Nephros, Inc. 380 Lackawanna Place South Orange NJ 07079 Call: 201 343 5202 nephros.com Nephros Announces Strong Second Quarter Financial Results Second-Quarter Net Revenue of $4.4 million; Robust Growth Drives 36% Incre

Announces Strong Second Quarter Financial Results

Net Revenue of $4.4 million; Robust Growth Drives 36% Increase in Net Revenue with

Third Consecutive Quarter of Profitability

ORANGE, NJ, August 7, 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 second quarter ended June 30, 2025.

the six months ended June 30, 2025:

2025 marked another strong quarter with net revenue of $4.4 million, an increase of $1.2 million, or 36% year-over-year. This performance

builds on our momentum from Q1 and marks the third consecutive quarter of profitability," said Robert Banks, President and Chief

Executive Officer of Nephros. "We believe these results reflect disciplined execution, operational excellence, and our consistent

investment in growth-driving innovation."

continued strong results reflect a strong upward trajectory," Mr. Banks continued, "Over the past two years, we've

grown trailing 12-month revenue from $13.8 million to $16.7 million-progress that highlights the strength of our programmatic business

and expanding customer base. In fact, our programmatic sales reached an all-time high in Q2, supported by the recent implementation of

our installation and replacement program which has deepened customer integration and begun driving reliable reorder volume."

Banks added, "During the second quarter, our dialysis water segment delivered its second-highest performance on record and secured

the largest dialysis filtration purchase order in company history. Additionally, active-site counts reached all-time highs across infection

control, dialysis water, and commercial segments. Further, our targeted additions to the sales-support team have broadened our reach

and supported our deepened our focus on verticals beyond patient care."

coupling of market-leading technology with strategic focus continues to position Nephros for sustained growth," Mr. Banks concluded,

"We believe our unprecedented results in programmatic business and active customer sites underscores durable demand, reinforcing

our confidence in the long-term outlook."

Performance for the Quarter Ended June 30, 2025

revenue for the three months ended June 30, 2025, and 2024 was $4.4 million and $3.3 million, respectively, an increase of 36%. Our core

programmatic revenue grew by 31% over the same period in 2024. The increase in programmatic sales reflects strong reorders and a number

of new active sites.

of goods sold for the second quarter of 2025 was $1.6 million, compared with $1.3 million in the second quarter of 2024, an increase

of 21%. Gross margin for the second quarter of 2025 was 63%, compared with 59% in the second quarter of 2024. The increase in gross margin

was primarily driven by a reduction in shipping costs and inventory reserve adjustments.

general and administrative expenses for the second quarter of 2025 were approximately $2.2 million, compared with $1.9 million in 2024,

an increase of 13% due to higher sales commissions resulting from increased revenue, higher accrual for employee bonuses, and increased

stock-based compensation.

and development expenses were $0.3 million for the second quarter of 2025, consistent with $0.3 million reported in the second quarter

and amortization expenses for the second quarter of 2025 were approximately $35,000, compared with approximately $34,000 in the second

a result of the improved sales and gross margins, net income for the second quarter of 2025 was $0.2 million, compared with a net loss

of ($0.3 million) during the same period in 2024. We are extremely pleased to show our third consecutive quarter of net income in the

EBITDA for the second quarter 2025 was approximately $0.4 million, compared with approximately ($0.1 million) in the second quarter of

Performance for the Six Months Ended June 30, 2025

revenue for the six months ended June 30, 2025, and 2024 was $9.3 million, and $6.8 million respectively, an increase of 37%. Our core

programmatic revenue grew by 27% over the same period in 2024. The increase in programmatic sales reflects strong reorders, and a number

of new active sites.

of goods sold for the six months ended June 30, 2025 and 2024 was $3.3 million and $2.7 million, respectively, an increase of 25%. Gross

margin for the six months ended June 30, 2025 was 64%, compared with 61% during the same period in 2024. The increase in gross margin

was primarily driven by lower product costs resulting from a more favorable product mix and a reduction in inventory reserve adjustments

general and administrative expenses for the six months ended June 30, 2025 and 2024 were approximately $4.5 million and $4.1 million,

respectively, an increase of 9% primarily driven by higher sales commission expense, increased employee bonus accruals, and higher stock-based

compensation expense.

and development expenses for the six months ended June 30, 2025 and 2024 were $0.6 million and $0.5 million, respectively.

and amortization expenses for the six months ended June 30, 2025 and 2024 were approximately $74,000, and $67,000 respectively.

a result of the improved sales and gross margins, net income for the six months ended June 30, 2025 was $0.8 million compared to a net

loss of ($0.5 million) during the same period in 2024.

EBITDA for the six months ended June 30, 2025 was approximately $1 million, compared with approximately ($0.2 million) in the same period

of June 30, 2025, Nephros had cash and cash equivalents of approximately $5.1 million, compared to $3.8 million as of December 31, 2024,

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 second quarter and

year-to-date period of the 2025 fiscal year:

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:

Domestic access: 1 (844) 808-7106

International 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 August 15th, 2025 at 1 (877) 344-7529 or 1 (412) 317-0088 for international callers and entering

replay access code: 6362809.

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 future revenue growth and the timing of such growth, the extent to which Nephros' customer installation

and replacement programs will lead to increased product reorders and revenue, the extent to which Nephros' operational activities

and product innovations will lead to revenue growth, Nephros' ability to continue realizing net income from its operations, 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, the extent to which U.S. tariffs may increase our expenses,