##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number
    000-23661
 ROCKWELL MEDICAL TECHNOLOGIES,
    INC.
 (Exact name of registrant as
    specified in its charter)
 Michigan

38-3317208(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)30142 Wixom Road
    Wixom, Michigan(Address of principal
    executive offices)

48393(Zip Code)   (248) 960-9009 (Registrants
    telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class:

Name of Each Exchange on Which Registered:Common Stock, no par value

Nasdaq Global Market   Securities
    registered pursuant to Section 12(g) of the Act:
    (None)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      Documents
    Incorporated by Reference
  Form 10-K.




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PART I
    Forward
    Looking Statements
      Item 1.
    Description
    of Business.  General
     1




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##### Table of Contents



How
    Hemodialysis Works
      Dialysis
    Industry Trends
  African-American
  55-60%
  Our
    Strategy
    
    increasing our revenues through new innovative products, such as
    our
    Dri-Sate®

    Dry Acid Concentrate Mixing System and
    SteriLyte®

    Liquid Bicarbonate Concentrate, 2




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
    gaining FDA approval to market innovative products such as iron
    supplemented dialysate,
    acting as a single source supplier to our customers for the
    concentrates, chemicals and supplies necessary to support a
    hemodialysis providers operation,
    offering our customers a higher level of delivery and customer
    service by using our own delivery vehicles and drivers, and
    expanding our market share in target regions, including regions
    where our proximity to customers will provide us with a
    competitive cost advantage and allow us to provide superior
    customer service levels.  Products
    Renal
    Pure Liquid Acid Concentrate
    Dri-Sate®

    Dry Acid Concentrate & Mixing System
    on-site.
  RenalPure
    Powder Bicarbonate Concentrate
    SteriLyte®

    Liquid Bicarbonate Concentrate
   3




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Ancillary
    Products
    Iron
    Supplemented Dialysate
             4




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##### Table of Contents



Distribution
    and Delivery Operations
    and/or
    Sales and
    Marketing
      Competition
  Dialysis
    Concentrate and Supplies Competition
       5




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Iron
    Maintenance Therapy Market Competition
  ® ® ® ® ® ® ® ® ® ® ® ®
  ® ®
  ®
     6




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Quality
    Assurance and Control
        Government
    Regulation
        Medical
    Device Approval and Regulation
  pre-amendment
 7




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and/or
   8




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Drug
    Approval and Regulation
           9




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Other
    government regulations
      Product
    License Agreements
         10




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Trademarks &
    Patents
        Suppliers
    Customers
    Employees
    Research &
    Development
   11




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Where You
    Can Get Information We File with the SEC
  1-800-SEC-0330. http://www.sec.gov. http://www.rockwellmed.com.
  Item 1A.Risk
    Factors.
  Investing in our common stock involves a high degree of risk.
    You should carefully consider the risks and uncertainties
    described below before purchasing our common stock. The risks
    and uncertainties described below are not the only ones facing
    our company. Additional risks and uncertainties may also impair
    our business operations. If any of the following risks actually
    occur, our business, financial condition or results of
    operations would likely suffer. In that case, the trading price
    of our common stock could fall, and you may lose all or part of
    the money you paid to buy our common stock.
  RISKS
    RELATED TO OUR BUSINESS
  The
    dialysis provider market is highly concentrated in national and
    regional dialysis chains that account for the majority of our
    domestic revenue. Our business is substantially dependent on one
    of our customers that accounts for a substantial portion of our
    sales. The loss of this customer would have a material adverse
    affect on our results of operations and cash flow.
    We
    operate in a very competitive market against substantially
    larger competitors with greater resources.
   12




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Our new
    drug product requires FDA approval and expensive clinical trials
    before it can be marketed.
    Even if
    our new drug product is approved by the FDA it may not be
    successfully marketed.
      We may
    not be successful in improving our gross profit margins and our
    business may remain unprofitable.
           13




