Good morning, and welcome to Rockwell Medical's Fourth Quarter and Full-Year 2022 Results Conference Call and Webcast. Please note, this event is being recorded. At this time, I would like to turn the conference call over to Heather Hunter, Senior Vice President, Chief Corporate Affairs Officer at Rockwell Medical. Heather, please go ahead.

Good morning, and thank you for joining us for this update on Rockwell Medical. Joining me on today's conference call are Dr. Mark Strobeck, Rockwell Medical’s President and Chief Executive Officer; Tim Chole, Rockwell Medical's Senior Vice President, Sales and Marketing; and Paul McGarry, Rockwell Medical's Senior Vice President, Finance and Chief Accounting Officer. Before we begin, I would like to remind you that this conference call will contain forward-looking statements about Rockwell Medical within the meaning of the federal securities laws including, but not limited to, the types of statements identified as forward-looking in our annual report on Form 10-K and our subsequent periodic reports filed with the SEC, which are all available on our website under the Investors section. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions and expectations only as of today. Except as required by law, we specifically disclaim any obligation to update or revise these forward-looking statements in-light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed in or implied by such forward-looking statements are discussed in greater detail in our periodic reports filed with the SEC. Rockwell Medical's annual report on Form 10-K for the year ended December 31, 2022 was filed prior to this call and provides a full analysis of the company's business strategy, as well as the company's fourth quarter and full-year 2022 results. It can be found on Rockwell Medical's website under the Investors section along with today’s press release and a recording of this webcast. Now, I would like to turn the conference call over to Rockwell Medical's President and CEO, Dr. Mark Strobeck.

Thank you, Heather. Good morning, everyone, and thank you for joining us today for Rockwell Medical's fourth quarter and full-year 2022 results conference call and webcast. We have a number of exciting accomplishments that we want to review with you this morning. So, let’s get started. For those of you who are new to Rockwell Medical and for those of you who have been following us for some time, I’d like to take a few minutes to remind everyone of our updated business model and strategy. Rockwell Medical is a revenue generating healthcare company that develops, manufacturers, commercializes, and distributes a portfolio of hemodialysis products for dialysis providers worldwide. Rockwell’s mission is to provide dialysis clinics in the patients they serve with the highest quality products supported by the best customer service in the industry. Rockwell is the second largest supplier of life-sustaining hemodialysis concentrates products, dialysis clinics in the United States, and is one of only two suppliers that has the manufacturing scalability and transportation infrastructure to service the over 7,200 dialysis clinics in the United States along with select international markets. This positions Rockwell as an indispensable player in a large and expanding market, which in the United States alone is currently valued at approximately $380 million and is projected to grow to approximately $500 million in 2026. Our vision is to become the leading global supplier of hemodialysis concentrates to dialysis providers worldwide. After joining Rockwell Medical in July of last year, I together with Rockwell's management team and board of directors underwent an extensive evaluation and assessment of our businesses and determined that for Rockwell to be successful, we need to focus our efforts on enhancing our revenue generating businesses, pause our capital intensive businesses, and focus on improving our financial condition, de-levering this company, and…

