10-K - NEPH - Equibles

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

WASHINGTON,

DC 20549

FORM

10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission

File Number 001-32288

NEPHROS,

INC.

(Exact name of registrant specified in its charter)

Delaware	13-3971809
(State<br> or Other Jurisdiction of<br><br> <br>Incorporation<br> or Organization)	(I.R.S.<br> Employer<br><br> <br>Identification<br> No.)

380Lackawanna Place

SouthOrange, NJ 07079

(Address of Principal Executive Offices)

(201)343-5202

(Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title<br> of each class	Trading<br> symbol	Name<br> of exchange on which registered
Common<br> stock, par value $0.001 per share	NEPH	The<br> Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large<br> accelerated filer ☐	Accelerated<br> filer ☐
Non-accelerated<br> filer ☒	Smaller<br> reporting company ☒
	Emerging<br> growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The

aggregate market value of the voting stock held by non-affiliates of the registrant, as of June 30, 2025, was $27,317,372. Such aggregate market value was computed by reference to the closing price of the common stock as reported on the Nasdaq Stock Market on June 30, 2025. For purposes of making this calculation only, the registrant has defined affiliates as including only directors and executive officers and stockholders holding greater than 10% of the voting stock of the registrant as of June 30, 2025.

As

of March 12, 2026, there were 10,644,268 shares of the registrant’s common stock, $0.001 par value, outstanding.

DOCUMENTS

INCORPORATED BY REFERENCE

Certain portions of the registrant’s proxy statement to be filed with the Securities and Exchange Commission in connection with the 2026 Annual Meeting of Stockholders (the “2026 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K. The 2026 Proxy Statement will be filed within 120 days of December 31, 2025.

NEPHROS,

INC.

TABLE

OF CONTENTS

PART I		4
	Item 1. Business	4
	Item 1A. Risk Factors	11
	Item 1B. Unresolved Staff Comments	21
	Item 1C. Cybersecurity	21
	Item 2. Properties	23
	Item 3. Legal Proceedings	23
	Item 4. Mine Safety Disclosures	23
PART II		24
	Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
	Item 6. Reserved	24
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk	28
	Item 8. Financial Statements and Supplementary Data	29
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	51
	Item 9A. Controls and Procedures	51
	Item 9B. Other Information	51
PART III		52
	Item 10. Directors, Executive Officers and Corporate Governance	52
	Item 11. Executive Compensation	52
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	52
	Item 13. Certain Relationships and Related Transactions, and Director Independence	52
	Item 14. Principal Accounting Fees and Services	52
PART IV		52
	Item 15. Exhibits, Financial Statement Schedules	52
	Item 16. Form 10K Summary	55
SIGNATURES		56

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FORWARD

LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain statements in this Annual Report on Form 10-K constitute “forward-looking statements.” Such statements include statements regarding the efficacy and intended use of our technologies under development, the timelines and strategy for bringing such products to market, the timeline for regulatory approval of our products, the availability of funding sources for continued development of such products, and other statements that are not historical facts, including statements that 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<br> face significant challenges in obtaining market acceptance of our products, which, if not obtained, could adversely affect our potential<br> sales and revenues;
●	product-related<br> deaths or serious injuries or product malfunctions could trigger recalls, class action lawsuits and other events that could cause<br> us to incur expenses and may also limit our ability to generate revenues from such products;
●	we<br> face potential liability associated with the production, marketing and sale of our products, and the expense of defending against<br> claims of product liability could materially deplete our assets and generate negative publicity, which could impair our reputation;
●	to<br> the extent our products or marketing materials are found to violate any provisions of the U.S. Food, Drug and Cosmetic Act (the “FDC<br> Act”) or any other statutes or regulations, we could be subject to enforcement actions by the U.S. Food and Drug Administration<br> (the “FDA”) or other governmental agencies;
●	we<br> may not be able to obtain funding when needed or on terms favorable to us in order to continue operations;
●	we<br> may not have sufficient capital to successfully implement our business plan;
●	we<br> may not be able to effectively market and sell our products in new or existing markets;
●	we<br> may not be able to sell our water filtration products at competitive prices or profitably;
●	we<br> may experience increased costs and/or disruptions in our supply chain due to the imposition of U.S. tariffs;
●	we<br> may encounter unanticipated internal control deficiencies or weaknesses or ineffective disclosure controls and procedures;
●	we<br> may not be able to obtain appropriate or necessary regulatory approvals to achieve our business plan;
●	we<br> may not be able to secure or enforce adequate legal protection, including patent protection, for our products; and
●	we<br> 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 in this Annual Report on Form 10-K, is set forth in our filings with the U.S. Securities and Exchange Commission (the “SEC”), including 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 web site at www.sec.gov. We do not undertake to publicly update or revise our forward-looking statements because of new information, future events or otherwise, except as required by law.

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PART

Item1. Business Overview

Nephros is a commercial-stage company that develops and markets high-performance water filtration solutions for points of use, with a core focus on medical-grade water filtration. Our medical filtration portfolio includes two product lines: infection control and dialysis water. The infection control segment features both microfilters (0.1 micron), which retain bacteria, and ultrafilters (0.005 micron), which retain bacteria, viruses, and endotoxins to address a broader spectrum of waterborne pathogens including and beyond Legionella and Pseudomonas. The dialysis segment consists exclusively of ultrafilters, extending the same microbial and endotoxin retention capabilities to the purification of water and bicarbonate concentrate used in dialysis treatment, where endotoxin control is especially critical. All of our medical-grade filters are FDA 510(k)-cleared as Class II medical devices—a distinguishing feature that affirms their validated safety and performance in critical-use environments. While these filters are widely used in healthcare settings, they have also been adopted across a range of other industries—including manufacturing, laboratories, aviation, and federal facilities—where water purity is essential to operational safety and compliance.

In addition, we offer a line of commercial water filters that improve taste and odor, reduce biofilm formation and scale buildup, and remove cysts, particulates, and lead from water systems. With the recent release of our newest solution, validated for the reduction of Total PFAS (a mixture of seven PFAS compounds including PFOA, PFOS, PFHxS, PFNA, PFHpA, PFBS, and PFDA), our portfolio of products is further enhanced with the ability to address a broad spectrum of emerging and persistent waterborne contaminants. Our commercial filtration products are broadly applicable across industries and are especially valuable when used in tandem with our medical-grade filters to deliver comprehensive water-quality protection. Whether in clinical care, industrial operations, or public infrastructure, Nephros solutions support the universal need for safe, high-quality water.

OurProducts

We develop and sell point-of-use water filtration products used in both medical and commercial applications. Our water filtration products employ multiple filtration technologies, as described below.

For medical applications, we manufacture both ultra- and microfilters using polysulfone hollow fiber membranes that retain microbiological contaminants through physical size exclusion. Our ultrafilters, with a 0.005-micron pore size, retain bacteria, viruses, and endotoxins, provide a unique alternative to charged membrane solutions and feature one of the smallest pore sizes available. Our microfilters, with a 0.1-micron pore size, also retain bacteria, a critically important function given the prevalence of Legionella in premise plumbing and the risks associated with Legionnaires’ disease. Across both filter types, Nephros filters are distinguished by exceptional membrane surface area and longer service life, particularly in comparison to our competitors, making Nephros filters well-suited to support improved water safety within the demands of highly regulated environments.

Our primary sales strategy for medical applications is to sell within healthcare through distributors (also termed as value-added resellers, or “VARs”). Leveraging VARs has enabled us to rapidly expand our access to target customers with limited sales staff expansion. In addition, while we are currently focused on healthcare as a primary customer base, the VARs that support these facilities also support a wide variety of commercial and industrial businesses. We believe that our VAR relationships have and will continue to facilitate growth in filter sales outside of the medical industry. In addition to VARs, we also utilize a direct salesforce that targets key geographic regions throughout the country, while focusing on the hospital and dialysis customers.

For commercial applications, we develop filters to improve water quality through the reduction of aesthetic and functional contaminants. This segment includes both carbon-based and carbon-free solutions to reduce a number of issues including taste, odor, scale buildup, fine particulate, lead, cysts, and Total PFAS (otherwise known as “forever chemicals”). Like our infection control segment, our commercial filters support a wide range of applications; they also play a key role in enhancing equipment performance and reducing maintenance needs.

Our commercial application sales model also combines both direct and indirect channels. Through our internal sales team, we sell directly to customers across a range of industries, including healthcare, where our commercial solutions are an effective complement to our medical-grade, infection control filters. We also partner with VARs, including one non-exclusive partner focused only on food service and hospitality sectors, such as quick-service restaurants (QSRs), convenience stores, and restaurants. In contrast to our channel partners who offer both medical and commercial products, this VAR expands our reach in high-volume, commercial food and beverage markets.

