Full Press Release Details
Nephros Completes Bridge Financing
RIVER EDGE, NJ, September 3, 2014 /PR Newswire-FirstCall/
-- Nephros, Inc. (OTCQB:NEPH), a commercial stage medical device company that develops and sells high performance liquid purification
ultrafilters and an on-line mid-dilution hemodiafiltration system for the treatment of chronic renal failure patients, today announced
that the company has entered into a bridge loan and security agreement with Lambda Investors LLC, an affiliate of Wexford Capital
LP and the company's largest shareholder.
On August 29, 2014, the company issued
a six-month 12% senior secured note to Lambda Investors in the principal amount of $1,750,000.
Under the terms of the note, the company
has undertaken to conduct a $3 million rights offering of common stock at an anticipated offering price of $0.60 per share. All
of the company's stockholders and warrantholders will be eligible to participate in the offering on a pro rata basis based
upon their proportionate ownership of the company's common stock on an as converted basis. The note requires the company
to repay the bridge loan with the proceeds from the rights offering or any other financing transaction.
In connection with the proposed rights
offering, Nephros will file a registration statement on Form S-1, as may be amended, with the Securities and Exchange Commission
(the "SEC"). The securities to be 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. The rights offering will include an over-subscription privilege
which permits each rights holder that exercises its rights in full to purchase additional shares of common stock that remain unsubscribed
at the expiration of the rights offering. This over-subscription privilege is subject to the availability and allocation of shares
among holders exercising their respective over-subscription privileges. To the extent that after the closing of the rights offering
there still remain unsubscribed shares, Lambda Investors LLC has agreed to purchase any or all such remaining unsubscribed shares.
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
Nephros is a commercial stage medical device
company that develops and sells high performance liquid purification filters. Our filters, which we call ultrafilters, are primarily
used in dialysis centers for the removal of biological contaminants from water, bicarbonate concentrate and/or blood.
We were founded in 1997 by healthcare professionals
affiliated with Columbia University Medical Center/New York-Presbyterian Hospital to develop and commercialize an alternative method
to hemodialysis (HD). We have extended our filtration technologies to meet the demand for liquid purification in other areas, in
particular water purification.
Presently, we offer ultrafilters for sale
to customers in four markets:
For more information about Nephros, please
visit the company's website at www.nephros.com.
Forward-Looking Statements
in this press release constitute "forward-looking statements". Such statements include statements regarding the efficacy
and intended use of our technologies under development, the timelines for bringing such products to market and the availability
of funding sources for continued development of such products and other statements that are not historical facts, including statements
which may be preceded by the words "intends," "may," "will," "plans," "expects,"
"anticipates," "projects," "predicts," "estimates," "aims," "believes,"
"hopes," "potential" or similar words. Forward-looking statements are not guarantees of future performance,
are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond
our control. Actual results may differ materially from the expectations contained in the forward-looking statements. Factors that
may cause such differences include, but are not limited to, the risks that:
we may not be able to find a strategic partner to successfully market our HDF system;
our HDF system may not be accepted by patients or health care providers in the U.S.
we may not be able to continue as a going concern;
a default under the terms of the secured note with Lambda Investors LLC would result
in the lender foreclosing upon substantially all of our assets and could result in our inability to continue business operations;
we may not be able to complete the contemplated rights offering which could result
in our inability to continue business operations;
even if we are able to complete the rights offering, we may not have sufficient
capital to successfully implement our business plan;
restrictions in the secured note and related security agreement, which require the
prior consent of the lender, may restrict our ability to operate our business, sell the company or sell our assets;
the voluntary recalls of point of use and DSU in-line ultrafilters used in hospital
water treatment applications announced on October 30, 2013 and the related circumstances could subject us to claims or proceedings
by consumers, the FDA or other regulatory authorities which may adversely impact our sales and revenues;
we face significant challenges in obtaining market acceptance of our products, which
could adversely affect our potential sales and revenues;
there are product-related deaths or serious injuries or product malfunctions, which
could trigger recalls, class action lawsuits and other events that could cause us to incur expenses and may also limit our ability
to generate revenues from such products;
we face potential liability associated with the production, marketing and sale of
our products, and/or the expense of defending against claims of product liability, could materially deplete our assets and generate
negative publicity which could impair our reputation;
to the extent our products or marketing materials are found to violate any provisions
of the FDC Act or any other statutes or regulations then we could be subject to enforcement actions by the FDA or other governmental
we may not be able to obtain funding if and when needed or on terms favorable to
us in order to continue operations;
we may not have sufficient capital to successfully implement our business plan;
we may not be able to effectively market our products;
we may not be able to sell our water filtration products or chronic renal failure
therapy products at competitive prices or profitably;
we may encounter problems with our suppliers, manufacturers and distributors;
we may encounter unanticipated internal control deficiencies or weaknesses or ineffective
disclosure controls and procedures;
we may not obtain appropriate or necessary regulatory approvals to achieve our business
products that appeared promising to us in research or clinical trials may not demonstrate
anticipated efficacy, safety or cost savings in subsequent pre-clinical or clinical trials;
we may not be able to secure or enforce adequate legal protection, including patent
protection, for our products; and
we may not be able to achieve sales growth in key geographic markets.
More detailed information
about us and the risk factors that may affect the realization of forward-looking statements, including the forward-looking statements
contained in this press release, is set forth in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal
year ended December 31, 2013, and our other periodic reports filed with the SEC. We urge investors and security holders to read
those documents free of charge at the SEC's website at www.sec.gov. We do not undertake to publicly update or revise
our forward-looking statements as a result of new information, future events or otherwise, except as required by law.