Thank you, Mark. Since re-acquiring the distribution rights for our hemodialysis products from Baxter and terminating the exclusive distribution agreement, our commercial strategy is now focused on two key areas. First, we're focused on transitioning the more than 700 former Baxter customers to Rockwell, to ensure that our life sustaining products continue to get to the hospitals, medical centers, dialysis centers, and health systems that serve hemodialysis patients. I'm pleased to report that this transition is on-track and we've successfully assumed commercial responsibility for Baxter's customers. We're now systematically working with each of these customers to establish new agreements with preferred terms and conditions and long-term supply arrangements. Now, Rockwell is capturing more of the economics associated with these customers, all of which we were unable to do previously under the Baxter agreement. This ultimately benefits Rockwell, our stockholders, and our customers in the long-term. The second strategic priority is to grow our business by adding new customers and expanding into new geographies to access portions of hemodialysis concentrate market that was previously unavailable to us under the Baxter arrangement. In the fourth quarter of 2022, we expanded our distribution capabilities further westward into Minnesota and are excited to be working more closely with our largest partner to support their dialysis centers and an estimated 3,000 additional patients with our life sustaining hemodialysis products. Additionally, we announced last month that we signed two new supply agreements with two new partners. The first agreement is a three-year multimillion dollar product purchase agreement with Concerto Renal Services, the largest provider of dialysis and skilled nursing facilities in the United States. And the second agreement is a three-year multimillion dollar supply agreement with the largest non-profit dialysis provider in the United States. Each of these arrangements include multi-year annual minimum purchase commitments and have the opportunity to increase as our customers' respective businesses grow. These are the first of many agreements that we anticipate establishing this year to grow our hemodialysis concentrates business and drive Rockwell toward profitability in 2024. Hemodialysis concentrates our Rockwell's core focus and competency. Given the disruptions that other suppliers have experienced recently, we are determined now more than ever to become the global leader in this market. Customers want to work with Rockwell because we are dedicated to providing the highest quality products supported by the best customer service in the industry. I'm personally very excited about the progress we've been making and the opportunities that lie ahead for Rockwell. Now, I'll turn the call over to Paul, to go through our fourth quarter and full-year 2022 financial results.

Thank you, Tim. Revenue for the three months ended December 31, 2022 was 19.3 million. This represents a 26% increase over the comparable period in 2021. Revenue for the year ended December 31, 2022 was 72.8 million, which represents a 17.6% increase over the same period of 2021. Net cash used in operating activities was 594,000 for the fourth quarter of 2022, compared to 9 million for the fourth quarter of 2021. Net cash used in operating activities was 17.4 million for the full-year of 2022, compared with 33.5 million for the comparable period in 2021, which represents a 48% reduction in cash used in operating activities year-over-year. For the three months ended December 31, 2022, Rockwell's net loss was 2.4 million or $0.20 per share, compared with a net loss of 8.9 million or $1.05 per share for the same period of 2021. For the year ended December 31, 2022, Rockwell's net loss was 18.7 million or $1.89 per share, compared with a net loss of 32.7 million or $3.83 per share in 2021. During the fourth quarter of 2022, we accelerated the pay down of our debt with the $5 million prepayment of our existing loan leaving Rockwell Medical with 10 million of long-term debt at December 31, 2022. Comparatively, at December 31, 2021, Rockwell's outstanding debt was 21.6 million. Rockwell's cash and cash equivalents at December 31, 2022 was 21.5 million as compared to 27.6 million at September 30, 2022. The reduction in our cash balance includes a $5 million debt prepayment and one-time cost associated with the purchase of equipment and severance related expenses. Absent these one-time charges, Rockwell is moving significantly closer to becoming cash flow neutral. Overall, we're pleased with our financial performance in the fourth quarter and full-year of 2022 and remain focused on continuing to position us for future growth as we drive towards profitability in 2024. I will now turn the call back over to Mark.

Thank you, Paul. Operator, please open the phone lines for any questions.

[Operator Instructions] And your first question today comes from the line of [Sam] [ph] Selvaraju from H.C. Wainwright. Your line is open.

Thanks very much for taking my questions. Can you hear me?

We can.

So, I was just wondering in a general sense whether you could comment on potential drivers of upside to your current 2023 top line guidance? And in particular, how you are seeing the underlying market dynamics evolving this year so far, particularly as you look to acquire market share, the dialysis, hemodialysis concentrates business?