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We depend
    on government funding of healthcare.
    We may
    not have sufficient cash to fund future growth or SFP
    development.
      Orders
    from our international distributors may not result in recurring
    revenue.
    We depend
    on key personnel.
    Our
    business is highly regulated.
     14




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We depend
    on contract research organizations and consultants to manage and
    conduct our clinical trials and if they fail to follow our
    protocol or meet FDA regulatory requirements our clinical trial
    data and results could be compromised causing us to delay our
    development plans or have to do more testing than
    planned.
    Foreign
    approvals to market our new drug products may be difficult to
    obtain.
      Health
    care reform could adversely affect our business.
    We may
    not have sufficient products liability insurance.
    Our Board
    of Directors is subject to potential deadlock.
   15




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RISKS
    RELATED TO OUR COMMON STOCK
  Shares
    eligible for future sale may affect the market price of our
    common shares.
      The
    market price of our securities may be volatile.
    Voting
    control and anti-takeover provisions reduce the likelihood that
    you will receive a takeover premium.
     16




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We do not
    anticipate paying dividends in the foreseeable future.
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.      Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.    PART II
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.      Sale PriceQuarter Ended

High


LowMarch 31, 2007


8.10



5.46June 30, 2007


7.20



5.07September 30, 2007


6.30



4.33December 31, 2007


7.99



5.54March 31, 2008


7.26



5.72June 30, 2008


7.49



4.65September 30, 2008


7.20



3.40December 31, 2008


4.79



1.06  17




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Dividends
    Securities
    Authorized for Issuance Under Equity Compensation
    Plans
  Form 10-K
  Recent
    Sales of Unregistered Securities
         18




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Item 6.
    Selected
    Financial Data.  Form 10-K.
  For the Year Ended December 31,2008


2007


2006


2005


2004Net sales

$
51,666,033


$
43,045,304


$
28,638,859


$
27,694,955


$
17,944,710Cost of sales


48,649,478



40,015,466



25,837,294



24,689,912



15,139,215Gross profit


3,016,555



3,029,838



2,801,565



3,005,043



2,805,495Income from continuing operations before interest expense and
    income taxes


(8,085,196
)


(3,608,353
)


(4,637,830
)


274,903



409,180Interest expense, net


(221,139
)


110,542



(62,851
)


198,095



197,658Income from continuing operations before income taxes


(7,864,057
)


(3,718,895
)


(4,574,979
)


76,808



211,522Income taxes


















Net income


(7,864,057
)


(3,718,895
)


(4,574,979
)


76,808



211,522Earnings per common share:Basic

$
(0.57
)

$
(0.32
)

$
(0.41
)

$
0.01


$
0.02Diluted

$
(0.57
)

$
(0.32
)

$
(0.41
)

$
0.01


$
0.02Weighted average number of common shares and common share
    equivalentsBasic


13,836,435



11,771,381



11,189,001



8,674,651



8,546,302Diluted


13,836,435



11,771,381



11,189,001



9,356,990



9,305,123   For the Year Ended December 31,2008


2007


2006


2005


2004Total assets

$
18,959,982


$
22,803,134


$
13,152,833


$
9,260,660


$
7,700,552Current assets


14,428,691



18,645,945



9,058,846



5,380,080



4,241,037Current liabilities


7,097,836



4,637,271



4,452,675



4,682,139



3,459,555Working capital


7,330,855



14,008,674



4,606,171



697,941



781,482Long-term debt


41,203



204,837



326,045



733,723



818,678Stockholders equity(1)


11,820,943



17,961,026



8,374,113



3,844,798



3,422,319Book value per outstanding common share

$
0.84


$
1.30


$
0.37


$
0.43


$
0.40Common shares outstanding


14,104,690



13,815,186



11,500,349



8,886,948



8,556,531     (1)
    
    There were no cash dividends paid during the periods presented. 19




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation.  Overview
    and Recent Developments
                 20




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Results
    of Operations
  For
    the year ended December 31, 2008 compared to the year ended
    December 31, 2007
  Sales
    Gross
    Profit
        Selling,
    General and Administrative Expenses
   21




