
$22,500 

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.
Forward-Looking Statements
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 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 plans and ability to successfully commercialize our products; our ability to successfully launch FDA-approved Triferic AVNU; our ability to develop FPC for other indications; our ability to successfully execute on our business strategy and development of new indications; and statements regarding our anticipated future financial condition, operating results, cash flows and business plans.
While we believe that 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, 2020 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 that 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.
Overview and Recent Developments
Rockwell is a commercial-stage, biopharmaceutical company developing and commercializing our next-generation parenteral iron technology platform, Ferric Pyrophosphate Citrate ("FPC"), which we believe has the potential to lead to transformative treatments for iron deficiency in multiple disease states, that we believe could reduce healthcare costs and improve patients’ lives. We are also one of the two major suppliers of life-saving hemodialysis concentrate products to kidney dialysis clinics in the United States.
We have two novel, FDA approved therapies, Triferic and Triferic AVNU, which are the first two products developed from our FPC platform. We are marketing both products to kidney dialysis centers for their patients receiving dialysis. In 2021, we intend to advance our FPC platform strategy by starting a Phase 2 trial for the treatment of iron deficiency anemia in patients outside of dialysis, who are receiving intravenous ("IV") medications in the home infusion setting. The trend toward providing medical care, including the delivery of medicines, at home make the home infusion market a rapidly growing area of healthcare. We believe that the home infusion setting is a natural path for expansion of our platform as many of the patients suffer from diseases that are associated with iron deficiency and anemia. In our R&D pipeline, we are also investigating FPC’s impact in the treatment of hospitalized patients with acute heart failure, with the potential to begin another Phase 2 trial in these patients in 2022.
We are the second largest supplier of hemodialysis concentrates in the United States, with a reputation for excellent service, quality, and reliability. We believe that this reputation, which is based on over 25 years of service to the kidney dialysis centers, combined with about $60 million in annual revenue, approximately 300 dedicated employees, expertise in manufacturing and logistics and the added expertise in pharmaceutical development and commercialization brought to the Company by recent additions to our management team, gives us a solid foundation on which to grow.
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At Rockwell Medical, we are dedicated to replacing the currently inadequate standard of care for treatment of iron deficiency in acute and chronic disease by leveraging our proprietary FPC platform technology. We believe that our proprietary drug platform, FPC, is a next-generation parenteral iron therapeutic. We believe our FPC platform has several advantages over other parenteral iron therapies. Importantly, it provides iron that is immediately available for critical body processes once it is administered. It has been demonstrated to be safe and well-tolerated, with a safety profile similar to placebo.
Iron deficiency can develop into a serious medical condition that is often overlooked and undertreated in several illnesses because it is hard to treat. It is a common comorbidity in many disease states, such as end-stage kidney disease, chronic kidney disease, acute heart failure, cancer and multiple chronic gastrointestinal conditions. Iron deficiency impacts patients’ health in many ways, including anemia, organ dysfunction, slower recovery, diminished energy and reduced quality of life.

Strategy Evolution and Overview
Rockwell Medical has evolved its strategy over the past year to develop into a more medically-, scientifically- and data-driven company. We believe future clinical, regulatory and commercial success require the right people with the right experience to navigate us to the right data. There has been an evolution of both our management and board, providing us with greater relevant experience. In particular, we have added board members and employees with significant medical and commercial experience in iron deficiency anemia and the dialysis sector, drug development and commercialization, small-cap public company finance and management and clinical nurse educator patient support. We believe these changes support an improved execution of our strategy to generate data that will support future commercial growth, fair reimbursement and regulatory approvals.
Our strategy is to accelerate Rockwell’s growth by creating and developing pharmaceutical products based on our FPC technology for disease states where patients can benefit the most from an effective treatment for iron deficiency, while concurrently refining our dialysis business to drive incremental growth and efficiencies. We plan to leverage and build on the foundation provided by our current dialysis business serving kidney dialysis centers by developing a pipeline of additional potential drug therapies in multiple disease states. We have preliminarily identified three disease states where we believe FPC may have the biggest impact.
