Nephros, Inc. 380 Lackawanna Place South Orange NJ 07079 Call:201 343 5202 nephros.com Nephros Announces Fourth Quarter and Fiscal Year 2023 Financial Results Full-Year Net Revenue of $14.2 Million and Fourth-Quarter Net

Announces Fourth Quarter and Fiscal Year 2023 Financial Results

Net Revenue of $14.2 Million and Fourth-Quarter Net Revenue of $3.3 Million

ORANGE, NJ, March 7, 2024 - Nephros, Inc. (Nasdaq: NEPH), a leading water technology company providing filtration solutions

to the medical and commercial markets, today announced financial results for the fourth quarter and fiscal year ended December 31, 2023.

Quarter Ended December 31, 2023.

was an exciting year for Nephros. With freshly streamlined operations and a refocus on filtration, we grew sales 43% for the full year,"

said Robert Banks, President and Chief Executive Officer. "Additionally, new water management guidance, such as ASHRAE 514, has

enabled our expanded salesforce to propel Nephros solutions to the front of the line within healthcare facilities. We believe our infection

control water filters are well-positioned to fulfill the latest directive recommendations and serve broadened customer needs."

my view, our ability to leverage the current regulatory landscape has been a significant driver of growth, as well as our active engagement

of new partners and strengthening of existing relationships," remarked Mr. Banks. "Further, we have enacted a series of deliberate

and transformative operational improvements to our supply chain management and consolidated expansion of our corporate footprint. Among

these improvements was the opening of our new warehouse space in the fourth quarter, which has enabled us to increase delivery efficiency

while supporting growing sales and solving the challenge of significant inventory expansion. Another enhancement was the extension of

our supplier production agreement, which helps ensure an uninterrupted source of product."

Banks continued, "I am very excited about the momentum we have built and am buoyed by the tailwinds created as a result of more

stringent water safety standards along with heightened awareness of microbiological proliferation. I look forward to sharing future products,

tools and key partnerships as they develop."

Performance for the Fourth Quarter and Year Ended December 31, 2023

revenue from continuing operations for the year ended December 31, 2023 was $14 million, compared with $10 million in 2022, an increase

of 43%. Net revenue for the fourth quarter of 2023 was $3.3 million, compared with $2.6 million in the fourth quarter of 2022, an increase

of goods sold for the year ended December 31, 2023 was $5.8 million, compared with $5.2 million in 2022, an increase of 11%. Cost of

goods sold for the fourth quarter of 2023 was $1.2 million, compared with $1 million in the fourth quarter of 2022, an increase of 18%.

margin for the year ended December 31, 2023 was 59%, compared with 47% in 2022. Gross margin for the fourth quarter of 2023 was 62%,

compared with 59% in the fourth quarter of 2022.

general and administrative expenses for the year ended December 31, 2023 were $8.9 million, compared with $7.6 million in 2022, an increase

of 17%. Selling, general and administrative expenses for the fourth quarter of 2023 were approximately $2.4 million, compared with $1.8

million in 2022, an increase of 35%.

and development expenses for the year ended December 31, 2023 were $0.9 million, compared with $1.3 million in 2022 a decrease of 30%.

Research and development expenses for the fourth quarter of 2023 were $0.2 million, compared with $0.4 million in the fourth quarter

of 2022, a decrease of 42%.

and amortization expenses for the year ended December 31, 2023 were approximately $214,000, compared with approximately $218,000 in 2022,

a decrease of 2%. Depreciation and amortization expenses for the fourth quarter of 2023 were approximately $51,000, compared with approximately

$56,000 in the fourth quarter of 2022, a decrease of 9%.

loss from continuing operations for the year ended December 31, 2023 was ($1.6 million), compared with a net loss of ($4.3 million) in

2022, a 63% decrease in loss. Net loss from continuing operations for the fourth quarter of 2023 and 2022 was approximately ($0.7 million)

EBITDA loss from continuing operations for the year ended December 31, 2023 was ($0.1 million), compared with ($2.4 million) in 2022.

Adjusted EBITDA loss from continuing operations for the fourth quarter 2023 was approximately ($0.1 million), compared with approximately

($0.5 million) in the fourth quarter of 2022.

of December 31, 2023, Nephros had cash and cash equivalents of approximately $4.3 million, compared to $3.6 million as of December 31,

2022, and remains debt free.

EBITDA Definition and Reconciliation to GAAP Financial Measures

EBITDA loss from continuing operations is calculated by taking net loss from continuing operations calculated in accordance with generally

accepted accounting principles ("GAAP") and excluding all interest-related expenses and income, tax-related expenses and

income, non-recurring expenses and income, and non-cash items, including depreciation, amortization, non-cash inventory impairments,

and write-offs, and non-cash compensation. The following table presents a reconciliation of Adjusted EBITDA loss from continuing operations

to net loss from continuing operations, the most directly comparable GAAP financial measure, for the fourth quarter of the 2023 and 2022

believes that Adjusted EBITDA loss from continuing operations provides useful information to management and investors regarding certain

financial and business trends relating to Nephros' financial condition and results of operations. Management does not consider

Adjusted EBITDA loss from continuing operations in isolation or as an alternative to financial measures determined in accordance with

GAAP. The principal limitation of Adjusted EBITDA loss from continuing operations is that it excludes significant expenses and income

that are required by GAAP to be recognized in Nephros' financial statements. In addition, Adjusted EBITDA loss from continuing

operations is subject to inherent limitations as it reflects the exercise of judgments by management about which expenses and income

are excluded or included in determining Adjusted EBITDA loss from continuing operations. To compensate for these limitations, management

presents Adjusted EBITDA loss from continuing operations in connection with net loss from continuing operations, the most directly comparable

GAAP financial measure. Nephros urges investors to review the reconciliation of Adjusted EBITDA loss from continuing operations to net

loss from continuing operations and not to rely on any single financial measure to evaluate the business.

Call Today at 4:30pm Eastern Time

will host a conference call today at 4:30pm ET, during which management will discuss Nephros' financial results and provide a general

may dial into the call as follows:

access: 1 (844) 808-7106

access: 1 (412) 317-5285

joining, please ask to be joined into the Nephros conference call.

audio archive of the call will be available shortly after the call on the Nephros Investor Relations page.

a replay of the call may be accessed until March 14th, 2024 at 1 (877) 344-7529 or

(412) 317-0088 for international callers and entering replay access code: 3916556.

is committed to improving the human relationship with water through leading, accessible technology. We provide innovative water filtration

products and services, along with water-quality education, as part of an integrated approach to water safety. Nephros goods serve the

needs of customers within healthcare and commercial markets, offering both proactive and emergency solutions for water management.

more information about Nephros, please visit nephros.com.

release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding

Nephros' expected revenue and cash flows for the quarter and year ended December 31, 2023, expected future revenue growth and the

timing of such growth, the effect of new regulations on future revenue growth, Nephros' ability to appropriately manage product

inventory , and other statements that are not historical facts, including statements that 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 Nephros' ability to further develop its sales organization and realize increased revenues, inflationary factors and other

economic and competitive conditions, the availability of capital when needed, dependence on third-party manufacturers and researchers,

and regulatory reforms. These and other risks and uncertainties are detailed in Nephros' reports filed with the U.S. Securities

and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2023, which is expected to be filed

on or before March 31, 2024. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks

only as of the date of this release, and Nephros does not undertake any responsibility to update any forward-looking statements that

it makes, except as may be required by law.

INC. AND SUBSIDIARIES

thousands, except share and per share amounts)

INC. AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

thousands, except share and per share amounts)