Yes. Thank you for those questions. So, let me start, sort of with the second one first. What we're seeing in the dialysis market today is that there is a shift that's occurring as we come out of what I think was a declining period during COVID. And what we're seeing and certainly what dialysis providers are reporting is that for the first time that decline of patient census has begun to slow and that those businesses are beginning to start to see that leveling off and potentially now see a path in 2023 or that growth to resume, meaning the increase in patient senses. So, from a dialysis perspective, I think we're through what has been probably for the first time in this industry a serious contraction and are now beginning to start to move back to growth that it didn't seem previously in this business, which will obviously impact the amount of concentrates that are then used to surface those patients. I think secondly, I would comment that in the hemodialysis concentrate market, we're continuing to see shifting dynamics there as well. And again, those point towards the continual need for Rockwell to supply the lion's share of the dialysis clinics that exist here in the U.S. and abroad. We are fortunate that the reputation that Rockwell has for not only its customer service, not only its distribution, but as well the quality of its products is one that those in the industry know and therefore are excited to access. And so, the second path to growth for us is going to be accelerated addition of customers that we've already started and you've seen that we've announced at the beginning of the year.

Very much appreciate that color. Just two other quick ones. Firstly, can you comment on how you expect [fee spending] [ph] to trend during 2023, particularly in-light of how low it was in the fourth quarter of 2022? And also if you could give us a sense of what you expect to do with respect to continuing management of the debt position and potentially paying it down still further during the course of 2023? Thank you.

Yes. So, although we haven't given guidance towards spending in 2023, it is a key priority for us to continue to operate this business in a more efficient manner. That includes production of our products, as well as the management of our organization. So, what I would say to that is, we are going to continue to work incredibly hard to try to find ways to continue to decrease the expenses associated with operating this business. Second, on the debt, the way that the [Novartis] [ph] agreement is set up, we are set to pay that off in 2024 or by 2024 we're going to continue to look for ways to accelerate that to again continue to provide flexibility for our business. So, we plan to consistently follow the way that the payment schedules are contemplated in the agreement, which as I said, allows us to pay that off by the end or by a period in 2024, but we're going to look for ways to accelerate that.

Thank you.

Your next question comes from the line of Brandon Folkes from Cantor Fitzgerald. Your line is open.

Hi. Thanks for taking my questions and congratulations on all the progress. Just a very high level one from me. Maybe, can you help us just conceptualize or think about where you are in terms of, sort of the strategy? And what I mean by that is, obviously tremendous progress in 2022, looks like continued significant progress in 2023 based on the guidance, but sort of how much opportunity do you see to continue on the, sort of growing concentrate and, kind of optimizing the cost structure within the next few years? How should we think about that versus maybe, sort of evolving the strategy over the next few years? Thank you.

Yes. Thanks Brandon. So, as we've discussed previously, the goal and we see a path to building this business to a $100 million plus in revenue. And we think we have a path that allows us to do that. We've also spoken to the fact that we want to become – our primary objective is to become the leading supplier of hemodialysis concentrates worldwide. And so, again, further growth for us will include tapping into international markets where we do not currently provide products today. And so, that's where the additional growth will come from. And then I think third to that, for the first time now being outside of the Baxter agreement, we have the ability to contemplate adding new products to our portfolio. And so, we are actively evaluating additional products to add that take advantage of our manufacturing capacity and expertise, as well as our distribution capabilities to grow out a larger renal care portfolio. So, those are some of the areas that I would say that we are focused on to growing this business, sort of well beyond where we stand today.

Great. Thank you very much and congratulations on all the progress.

Thanks, Brandon.

And there are no further questions. I will now turn the call back over to Dr. Strobeck.

Thank you, operator, and thank you everyone for joining us on today's call. It was a pleasure to provide you with an overview of our accomplishments in 2022. We are steadfast and focused on driving our overall business to profitability, improving our financial position, maximizing revenue, and unlocking the value of our manufacturing and distribution capabilities. We are putting Rockwell Medical in a better position to drive growth and further improve our performance so we can serve more patients, clinics, and major medical centers around the world. We are in the business to make products that impact the patient's life. This is our passion and we take this responsibility very seriously. We look forward to sharing our progress on future calls.

This concludes today's conference call and webcast. You may now disconnect.