UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Title of Each Class | Trading Symbol | Name of Each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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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. ¨
| Item 1.01 | Entry into a Material Definitive Agreement. |
On July 12, 2024, Rockwell Medical, Inc. (the “Company”) and Evoqua Water Technologies LLC, a Delaware limited liability company (“Evoqua”), executed Amendment No. 1 to the Asset Purchase Agreement (the “Amendment”), dated as of July 10, 2023, by and between the Company and Evoqua (the “Purchase Agreement”). The Amendment clarifies certain terms regarding physical assets covered by the Purchase Agreement and provides for an extended payment schedule for the deferred payments due by the Company to Evoqua and a partial reduction in such payments as follows:
| · | $2,500,000 (the “First Deferred Payment”), which shall be partially offset $322,260 to reimburse the Company for certain expenses incurred following the closing of the Purchase Agreement, resulting in a reduction of the First Deferred Payment to $2,177,740, and which shall be paid in four quarterly installments through April 2025; and |
| · | $2,500,000, which shall be payable to Evoqua in four quarterly installments from July 10, 2025 through April 10, 2026. |
The foregoing description of the Amendment and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K (this “Form 8-K”) and incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
Gross Margin Guidance for 2024
On July 15, 2024, Mark Strobeck, the Company’s Chief Executive Officer, was interviewed by HC Wainwright as part of the 2024 Annual Kidney Conference. During such interview, Dr. Strobeck reconfirmed the Company’s previously provided guidance of gross margin for 2024 between 14% and 16% (noting that Dr. Strobeck inadvertently referred to gross margin guidance in the range of 13% to 15%, which was actually a reference to the Company’s previously issued gross profit guidance of $13 to $15 million).
As noted in the Company’s first quarter earnings release, the Company has excluded deferred revenue from the first quarter calculation of gross margin. This gross margin measure is a non-GAAP (as defined below) financial measure. The Company has provided reconciliations to the GAAP measures at the end of the press release issued by the Company on May 14, 2024, announcing gross margin guidance for 2024. Adjusted gross margin is used by the Company to understand growth within its hemodialysis concentrates business by excluding a one-time item that is not indicative of its core operating performance.
Adjusted gross margin should not be considered in isolation of, or as an alternative to, measures prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Other companies, including companies in the same industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of adjusted gross margin as a tool for comparison. There are a number of limitations related to the use of this non-GAAP financial measure rather than the most directly comparable financial measures calculated in accordance with GAAP. When evaluating the Company’s performance, you should consider adjusted gross margin alongside other financial performance measures, including net loss and other GAAP results. Adjusted gross margin enables us to understand growth within our hemodialysis concentrates business by excluding a one-time item that is not indicative of our core operating performance.
Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the federal securities laws. Words such as, “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “could,” “can,” “would,” “develop,” “plan,” “potential,” “predict,” “forecast,” “project,” “intend,” “look forward to,” “remain confident,” “feel confident,” “guidance,” or the negative of these terms, and similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. These statements include (without limitation) statements regarding gross margin and financial guidance for 2024. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties (including, without limitation, those set forth in the Company’s SEC filings), many of which are beyond our control and subject to change. Actual results could be materially different. Risks and uncertainties include but are not limited to those risks more fully discussed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023, as such description may be amended or updated in any subsequent reports filed with the SEC. The Company expressly disclaims any obligation to update our forward-looking statements, except as may be required by law.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
EXHIBIT INDEX
| Exhibit No. | Description | |
| 10.1 | Amendment No. 1 to Asset Purchase Agreement, dated July 12, 2024, by and between Rockwell Medical, Inc., and Evoqua Water Technologies LLC. | |
| 104 | Cover Page Interactive Data File, formatted in INline XBRL and included as Exhibit 101. |
SIGNATURE
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 hereunto duly authorized.
| ROCKWELL MEDICAL, INC. | ||
| Date: July 15, 2024 | By: | /s/ Mark Strobeck |
| Mark Strobeck, Ph.D. | ||
| President and Chief Executive Officer | ||
Exhibit 10.1
Amendment No. 1 to Asset Purchase Agreement
This Amendment No. 1 to Asset Purchase Agreement (this “Amendment”) is made as of July 12, 2024, by and between Evoqua Water Technologies LLC, a Delaware limited liability company (“Seller”), and Rockwell Medical, Inc., a Delaware corporation (“Purchaser” and together with Seller, the “Parties”). Capitalized terms used and not otherwise defined herein shall have the meanings accorded to such terms under the Agreement (as defined below).
