Full Press Release Details
Completes Bridge Financing and Announces Stockholder Rights
EDGE, NJ, October 1, 2010 /PRNewswire-FirstCall/ -- Nephros, Inc. (OTC Bulletin
Board:NEPH - News), a medical device company developing and marketing filtration
products for therapeutic applications, infection control, and water
purification, today announced that the company has entered into a bridge
financing agreement with Lambda Investors LLC and has filed a registration
statement for a rights offering to its stockholders. Wexford Capital
LP is the managing member of Lambda Investors.
October 1, 2010, the company issued a six-month senior secured note to Lambda
Investors in the principal amount of $500,000. The company expects
that the proceeds from the note will allow it to fund its operations into
required under the terms of the note, the company has undertaken to conduct a
rights offering to raise $3,500,000 from its existing
stockholders. All of the company's stockholders as of the record date
for the rights offering, which date will be determined by the company at a later
date, will be eligible to participate in the rights offering on a pro rata
basis. Pursuant to the rights offering, Nephros is offering up to 175
million units at a price of $0.02 per unit. Stockholders will have
the right to purchase 4.185496618 units for each share of Nephros stock
owned. Each unit consists of one share of common stock and a warrant
to purchase 0.924532845 shares of common stock at an exercise price of $0.02 per
share for a period of five years. Lambda Investors' loan terms
included its agreement to surrender for cancellation up to approximately 50% of
its existing warrants, after giving effect to the full ratchet anti-dilutive
adjustment contained in those warrants that will be triggered by the rights
offering. The number of cancelled Lambda warrants will be equal to
the aggregate number of shares underlying the warrants issued in the rights
offering. The term of the remaining Lambda Investors warrants will be
increased to a five-year term, which is equal to the term of the warrants to be
issued in the rights offering.
connection with the proposed rights offering, Nephros has filed a registration
statement on Form S-1 (File No. 333-169728), as may be amended, with the
Securities and Exchange Commission (the "SEC"), which registration statement has
not yet become effective. The securities offered in the rights
offering may not be sold, nor may offers to buy be accepted, prior to the time
the registration statement becomes effective. This press release
shall not constitute an offer to sell or the solicitation of an offer to buy,
nor shall there be any sale of these securities, in any state in which such
offer, solicitation or sale would be unlawful prior to their registration or
qualification under the securities laws of any such state. The
securities may only be offered by means of a prospectus, copies of which may be
obtained (when available) free of charge at the website maintained by the SEC at
www.sec.gov or by contacting the Company's Chief Financial Officer at (201)
343-5202. The prospectus will contain important information about the
rights offering, and the company's stockholders are urged to read the prospectus
carefully when available.
Inc., headquartered in River Edge, New Jersey, is a medical device company
developing and marketing filtration products for therapeutic applications,
infection control, and water purification.
Nephros hemodiafiltration ("HDF") system is designed to improve the quality of
life for the End-Stage Renal Disease (ESRD) patient while addressing the
critical financial and clinical needs of the care provider. ESRD is a disease
state characterized by the irreversible loss of kidney function. The Nephros HDF
system removes a range of harmful substances more effectively, and with greater
capacity, than existing ESRD treatment methods, particularly with respect to
substances known collectively as "middle molecules." These molecules have been
found to contribute to such conditions as dialysis-related amyloidosis, carpal
tunnel syndrome, degenerative bone disease and, ultimately, mortality in the
ESRD patient. Nephros ESRD products are sold and distributed throughout
Nephros Dual Stage Ultrafilter (DSU) is the basis for the Nephros line of water
filtration products. The patented dual stage cold sterilization ultrafilter has
the capability to filter out bacteria and, due to its exceptional filtration
levels, filter out many viruses, parasites and biotoxins. Nephros's DSUs are
being evaluated at several major U.S. medical centers for infection control. The
DSU has also been selected for further development by the U.S. Marine Corps for
purification of drinking water by soldiers in the field.
information about Nephros, please visit the company's website at
in this news release that are not historical facts constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "PSLRA"). Such statements may be preceded by words such as "may,"
"plans," "expects," "believes," "hopes," "potential" or similar words. For such
statements, Nephros claims the protection of the PSLRA.
statements are not guarantees of future performance, are based on assumptions
and are subject to various known and unknown risks and uncertainties, many of
which are beyond Nephros' control. Actual results may differ materially from the
expectations contained in the forward-looking statements. Factors that may cause
such differences include the risks that Nephros may not be able: (i) to complete
the rights offering; (ii) to continue as a going concern; (iii) to obtain
additional funding when needed or on favorable terms; (iv) to obtain appropriate
or necessary governmental approvals to achieve its business plan or effectively
market its products; (v) to have its technologies and products accepted in
current or future target markets; (vi) to demonstrate in pre-clinical or
clinical trials the anticipated efficacy, safety or cost savings of products
that appeared promising to Nephros in research or clinical trials; or (vii) to
secure or enforce adequate legal protection, including patent protection, for
its products. More detailed information about Nephros and the risk factors that
may affect the realization of forward-looking statements is set forth in
Nephros' filings with the SEC. Investors and security holders are
encouraged to read these documents on the SEC's website at http://www.sec.gov/.
Nephros does not undertake to publicly update or revise its forward-looking
statements as a result of new information, future events or otherwise except as