Nephros, Inc. 380 Lackawanna Place South Orange NJ 07079 Call: 201 343 5202 nephros.com Nephros Announces Fourth Quarter and Fiscal Year 2024 Financial Results Full-Year Net Revenue of $14.2 Million and Fourth-Quarter Ne

Announces Fourth Quarter and Fiscal Year 2024 Financial Results

Net Revenue of $14.2 Million and Fourth-Quarter Net Revenue of $3.9 Million

ORANGE, NJ, March 6, 2025 - 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, 2024.

Quarter Ended December 31, 2024.

finished 2024 strong despite annual revenue results approximately flat to 2023. Throughout the year we consistently showed growth as

our core programmatic revenue steadily increased. In contrast, we had a significant decline in our emergency response business over the

first half of the year. Historically, Nephros has experienced double-digit percentages of our total revenue as a result of our emergency

business, yet in Q1 and Q2, those values declined to single digits. We were able to overcome this headwind in the second half of 2024,

particularly with 19% year-over-year growth in total sales in the fourth quarter," said Robert Banks, President and Chief Executive

Officer. "Nephros has always had a strong product offering and been able to demonstrate significant customer value within a diverse

range of applications. I am excited to share that we are continuing to expand both our product lineup and range of customer market sectors

into areas such as office space and transportation-related entities."

Banks continued, "With regard to our portfolio of products, most notable was the launch of our 20" HydraGuard Ultrafilter

which is a new product ideal for applications with higher volumes of water than we typically support. Sterile processing, laboratories,

and manufacturing are just a few of the broader industries for which we believe we are now well-positioned to advance. Concerning sterile

processing (i.e., the sterilization of medical instruments), the late-2023 release of the ANSI/AAMI ST108 standard, stipulates strict

guidelines for the water quality used throughout the operation. We believe the new HydraGuard, which has the tightest control of bacteria

and endotoxins on the market, has the potential to serve as a key asset for sterile processing compliance, while supporting improved

2024 did not meet our revenue expectations, we achieved profitability for the first time in Q3, thanks to a fantastic job controlling

costs and keeping our spend in line with our revenue. Of additional note, we added nearly 600 new customer sites, which combined to almost

$2 million in sales, and represented more than 13% of our annual revenue," said Mr. Banks. "We believe that we continue to

be well-placed for growth as we cultivate steady expansion into new and existing markets. I am very proud of our entire team as they

persist in their dedication and hard work, driving us ever closer to large-scale success!"

Performance for the Fourth Quarter and Year Ended December 31, 2024

revenue for the years ended December 31, 2024, and 2023 was $14.2 million, respectively. Net revenue for the fourth quarter of 2024 was

$3.9 million, compared with $3.3 million in the fourth quarter of 2023, an increase of 19%. Our core programmatic revenue grew 9% for

the year, despite a decline in the emergency response business, with our fourth quarter of 2024 showing double-digit growth in programmatic

revenue year-over-year. The increase in programmatic sales reflects the development of our newer sales personnel hired in 2023 and a

number of new customer accounts added throughout the year.

of goods sold for the year ended December 31, 2024 was $5.4 million, compared with $5.8 million in 2023, a decrease of 7%. Cost of goods

sold for the fourth quarter of 2024 was $1.4 million, compared with $1.2 million in the fourth quarter of 2023, an increase of 13%.

margin for the year ended December 31, 2024, was 62%, compared with 59% in 2023. Gross margin for the fourth quarter of 2024 was 64%,

compared with 62% in the fourth quarter of 2023. The increase in gross margin reflects primarily more favorable terms with our largest

general and administrative expenses for the year ended December 31, 2024 were $7.7 million, compared with $8.9 million in 2023, a decrease

of 14% due to a decline in bonuses, commissions and stock compensation. Selling, general and administrative expenses for the fourth quarter

of 2024 were approximately $1.9 million, compared with $2.4 million in 2023, a decrease of 22% due to a decline in bonuses, commissions

and professional fees.

and development expenses for the years ended December 31, 2024 and 2023 were $0.9 million, respectively. Research and development expenses

for the fourth quarter of 2024 were $0.3 million, compared with $0.2 million in the fourth quarter of 2023, an increase of 21% due to

and amortization expenses for the year ended December 31, 2024 were approximately $135,000, compared with approximately $214,000 in 2023,

a decrease of 37%. Depreciation and amortization expenses for the fourth quarter of 2024 were approximately $34,000, compared with approximately

$51,000 in the fourth quarter of 2023, a decrease of 33%.

income for the year ended December 31, 2024 was $0.1 million, compared with a net loss of ($1.6 million) in 2023, an improvement of 105%.

Net income for the fourth quarter of 2024 was $0.3 million, compared with a net loss of ($0.7 million) during the same period in 2023.

2024 benefitted from the improvement in gross margins and decline in operating expenses. We are extremely pleased to show our first quarterly

and annual net income in the Company's history.

EBITDA for the year ended December 31, 2024 was $0.5 million, compared with ($0.1 million) in 2023. Adjusted EBITDA for the fourth quarter

2024 was approximately $0.5 million, compared with approximately ($0.1 million) in the fourth quarter of 2023.

of December 31, 2024, Nephros had cash and cash equivalents of approximately $3.8 million, compared to $4.3 million as of December 31,

2023, and remains debt free.

EBITDA Definition and Reconciliation to GAAP Financial Measures

EBITDA is calculated by taking net income (loss) 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 write-offs, and non-cash compensation. The following tables present a

reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, for the fourth quarter and

year to date of the 2024 and 2023 fiscal years:

believes that Adjusted EBITDA 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 in isolation or

as an alternative to financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA is that it excludes

significant expenses and income that are required by GAAP to be recognized in Nephros' financial statements. In addition, Adjusted

EBITDA 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. To compensate for these limitations, management presents Adjusted EBITDA in connection

with net income loss, the most directly comparable GAAP financial measure. Nephros urges investors to review the reconciliation of Adjusted

EBITDA to net income loss 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 13th, 2025 at 1 (877) 344-7529 or 1 (412) 317-0088 for international callers and

entering replay access code: 1414130.

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, 2024, expected future revenue growth and the

timing of such growth, the effect of new regulations on future revenue growth, the expected competitive advantages and anticipated impact

of new product offerings, 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, the

extent to which financial results based on emergency response sales can be outside Nephros' control, 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, 2024, which is expected to be filed

on or before March 31, 2025. 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.

NEPHROS, INC. AND SUBSIDIARIES