Dialysis Business: We are the second largest supplier, and one of the two major suppliers of hemodialysis concentrates in the United States. We manufacture, sell and deliver hemodialysis concentrates, which are used to maintain human life by removing toxins and balancing electrolytes in the dialysis patient’s bloodstream. We have core capabilities in manufacturing hemodialysis concentrates in three facilities, totaling 159,000 square feet, located in Michigan, Texas and South Carolina. We also have core capabilities in the logistics of delivering these products to dialysis clinics throughout most of the United States.
Our first two branded products from our FPC platform, Triferic® (dialysate) and Triferic AVNU® (IV), are used to maintain hemoglobin in patients undergoing hemodialysis. We are building on our reputation and industry presence by commercializing then to medium and small dialysis organizations. We began commercializing Triferic and Triferic AVNU in the United States in the second half of 2019 and in early 2021, respectively. In April 2021, we received marketing approval for Triferic AVNU from Health Canada for the replacement of iron to maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease, which is the first international regulatory approval for our intravenous therapy. We expect Triferic AVNU to become commercially available in Canada during 2022. Our strategy for increasing Triferic adoption is to continue to generate data in clinics showing the benefits of Triferic in real world protocols. In addition, we expect to study Triferic use with the innovations that we believe have the potential to change future medical practices (e.g. introduction and adoption of HIF-PHIs). We believe that positive data from these studies would better position Triferic for long-term growth. We are developing strategic alliance partners for development, regulatory approval and commercialization of Triferic outside of the United States.
Home Infusion Program: We are initiating a clinical trial program of FPC for the treatment of iron deficiency anemia in the home-infusion setting. Many patient groups requiring home infusion therapies suffer from chronic diseases that are associated with a high incidence of iron deficiency and anemia. Home infusion represents a large and rapidly-growing segment of healthcare where we believe FPC may have distinct advantages over currently available iron replacement therapy options.
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Pipeline Development: We are investigating the use of our FPC platform for the treatment of hospitalized patients with acute heart failure. We believe that FPC may deliver rapidly bioavailable iron to the heart and improve cardiac energetics. This effect could help patients recover faster, resulting in shorter hospital stays and fewer 30-day re-admissions, which would be a meaningful reduction healthcare costs and human suffering.
Our Growth Strategy
We plan to accelerate our growth by combining the solid foundation, strength and reputation of our dialysis business with the high-growth potential from therapeutics derived (or generated) from our FPC platform in multiple disease states where patients can benefit the most from an effective treatment for iron deficiency. In parallel with continually seeking to drive incremental growth and efficiencies in our dialysis business unit, our strategy is to accelerate the growth of our business in large, higher-margin markets by creating and developing pharmaceutical products based on our proprietary FPC technology that address iron deficiency in patients who are currently under-treated.
Dialysis Business
We are one of the two major suppliers of hemodialysis concentrates in the United States. Over the past 25 years we have developed a core expertise in manufacturing and delivering hemodialysis concentrates. Because these concentrates are used to maintain human life by removing toxins and balancing electrolytes in the dialysis patient’s bloodstream, we manufacture them under cGMP regulations as described below. Our concentrates are manufactured in three facilities, totaling 159,000 square feet, located in Michigan, Texas and South Carolina, from which we deliver these products to dialysis clinics throughout most of the United States. We utilize our own delivery fleet as well as third parties. We employ approximately 300 people in the concentrates unit of our dialysis business.
The “Rockwell Medical” name has earned a reputation for dependability, quality and service within our customer base. This reputation was further strengthened during the recent challenges presented, not only by the COVID-19 pandemic, but also by the multitude of recent natural disasters where our team has been challenged by hurricanes, flooding and freezing, while still meeting production demands.
Our dialysis business in concentrates and our growth opportunities with FPC technology are synergistic. We are leveraging our leadership position in the dialysis sector to commercialize our first two FPC-based products, Triferic and Triferic AVNU, which are indicated for the replacement of iron to maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease. We commercialize the Triferic products ourselves in the United States, and are partnering with established local pharmaceutical companies for the regulatory approval and commercialization outside of the United States.