TargetMarkets

We currently serve the following primary and emerging markets through our portfolio of medical-grade and commercial water filtration products:

●	Hospitals<br> and Other Healthcare Facilities: Our ultrafilters and microfilters support infection control across a wide range of water outlets<br> and equipment, including sinks, showers, ice machines and sterile processing. These filters are FDA 510(k)-cleared Class II medical<br> devices, offering validated performance that helps facilities address waterborne pathogen control under CMS Conditions of Participation<br> and The Joint Commission’s water management expectations.
●	Dialysis<br> Settings: Our ultrafilters are used for advanced purification and polishing of water or bicarbonate concentrate in dialysis environments.<br> They are typically installed post-reverse osmosis in water treatment rooms or upstream of dialysis machines. These filters assist<br> in achieving hemodialysis-quality water that exceeds the ISO 23500-5 standard for ultrapure dialysate production and are FDA 510(k)-cleared<br> as Class II medical devices.
●	Foodservice<br> and Hospitality: Our commercial filters are ideal for foodservice and hospitality operations<br> where they improve water quality, equipment performance, and operational efficiency. These<br> filters are commonly installed at beverage dispensers, coffee machines, and ice makers, supporting<br> restaurants, convenience stores, hotels, and similar venues in enhancing taste and customer<br> experience.

●

Hospitals and Other Healthcare Facilities: Our ultrafilters and microfilters support infection control across a wide range of water outlets and equipment, including sinks, showers, ice machines and sterile processing. These filters are FDA 510(k)-cleared Class II medical devices, offering validated performance that helps facilities address waterborne pathogen control under CMS Conditions of Participation and The Joint Commission’s water management expectations.

●

Dialysis Settings: Our ultrafilters are used for advanced purification and polishing of water or bicarbonate concentrate in dialysis environments. They are typically installed post-reverse osmosis in water treatment rooms or upstream of dialysis machines. These filters assist in achieving hemodialysis-quality water that exceeds the ISO 23500-5 standard for ultrapure dialysate production and are FDA 510(k)-cleared as Class II medical devices.

●

Foodservice and Hospitality: Our commercial filters are ideal for foodservice and hospitality operations where they improve water quality, equipment performance, and operational efficiency. These filters are commonly installed at beverage dispensers, coffee machines, and ice makers, supporting restaurants, convenience stores, hotels, and similar venues in enhancing taste and customer experience.

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Additional Use Cases

Beyond healthcare and foodservice settings, Nephros filters are also deployed in laboratories, manufacturing facilities, aviation environments, and government buildings, where water purity is critical to safety, compliance, or system performance. With the recent addition of Total PFAS reduction capability, we also anticipate growing relevance in schools and other federally regulated facilities, where adherence to standards such as the Safe Drinking Water Act is a key consideration. We continue to evaluate opportunities to expand into new verticals where our filtration technologies provide measurable value.

Hospitalsand Other Healthcare Facilities. Nephros infection control filters are a leading tool for proactive protection to patients in high-risk areas (e.g., ice machines, surgical rooms, NICUs) and reactive protection to patients in broader areas during periods of water pathogen outbreaks. Our products are used in hundreds of medical facilities to aid in infection control, both proactively and reactively.

According to the American Hospital Association’s most recent annual survey data (2023), there are approximately 6,093 hospitals in the U.S., representing more than 913,000 beds and approximately 34.4 million inpatient admissions annually. These facilities rely on extensive internal water systems to support patient care, including handwashing, bathing, medical device reprocessing, dialysis, and other clinical and operational uses.

According to a June 2025 report from the U.S. Centers for Disease Control and Prevention (“CDC”), on any given day, approximately one in 31 hospitalized patients has at least one healthcare-associated infection (“HAI”), underscoring the scale of infection risk within hospital environments. The CDC further identifies waterborne pathogens such as Legionella, Pseudomonas, and nontuberculous mycobacteria as significant contributors to HAIs, noting that these organisms can proliferate in aging, complex premise plumbing systems commonly found in healthcare facilities and be transmitted through sinks, showers, ice machines, and other water outlets.

CDC surveillance of waterborne disease outbreaks indicates that premise plumbing is a leading source of water-related illness, hospitalizations, and deaths in the United States, with healthcare facilities representing a higher-risk environment due to susceptible patient populations and frequent water exposure. These factors underscore the importance of effective water management and point-of-use filtration strategies to mitigate microbiological risk in critical-use healthcare settings.

Since 2017, Centers for Medicare and Medicaid Services (“CMS”) has required Medicare- and Medicaid-certified healthcare facilities to implement policies and procedures to reduce the risk of growth and spread of Legionella and other opportunistic waterborne pathogens in building water systems. Compliance with these expectations is evaluated through routine survey and certification activities, during which CMS surveyors and accrediting organizations review whether facilities have established and implemented formal water management programs (“WMPs”), including documented governance, monitoring protocols, corrective actions, and records demonstrating ongoing execution. CMS guidance directs facilities to align their WMPs with prevailing industry standards, including ASHRAE Standard 188 and the Centers for Disease Control and Prevention (“CDC”) water management toolkit. While the underlying CMS expectations have remained in effect since 2017, enforcement and documentation requirements have become increasingly embedded in standard survey practice over time, particularly as healthcare facilities have faced heightened scrutiny of waterborne infection risks. We believe that continued enforcement of these requirements and the growing emphasis on effective water management programs may have a positive impact on demand for our HAI-inhibiting micro- and ultrafilters.

Nephros filters are validated for physical retention of bacteria, viruses, and endotoxins through size exclusion. All models are FDA 510(k)-cleared and installed at the point of use, where they can support compliance goals, align with evolving standards, and provide additional protection for patients, staff, and visitors.

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DialysisSettings. Nephros dialysis water filters are widely deployed in both acute and chronic dialysis environments to enhance water safety and support the production of ultrapure dialysate. Our solutions provide retention of bacteria, viruses, and endotoxins in water and bicarbonate lines used to treat patients with kidney failure.

Hemodialysis requires the use of large volumes of purified water, often more than 100 liters per treatment. Clinics rely on reverse osmosis systems to generate this water and use ultrafilters downstream as a final barrier against microbial contaminants. Our filters are used in both fixed RO loops and portable systems and are validated for up to 12 months of service life in dialysis applications.

To perform hemodialysis, dialysis clinics rely on dedicated water purification systems to produce ultrapure water and bicarbonate concentrate, the two essential ingredients for preparing dialysate, the fluid used to remove waste material from the blood during treatment. As of early 2025, there are approximately 7,556 dialysis clinics in the United States serving more than 500,000 patients. While precise counts of hemodialysis machines in use are not publicly reported on a routine national basis, industry sources indicate that the installed base in the United States likely exceeds 200,000 hemodialysis units, consistent with estimates used in market analyses. These dialysis facilities and machines represent a significant sustained demand environment for water purification and treatment technologies that support patient safety and the reliable operation of clinical dialysis care.

Nephros dialysis filters are validated for physical retention of bacteria, viruses, and endotoxins through size exclusion. All models are FDA 510(k)-cleared and installed within dialysis water systems, where they support the production of ultrapure water and bicarbonate concentrate used in hemodialysis treatment.

Foodserviceand Hospitality. Our commercial product portfolio includes both carbon-based and carbon-free filtration solutions that address a variety of water-quality concerns common in foodservice and hospitality industries. These include but are not limited to taste and odor compounds, scale-forming minerals, and various particulates, with several membrane-based models capable of retaining particles down to 0.005 micron. In addition, our newest offering supports the validated reduction of Total PFAS, expanding our reach to customers concerned with long-term exposure to “forever chemicals” in water-fed equipment.

Over time, we believe that the same water safety management programs currently underway at medical facilities may migrate to commercial markets. As the epidemiology of waterborne pathogens expands, links to contamination sources will become more efficient and the data more readily available. In cases where those sources are linked to restaurants, hotels, office buildings and residential complexes, the owners of those facilities may face increasing liability exposure. We expect that building owners will come to understand ASHRAE-188, which outlines risk factors for buildings and their occupants, and provides water safety management guidelines. We believe, in time, most commercial buildings will need to follow the basic requirements of ASHRAE-188: create a water management plan, perform routine testing, and establish a plan to treat the building in the event of a positive test.

As demand for water testing and microbiological filtration grows, we intend to be ready to deploy our expertise and solutions based on our years of experience servicing the medical market. We believe that we have an opportunity to offer unique expertise and products to the commercial market.

CorporateInformation

We were incorporated under the laws of the State of Delaware in April 1997. Our principal executive offices are located at 380 Lackawanna Place, South Orange, New Jersey 07079, and our telephone number is (201) 343-5202. We also have an office in Whippany, New Jersey. For more information about Nephros, please visit our website at www.nephros.com. We are not including the information on our website as a part of, nor incorporating it by reference into, this Annual Report on Form 10-K.

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Manufacturingand Suppliers

We do not, and do not intend to in the near future, manufacture any of our medical device filtration products. We do manufacture some of our commercial filtration products in our facility in South Orange, New Jersey.

