Nephros Reports Third Quarter 2007 Financial Results

Reports Third Quarter 2007 Financial Results

YORK, NY-November 13, 2007 - Nephros, Inc. (AMEX: NEP)

announced today financial results for the three and nine month periods ended

third quarter of 2007 has been an exciting period for Nephros," said Norman J.

Barta, Chairman and CEO of Nephros. "With our recent financing, the

Company is now poised to execute the commercialization of our filtration

anticipate 2008 to be a transforming year for Nephros. Upon

successful completion of the U.S. clinical trial, Nephros plans to seek FDA

approval to market both the OLp r(TM)

H2H(TM) Module and the OLp r(TM)

Hemodiafilter series in the U.S., with a product launch targeted for

2008. We were pleased with the physician interest and enthusiasm

during our product demonstrations at the recent American Society of Nephrology

(ASN) Renal Week in San Francisco, CA. It was clear these physicians

understood the value our technologies can bring to both the patient and the

progress with our leading-edge technologies for ESRD therapy, we are also

placing our water ultrafiltration products on the fast track, moving forward

with our marketing and sales in hospital, assisted living, and related domains

and pursuing our military product development."

October 16, 2007, Nephros announced the initiation of its pivotal U.S. clinical

trial for the OLp r(TM)

H2H(TM) Hemodiafiltration Module and OLp r(TM)

220 Hemodiafilter. Nephros believes that, upon approval, its

mid-dilution HDF technology would be the first approved online HDF therapy

quarter ended September 30, 2007, Nephros reported net product revenues of

$112,000, attributable to sales of its OLp r(TM)

MD190 and MD220 products in Europe, compared with $165,000 in the corresponding

period of 2006, a decrease of 32%. The decrease is largely due to a few

customers in the U.K. drawing down surplus inventory positions.

Company's net loss was $1,462,000 or $(0.12) per basic and diluted common

for the third quarter of 2007 versus a net loss of $1,906,000 or $(0.15)

basic and diluted common share in the third quarter of 2006. The Company's net

loss was decreased in the current quarter primarily due to the gain

recorded on the exchange of notes which includes approximately the gain realized

on debt extinguishment and the impact of refunds received from New York

State for Qualified Emerging Technology Credits.

product revenues for the nine months ended September 30, 2007 were $755,000

compared to $641,000 in the corresponding period of 2006, an increase of almost

18%. The Company's net loss was $4,663,000 or $(0.38) per basic and diluted

common share for the nine months ended September 30, 2007 compared with

$5,758,000 or $(0.47) per basic and diluted common share for the corresponding

September 30, 2007, Nephros had cash, cash equivalents and short-term

investments of $10,513,000.

Inc., headquartered in New York, is a medical device company developing and

marketing products 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

the irreversible loss of kidney function. The Nephros HDF system is designed

remove a range of harmful substances more effectively, and more

cost-effectively, 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 products are sold and distributed

throughout Europe and are currently being used in over fifty clinics in

also markets a line of water filtration products, the Dual Stage Ultrafilter

(DSU). The Company's patented dual stage cold sterilization Ultrafilter has

capability to filter out bacteria and, due to its exceptional filtration levels,

filter out many viruses and parasites. The DSU proprietary design provides

dual-stage filtration which reduces the risk of filtration failure. With an

initial focus on health care, the DSU is in a pilot-use program at a major

medical center and has been selected for further development by the U.S. Marine

information on Nephros please visit the Company's website, www.nephros.com.

release contains certain "forward-looking statements" within the meaning of the

Private Securities Litigation Reform Act of 1995, as amended. Such

statements include statements regarding the efficacy and intended use of the

Company's 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. For such statements,

the Company claims the protection of the Private Securities Litigation Reform

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 the Company's control. Actual

results may differ materially from the expectations contained in the

forward-looking statements. Factors that may cause such differences include

risks that: (i) Nephros may not be able to satisfy its obligations when

they become due and payable and meet its anticipated cash needs and may not

able to obtain funding if and when needed or on terms favorable to it in order

to continue operations or fund its clinical trials; (ii) Nephros may not be

to continue as a going concern; (iii) Nephros may be unable to show progress

consistent with its plan of compliance to meet the American Stock Exchange's

continued listing standards or may be otherwise unable to timely regain

compliance with the AMEX listing standards; (iv) products that appeared

promising to Nephros in research or clinical trials may not demonstrate

anticipated efficacy, safety or cost savings in subsequent pre-clinical or

clinical trials; (v) Nephros may not obtain appropriate or necessary

governmental approvals to achieve its business plan or effectively market its

products; (vi) Nephros may encounter unanticipated internal control deficiencies

or weaknesses or ineffective disclosure controls and procedures; (vii) HDF

therapy may not be accepted in the United States and/or Nephros' technology and

products may not be accepted in current or future target markets, which could

lead to failure to achieve market penetration of Nephros' products; (viii)

Nephros may not be able to sell its ESRD therapy or water filtration products

competitive prices or profitably; (ix) Nephros may not be able to secure or

enforce adequate legal protection, including patent protection, for its

products; (x) FDA approval relating to Nephros' OLp r HD190 filter may not

facilitate or have any effect on the regulatory approval process for its other