Although we have an excellent reputation for dependability and service within the dialysis sector, with concentrates and Triferic, our growth opportunities for both in the United States dialysis market are challenged by the consolidated ownership of dialysis clinics, a capitated reimbursement model and the demographics of the patient population. The two largest dialysis organizations treat approximately 73% of the patients in the United States. One manufactures its own concentrates and IV iron and we already supply concentrates to the other. Through our partnership with Baxter International, we currently supply concentrates to a significant percentage of the small and medium sized dialysis organizations. In a sector, such as kidney dialysis, with capitated reimbursement for the dialysis procedure and all included inputs, new product success depends on compelling data demonstrating improved patient outcomes and/or pharmacoeconomics versus the current standard of care in practice in the clinics. Once Medicare determined that Triferic and Triferic AVNU would be reimbursed under the fixed bundled rate, market adoption became more dependent on the generation of these data, which were not required for the drug's approval from the FDA.
Notwithstanding the growth limitations mentioned above, we have made progress and continue to be confident that Triferic has the potential to be the treatment of choice for the maintenance of hemoglobin in dialysis patients. Toward this end, we have increased our efforts in generating real world data in clinics with current protocols, which we believe will help with the adoption of Triferic and Triferic AVNU as these results are developed and disseminated over time. In addition, we believe the hemodialysis industry may experience a great deal of change over the next several years. We plan to take the steps necessary to generate the data necessary to potentially allow Triferic and Triferic AVNU to benefit from these new innovations, such as the potential approval of a class of drugs, known as hypoxia-inducible factor prolyl hydroxylase inhibitors ("HIF-PHIs"), as well as the new, solid-state dialysis equipment in development. We are planning to study Triferic in combination with these potential new innovations as they become available.
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A key element of our dialysis business strategy is to also improve the strength of our concentrates business by creating efficiencies and enhancing our manufacturing and transportation operations. We have launched projects to identify ways to improve the overall profitability of these core operations. Specifically, we are reviewing our entire supply chain to identify opportunities for improvement, prioritizing initiatives that will have the largest impact on long-term efficiency, profitability and growth.
Home Infusion
Our growth strategy is to go beyond our foundational business in dialysis by leveraging the efficacy and safety data from Triferic. We are planning to develop an FPC-based therapeutic for iron deficiency to be given in the home infusion setting. The number of patients served by home infusion therapy has grown from approximately 800,000 in 2010 to over 3,000,000 in 2019. The home infusion setting is expected to continue to expand, which has been further supported with the COVID-19 environment. Many patient groups requiring home infusion therapies suffer from diseases that are associated with an incidence of iron deficiency and anemia. For example, it is estimated that 40% to 55% of all home parenteral nutrition patients are iron deficient. We believe, based on our data with hemodialysis patients, FPC as a home infusion therapy for iron deficiency anemia may have distinct advantages over currently available iron replacement therapy options.
Based on feedback received in March 2021 from the FDA, we plan on initiating a Phase 2 clinical study in home infusion patients with iron deficient anemia during the second half of 2021 to confirm the dose and duration of FPC treatment. We expect data from the trial in the second half of 2022. The company is planning to review this clinical plan in a meeting with the FDA in 2021. After reviewing with the FDA, apply feedback, initiate the trial and, if necessary, update our clinical plan and related timelines.
Pipeline Development
In our R&D pipeline, we are also exploring FPC’s impact in the treatment of hospitalized heart failure patients. More than one million people in the United States are hospitalized each year for acute heart failure. Clinical improvement in heart failure has already been demonstrated with older first-generation forms of IV iron in clinical trials in the outpatient setting. 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 resulting in shorter hospital stays and fewer 30-day re-admissions. If so, these outcomes would translate into a meaningful reduction in healthcare costs and human suffering. We expect to communicate with the FDA in 2021 regarding a development pathway for this indication.