In April 2012, we entered into a License and Supply Agreement (as thereafter amended, the “License and Supply Agreement”) with Medica S.p.A. (“Medica”), an Italy-based medical product manufacturing company, for the marketing and sale of certain filtration products based upon Medica’s proprietary Medisulfone ultrafiltration technology in conjunction with the Company’s filtration products, and for an exclusive supply arrangement for the filtration products. Under the License and Supply Agreement, as amended, Medica granted us an exclusive license, with right of sublicense, to market, promote, distribute, offer for sale and sell the filtration products worldwide, with certain limitations on territory, during the term of the License and Supply Agreement. In addition, the Company granted to Medica an exclusive license under the Company’s intellectual property to make the filtration products during the term of the License and Supply Agreement. The filtration products covered under the License and Supply Agreement include both certain products based on Medica’s proprietary Versatile microfiber technology and certain filtration products based on Medica’s proprietary Medisulfone ultrafiltration technology. In November 2025, the Company signed a new agreement with Medica which extends the term until December 31, 2030, unless earlier terminated by either party in accordance with the terms of the License and Supply Agreement. In exchange for the rights granted, the Company has agreed to make minimum annual aggregate purchases from Medica of €4,976,000, €5,349,000, €5,750,000, €6,000,000 and €6,300 ,000 for the years 2026, 2027, 2028, 2029 and 2030 , respectively. Under the November 2025 agreement, we have agreed to pay interest per month at the EURIBOR 360-day rate plus 500 basis points calculated on the principal amount of any outstanding invoices that are overdue by more than 15 days beyond the original payment terms. The Company has the right to terminate the License and Supply Agreement for convenience upon 90 days’ prior written notice. Medica may terminate the License and Supply Agreement upon written notice if the Company fails to cure a monetary breach thereunder within 30 days after Medica provides written notice thereof to the Company. Either the Company or Medica may terminate the License and Supply Agreement if the other party is in material breach and such breach is not cured within the specified cure period. Additionally, either the Company or Medica may terminate the License and Supply Agreement in the event of specified insolvency events involving the other party.

Salesand Marketing

Our New Jersey headquarters oversees global sales and marketing activity of our ultrafilter products. We work with multiple distributors for our ultrafilter products in the hospital and dialysis water markets. For the foodservice and hospitality markets, as discussed above, we had contracted with Donastar LLC as our exclusive distributor. Effective September 2024, we ended our exclusive relationship with Donastar. Although Donastar continues to distribute our products on a non-exclusive basis, we are broadening our market reach through new distributor relationships. For other prospective markets for our ultrafilter products, we are pursuing alliance opportunities for joint product development and/or distribution. Our ultrafilter manufacturer in Europe shares certain intellectual property rights with us for one of our dual stage ultrafilter designs.

Researchand Development

Our research and development efforts continue on several fronts directly related to our current product lines. For the ultrafiltration systems business, we are continually working with existing and potential distributors of ultrafilter products to develop solutions to meet customer needs.

MajorCustomers

For the years ended December 31, 2025 and 2024, the following customers accounted for the following percentages of our revenues, respectively:

Customer
A	22	%	25	%
B	12	%	3	%
C	10	%	8	%
Total	44	%	36	%

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As of December 31, 2025 and 2024, the following customer accounted for the following percentage of our accounts receivable:

Customer
A	17	%	13	%
C	16	%	4	%
D	11	%	6	%
Total	44	%	23	%

Competition

With respect to the water filtration market, we compete with companies that are well-entrenched in the water filtration domain. These companies include Cytiva (formerly Pall Corporation), Aquatools, Aquamedix, and i3 for medical / microbiological filtration, and 3M Company and Pentair for commercial water-quality filtration. Our methods of competition in the water filtration domain include:

●	Designing<br> and commercializing point-of-use filtration solutions that address defined, high-risk applications where water quality directly impacts<br> safety, compliance, or performance
●	Differentiating<br> through validated performance, reliability, and ease of use in mission-critical environments
●	Competing<br> in regulated and high-consequence customer segments where product performance, documentation, and service consistency are essential
●	Supporting<br> customers and partners through education-driven engagement, including standards interpretation, application guidance, and risk-based<br> filtration selection
●	Expanding<br> value through installation, replacement, and lifecycle support services that improve adoption, reliability, and long-term customer<br> outcomes
●	Pursuing<br> strategic alliances, OEM arrangements, and selective acquisitions to extend technical capabilities, market reach, and distribution<br> efficiency

IntellectualProperty

Patents

We protect our technology and products through patents and patent applications. In addition to the United States, we also apply for patents in other jurisdictions, such as the European Patent Office, Canada, and Japan, to the extent we deem appropriate. We have built a portfolio of patents and applications covering our products, including their hardware design and methods of hemodiafiltration.

We believe that our patent strategy will provide a competitive advantage in our target markets, but our patents may not be broad enough to cover our competitors’ products and may be subject to invalidation claims. Our U.S. patent for the “Method and Apparatus for a Hemodiafiltration Module for use with a Dialysis Machine,” has claims that cover the OLpūr MDHDF filter series and the method of hemodiafiltration employed in the operation of the products. Technological developments in end stage renal disease (“ESRD”) therapy could reduce the value of our intellectual property. Any such reduction could be rapid and unanticipated. We have issued patents on our water filtration products and applications in process to cover various applications in residential, commercial, and remote environments.

As of December 31, 2025, we had five U.S. patents and one Canadian patent.

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Trademarks

As of December 31, 2025, in the United States, we secured registrations of the trademarks ENDOPUR, HYDRAGUARD, NANOGUARD, and NEPHROS. In the U.S., we filed one trademark application for BECAUSE WATER MATTERS. In the U.K., we secured registrations for the trademarks NANOGUARD, and NEPHROS HYDRAGUARD.

GovernmentalRegulation

The research and development, manufacturing, promotion, marketing, and distribution of our medical filtration products in the United States and other regions of the world are subject to regulation by numerous governmental authorities, including the FDA and analogous agencies.

UnitedStates

The FDA regulates the manufacture and distribution of medical devices in the United States pursuant to the Food, Drug, and Cosmetics (FDC) Act. Our medical filtration products are regulated in the United States as medical devices by the FDA under the FDC Act. Under the FDC Act, medical devices are classified into one of three classes, namely Class I, II or III, on the basis of the controls deemed necessary by the FDA to reasonably ensure their safety and effectiveness.

●	Class<br> I devices are medical devices for which general controls are deemed sufficient to ensure their safety and effectiveness. General<br> controls include provisions related to (1) labeling, (2) producer registration, (3) defect notification, (4) records and reports<br> and (5) quality service requirements (“QSR”).
●	Class<br> II devices are medical devices for which the general controls for the Class I devices are deemed not sufficient to ensure their safety<br> and effectiveness and require special controls in addition to the general controls. Special controls include provisions related to<br> (1) performance and design standards, (2) post-market surveillance, (3) patient registries and (4) the use of FDA guidelines.
●	Class<br> III devices are the most regulated medical devices and are generally limited to devices that support or sustain human life or are<br> of substantial importance in preventing impairment of human health or present a potential, unreasonable risk of illness or injury.<br> Pre-market approval by the FDA is the required process of scientific review to ensure the safety and effectiveness of Class III devices.

●

Class I devices are medical devices for which general controls are deemed sufficient to ensure their safety and effectiveness. General controls include provisions related to (1) labeling, (2) producer registration, (3) defect notification, (4) records and reports and (5) quality service requirements (“QSR”).

●

Class II devices are medical devices for which the general controls for the Class I devices are deemed not sufficient to ensure their safety and effectiveness and require special controls in addition to the general controls. Special controls include provisions related to (1) performance and design standards, (2) post-market surveillance, (3) patient registries and (4) the use of FDA guidelines.

●

Class III devices are the most regulated medical devices and are generally limited to devices that support or sustain human life or are of substantial importance in preventing impairment of human health or present a potential, unreasonable risk of illness or injury. Pre-market approval by the FDA is the required process of scientific review to ensure the safety and effectiveness of Class III devices.

Before a new medical device can be introduced to the market, Section 510(k), and Section 515 of the FDC Act require a manufacturer who intends to market a medical device to submit a premarket notification (Section 510(k)) or a request for premarket approval (Section 515), to the FDA.

A 510(k) clearance will be granted if the submitted information establishes that the proposed device is “substantially equivalent” to a legally marketed Class I or Class II medical device or to a Class III medical device for which the FDA has not called for premarket approval under Section 515. The 510(k)-clearance process is generally faster and simpler than the premarket approval process.

Premarket approval (PMA) is the FDA’s process of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices. Class III devices are those that support or sustain human life, are of substantial importance in preventing impairment of human health, or which present a potential, unreasonable risk of illness or injury, or are new and present unknown safety or effectiveness issues or risks. PMA is the most stringent type of device marketing application required by the FDA. To gain approval, the manufacturer must present adequate scientific evidence to assure that the device is safe and effective for its intended use(s).

For any devices cleared through the 510(k)-clearance process, modifications or enhancements that could significantly affect the safety or effectiveness of the device or that constitute a major change to the intended use of the device will require a new 510(k) clearance submission. Accordingly, for any of our medical filtration products cleared through the Section 510(k) clearance process, we are required to submit an additional Section 510(k) notification if subsequent modifications or enhancements could significantly affect a product’s safety or effectiveness or constitute a major change to its intended use.