BACKGROUND
WHEREAS, the Parties are each party to that certain Asset Purchase Agreement, dated as of July 10, 2023 (the “Agreement”);
WHEREAS, Section 10.2 of the Agreement provides that the Agreement may be amended by an agreement in writing executed by the Parties; and
Whereas, the Parties wish to make certain changes to the provisions related to the Purchase Price, including to account for payments made by Rockwell to dispose of expired Inventory.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
| 1. | Amendment to Section 1.1(d). Section 1.1(d) of the Agreement is hereby amended and restated to read in its entirety as follows: |
(d) all manufacturing equipment, supplies and other tangible personal property used primarily in the Concentrates Business, including the manufacturing equipment, supplies and other tangible personal property listed on Disclosure Schedule 1.1(d) (the “Equipment”); provided, however, that Equipment listed on Disclosure Schedule 1.1(d) that cannot be physically separated from its existing site and physically relocated to Purchaser’s site using commercially reasonable efforts (the “Undeliverable Equipment”) shall not be considered an Acquired Asset and Seller shall have no obligation to reimburse Purchaser for such Undeliverable Equipment;
| 2. | Amendment to Section 2.1. Section 2.1 of the Agreement is hereby amended and restated to read in its entirety as follows: |
“2.1 Purchase Price. In consideration of the sale and transfer of the Acquired Assets and assumption of the Assumed Liabilities, Purchaser shall pay and deliver to Seller an aggregate purchase price amount equal to sixteen million dollars ($16,000,000) plus the Final Inventory Amount (collectively, the “Purchase Price”). The Purchase Price shall be paid by Purchaser to Seller as follows:
(a) at Closing, an amount equal to eleven million dollars ($11,000,000) (the “Closing Purchase Price”) plus the Estimated Inventory Amount, by wire transfer of immediately available funds to an account designated by Seller;
(b) two million five hundred thousand dollars ($2,500,000), (the “First Deferred Payment”), payable by wire transfer of immediately available funds to an account designated by Seller; provided, however, that pursuant to Section 8.4(d) the First Deferred Payment shall be partially offset by an amount equal to three hundred twenty-two thousand, two hundred sixty dollars ($322,260) to reimburse Purchaser for expenses incurred by Purchaser following the Closing related to the disposal of expired Inventory (the “Expired Inventory”), resulting in a reduction of the First Deferred Payment to two million one hundred seventy-seven thousand seven hundred forty dollars ($2,177,740) (the “Adjusted First Deferred Payment”). Such Adjusted First Deferred Payment shall be made in in four (4) installments payable as follows: $653,322 on July 12, 2024; $653,322 on October 10, 2024; $435,548 on January 10, 2025; and $435,548 on April 10, 2025; and
(c) two million five hundred thousand dollars ($2,500,000) (the “Second Deferred Payment” and collectively with the Adjusted First Deferred Payment, the “Deferred Payments”), payable by wire transfer of immediately available funds to an account designated by Seller in four (4) installments payable as follows: $750,000 on July 10, 2025; $750,000 on October 10, 2025; $500,000 on January 12, 2026; and $500,000 on April 10, 2026.”
3. Release. In consideration of the foregoing amendments, Purchaser, on behalf of itself and its affiliates, their respective successors and assigns, and their respective employees, representatives, officers, directors, and shareholders, hereby fully releases and forever discharges Seller and its affiliates, their respective successors and assigns, and their respective employees, representatives, officers, directors, and shareholders from any and all claims, demands, and causes of action, in law, equity, or otherwise, whether asserted or unasserted, known or unknown, suspected or unsuspected, based in contract, tort, statute, or regulation (whether state, local, foreign, federal, statutory, regulatory, common, or other law or rule), or otherwise, contingent or non-contingent, based on, arising out of, relating to, or concerning, in whole or in part, any failure to deliver the Undeliverable Equipment or Purchaser’s disposal of Expired Inventory.
4. Effect of this Amendment; Counterparts. Except as specifically modified herein, the Agreement remains in full force and effect. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, with the same effect as if the signatures thereto were in the same instrument. Article X of the Agreement is hereby incorporated by reference mutatis mutandis.
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| 2 |
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above.
| PURCHASER: | ||
| Rockwell Medical, Inc. | ||
| By: | /s/ MARK STROBECK | |
| Name: Mark Strobeck, Ph.D | ||
| Title: President and CEO | ||
| SELLER: | ||
| EVOQUA WATER TECHNOLOGIES LLC | ||
| By: | /s/ RODNEY MCNELLY | |
| Name: Rodney McNelly | ||
| Title: VP WSS North America | ||
[Signature Page to Amendment No. 1 to Asset Purchase Agreement]
Cover |
Jul. 12, 2024 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Jul. 12, 2024 |
| Entity File Number | 000-23661 |
| Entity Registrant Name | Rockwell Medical, Inc. |
| Entity Central Index Key | 0001041024 |
| Entity Tax Identification Number | 38-3317208 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 30142 S. Wixom Road |
| Entity Address, City or Town | Wixom |
| Entity Address, State or Province | MI |
| Entity Address, Postal Zip Code | 48393 |
| City Area Code | 248 |
| Local Phone Number | 960-9009 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, par value $0.0001 |
| Trading Symbol | RMTI |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | false |