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Research
    and Development
    Interest
    Expense, Net
    Income
    Tax Expense
    Critical
    Accounting Estimates and Judgments
      Revenue
    recognition
    Allowance
    for doubtful accounts
   22




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Impairments
    of long-lived assets
  Accounting for the Impairment or
    Disposal of Long-Lived Assets Goodwill and Other Intangible Assets,
    Accounting
    for income taxes
    Liquidity
    and Capital Resources
         23




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Foreign
    Currency Exchange Rate Risk
    Item 8.
    Financial
    Statements.    Item 9.
    Changes
    In and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
     24




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Form 10-K
  Managements
    Report on Internal Control Over Financial Reporting
            This Annual Report on
    Form 10-K
    includes an attestation report of the Companys registered
    public accounting firm regarding internal control over financial
    reporting.
  Changes
    in Internal Controls
   25




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Item 9B.
    Other
    Information.  Form 10-K
  PART III
  Item 10.
    Directors,
    Executive Officers and Corporate Governance.    Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    Number of securities to beissued upon exercise of


Weighted-average


Number of securities remainingoutstanding options,


exercise price of


available for future issuance underwarrants


outstanding options,


equity compensation plans (excludingand rights


warrants and rights


securities reflected in column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by security holders


4,063,031


$
3.44



435,000Equity compensation plans not approved by security holders










Total


4,063,031


$
3.44



435,000   Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.   26




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##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services.    Item 15.
    Exhibits.  (a) Exhibits
  000-23-661.
  3
.1

Amended and Restated Articles of Incorporation, dated as of June
    4, 2008 incorporated herein by reference to the quarterly report
    on Form 10-Q filed August 12, 2008.3
.2

Amended and Restated Bylaws of the Company, filed as an exhibit
    to the Companys Current Report on Form 8-K on November 25,
    2008 and incorporated herein by reference.4
.1

Form of Warrant, filed as an exhibit to the Companys
    Current Report on Form 8-K on December 4, 2007 and incorporated
    herein by reference.4
.2

RJ Aubrey Warrant Agreement, dated November 28, 2007, filed as
    an exhibit to the Companys Current Report on Form 8-K on
    December 4, 2007 and incorporated herein by reference.*10
.1

Rockwell Medical Technologies, Inc. 1997 Stock Option Plan,
    incorporated by reference to Rockwells Proxy Statement for
    the Annual Meeting of Shareholders filed with the Securities and
    Exchange Commission on April 17, 2006.10
.2

Lease Agreement dated March 12, 2000 between the Company and DFW
    Trade Center III Limited Partnership, incorporated by
    reference to the annual report on Form 10-KSB filed March 30,
    2000.10
.3

Lease Agreement dated October 23, 2000 between the Company and
    International-Wixom, LLC, incorporated by reference to the
    annual report on Form 10-KSB filed April 2, 2001.10
.4

Licensing Agreement between the Company and Charak LLC and
    Dr. Ajay Gupta dated January 7, 2002 (with certain
    portions of the exhibit deleted under a request for confidential
    treatment under Rule 24b-2 of the Securities Exchange Act of
    1934), incorporated by reference to the annual report on Form
    10-KSB filed April 1, 2002.10
.5

Supply Agreement between the Company and DaVita, Inc. dated
    March 7, 2003 (with certain portions of the exhibit deleted
    under a request for confidential treatment under Rule 24b-2 of
    the Securities Exchange Act of 1934), incorporated by reference
    to the annual report on
    Form 10-KSB
    filed March 28, 2003.10
.6

Supply Agreement between the Company and DaVita, Inc. dated May
    5, 2004 (with certain portions of the exhibit deleted under a
    request for confidential treatment under Rule 24b-2 of the
    Securities Exchange Act of 1934), incorporated by reference to
    the quarterly report on
    Form 10-QSB
    filed on May 17, 2004.10
.7

Loan and Security Agreement dated as of March 29, 2005 between
    the Company and Standard Federal Bank National Association,
    incorporated by reference to the annual report on
    Form 10-KSB
    filed March 31, 2005.10
.8