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All of our medical filtration products currently marketed in the United States are regulated by the FDA as Class II medical devices and have received FDA 510(k) clearance for their intended uses. Our FDA-cleared portfolio includes ultrafiltration designed for purification of dialysis water, as well as ultrafiltration and microfiltration technologies for filtration of EPA-quality water to aid in infection control at the point of use. In addition, we hold FDA clearances for certain products and technologies that are not currently commercialized, which may support future development, partnerships, or strategic initiatives.

The FDC Act requires that medical devices be manufactured in accordance with the FDA’s current QSR regulations which require, among other things, that:

●	the<br> design and manufacturing processes be regulated and controlled by the use of written procedures;
●	the<br> ability to produce medical devices which meet the manufacturer’s specifications be validated by extensive and detailed testing<br> of every aspect of the process;
●	any<br> deficiencies in the manufacturing process or in the products produced be investigated;
●	detailed<br> records be kept, and a corrective and preventative action plan be in place; and
●	manufacturing<br> facilities be subject to FDA inspection on a periodic basis to monitor compliance with QSR regulations.

In addition to the requirements described above, the FDC Act requires that:

●	all<br> medical device manufacturers and distributors register with the FDA annually and provide the FDA with a list of those medical devices<br> which they distribute commercially;
●	information<br> be provided to the FDA on death or serious injuries alleged to have been associated with the use of the products, as well as product<br> malfunctions that would likely cause or contribute to death or serious injury if the malfunction were to recur; and
●	certain<br> medical devices not cleared with the FDA for marketing in the United States meet specific requirements before they are exported.

We and our contract manufacturers are required to manufacture our products in compliance with current Good Manufacturing Practice (GMP) requirements set forth in the QSR. The QSR requires a quality system for the design, manufacture, packaging, labeling, storage, installation, and servicing of marketed devices, and it includes extensive requirements with respect to quality management and organization, device design, buildings, equipment, purchase and handling of components or services, production and process controls, packaging and labeling controls, device evaluation, distribution, installation, complaint handling, servicing, and record keeping. The FDA evaluates compliance with the QSR through periodic unannounced inspections that may include the manufacturing facilities of our subcontractors. If the FDA believes that we or any of our contract manufacturers, or regulated suppliers, are not in compliance with these requirements, there may be a material adverse effect on our manufacturing operations, affecting our ability to sell.

RegulatoryAuthorities in Regions Outside of the United States

We have obtained regulatory approvals to market certain medical filtration products outside of the United States, including in Canada and Brazil. Regulatory requirements for medical devices vary significantly by country and may range from minimal oversight to comprehensive pre-market review and post-market compliance obligations similar to those required by the FDA.

Our manufacturing facilities are subject to audits and certified to ISO 13485:2016, the international quality management standard for medical device manufacturers, which supports regulatory compliance and product distribution in multiple jurisdictions, including the United States and Canada.

We participate in the Medical Device Single Audit Program (MDSAP), which allows for a single regulatory audit of a medical device manufacturer’s quality management system that satisfies the requirements of multiple regulatory authorities. In November 2020, we received MDSAP certification supporting continued compliance regulatory compliance and the ongoing marketing of approved products in the United States and Canada. In November 2023, our MDSAP certification was expanded to include Brazil, enabling the marketing of select medical filtration products in that market in accordance with applicable regulatory approvals.

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ProductLiability and Insurance

The production, marketing and sale of our products have an inherent risk of liability in the event of product failure or claim of harm caused by product operation. We have acquired product liability insurance for our products in the amount of $3 million. A successful claim in excess of our insurance coverage could materially deplete our assets. Moreover, any claim against us could generate negative publicity, which could decrease the demand for our products, our ability to generate revenues and our profitability.

Some of our existing and potential agreements with manufacturers of our products and components of our products do or may require us (1) to obtain product liability insurance or (2) to indemnify manufacturers against liabilities resulting from the sale of our products. If we are not able to maintain adequate product liability insurance, we will be in breach of these agreements, which could materially adversely affect our ability to produce our products. Even if we are able to obtain and maintain product liability insurance, if a successful claim in excess of our insurance coverage is made, then we may have to indemnify some or all of our manufacturers for their losses, which could materially deplete our assets.

Employees

As of December 31, 2025, we employed a total of 36 full-time employees, including 12 employed in sales/marketing/customer support, 17 in logistics, quality, general, and administrative, and 6 in research and development and 1 in manufacturing. None of our employees are currently represented by a labor union or covered by a collective bargaining agreement and we believe that our relations with our employees are good. During 2025, we had limited voluntary turnover. Going forward, we intend to focus on maintaining our current good relations with our employees and continuing to develop and explore ways to collaborate with our employees and create a well-regarded workplace.

AvailableInformation

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Exchange Act requires us to file periodic reports, proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. These materials may be obtained electronically by accessing the SEC’s website at http://www.sec.gov.

Item1A. Risk Factors

Risks

Related to Our Overall Business and Operations

Wehave only a limited history of profitability and a significant accumulated deficit, and we may not be able to maintain or improve ourprofitability in the future.

Although we have been profitable during each of the fiscal years ended December 31, 2024, and December 31, 2025, as of December 31, 2025, we had an accumulated deficit of $143.1 million as a result of prior historical operating losses. While our revenues have increased following our expansion of the sales team in both 2024 and 2025, there can be no guarantee our revenues will continue to grow. We may incur additional losses in the future depending on the timing and marketplace acceptance of our products and as a result of operating expenses being higher than our gross margin from product sales. Each of the following factors, among others, may influence our profitability:

●	the<br> market acceptance of our technologies and products in each of our target markets;

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| --- | | ● | our ability to effectively and efficiently manufacture, market and distribute our products; | | --- | --- | | ● | our ability to sell our products at competitive prices that exceed our per unit costs; and | | ● | our ability to continue to develop products and maintain a competitive advantage in our industry. |

If we are unable to maintain profitability, we will need additional capital to fund our operating activities. Such capital is likely to be from the sale of shares of our common stock or other equity securities or from loans or other debt securities. However, there is no assurance that such capital will be available on favorable terms or at all.

Wemay be unable to achieve or sustain revenue growth.

Our business and future prospects are substantially dependent upon our ability to significantly grow our product revenue. Although our sales were approximately 33% higher in 2025 compared to 2024, our revenues declined slightly in 2024 compared to 2023. There is no assurance that we will be able to maintain sales growth in future periods. Our ability to increase our revenues in future periods will depend on our ability to significantly grow our customer base and then consistently obtain product reorders from those customers. If we cannot sustain significant revenue growth for an extended period, our financial results will be adversely affected, and our stock price may decline.

Weface significant challenges in obtaining market acceptance of our products, which could adversely affect our potential sales and revenues.

Our success depends on our ability to both maintain our existing customers and to continue growing our customer base. If we are unable to maintain and further grow our customer base, our ability to grow revenue will be limited and we will have difficulty maintaining profitability. Our ability to grow our customer base also depends on our ability to achieve further market acceptance of our water filter products, including among healthcare facility customers, or may not be deemed suitable for other commercial, military, industrial or retail applications. Factors that may affect our ability to achieve acceptance of our water filtration products and technologies in the marketplace include whether such products will be safe for use, whether they will be effective and whether they will be cost-effective.

Ifwe are not able to successfully scale-up production of our products, then our sales and revenues will suffer.

In order to successfully maintain commercialization of our products, we need to be able to produce them in a cost-effective way on a large scale to meet commercial demand, while maintaining extremely high standards for quality and reliability. The extent to which we fail to successfully maintain commercial success of our products could limit our ability to be profitable.

We rely on, and for the foreseeable future expect to continue to rely on, a limited number of independent manufacturers to produce our products. Our manufacturers’ systems and procedures may not be adequate to support our operations and may not be able to achieve the rapid execution necessary to exploit the market for our products. If we are successful in continuing to increase our product revenue, we will need to also increase our supply requirements. However, our contracted manufacturers could experience manufacturing and control problems in connection with their manufacture of our products, which could disrupt their ability to timely and adequately supply us with product. If we experience any of these problems with respect to our manufacturers’ scale-ups of manufacturing operations, then we may not be able to have our products manufactured and delivered in a timely manner. Our products are new and evolving, and our manufacturers may encounter unforeseen difficulties in manufacturing them in commercial quantities or at all.

Therevenue from our emergency response business is unpredictable and is subject to factors outside our control. As a result, our revenueand operating results may vary significantly from period to period.

A portion of our revenue is derived from the sale of our filtration products to address outbreaks of waterborne pathogens in hospitals and other buildings and facilities, which we sometimes refer to as our emergency response (ER) business. In these situations, building operators often look to us to install our filtration systems in order to immediately remediate an active outbreak. However, the frequency, timing and severity of such outbreaks are unpredictable. During periods in which several outbreaks occur across the territories we serve we may see a significant increase in the demand for our filtration products, leading to increased sales. On the other hand, during periods when only a small number of outbreaks occur, we see reduced demand for our products. Given the difficulty in predicting the timing and magnitude of sales based on our ER business, we may experience quarter-to-quarter fluctuations in revenue resulting in the potential for a sequential decline in quarterly revenue.