We continue exploring other potential patient populations for application of our technology. We are considering disease states where patients can benefit the most from an effective treatment for iron deficiency, and where the development path, cost estimates and reimbursement are the most favorable.

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Results of Operations for the Three Months Ended March 31, 2021 and 2020
The following table summarizes our operating results for the periods presented below (dollars in thousands):
For the Three Months Ended March 31,
2021% of Revenue2020% of Revenue% Change
Net Sales$15,473 $15,857 (2.4)%
Cost of Sales15,072 97.4 %14,744 93.0 %2.2 
Gross Profit401 2.6 1,113 7.0 (64.0)
Research and Product Development1,809 11.7 1,822 11.5 (0.7)
Selling and Marketing1,851 12.0 2,073 13.1 (10.7)
General and Administrative3,923 25.4 5,273 33.3 (25.6)
Operating Loss$(7,182)(46.4)%$(8,055)(50.8)%(10.8)%
Net Sales
During the three months ended March 31, 2021, our net sales were $15.5 million compared to net sales of $15.9 million during the three months ended March 31, 2020. The decrease of $0.4 million was primarily due to a decrease in sales of dialysis concentrates products.
Gross Profit
Cost of sales during the three months ended March 31, 2021 was $15.1 million, resulting in gross profit of $0.4 million during the three months ended March 31, 2021, compared to cost of sales of a $14.7 million and a gross profit of $1.1 million during the three months ended March 31, 2020. Gross profit decreased by $0.7 million mainly due to a decrease in concentrate sales and an increase in costs related to protocols implemented because of the ongoing COVID-19 pandemic.
Research and Product Development Expense
Research and product development expenses were $1.8 million for the three months ended March 31, 2021 and 2020. The Company is continuing to invest in its medical and scientific programs to support the continued data and phase 4 clinical programs for Triferic in dialysis and the advancement of our FPC technology platform.
Selling and Marketing Expense
Selling and marketing expenses were $1.9 million during the three months ended March 31, 2021, compared with $2.1 million during the three months ended March 31, 2020. The decrease of $0.2 million is primarily due to a decrease in marketing costs related to Triferic (dialysate) partially offset by a slight increase in costs associated with the launch of Triferic AVNU.
General and Administrative Expense
General and administrative expenses were $3.9 million during the three months ended March 31, 2021, compared with $5.3 million during the three months ended March 31, 2020. The decrease of $1.4 million is due primarily to a decrease in stock compensation of $1.2 million, relating to a decrease in incentive compensation from forfeited equity awards and the change in probability relating to performance award achievement; a decrease in legal costs of $0.2 million, relating to previous litigation that has since been resolved; and a decrease in insurance costs of $0.1 million, relating to reduced premiums; partially offset by an increase of $0.1 million for increased headcount and severance pay related to our former President and Chief Executive Officer.
Other Income (Expense)
Other income for the three months ended March 31, 2021 was $11,000, consisting primarily of interest income. Other income for the three months ended March 31, 2020 was $0.2 million, consisting primarily of interest income. Other expense for the three months ended March 31, 2021 was $0.6 million of interest expense related to our debt facility (see Note 15 for more
28


information on our debt facility). Other expense for the three months ended March 31, 2020 was $0.1 million of interest expense.
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Liquidity and Capital Resources
Since inception, Rockwell has incurred significant net losses and has funded its operations primarily through revenue from commercial products, proceeds from the issuance of debt and equity securities and payments from partnerships. At March 31, 2021, Rockwell had an accumulated deficit of approximately $345.2 million and stockholders' equity of $26.2 million. As of March 31, 2021, Rockwell had approximately $46.1 million of cash, cash equivalents and investments available-for-sale, and working capital of $48.0 million. Net cash used in operating activities for the three months ended March 31, 2021 was approximately $12.5 million. Based on the currently available working capital, capital raise and debt financing noted above, management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of the filing of this report.

