RIVER EDGE, NJ, May 19, 2015 /Businesswire/ — Nephros, Inc. (OTCQB:NEPH), 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 closed its previously announced private placement offering for gross proceeds of approximately $1.23 million, wherein the Company issued approximately 1.83 million shares of the Company’s common stock, and 5 year warrants to purchase approximately 0.92 million shares of common stock at $0.85 per share.
RIVER EDGE, NJ, May 15, 2015 /Businesswire/ — Nephros, Inc. (OTCQB:NEPH), a commercial stage medical device company that develops and sells high performance liquid purification ultrafilters and an on-line mid-dilution hemodiafiltration (HDF) system for use with a hemodialysis machine for the treatment of patients with end stage renal disease, announced today financial results for the three months ended March 31, 2015.
“Nephros realized its best quarter to date with regard to revenue from product sales, posting a 140% increase over the first quarter of 2014. We have been focused on supporting the efforts of our distribution partners, who are leading the efforts in water safety in the US healthcare industry,” said Daron Evans, President and Chief Executive Officer of Nephros. “With the VHA Directive on Legionella and the pending adoption of the ASHRAE 188 WHO guidelines on waterborne pathogens, we are seeing increased market demand for filtration as part of a multi-barrier approach to water safety. Our recent 510K Clearance of our in-line water filters for use in aiding hospital infection control plays a key role in this environment. We expect continued momentum throughout 2015. To date in the current quarter, we have already exceeded our product sales from the second quarter of 2014 with half of the quarter remaining. ”
“In the dialysis services market, we will be working with our current partners to expand the number of US patients who have access to our HDF technology. Additionally, later this year we intend to place additional OLp?r H2H Modules in additional dialysis clinics to increase our exposure to the dialysis community and to enhance our understanding of the clinical and economic benefits of our system.”
“We expect to close our recently announced $1.2 million private placement shortly. After many years of rights offerings, we are pleased to return to a conventional funding process. Our goal is to grow product revenues sufficiently to generate positive cash flow, allowing us to properly invest in our product portfolio and monetize asset value for shareholders.”
Financial Performance for the First Quarter Ended March 31, 2015
Total revenue for the quarter ended March 31, 2015, were approximately $527,000 compared to approximately $473,000 for the first quarter of 2014. Revenue from product sales increased 140%, while revenue from fees and other payments received under our licensing arrangements decreased by approximately $237,000 to $17,000. The decrease primarily relates to a change in the amortization of the Bellco license fee in 2015 versus the first quarter in 2014 after entering into the First Amendment to the Bellco License Agreement. Total operating expenses for the quarter ended March 31, 2015, were approximately $1,088,000 compared to approximately $929,000 for the first quarter of 2014. The 17% increase in operating expenses were driven by CEO severance costs, increased sales commission, increased expenses relating to our OLp?r H2H Module, and increased professional services fees. These expenses were partially offset by a decrease in stock based compensation expense and legal fees. Net operating loss for the quarter ended March 31, 2015, was approximately $806,000 compared to a loss of approximately $562,000 in the first quarter 2014. As of March 31, 2015, Nephros had cash and cash equivalents of approximately $367,000.
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 kidney disease. Its filters, which it calls ultrafilters, are primarily used in dialysis centers and hospitals for the removal of biological contaminants from water, bicarbonate concentrate and/or blood.
Nephros was founded in 1997 by healthcare professionals affiliated with Columbia University Medical Center/New York-Presbyterian Hospital to develop and commercialize a hemodiafiltration system, an alternative method to hemodialysis. Since its founding, the company has extended its filtration technologies to meet the demand for liquid purification in other areas, in particular water purification.
For more information about Nephros and its products, please visit the company’s website at www.nephros.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding our expected financial and operational performance in future financial periods, including our anticipated revenue for the quarter ending June 30, 2015, our ability to expand patient access to our HDF products, our plan to expand the number of dialysis clinics using our OLp?r H2H Modules, the expected timing of closing the sale of the shares and warrants, our plan to grow revenues sufficient to generate positive cash flow, 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 changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, 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, 2014. Nephros, Inc.does not undertake any responsibility to update the forward-looking statements in this release.
PCG Advisory Group
Kirin M. Smith, Chief Operating Officer