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Ifwe cannot develop adequate distribution, customer service and technical support networks, then we may not be able to market and distributeour products effectively and/or customers may decide not to order our products. In either case, our sales and revenues will suffer.

Our strategy requires us to distribute our products and, if needed, provide customer service and maintenance and other technical service. To provide these services, we have begun, and will need to continue, to develop a network of distribution and a staff of employees and independent contractors in each of the areas in which we intend to operate. In particular, following the termination of our exclusive distribution relationship with Donastar in the food, beverage and hospitality markets, our ability to grow sales in our commercial business will depend largely on the efforts of new distribution partners in these markets. We cannot assure that we will be able to organize and manage this network on a cost-effective basis. If we cannot effectively organize and manage this network, then it may be difficult for us to distribute our products and to provide competitive service and support to our customers, in which case customers may be unable, or decide not, to order our products and our sales and revenues will suffer.

Weare dependent on third parties to supply us with our products, making us vulnerable to supply problems and price fluctuations.

We rely on third-party suppliers to provide us with certain components of our products. With respect to our proprietary filter material used in our DSU-H, SSU-H, S100 and HydraGuard^TM^ and HydraGuard^TM^ – Flush filters, we rely on a single source supplier, Medica S.p.A. (“Medica”), an Italy-based medical product manufacturing company. Our agreement with Medica will expire in 2030 and although we believe our relationship with this supplier is good, there can be no assurance that our current agreement will guarantee uninterrupted supply or that we will be able to renew the agreement on favorable terms, or at all. We depend on Medica and our other suppliers to provide us and our customers with materials in a timely manner that meet our and their quality, quantity and cost requirements. These suppliers may encounter problems during manufacturing for a variety of reasons, any of which could delay or impede their ability to meet our demand and our customers’ demands.

Companies in the United States and around the world may experience a disruption in the supply of certain components and raw materials, as happened during the worldwide pandemic starting in 2020. A disruption in such items as resins and polymers could adversely affect us and our ability to obtain these components in a timely manner, in the volumes we require, or at all. In addition, the prices of these components and other supplies we rely upon in the manufacture of our products may rise. For example, we and our suppliers have recently experienced, and may continue to experience, rising costs due to inflation, such as costs of materials, labor and freight. If inflation continues to rise, the prices of our components may rise, resulting in increased expenses to us that we may not be able to offset by raising the prices of our products.

Any supply interruption from our suppliers or failure to obtain additional suppliers for any of the components used in our products, or price increases of these supplies, could have a material adverse effect on our business, financial condition and results of operations.

Significantdevelopments resulting from recent and potential changes in United States tariff policies could have a material adverse effect on us .

Beginning in the first quarter of 2025, the current U.S. presidential administration has imposed tariffs on various goods from various countries, including the European Union (“EU”), and has announced intentions to impose further significant tariffs on certain United States imports. The administration relied on the U.S. International Emergency Economic Powers Act (IEEPA) as the statutory basis for its authority to impose most of such tariffs. However, on February 20, 2026, the U.S. Supreme Court ruled that the IEEPA did not grant the president authority to impose tariffs, rendering such previously imposed tariffs invalid. Following the Supreme Court’s decision, the U.S. administration announced its intention to invoke other laws to impose tariffs by executive order and thereafter imposed new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. We rely on suppliers operating in, and exporting from, the EU, including our exclusive supplier of the filtration materials and technology used in certain of our filtration products. To the extent that tariffs and other restrictions imposed by the United States increase the price of, or limit the amount of, materials and finished goods imported into the United States, the costs of our materials, which we may be unable to pass onto customers, may be adversely affected, which could adversely affect our revenues and profitability. We cannot predict the effect these and potential additional tariffs will have on our supplier and our business, including in the context of escalating trade tensions. Further tariffs, additional taxes, or trade barriers, both domestically and internationally, may affect our costs and margins, the competitiveness of our products, and our ability to sell products or purchase necessary equipment and supplies, and consequently materially and adversely affect our business, results of operations, and financial conditions.

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Weare subject to minimum purchase obligations under our License and Supply Agreement with Medica and failure to meet these minimum purchaserequirements may result in termination of the agreement, which could materially impact our ability to obtain our filtration products.

On November 1, 2025, we entered into a license and supply agreement (the “License and Supply Agreement”) with Medica for the marketing and sale of certain filtration products based upon Medica’s proprietary ultrafiltration technology in conjunction with our filtration products (collectively, the “Products”), and to engage in an exclusive supply arrangement for the Products, meaning Medica is our sole supplier for the filter material used in certain of our products. Under the License and Supply Agreement, Medica granted to us an exclusive license, with right of sublicense, to market, promote, distribute, offer for sale and sell the Products in the Territory (as defined in the License and Supply Agreement). In addition, we granted to Medica an exclusive license under our intellectual property to make the Products during the term of the License and Supply Agreement.

In exchange for the rights granted, we have agreed to make minimum annual aggregate purchases from Medica of €4,976,000, €5,349,000, €5,750,000, €6,000,000 and €6,300,000 for the years 2026, 2027, 2028, 2029 and 2030, respectively. If we are unable to satisfy the minimum purchase commitments in future years, we may be in breach of the License and Supply Agreement, giving Medica a right of termination. If the License and Supply Agreement is terminated, we may be unable to obtain our filtration products from an alternative supplier on commercially favorable terms, if at all. If we are unable to obtain our filtration products from an alternative supplier, we may be unable to supply our products to our customers, which could have a material adverse effect on our results of operations and damage our reputation.

Weoperate with a limited senior management team and are highly dependent on our sales and marketing personnel. Our business could be harmedif we are unable to attract and retain personnel necessary for our success.

We operate our business with a two-person senior management team. We have a Chief Executive Officer and a Chief Financial Officer, who together directly oversee operations, sales, finance and corporate development. Our dependence on two officers to perform multiple functions exposes us to various risks, including the risk that two officers may be unable to devote sufficient or timely attention to all aspects of operating our business and that in the event of a sudden departure of one officer, we may not be able to promptly identify a successor. We do not carry key person life insurance on any of our employees. If we are unable to recruit and retain qualified personnel to our senior management teams, we will be unlikely to achieve our objectives of continuing to grow our company and our business may otherwise be harmed.

In addition, our need to significantly increase our revenue is also dependent on the personnel in our sales and marketing organization. We have limited resources to add sales and marketing professionals at this time. Accordingly, our success will depend on our ability to continue developing and retaining our personnel. Our ability to increase our sales revenue may be materially impaired if we experience attrition in our sales and marketing organization or if we are unsuccessful in developing our sales personnel.

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Werely on information technology systems and network infrastructure to operate and manage our business. If we experience a breach, cyberattack or other disruption to these systems or data, our business, results of operations and financial condition could be adversely affected.

We are increasingly dependent on sophisticated information technology systems to operate our business, including to process, transmit and store sensitive data. Specifically, we rely on our information technology systems to effectively manage sales and marketing, accounting and financial functions, inventory management, and our research and development data. Our business therefore depends on the continuous, effective, reliable, and secure operation of our computer hardware, software, networks, Internet servers, and related infrastructure.

Although we believe our computer and communications hardware is protected by reasonable physical, technical, and administrative safeguards, it is still vulnerable to system malfunction, computer viruses, and cybersecurity breaches – including ransomware, phishing, malware, brute force, insider threats, and other cyber attacks and security incidents. These events could lead to the unauthorized access to information systems maintained by us or our service providers or customers and result in the misappropriation or unauthorized disclosure of confidential information belonging to us, our employees, customers, distributors or our suppliers. The techniques used by criminal elements to attack computer systems are sophisticated, change frequently and may originate from less regulated and remote areas of the world, including countries that engage in state-sponsored cyber attacks. As a result, we may not be able to address these techniques proactively or implement adequate preventative measures. Additionally, the regulatory environment governing information, security and privacy laws is increasingly demanding and continues to evolve. If our information technology systems are compromised, we could be subject to fines, damages, litigation and enforcement actions and we could lose trade secrets or other confidential information, the occurrence of which could harm our reputation, business, results of operations and financial condition.

Our information systems, and those of third parties with whom we contract, also require an ongoing commitment of significant resources to maintain, protect and enhance existing systems and develop new systems to keep pace with continuing changes in information technology. The failure of our information technology systems to perform as we anticipate or our failure to effectively implement new systems could disrupt our operations and could result in decreased sales, increased overhead costs, excess inventory and product shortages, all of which could have a material adverse effect on our reputation, business, results of operations and financial condition.

Productliability associated with the production, marketing, and sale of our products, and/or the expense of defending against claims of productliability, could materially deplete our assets and generate negative publicity which could impair our reputation.