Revolving Note dated as of March 29, 2005 executed by the
    Company for the benefit of Standard Federal Bank National
    Association, incorporated by reference to the annual report on
    Form 10-KSB filed March 31, 2005.10
.9

Unconditional Guaranty dated as of March 29, 2005 executed by
    Rockwell Transportation, Inc. for the benefit of Standard
    Federal Bank National Association, incorporated by reference to
    the annual report on Form 10-KSB filed March 31, 2005.10
.10

Second Amendment of Industrial Lease Agreement between Rockwell
    Medical Technologies, Inc. and DCT DFW, LP dated August 17,
    2005, incorporated by reference to Exhibit 99.1 on Form 8-K
    filed on August 19, 2005. 27




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##### Table of Contents



10
.11

Amending Agreement made the 16th day of January, 2006, by
    and between Dr. Ajay Gupta, Charak LLC and Rockwell Medical
    Technologies, Inc., incorporated by reference to the annual
    report on Form 10-KSB filed March 31, 2006.10
.12

Letter dated March 29, 2006 from LaSalle Bank Midwest National
    Association to Rockwell Medical Technologies, Inc., incorporated
    by reference to Exhibit 99.1 to Form 8-K filed with the
    Securities and Exchange Commission on April 11, 2006.10
.13

Securities Purchase Agreement between Rockwell Medical
    Technologies, Inc. and Emerald Asset Advisors, LLC dated June
    22, 2006 incorporated by reference to Exhibit 10.1 on
    Form 8-K
    filed with the Securities and Exchange Commission on June 23,
    2006.10
.14

Registration Rights Agreement between Rockwell Medical
    Technologies, Inc. and Emerald Asset Advisors, LLC dated June
    22, 2006, incorporated by reference to Exhibit 10.2 on Form 8-K
    filed with the Securities and Exchange Commission on June 23,
    2006.10
.15

Letter dated March 23, 2007 from LaSalle Bank Midwest National
    Association to Rockwell Medical Technologies, Inc., incorporated
    by reference to the Annual Report on Form 10-KSB filed on March
    27, 2007.*10
.16

Rockwell Medical Technologies, Inc. 2007 Long Term Incentive
    Plan, incorporated by reference to the Proxy Statement for the
    Annual Meeting of Shareholders filed on April 18, 2007.10
.17

Consulting Agreement, dated as of October 3, 2007, filed as an
    exhibit to the Companys Current Report on Form 8-K on
    October 9, 2007 and incorporated herein by reference.10
.18

Common Stock Purchase Agreement dated November 28, 2007, between
    the Company and certain Purchasers, filed as an exhibit to the
    Companys Current Report on Form 8-K on December 4, 2007
    and incorporated herein by reference.10
.19

Registration Rights Agreement, dated November 28, 2007, between
    the Company and certain Purchasers, filed as an exhibit to the
    Companys Current Report on Form 8-K on December 4, 2007
    and incorporated herein by reference.*10
.20

Form of Nonqualified Stock Option Agreement (Director Version),
    filed as an exhibit to the Companys Current Report on Form
    8-K on December 20, 2007 and incorporated herein by reference.*10
.21

Form of Nonqualified Stock Option Agreement (Employee Version),
    filed as an exhibit to the Companys Current Report on Form
    8-K on December 20, 2007 and incorporated herein by reference.10
.22

Lease Agreement dated March 19, 2008 between the Company and EZE
    Management Properties Limited Partners filed as an exhibit to
    the Companys Annual Report on Form 10-K filed on March
    24,2008 and incorporated herein by reference.*10
.23

Amendment No. 1 to Rockwell Medical Technologies, Inc. 2007 Long
    Term Incentive Plan, filed as an exhibit to the Companys
    Current Report on Form 8-K on May 30, 2008 and incorporated
    herein by reference.10
.24