The Company expects it will require additional capital to sustain its operations and make the investments it needs to execute its strategic plan, including the commercialization of Triferic (dialysate) and Triferic AVNU in dialysis, generating additional data for Triferic in dialysis, developing FPC for iron deficiency anemia in patients undergoing home infusion and for progressing our pipeline development program of new indications for its FPC platform. If the Company is unable to generate sufficient revenue from sales of its commercial products and from partnerships, the Company will need to obtain additional equity or debt financing. If the Company attempts to obtain additional debt or equity financing, the Company cannot assume that such financing will be available on favorable terms, if at all.

In addition, the Company is subject to certain covenants and cure provisions under our Loan Agreement with Innovatus. As of the date of this report, the Company is in compliance with all covenants.(See Note 15 for further detail).
General
The actual amount of cash that we will need to execute our business strategy is subject to many factors, including, but not limited to, the expenses and revenue associated with the commercial operations in the United States and internationally (with partners); the timing and magnitude of cash received from drug product sales; the timing and expenditures associated with the development programs including our FPC technology for home infusion and potentially acute heart failure; and the costs associated with our manufacturing and transportation operations related to our concentrate business.
We may elect to raise capital in the future through one or more of the following: (i) equity and debt raises through the equity and capital markets, though there can be no assurance that we will be able to secure additional capital or funding on acceptable terms, or if at all; and (ii) strategic transactions, including potential alliances and collaborations focused on markets outside the United States, as well as potential combinations (including by merger or acquisition) or other corporate transactions. In particular, our Baxter Agreement prohibits us from entering into a contract that would encumber the assets used in our concentrate business without the prior written consent of Baxter. Due to the fact that the assets used in our concentrate business currently constitute a substantial portion of the tangible assets we own other than our drug inventory, we may not be able to, or we may find it difficult, to obtain secured debt financing without the consent of Baxter.
We believe that our ability to fund our activities in the long term will be highly dependent upon 1) our ability to execute on the development of the FPC platform for new therapies, and 2) our ability to commercialize and increase adaptation of Triferic (dialysate) and Triferic AVNU. Both of these strategies is subject to significant risks and uncertainties such that there can be no assurance that we will be successful is achieving approval of FPC in a new therapeutic area or that we will be able to have sustained commercial success with Triferic (dialysate) and Triferic AVNU. If our planned clinical program is delayed or fails or if our commercialization of Triferic (dialysate) and/or Triferic AVNU should fail to increase sales, we may be forced to implement cost-saving measures that may potentially have a negative impact on our activities and potentially the results of our research and development programs. Even though we began commercialization of Triferic (dialysate) and Triferic AVNU as planned, if the results are unsuccessful, we may be unable to secure the additional capital that we will require to continue our research and development activities and operations, which could have a material adverse effect on our business. If we are unable to raise the required capital, we may be forced to curtail all of our activities and, ultimately, cease operations. Even if we are able to raise sufficient capital, such financings may only be available on unattractive terms, or result in significant dilution of stockholders’ interests and, in such event, the market price of our common stock may decline.
Cash Used in Operating Activities
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Net cash used in operating activities was $12.5 million for the three months ended March 31, 2021 compared to net cash used in operating activities of $6.5 million for the three months ended March 31, 2020. The increase in cash used from operating activities during the current period was primarily due to changes in current balance sheet accounts in the ordinary course of business of approximately $5.3 million, including an increase in net accounts receivable of $2.4 million and a reduction in accounts payable and accrued expense of approximately $1.8 million. Our cash used in Q1 is normally higher due to one-time annualized payments and further affected by some timing issues related to the receipt of payments for product sales and reimbursements from one of our large customers, which was received in early April. Overall, our cash burn for the first quarter was in line with our expectations, and we continue to expect, in aggregate, 2021 cash burn to be lower than 2020 cash burn.
Cash (Used In) Provided by Investing Activities
Net cash used in investing activities was $0.5 million during the three months ended March 31, 2021 compared to net cash provided by investing activities of $2.6 million for the three months ended March 31, 2020. The net cash used in investing activities during the three months ended March 31, 2021 was primarily due to sales and purchase of available-for-sale investments during the quarter.
