RIVER EDGE, NJ, August 08, 2016 — 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 (“HDF”) system for use with a hemodialysis machine for the treatment of patients with end stage renal disease, today announced financial results for the three months ended June 30, 2016.
“We continue to expect growth ahead. While disappointed by our second quarter results, which we believe do not reflect the progress we have made over the last year, we expect our hospital filter business to grow significantly by the fourth quarter versus the second quarter, as we ramp up production of our point-of-use filters,” said Daron Evans, President and Chief Executive Officer of Nephros. “Pending 510(k) clearance on our EndoPurTM, we also expect our dialysis filter business to grow significantly over the subsequent few quarters. We are optimistic that our upcoming meeting with the FDA will clarify our path to clearance.”
“We reiterate our primary goal of achieving positive cash flow by the end of the year. However, achievement of this goal is dependent upon the timing of the launch of the EndoPurTM dialysis filters. Even with potential delays, we believe that we have the balance sheet runway to achieve our goal to be cash flow positive without the need for additional capital,” Mr. Evans concludes.
The Company expects to ship the first large production lot of S100 point-of-use water filters to customers before the end of August, and to ramp up to full production levels by October. The full revenue impact of the S100 is expected to occur in the fourth quarter.
EndoPur™ and PathoGuard™
Both the EndoPur™ 10” and PathoGuard™ 10” cartridge products are currently being reviewed for Special 510(k) clearance by the FDA. The Company received questions from the FDA on both submissions, and given the similarities of questions received from the FDA on both products, the Company requested a meeting to more expeditiously resolve these questions. The meeting is scheduled for August 15th.
The EndoPur™ 20”, 30” and 40” cartridge products are currently being reviewed for 510(k) clearance by the FDA. Pending FDA clearance, the Company intends to launch these products in the fourth quarter.
Financial Performance for the Quarter Ended March 31, 2016
Total revenues for the quarter ended June 30, 2016 were approximately $509,000, compared to approximately $567,000 for the quarter ended June 30, 2015. Total operating expenses for the quarter ended June 30, 2016 were approximately $1,114,000, compared to approximately $952,000 for the quarter ended June 30, 2015.
Net cash used in operating activities for the quarter ended June 30, 2016 was approximately $272,000, compared to $534,000 for the quarter ended June 30, 2015. As of June 30, 2016, Nephros had cash and cash equivalents of approximately $1,602,000.
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 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.
This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding the Company’s expectations and beliefs as to revenue growth and cash flow; the S100 Point-of-Use, including the expectations regarding revenue impact; the EndoPur™ and the PathoGuard™, including the eligibility for and timing of 510(k) clearances, and the timing of commercial launch; 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.
PCG Advisory Group
Kirin M. Smith, Chief Operating Officer