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Nephros Announces Closing of $1.2 Million Note and Warrant Offering

RIVER EDGE, NJ, June 9, 2016 /Issuer’s Direct/ — Nephros, Inc. (OTCQB:NEPH) (the “Company”), a commercial stage medical device company that develops and sells high performance liquid purification ultrafilters and an on-line mid-dilution hemodiafiltration system for use with a hemodialysis machine for the treatment of patients with end stage renal disease, announced today that it has completed a private placement of unsecured promissory notes  and warrants to purchase the Company’s common stock resulting in total gross proceeds to the Company of approximately $1.2 million.

The outstanding principal under the notes accrues interest at a rate of 11% per annum.  The Company is required to make interest only payments on a semi-annual basis, and all outstanding principal under the notes is repayable in cash on the third anniversary of the date of issuance. In addition to the promissory notes, the Company issued to the investors warrants to purchase approximately 2.4 million shares of common stock. The warrants have an exercise price of $0.30 per share and are exercisable for 5 years from the issuance date.

“We expect to see the initial revenue impact of our new products in the third quarter with significant growth through the end of this year,” said Daron Evans, President and Chief Executive Officer of the Nephros.  “We appreciate the continued support of our investors to provide working capital as we progress toward becoming a cash-flow positive company.”

The securities offered in the private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. The securities were offered only to accredited investors.

This release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state.

Further details of the placement will be described in a Current Report on Form 8-K to be filed with the SEC by the Company and all of the transaction documents will be attached to the Form 8-K.

About Nephros, Inc.
Nephros is a commercial stage medical device company that develops and sells high performance liquid purification filters, as well as a hemodiafiltration system for the treatment of patients with End Stage Renal Disease. Its filters, which it calls ultrafilters, are used primarily in medical applications. Nephros ultrafilters are used by dialysis centers for the removal of biological contaminants from the water and bicarbonate concentrate feeding hemodialysis devices. Additionally, Nephros ultrafilters are used in hospitals and medical clinics as an aid in infection control by retaining bacteria (i.e. Legionella, Pseudomonas), virus and endotoxin from water used by patients.

For more information about Nephros, please visit the company’s website at www.nephros.com.

Forward-Looking Statements
This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding the Company’s ability to generate positive cash flows, expected revenue from new products and other statements that are not historical facts, including statements which may be accompanied by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words.  Actual results could differ materially from those described in these forward-looking statements due to certain factors, including potential delays in the regulatory approval process, changes in business, economic and competitive conditions, the availability of capital when needed, our dependence on third party manufacturers, regulatory reforms, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Nephros Inc.’s reports filed with the U.S. Securities and Exchange Commission, including with respect to Nephros, its Annual Report on Form 10-K for the year ended December 31, 2015.  Nephros, Inc. does not undertake any responsibility to update the forward-looking statements in this release.

Contact:

Investor:
PCG Advisory Group
Kirin M. Smith, Chief Operating Officer
Direct: 646-863-6519
www.pcgadvisory.com