Advisory Agreement dated May 28, 2008 between the Company and
    Capitol Securities Management, Inc. filed as an exhibit to the
    quarterly report on Form 10-Q filed on August 12, 2008 and
    incorporated herein by reference.10
.25

Mutual Release and Settlement Agreement dated September 24, 2008
    by and among the Company, FWLL, LLC and ST Holdings, Inc filed
    as an exhibit to the quarterly report on Form 10-Q  filed
    on November 13, 2008 and incorporated herein by reference.10
.26

Advisory Agreement dated September 30, 2008 between the Company
    and RJ Aubrey IR Services LLC filed as an exhibit to the
    quarterly report on Form 10-Q filed on November 13, 2008 and
    incorporated herein by reference.10
.27

Advisory Agreement dated November 5, 2008 between the Company
    and Emerald Asset Advisors, LLC filed as an exhibit to the
    quarterly report on Form 10-Q filed on November 13, 2008 and
    incorporated herein by reference.*10
.28

Form of  Restricted Stock Award Agreement (Executive Version),
    filed as an exhibit to the Companys Current Report on Form
    8-K on November 25, 2008 and incorporated herein by reference. 28




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##### Table of Contents



10
.29

Amendment to Advisory Agreement dated November 21, 2008 between
    the Company and Emerald Asset Advisors, LLC.10
.30

Lease Renewal dated August 21, 2008 between the Company and
    International-Wixom, LLC with respect to the Lease Agreement
    dated March 12, 2000.10
.31

Second Amendment dated November 18, 2008 to the Supply
    Agreement between the Company and DaVita, Inc. dated May 5,
    2004 (with certain portions of the exhibit deleted under a
    request for confidential treatment under Rule
    24b-2 of the
    Securities Exchange Act of 1934).14
.1

Rockwell Medical Technologies, Inc. Code of Ethics, incorporated
    by reference to the Definitive Proxy Statement for the 2004
    Annual Meeting of Shareholders filed April 23, 2004.21
.1

List of Subsidiaries, incorporated by reference to Exhibit 21.1
    to the Companys Registration Statement on Form SB-2, File
    No. 333-31991.23
.1

Consent of Plante & Moran, PLLC.31
.1

Certification of Chief Executive Officer Pursuant to Rule
    13a-14(a).31
.2

Certification of Chief Financial Officer Pursuant to Rule
    13a-14(a).32
.1

Certification of the Chief Executive Officer and Chief Financial
    Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted
    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Current management contracts or compensatory plans or
    arrangements. 29




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SIGNATURES
       By:
    /s/  ROBERT
    L. CHIOINI         Signature

Title

Date/s/  ROBERT
    L. CHIOINIRobert
    L. Chioini

President, Chief Executive Officer and Director (Principal
    Executive Officer)

March 16, 2009/s/  THOMAS
    E. KLEMAThomas
    E. Klema

Vice President of Finance, Chief Financial Officer, Treasurer
    and Secretary (Principal Financial Officer and Principal
    Accounting Officer)

March 16, 2009/s/  KENNETH
    L. HOLTKenneth
    L. Holt

Director

March 16, 2009/s/  RONALD
    D. BOYDRonald
    D. Boyd

Director

March 16, 2009/s/  PATRICK
    J. BAGLEYPatrick
    J. Bagley

Director

March 16, 2009  30




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##### 



INDEX TO
    FINANCIAL STATEMENTS
   
 PAGEI. Consolidated Financial Statements for Rockwell Medical
    Technologies, Inc. and SubsidiaryReports of Independent Registered Accounting
    Firm


F-1 - F-2Consolidated Balance Sheets at December 31,
    2008 and December 31, 2007


F-3Consolidated Income Statement for the years ended
    December 31, 2008 and 2007


F-4Consolidated Statement of Changes in
    Shareholders Equity for the years ended December 31,
    2008 and 2007


F-5Consolidated Statements of Cash Flow for the
    years ended December 31, 2008 and 2007


F-6Notes to the Consolidated Financial Statements


F-7 - F-19EX-10.29EX-10.30EX-10.31EX-23.1EX-31.1EX-31.2EX-32.1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             
    F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                 
    F-2