Cash Provided by Financing Activities
Net cash provided by financing activities was nil during the three months ended March 31, 2021 compared to the net cash provided by financing activities of $29.6 million for the three months ended March 31, 2020. The net cash provided during the three months ended March 31, 2020 was primarily due to net proceeds of $22.1 million related to proceeds from the debt facility and $8.0 million from the sale of our common stock, related to our public offering, offset by $0.6 million for payments on short term notes.
COVID-19 Impact

The COVID-19 pandemic and resulting global disruptions have adversely affected our business and operations, including, but not limited to, our sales and marketing efforts and our research and development activities, and the operations of third parties upon whom we rely. Quarantines, shelter-in-place, executive and similar government orders may negatively impact our sales and marketing activities, particularly if our sales representatives are unable to interact with current and potential customers to the same extent as before onset of the COVID-19 pandemic. The Company's international business development activities may also continue to be negatively impacted by COVID-19, especially with the recent surge in infections internationally, ongoing international travel restrictions and quarantines or shelter-in-place orders.

The COVID-19 pandemic and resulting global disruptions have caused significant volatility in financial and credit markets. We have utilized a range of financing methods to fund our operations in the past; however, current conditions in the financial and credit markets may limit the availability of funding or increase the cost of funding. Due to the rapidly evolving nature of the global situation, it is not possible to predict the extent to which these conditions could adversely affect our liquidity and capital resources in the future.
Critical Accounting Policies and Significant Judgments and Estimates
Our critical accounting policies and significant estimates are detailed in our Annual Report on Form 10-K for the year ended December 31, 2020. Our critical accounting policies and significant estimates have not changed from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.
Recently issued and adopted accounting pronouncements:
We have evaluated all recently issued accounting pronouncements and believe such pronouncements do not have a material effect our financial statements. See Note 3 of the condensed consolidated financial statements at March 31, 2021.
Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Per §229.305 of Regulation S-K, the Company, designated a Smaller Reporting Company as defined in §229.10(f)(1) of Regulation S-K, is not required to provide the disclosure required by this Item.
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Item 4.  Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure material information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure. In designing and evaluating the disclosure controls and procedures, we recognized that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Management necessarily was required to apply its judgment in evaluating the cost‑benefit relationship of possible controls and procedures.
Under the supervision of and with the participation of our management, including the Company’s Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2021. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2021.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1.  Legal Proceedings
The disclosure set forth above in Note 14  (Commitments and Contingencies – Litigation) to our unaudited condensed consolidated financial statements is incorporated herein by reference.
Additionally, we are involved in certain other legal proceedings from time to time before various courts and governmental agencies. We cannot predict the final disposition of such proceedings. We regularly review legal matters and record provisions for claims that are considered probable of loss. The resolution of these pending proceedings is not expected to have a material effect on our operations or consolidated financial statements in the period in which they are resolved.
Item 1A. Risk Factors
There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2020 under “Item 1A — Risk Factors.”
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Item 5. Other Information.
None.
Item 6. Exhibits

The exhibits filed or furnished as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index, which Exhibit Index is incorporated herein by reference.
EXHIBIT INDEX
Exhibit No.Description
31.1*
31.2*
32.1**
101.INS*XBRL Instance Document
101.SCH*XBRL Taxonomy Extension Schema
101.CAL*XBRL Taxonomy Extension Calculation Linkbase
101.DEF*XBRL Taxonomy Extension Definition Database
101.LAB*XBRL Taxonomy Extension Label Linkbase
101.PRE*XBRL Taxonomy Extension Presentation Linkbase
104*The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline XBRL (included as Exhibit 101)
*Filed herewith
**Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ROCKWELL MEDICAL, INC.
(Registrant)
Date: May 17, 2021/s/ Russell Ellison
Russell Ellison
Chief Executive Officer (Principal Executive Officer)
Date: May 17, 2021/s/ Russell Skibsted
Russell Skibsted
Chief Financial Officer (Principal Financial Officer)
34