The production, marketing and sale of water-filtration products, particularly to healthcare facility customers, have inherent risks of liability in the event of product failure or claim of harm caused by product operation. Voluntary recalls could subject us to claims or proceedings by consumers, the FDA or other regulatory authorities which may adversely impact our sales and revenues. Furthermore, even meritless claims of product liability may be costly to defend against. Although we have acquired product liability insurance for our products, we may not be able to maintain or obtain this insurance on acceptable terms or at all. Because we may not be able to obtain insurance that provides us with adequate protection against all potential product liability claims, a successful claim in excess of our insurance coverage could materially deplete our assets. Moreover, even if we are able to obtain adequate insurance, any claim against us could generate negative publicity, which could impair our reputation and adversely affect the demand for our products, our ability to generate sales and our profitability.

Some of the agreements that we may enter into with manufacturers of our products and components of our products may require us to obtain product liability insurance; or to indemnify manufacturers against liabilities resulting from the sale of our products. For example, the agreement with our contract manufacturer (“CM”) requires that we obtain and maintain certain minimum product liability insurance coverage and that we indemnify our CM against certain liabilities arising out of our products that they manufacture, provided they do not arise out of our CM’s breach of the agreement, negligence or willful misconduct. If we are not able to obtain and maintain adequate product liability insurance, then we could be in breach of these agreements, which could materially adversely affect our ability to produce our products and generate revenues. Even if we are able to obtain and maintain product liability insurance, if a successful claim in excess of our insurance coverage is made, then we may have to indemnify some or all of our manufacturers for their losses, which could materially deplete our assets.

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Wecannot assure you that our products will be safe or that there will not be product-related deaths, serious injuries or product malfunctions.Further, we are required under applicable law to report any circumstances relating to our medically approved products that could resultin deaths or serious injuries. These circumstances could trigger recalls, class action lawsuits and other events that could cause usto incur expenses and may also limit our ability to generate revenues from such products.

We cannot assure you that our products will prove to be safe or that there will not be 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 significant expenses, limit our ability to market our products and generate revenues from such products or cause us reputational harm. Under the FDC Act, we are required to submit medical device reports (“MDRs”) to the FDA to report device-related deaths, serious injuries and malfunctions of medically approved products that could result in death or serious injury if they were to recur. Depending on their significance, MDRs could trigger events that could cause us to incur expenses and may also limit our ability to generate revenues from such products. Additionally, any of the following could occur:

●	information<br> contained in the MDRs could trigger FDA regulatory actions such as inspections, recalls and patient/physician notifications;
●	because<br> the reports are publicly available, MDRs could become the basis for private lawsuits, including class actions; and
●	if<br> we fail to submit a required MDR to the FDA, the FDA could take enforcement action against us.

If any of these events occur, then we could incur significant expenses and it could become more difficult for us to market and sell our products and to generate revenues from sales. Other countries may impose analogous reporting requirements that could cause us to incur expenses and may also limit our ability to generate revenues from sales of our products.

Werely on both employees and third-party contractors to install and service our water filtration products, and any failure by these partiesto perform adequately could adversely affect our business and reputation.

The proper installation and servicing of our water filtration products are critical to ensuring their performance, safety and regulatory compliance. We rely on employees and third-party contractors and service providers to install and service our water filtration products. These contractors are not our employees, and we have limited control over the quality, timeliness, and consistency of their work. Their performance is influenced by factors that may be beyond our control, including the availability and training of their personnel. If we or our third-party service providers fail to perform installation or service work to our standards or to our customers’ expectations, our products may not function as intended, our reputation and customer satisfaction may be harmed. Poor workmanship or noncompliance with our installation and servicing specifications or applicable regulations could result in product malfunctions, water quality issues, property damage, customer complaints, personal injury, or other claims against us. Such failures could also expose us to increased warranty claims, as well as costs associated with corrective actions, replacements, or recalls. In addition, even isolated incidents of improper installation or servicing – whether caused by us or by third-party providers engaged by us – could negatively impact our brand and reputation, leading to reduced repeat or referral sales. Any of these outcomes could materially and adversely affect our reputation, results of operations, and financial condition.

Risks

Related to Government Regulation

Ifwe violate any provisions of the FDC Act or any other statutes or regulations, then we could be subject to enforcement actions by theFDA or other governmental agencies.

We face a significant compliance burden under the FDC Act and other applicable statutes and regulations which govern the testing, labeling, storage, record keeping, distribution, sale, marketing, advertising and promotion of our medically approved products. If we violate the FDC Act or other regulatory requirements (either with respect to our ultrafilters or otherwise) at any time during or after the product development and/or approval process, we could be subject to enforcement actions by the FDA or other agencies, including:

●	fines;
●	injunctions;

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| --- | | ● | civil penalties; | | --- | --- | | ● | recalls or seizures of products; | | ● | total or partial suspension of the production of our products; | | ● | withdrawal of any existing approvals or pre-market clearances of our products; | | ● | refusal to approve or clear new applications or notices relating to our products; | | ● | recommendations that we not be allowed to enter into government contracts; and | | ● | criminal prosecution. |

Any of the above could have a material adverse effect on our business, financial condition, and results of operations.

Ifwe develop new water filter products in the future, we may be required to obtain regulatory approvals and clearances in the countriesin which we intend to sell such products. If we fail to receive, or experience a significant delay in receiving, such approvals and clearances,then we may not be able to get our new products to market and enhance our revenues.

Our current water filter products that we market and sell to healthcare facilities and dialysis centers have 510(k) clearance from the FDA. However, we will need to continue developing new products in the future to continue to compete in our industry, and such new products may require obtaining regulatory approvals in the U.S. and other jurisdictions in which we intend to market them.

We cannot ensure that any new products developed by us in the future, will be approved for marketing. The clearance and/or approval processes can be lengthy and uncertain, and each requires substantial commitments of our financial resources and our management’s time and effort. Even if we do obtain regulatory approval, approval may be only for limited uses with specific classes of patients, processes, or other devices. Our failure to obtain, or delays in obtaining, the necessary regulatory clearance and/or approvals would prevent us from selling our affected products in the applicable regions. If we cannot sell some of our products in such regions, or if we are delayed in selling while waiting for the necessary clearance and/or approvals, our ability to generate revenues from these products will be limited.

Over time, we intend to market our products globally. Requirements pertaining to the sale of our products vary widely from country to country. It may be very expensive and difficult for us to meet the requirements for the sale of our products in many countries. As a result, we may not be able to obtain the required approvals in a timely manner, if at all. If we cannot sell our products in a particular region, then the size of our potential market could be reduced, which would limit our potential sales and revenues.

Significantadditional governmental regulation could subject us to unanticipated delays that would adversely affect our sales and revenues.

Our business strategy depends in part on our ability to get our products into the market as quickly as possible. Additional laws and regulations, or changes to existing laws and regulations that are applicable to our business may be enacted or promulgated, and the interpretation, application or enforcement of the existing laws and regulations may change. We cannot predict the nature of any future laws, regulations, interpretations, applications or enforcements or the specific effects any of these might have on our business. Any future laws, regulations, interpretations, applications, or enforcements could delay or prevent regulatory approval or clearance of our products and our ability to market our products. Moreover, changes that result in our failure to comply with the requirements of applicable laws and regulations could result in enforcement actions by the FDA and/or other agencies, all of which could impair our ability to have manufactured and to sell the affected products.

Ifwe are not able to maintain sufficient quality controls, then the approval or clearance of any of our future products by the FDA or otherrelevant authorities could be withdrawn, delayed, or denied and our sales and revenues will suffer.

Approval or clearance of our products could be withdrawn, delayed, or denied by the FDA and the relevant authorities of other countries if our manufacturing facilities do not comply with their respective manufacturing requirements. The FDA imposes requirements through quality system requirements regulations, which include requirements for good manufacturing practices. Failure by our manufacturers to comply with these requirements could prevent us from obtaining FDA pre-clearance or approval of our products and from marketing such products in the United States. Although the manufacturing facilities and processes that we use to manufacture our OLpūr MD HDF filter series have been inspected and certified by a worldwide testing and certification agency (also referred to as a notified body) that performs conformity assessments to requirements for medical devices, they have not been inspected by the FDA. A “notified body” is a group accredited and monitored by governmental agencies that inspects manufacturing facilities and quality control systems at regular intervals and is authorized to carry out unannounced inspections. We cannot be sure that any of the facilities or processes we use will comply or continue to comply with their respective requirements on a timely basis or at all, which could delay or prevent our obtaining the approvals we need to market our products in the United States.

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Risks

Related to our Intellectual Property

Protectingour intellectual property in our technology through patents may be costly and ineffective. If we are not able to adequately secure orenforce protection of our intellectual property, then we may not be able to compete effectively and we may not be profitable.

Our future success depends in part on our ability to protect the intellectual property for our technology through patents. We will only be able to protect our products and methods from unauthorized use by third parties to the extent that our products and methods are covered by valid and enforceable patents or are effectively maintained as trade secrets. Our 5 granted U.S. patents will expire at various times from 2026 to 2044, assuming they are properly maintained.