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  CONSOLIDATED
    BALANCE SHEETS
  As of December 31, 2008 and December 31, 2007
  December 31,


December 31,2008


2007ASSETSCash and Cash Equivalents

$
5,596,645


$
11,097,092Accounts Receivable, net of a reserve of $97,000 in 2008 and
    $69,000 in 2007


5,229,656



4,687,229Inventory


3,161,625



2,559,051Other Current Assets


440,765



302,573Total Current Assets


14,428,691



18,645,945Property and Equipment, net


3,249,003



2,840,331Intangible Assets


240,656



270,446Goodwill


920,745



920,745Other Non-current Assets


120,887



125,667Total Assets

$
18,959,982


$
22,803,134LIABILITIES AND SHAREHOLDERS EQUITYNotes Payable & Capitalized Lease Obligations

$
176,850


$
194,239Accounts Payable


5,210,972



2,982,899Accrued Liabilities


1,464,828



1,122,737Customer Deposits


245,186



337,396Total Current Liabilities


7,097,836



4,637,271Long Term Notes Payable & Capitalized Lease Obligations


41,203



204,837Shareholders Equity:Common Shares, no par value, 14,104,690 and
    13,815,186 shares issued and outstanding


34,799,093



33,415,106Common Share Purchase Warrants, 2,114,169 and 1,204,169 warrants
    issued and outstanding


3,378,398



3,038,411Accumulated Deficit


(26,356,548
)


(18,492,491
)Total Shareholders Equity


11,820,943



17,961,026Total Liabilities And Shareholders Equity

$
18,959,982


$
22,803,134    F-3




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  CONSOLIDATED
    INCOME STATEMENTS
  For The Years Ended December 31, 2008 and 2007
 (Whole Dollars)
  2008


2007Sales

$
51,666,033


$
43,045,304Cost of Sales


48,649,478



40,015,466Gross Profit


3,016,555



3,029,838Selling, General and Administrative


7,271,617



3,374,458Research and Product Development


3,830,134



3,263,733Operating Income (Loss)


(8,085,196
)


(3,608,353
)Interest (Income) Expense, net


(221,139
)


110,542Income (Loss) Before Income Taxes


(7,864,057
)


(3,718,895
)Income Tax Expense






Net Income (Loss)

$
(7,864,057
)

$
(3,718,895
)Basic And Diluted Earnings (Loss) Per Share

$
(.57
)

$
(.32
)    F-4




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  CONSOLIDATED
    STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
  For The Years Ended December 31, 2008 and 2007
 (Whole Dollars)
  TotalCommon Shares


Purchase Warrants


Accumulated


ShareholdersShares


Amount


Warrants


Amount


Deficit


EquityBalance as of December 31, 2006


11,500,349


$
23,147,709



-0-



-0-


$
(14,773,596
)

$
8,374,113Issuance of Common Shares


2,314,837



10,209,459















10,209,459Issuance of Purchase Warrants










1,204,169



3,038,411







3,038,411Stock Option Based Expense






57,938















57,938Net Loss


















(3,718,895
)


(3,718,895
)Balance as of December 31, 2007


13,815,186


$
33,415,106



1,204,169



3,038,411


$
(18,492,491
)

$
17,961,026Issuance of Common Shares


289,504



268,757















268,757Issuance of Purchase Warrants










910,000



339,987







339,987Stock Option Based Expense






1,097,432















1,097,432Restricted Stock Amortization






17,798















17,798Net Loss


















(7,864,057
)


(7,864,057
)Balance as of December 31, 2008


14,104,690


$
34,799,093



2,114,169


$
3,378,398


$
(26,356,548
)

$
11,820,943    F-5




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For The Years Ended December 31, 2008 and 2007
 (Unaudited)
  2008


2007Cash Flows From Operating Activities:Net (Loss)

$
(7,864,057
)

$
(3,718,895
)Adjustments To Reconcile Net Loss To Net Cash Used In Operating
    Activities:Depreciation and Amortization


