Rockwell Medical Raises $1M via Private Placement, Issues Warrants

TL;DR

**Rockwell Medical just raised $1M through a private placement and issued warrants, which is good for cash but could dilute existing shares.**

AI Summary

On January 2, 2024, Rockwell Medical, Inc. entered into a definitive agreement with an institutional investor for a private placement of 1,000,000 shares of its common stock at $1.00 per share, generating $1.0 million in gross proceeds. Additionally, the company issued unregistered warrants to purchase up to 1,000,000 shares of common stock at an exercise price of $1.20 per share. This capital infusion is crucial for Rockwell Medical, Inc. as it provides immediate funding, but the issuance of new shares and warrants could dilute the value of existing shareholders' investments if the warrants are exercised.

Why It Matters

This capital raise provides Rockwell Medical with much-needed funds but also introduces potential dilution for current shareholders due to the issuance of new shares and warrants.

Risk Assessment

Risk Level: medium — While the capital raise provides immediate funding, the issuance of new shares and warrants carries a medium risk of diluting existing shareholder value.

Analyst Insight

A smart investor would weigh the immediate capital infusion against the potential for future share dilution from the warrants. Monitoring the company's use of these funds and future financial performance will be key.

Key Numbers

• $1.00 — Common Stock Purchase Price (The price per share at which common stock was sold in the private placement.)
• 1,000,000 — Shares Sold (The number of common shares sold in the private placement.)
• 1,000,000 — Warrants Issued (The number of shares underlying the warrants issued.)
• $1.20 — Warrant Exercise Price (The price at which the warrants can be exercised to purchase additional shares.)
• $1.0 million — Gross Proceeds (The total amount of money raised from the private placement before expenses.)

Key Players & Entities

• Rockwell Medical, Inc. (company) — the registrant entering into the agreement
• $1.00 (dollar_amount) — the per-share purchase price for common stock
• 1,000,000 (dollar_amount) — number of common shares sold and warrants issued
• $1.20 (dollar_amount) — the exercise price per share for the warrants
• January 2, 2024 (dollar_amount) — date of the earliest event reported
• $1.0 million (dollar_amount) — gross proceeds from the private placement

Forward-Looking Statements

• The exercise of the warrants will lead to further dilution of existing shareholder value. (Rockwell Medical, Inc. common stock) — high confidence, target: Within the warrant exercise period

FAQ

Key Financial Figures

• $0.0001 — h registered Common Stock, par value $0.0001 RMTI Nasdaq Capital Market Indicate
• $8.0 million — ipal amount as of the Effective Date of $8.0 million (the "Term Loans"). The Company will ma
• $1.5 million — three-month cash burn or (y) the sum of $1.5 million and the aggregate amount of capital lea
• $1.83 — common stock with an exercise price of $1.83 per share. The Warrant may be exercised

Filing Documents

• tm242195d1_8k.htm (8-K) — 36KB
• tm242195d1_ex4-1.htm (EX-4.1) — 75KB
• tm242195d1_ex10-1.htm (EX-10.1) — 291KB
• tm242195d1_ex99-1.htm (EX-99.1) — 48KB
• tm242195d1_ex99-1img001.jpg (GRAPHIC) — 6KB
• 0001104659-24-002065.txt ( ) — 728KB
• rmti-20240102.xsd (EX-101.SCH) — 3KB
• rmti-20240102_lab.xml (EX-101.LAB) — 33KB
• rmti-20240102_pre.xml (EX-101.PRE) — 22KB
• tm242195d1_8k_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement . On January 2, 2024, Rockwell Medical, Inc. (the "Company") and Rockwell Transportation, Inc., a wholly-owned subsidiary of the Company ("RTI"), entered into the Third Amendment to and Restatement of Loan and Security Agreement (the "A&R Loan Agreement") with Innovatus Life Sciences Lending Fund I, LP ("Innovatus"), a Delaware limited partnership, as collateral agent and the Lenders listed on Schedule 1.1 thereto, dated January 1, 2024 (the "Effective Date"), which amended and restated the Loan and Security Agreement, dated March 16, 2020 (the "Original Effective Date"), as amended. The A&R Loan Agreement provides for the continuation of term loans initially borrowed on or after the Original Effective Date, in an aggregate outstanding principal amount as of the Effective Date of $8.0 million (the "Term Loans"). The Company will make interest-only payments on the Term Loans for thirty months, or up to thirty-six months if certain conditions are met. The Term Loans will mature on the fifth anniversary of the Effective Date, unless earlier repaid. The Term Loans will bear interest at the greater of (i) Prime Rate (as defined in the A&R Loan Agreement) and (ii) 7.50%, plus 3.50%. At the Company's option, 2.00% of the interest due on any applicable interest payment date during the interest-only period may be paid in-kind by adding such amount to the then outstanding principal balance of the Term Loans. The Term Loans may be voluntarily prepaid in full (but not partially) at any time, upon at least seven business days' prior notice. In connection with any voluntary prepayment or satisfaction of the Term Loans prior to the maturity date (including any acceleration), the Company will pay all accrued and unpaid interest and all other amounts due in connection with the Term Loans, together with (x) a prepayment fee (the "Prepayment Fee") equal to: (i) 6.0% of the principal amount of the Term Loans prepaid if the paymen

02 Results of Operations and Financial Condition

Item 2.02 Results of Operations and Financial Condition . The information set forth in Item 8.01 below regarding the press release issued on January 8, 2024 is incorporated by reference into this Item 2.02. Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant . The information set forth in Item 1.01 above regarding the A&R Loan Agreement is incorporated by reference into this Item 2.03.

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities . The information set forth in Item 1.01 above regarding the Warrant is incorporated by reference into this Item 3.02. The issuance of shares of the Company's common stock underlying the Warrant will be made in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D thereunder.

01 Other Events

Item 8.01 Other Events . On January 8, 2024, the Company issued a press release announcing certain corporate updates. The press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits . (d) Exhibits EXHIBIT INDEX Exhibit No. Description 4.1 Form of January 2024 Warrant to Purchase Common Stock issued to Innovatus. 10.1 Third Amendment to and Restatement of Loan and Security Agreement, dated January 1, 2024, by and among the Company, Rockwell Transportation, Inc., Innovatus Life Sciences Lending Fund I, LP and the lenders party thereto. 99.1 Press Release, dated January 8, 2024. 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: January 8, 2024 By: /s/ Mark Strobeck Mark Strobeck Chief Executive Officer

View Full Filing

View this 8-K filing on SEC EDGAR