The protection provided by our patents may not be broad enough to prevent competitors from introducing similar products into the market. Our patents, if challenged or if we attempt to enforce them, may not necessarily be upheld by the courts of any jurisdiction. Numerous publications may have been disclosed by, and numerous patents may have been issued to, our competitors and others relating to methods and devices for dialysis of which we are not aware and additional patents relating to methods and devices for dialysis may be issued to our competitors and others in the future. If any of those publications or patents conflict with our patent rights, or cover our products, then any or all of our patent applications could be rejected and any or all of our granted patents could be invalidated, either of which could materially adversely affect our competitive position.

Litigation and other proceedings relating to patent matters, whether initiated by us or a third party, can be expensive and time-consuming, regardless of whether the outcome is favorable to us, and may require the diversion of substantial financial, managerial, and other resources. An adverse outcome could subject us to significant liabilities to third parties or require us to cease any related development, product sales or commercialization activities. In addition, if patents that contain dominating or conflicting claims have been or are subsequently issued to others and the claims of these patents are ultimately determined to be valid, then we may be required to obtain licenses under patents of others in order to develop, manufacture, use, import and/or sell our products. We may not be able to obtain licenses under any of these patents on terms acceptable to us, if at all. If we do not obtain these licenses, we could encounter delays in, or be prevented entirely from using, importing, developing, manufacturing, offering, or selling any products or practicing any methods, or delivering any services requiring such licenses.

If we file for or obtain additional patents in foreign countries, we will be subject to laws and procedures that differ from those in the United States. Such differences could create additional uncertainty about the level and extent of our patent protection. Moreover, patent protection in foreign countries may be different from patent protection under U.S. laws and may not be as favorable to us. Many non-U.S. jurisdictions, for example, prohibit patent claims covering methods of medical treatment of humans, although this prohibition may not include devices used for such treatment.

Ifwe are not able to secure and enforce protection of our trade secrets through enforcement of our confidentiality and non-competitionagreements, then our competitors may gain access to our trade secrets, we may not be able to compete effectively, and we may not be profitable.Such protection may be costly and ineffective.

We attempt to protect our trade secrets, including the processes, concepts, ideas, and documentation associated with our technologies, through the use of confidentiality agreements and non-competition agreements with our current employees and with other parties to whom we have divulged such trade secrets. If these employees or other parties breach our confidentiality agreements and non-competition agreements, or if these agreements are not sufficient to protect our technology or are found to be unenforceable, then our competitors could acquire and use information that we consider to be our trade secrets and we may not be able to compete effectively. Policing unauthorized use of our trade secrets is difficult and expensive and, in the event we further expand our operations, the laws of other countries may not adequately protect our trade secrets.

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Risks

Related to Owning Our Common Stock

Theprices at which shares of the common stock trade have been and will likely continue to be volatile.

During the two years ended December 31, 2025, our common stock has traded at prices ranging from a high of $6.42 to a low of $1.39 per share. Due to the limited trading volume of our common stock, we expect the prices at which our common stock might trade to continue to be highly volatile. The expected volatile price of our stock will make it difficult for investors to predict the value of an investment in our common stock, to sell shares at a profit at any given time, or to plan purchases and sales in advance. A variety of other factors might also affect the market price of our common stock. These include, but are not limited to:

●	period-to-period<br> fluctuations in our results of operations;
●	sales<br> of our common stock or other financing transactions;
●	announcements<br> of technological innovations or new commercial products by our competitors or us;
●	developments<br> concerning proprietary rights, including patents;
●	achievement<br> or rejection of regulatory approvals by our competitors or us;
●	regulatory<br> developments in the United States and foreign countries;
●	economic<br> or other crises and other external factors;
●	threatened<br> or actual litigation; and
●	changes<br> in financial estimates by securities analysts.

We are not able to control many of these factors, and we believe that period-to-period comparisons of our financial results will not necessarily be indicative of our future performance.

Ourcommon stock could be further diluted as a result of the issuance of additional shares of common stock, warrants or options.

In the past we have issued common stock and warrants in order to raise capital to help fund our business. We have also issued stock options and restricted stock as compensation for services and incentive compensation for our employees, directors, and consultants, and we have previously issued shares of our common stock as consideration for acquiring other businesses. We have shares of common stock reserved for issuance upon the exercise of certain of these securities and may increase the shares reserved for these purposes in the future. Our issuance of additional common stock, options and warrants could affect the rights of our stockholders, could reduce the market price of our common stock, or could obligate us to issue additional shares of common stock.

Market sales of large amounts of our common stock, or the potential for those sales even if they do not actually occur, may have the effect of depressing the market price of our common stock, the supply of common stock available for resale could be increased, which could stimulate trading activity and cause the market price of our common stock to drop, even if our business is doing well. Furthermore, the issuance of any additional shares of our common stock or securities convertible into our common stock could be substantially dilutive to holders of our common stock if they do not invest in future offerings.

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Wehave identified a material weakness in our internal control over financial reporting. If we are unable to remediate this material weakness,or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controlover financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which mayadversely affect investor confidence in us and the value of our common stock.

In connection with the preparation of our financial statements as of and for the quarterly period ended March 31, 2025, we identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. Specifically, our management concluded that we had designed or maintained effective controls to ensure that we properly recognize revenue from service-based sales contracts. See “PART II – Item 9A. Controls and Procedures” in this Annual Report.

Although these items did not result in a material misstatement to our financial statements, this material weakness could have resulted in a material misstatement to our annual or interim financial statements that would not be prevented or detected. While we are designing and implementing measures to remediate our existing material weakness, we cannot predict the success of such measures. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business, personnel, information technology systems or other factors. If we fail to remediate our existing material weakness or identify new material weaknesses in our internal control over financial reporting, or if we are unable to conclude that our internal control over financial reporting is effective, it is possible that a material misstatement of our financial statements would not be prevented or detected on a timely basis, investors may lose confidence in the accuracy and completeness of our financial reports, and the value of our common stock could be materially and adversely affected.

Wehave never paid dividends and do not intend to pay cash dividends.

We have never paid dividends on our common stock and currently do not anticipate paying cash dividends on our common stock for the foreseeable future. Consequently, any returns on an investment in our common stock in the foreseeable future will have to come from an increase in the value of the stock itself. As noted above, the lack of an active trading market for our common stock will make it difficult to value and sell our common stock. While our dividend policy will be based on the operating results and capital needs of our business, we anticipate that all earnings, if any, will be retained to finance our future operations.

Severalprovisions of the Delaware General Corporation Law, our fourth amended and restated certificate of incorporation, as amended, and oursecond amended and restated bylaws could discourage, delay or prevent a merger or acquisition, which could adversely affect the marketprice of our common stock.

Several provisions of the Delaware General Corporation Law, our fourth amended and restated certificate of incorporation, as amended, and our second amended and restated bylaws could discourage, delay or prevent a merger or acquisition that stockholders may consider favorable, and the market price of our common stock could be reduced as a result. These provisions include:

●	authorizing<br> our board of directors to issue “blank check” preferred stock without stockholder approval;
●	providing<br> for a classified board of directors with staggered, three-year terms;
●	prohibiting<br> us from engaging in a “business combination” with an “interested stockholder” for a period of three years<br> after the date of the transaction in which the person became an interested stockholder unless certain provisions are met;
---	---
●	prohibiting<br> cumulative voting in the election of directors;
●	limiting<br> the persons who may call special meetings of stockholders; and
●	establishing<br> advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on<br> by stockholders at stockholder meetings.

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Asa smaller reporting company with little or no name recognition and with several risks and uncertainties that could impair our businessoperations, we are not likely to generate widespread interest in our common stock. Without widespread interest in our common stock, ourcommon stock price may be highly volatile and an investment in our common stock could decline in value.

Unlike many companies with publicly traded securities, we have little or no name recognition in the investment community. We are a relatively new company and very few investors are familiar with either our company or our products. We do not have an active trading market in our common stock, and one might never develop, or if it does develop, might not continue.

Additionally, the market price of our common stock may fluctuate significantly in response to many factors, many of which are beyond our control. Risks and uncertainties, including those described elsewhere in this “Risk Factors” section could impair our business operations or otherwise cause our operating results or prospects to be below expectations of investors and market analysts, which could adversely affect the market price of our common stock. As a result, investors in our common stock may not be able to resell their shares at or above their purchase price and could lose all of their investment.

Securities class action litigation is often brought against public companies following periods of volatility in the market price of such company’s securities. We may become subject to this type of litigation in the future. Litigation of this type could be extremely expensive and divert management’s attention and resources from running our company.

Ourdirectors, executive officers, and Wexford Capital control a significant portion of our stock and, if they choose to vote together, couldhave sufficient voting power to control the vote on substantially all corporate matters.