911,718



949,739Share Based Compensation  Non-employee warrants


339,987



85,911Share Based Compensation  Employees


1,115,231



57,938Loss (Gain) on Disposal of Assets


(7,534
)


17,710Changes in Assets and Liabilities:(Increase) in Accounts Receivable


(542,427
)


(1,212,827
)(Increase) Decrease in Inventory


(602,574
)


101,047(Increase) in Other Assets


(133,412
)


(39,142
)Increase in Accounts Payable


2,228,073



62,641Increase in Other Liabilities


286,497



297,267Changes in Assets and Liabilities


1,236,157



(791,014
)Cash (Used) In Operating Activities


(4,268,498
)


(3,398,611
)Cash Flows From Investing Activities:Purchase of Equipment


(1,268,498
)


(924,608
)Proceeds on Sale of Assets


9,555



Purchase of Intangible Assets


(903
)


(8,189
)Cash (Used ) In Investing Activities


(1,259,846
)


(932,797
)Cash Flows From Financing Activities:Proceeds From Borrowings on Line of Credit






1,800,000Payments on Line of Credit






(1,800,000
)Issuance of Common Shares and Purchase Warrants


232,140



13,161,959Payments on Notes Payable


(204,243
)


(396,332
)Cash Provided By Financing Activities


27,897



12,765,627Increase (Decrease) In Cash


(5,500,447
)


8,434,219Cash At Beginning Of Period


11,097,092



2,662,873Cash At End Of Period

$
5,596,645


$
11,097,092Supplemental Cash Flow disclosure   2008

2007Interest Paid

$
52,361


$
159,444Non-Cash Investing and Financing Activity  Equipment
    Acquired Under
    Capital Lease Obligations

$
23,220


$
99,812    F-6




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Description
    of Business        2.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
      Revenue
    Recognition
      Shipping
    and Handling Revenue and Costs
      Cash
    and Cash Equivalents
    Accounts
    Receivable
   F-7




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Inventory
  first-in
  Property
    and Equipment
    Licensing
    Fees
    Goodwill,
    Intangible Assets and Long Lived Assets
        Income
    Taxes
   F-8




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Research
    and Product Development
      Share
    Based Compensation
      Net
    Earnings per Share
    2008


2007Basic Weighted Average Shares Outstanding


13,836,435



11,771,381Effect of Dilutive Securities


-0-



-0-Diluted Weighted Average Shares Outstanding


13,836,435



11,771,381      F-9




---



##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair
    Market Value Measurements
    Level 1:
    Quoted prices (unadjusted) in active markets that are accessible
    at the measurement date for assets or liabilities. The fair
    value hierarchy gives the highest priority to Level 1
    inputs.Level 2:
    Observable prices that are based on inputs not quoted on active
    markets, but corroborated by market data.Level 3:
    Unobservable inputs are used when little or no market data is
    available. The fair value hierarchy gives the lowest priority to
    Level 3 inputs.          Estimates
    in Preparation of Financial Statements
    3.
    Managements
    Plan of Action   F-10




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            4.
    Significant
    Market Segments   F-11




---



##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Inventory    2008


2007Raw Materials

$
1,316,875


$
1,096,191Work in Process


291,937



75,167Finished Goods


1,552,813



1,387,693Total

$
3,161,625


$
2,559,051   6.
    Property
    and Equipment    2008


2007Leasehold Improvements

$
279,382


$
229,941Machinery and Equipment


4,605,251



4,333,693Information Technology & Office Equipment


1,433,830



519,278Laboratory Equipment


365,515



339,380Transportation Equipment


407,802



389,4777,091,780



5,811,770Accumulated Depreciation


(3,842,777
)


(2,971,439
)Net Property and Equipment

$
3,249,003


$
2,840,331       7.
    Goodwill
    and Intangible Assets           F-12




---



##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    8.
    Line of
    Credit    9.  Notes Payable &
    Capital Lease Obligations
  Notes
    Payable
    Capital
    Lease Obligations
      Year ending December 31, 2009

$
188,783Year ending December 31, 2010


35,868Year ending December 31, 2011


6,782Total minimum payments on capital lease obligations


231,433Interest


(13,380
)Present value of minimum lease payments


218,053Current portion of capital lease obligations


(176,850
)Long-term capital lease obligations

$
41,203   10.
    Operating
    Leases     F-13




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year ending December 31, 2009

$
1,864,864Year ending December 31, 2010


1,540,904Year ending December 31, 2011


786,236Year ending December 31, 2012


649,737Year ending December 31, 2013


100,897Thereafter


4,392Total

$
4,947,030   11.
    Income
    Taxes      2008


2007Tax Expense Computed at 34% of Pretax Income

$
(2,674,000
)

$
(1,264,000
)Effect of Permanent Differences Principally Related to
    Non-deductible expenses






Effect of Change in Valuation Allowance


(2,674,000
)


(1,264,000
)Total Income Tax Benefit

$
-0-


$
-0-     2008


2007Total Deferred Tax Assets

$
9,090,000


$
6,092,000Total Deferred Tax Liabilities


(432,000
)


(379,000
)Valuation Allowance Recognized for Deferred Tax Assets


(8,658,000
)


(5,713,000
)Net Deferred Tax Asset

$
-0-


$
-0-        F-14




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    12.
    Capital
    Stock          Common
    Shares
    Warrants
       F-15




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Exercise Price

Expiration Date

2008


2007$ 7.18

11/28/2012


1,079,169



1,079,169$ 1.99

11/5/2011


300,000



$ 4.54

11/5/2011


200,000



$ 7.00

11/5/2011


200,000



$ 9.00

5/28/2012


100,000



$ 7.00

10/3/2011


90,000



45,000$10.00

11/28/2012


80,000



80,000$ 7.50

10/3/2011


45,000



$ 6.50

9/30/2012


20,000



Total




2,114,169



1,204,169   13.
    Long Term
    Incentive Plan & Stock Options  Long
    Term Incentive Plan & Stock Options
         F-16




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      WeightedAverage


AggregateExercise


IntrinsicShares


Price


ValueOutstanding at December 31, 2006


3,219,235



2.68


$
14,313,218Granted


785,000



6.43Exercised


(156,500
)


3.03


$
342,853Cancelled


(40,700
)


5.26Outstanding at December 31, 2007


3,807,035



3.42


$
14,034,941Granted


495,000



3.75Exercised


(139,504
)


1.66


$
308,740Cancelled


(99,500
)


6.16Outstanding at December 31, 2008


4,063,031



3.44


$
4,557,158   Options ExercisableOptions Outstanding





WeightedRemaining


Weighted


Number


AverageRange of

Number of


Contractual


Exercise


of


ExerciseExercise Prices

Options


Life


Price


Options


Price$.55 to $1.50


529,763



2.0-4.0 yrs.


$
.64



529,763


$
.64$1.81 to $2.79


1,308,268



.1-6.5 yrs.


$
2.26



1,308,268


$
2.26$3.00 to $4.55


1,455,000



4.7-9.9 yrs.


$
3.96



1,060,000


$
4.28$5.87 to $6.50


770,000



8.8-9.6 yrs.


$
6.40



223,333


$
6.45Total


4,063,031



6.1 yrs.


$
3.44



3,121,364


$
2.97Intrinsic Value

$
4,991,658










$
4,557,158   F-17




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  WeightedAverageNumber of


Fair MarketUnvested


Value AtOptions


Grant DateAs of December 31, 2006


Granted


785,000


$
4.37Forfeited


(30,000
)Vested As of December 31, 2007


755,000Granted


495,000


$
2.33Forfeited


(85,000
)Vested


(223,333
)As of December 31, 2008


941,667   67-73%
  Share-Based Payment,
       F-18




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##### Table of Contents



ROCKWELL
    MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  14.
    Recent
    Accounting Pronouncements  Business Combinations
 F-19