As of March 1, 2026, Wexford Capital L.P. and its affiliates (together, “Wexford”),, our largest stockholder, beneficially owned approximately 34% of our outstanding common stock. Collectively, Wexford, our directors and our executive officers beneficially owned approximately 37.5% of our outstanding common stock. As a result of this ownership, Wexford has the ability to exert significant influence over our policies and affairs, including the election of directors. Wexford, whether acting alone or acting with other stockholders, could have the power to elect all of our directors and to control the vote on substantially all other corporate matters without the approval of other stockholders. Furthermore, such concentration of voting power could enable Wexford, whether acting alone or acting with other stockholders, to delay or prevent another party from taking control of our company even where such change of control transaction might be desirable to other stockholders. The interests of Wexford in any matter put before the stockholders may differ from those of any other stockholder.

Futuresales of our common stock could cause the market price of our common stock to decline.

The market price of our common stock could decline due to sales of a large number of shares in the market, including sales of shares by Wexford or any other large stockholder, or the perception that such sales could occur. These sales could also make it more difficult or impossible for us to sell equity securities in the future at a time and price that we deem appropriate to raise funds through future offerings of common stock. Future sales of our common stock by stockholders could depress the market price of our common stock.

Item1B. Unresolved Staff Comments

Not required.

Item1C. Cybersecurity

RiskManagement and Strategy

We have implemented cybersecurity processes, technologies, and controls to aid in our efforts to assess, identify, and manage cybersecurity risks. Our enterprise risk management framework considers cybersecurity risk alongside other company risks as part of our overall risk assessment process.

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Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.

Our cybersecurity risk management program includes:

●	risk<br> assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and<br> our broader enterprise information technology (“IT”) environment;
●	an<br> outsourced security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls,<br> and (3) our response to cybersecurity incidents;
●	the<br> use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security controls;
●	cybersecurity<br> awareness training for our employees, incident response personnel, and senior management. This includes mandatory computer-based<br> training, internal communications, and regular phishing awareness campaigns that are designed to emulate real-world contemporary<br> threats and provide immediate feedback (and, if necessary, additional training or remedial action) to employees.

In addition to the processes, technologies, and controls that we have in place to reduce the likelihood of a material cybersecurity incident (or series of related cybersecurity incidents), our outsourced security team has a written incident response plan outlining how to address cybersecurity events that occur. We have assigned a team comprised of finance and technology personnel to review the plan annually to serve as a framework for the execution of responsibilities across businesses and operational roles. The incident response plan is designed to help us coordinate actions to prepare for, detect, respond to and recover from cybersecurity incidents, and includes processes to triage, assess severity, escalate, contain, investigate, and remediate the incident, as well as to assess the need for disclosure, comply with applicable legal obligations and mitigate the impact to our brand and reputation and on impacted parties.

In addition to the cybersecurity incident response plan, our outsourced team conducts tabletop exercises to enhance our incident response preparedness. They also have processes to oversee and identify material risks from cybersecurity threats associated with our use of third-party service providers. Such processes include conducting due diligence and risk assessment of our current and potential vendors that examine such vendor’s cybersecurity protocols and adherence to applicable regulations.

We also maintain business continuity and disaster recovery plans to prepare for and respond to the potential for any disruption in the technology we rely on. Additionally, we maintain insurance coverage that, subject to its terms and conditions, is intended to help us cover certain costs associated with cybersecurity incidents and information system failures.

We (or the third parties we rely on) may not be able to fully, continuously, or effectively implement security controls as intended. As described above, we utilize a risk-based approach and judgment to determine whether and how to implement certain security controls and it is possible that we may not implement the necessary controls if we are unable to recognize or underestimate a particular risk. In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate cybersecurity risks. Cybersecurity events, when detected by security tools or third parties, may not always be identified immediately or addressed in the manner intended by our cybersecurity incident response plan.

Governance

Based on the information available as of the date of this Annual Report, we have no reason to believe any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. For additional information, see “Risks Related to Our Overall Business and Operations – We rely on information technology systems and network infrastructure…” in Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

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Given that cybersecurity risks can impact various areas of responsibility of the Committees of the Board, as well as the overall size of the Board, the Board believes it is useful and effective for the entire Board to maintain direct oversight over cybersecurity matters. We have implemented processes that will include regular updates to the Board from our Chief Executive Officer and Chief Financial Officer for its review and feedback regarding cybersecurity governance processes, the status of projects to strengthen internal cybersecurity, results from third-party assessments, and also discusses any significant cyber incidents, including recent incidents at other companies and the emerging threat landscape.

Our cybersecurity risk management strategy processes, discussed in greater detailed above, are led by our Chief Financial Officer, in conjunction with our outsourced security team, under the supervision of our Chief Executive Officer. These individuals are informed about and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including their roles in our overall enterprise risk management. As discussed above, our Chief Executive Officer and Chief Financial Officer regularly report to the Board about cybersecurity threat risks, among other cybersecurity related matters.

Item2. Properties

Our U.S. facilities are located at 380 Lackawanna Place, South Orange, New Jersey 07079 and 30 Leslie Court, Whippany, NJ 07981. We use these facilities to house our corporate headquarters, research, manufacturing, and distribution facilities.

We believe our current facilities are adequate to meet our needs, although we may consolidate facilities in the future. We do not own any real property for use in our operation or otherwise.

Item3. Legal Proceedings

There are currently no material pending legal proceedings and, as far as we are aware, no governmental authority is contemplating any material proceeding to which we are a party or to which any of our properties is subject.

Item4. Mine Safety Disclosures

Not applicable.

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PART

Item5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

CommonStock Information

Our common stock is quoted on the Nasdaq Capital Market under the symbol “NEPH”. Our common stock commenced trading on August 14, 2019.

As of December 31, 2025, there were approximately 41 holders of record of our common stock. The actual number of holders of common stock is greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and nominees. The number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

RecentSales of Unregistered Securities

Except as previously reported in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, we have not sold any equity securities during the year ended December 31, 2025, that were not registered under the Securities Act of 1933, as amended.

IssuerRepurchases of Equity Securities

There were no repurchases of our common stock during the fourth quarter of 2025.

EquityCompensation Plan Information

See Part III, Item 12, under the heading “Equity Compensation Plan Information,” which is incorporated by reference herein.

Item6. Reserved

Item7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Thefollowing discussion includes forward-looking statements about our business, financial condition and results of operations includingdiscussions about management’s expectations for our business. These statements represent projections, beliefs and expectationsbased on current circumstances and conditions and in light of recent events and trends, and these statements should not be construedeither as assurances of performances or as promises of a given course of action. Instead, various known and unknown factors are likelyto cause our actual performance and management’s actions to vary, and the results of these variances may be both material and adverse.A list of the known material factors that may cause our results to vary, or may cause management to deviate from its current plans andexpectations, is included in Item 1A, “Risk Factors,” of this Annual Report on Form 10-K. The following discussion shouldalso be read in conjunction with the financial statements and notes included in Item 8, “Financial Statements and SupplementalData,” of this Annual Report on Form 10-K.

BusinessOverview

Nephros is a commercial-stage company that develops and markets high-performance water filtration solutions for points of use, with a core focus on medical-grade water filtration. Our medical filtration portfolio includes two product lines: infection control and dialysis water. The infection control products feature both microfilters (0.1 micron), which retain bacteria, and ultrafilters (0.005 micron), which retain bacteria, viruses, and endotoxins to address a broader spectrum of waterborne pathogens including and beyond Legionella and Pseudomonas. The dialysis products consist exclusively of ultrafilters, extending the same microbial and endotoxin retention capabilities to the purification of water and bicarbonate concentrate used in dialysis treatment, where endotoxin control is especially critical. All of our medical-grade filters are FDA 510(k)-cleared as Class II medical devices—a distinguishing feature that affirms their validated safety and performance in critical-use environments. While these filters are widely used in healthcare settings, they have also been adopted across a range of other industries—including manufacturing, laboratories, aviation, and federal facilities—where water purity is essential to operational safety and compliance.

Across our product portfolio, we characterize revenue as either programmatic or emergency response. Programmatic revenue reflects recurring procurement of filters used within ongoing clinical, treatment, or operational workflows, and following a replacement schedule based on filter life. Emergency response revenue represents the rapid deployment of filtration solutions in response to acute water-quality events, such as outbreaks, contamination concerns, system disruptions, or precautionary advisories, and is predominantly associated with infection control filtration. Emergency response orders are generally non-recurring in nature, although emergency deployments may lead to subsequent routine purchasing.

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RecentAccounting Pronouncements

We are subject to recently issued accounting standards, accounting guidance and disclosure requirements. For a description of these new accounting standards, see “Note 2 – Summary of Significant Accounting Policies,” to our financial statements included in Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

CriticalAccounting Policies and Estimates

Revenue Recognition

A majority of our revenue is product sales which is recognized at a point-in-time when the product is shipped via external logistics providers and the other criteria of ASC 606 are met. Product revenue is recorded net of variable consideration which includes prompt pay discounts, other discounts, and returns and allowances.

In addition to product revenue, the Company recognizes revenue related to royalty, service, and other agreements in accordance with the five-step model in ASC 606. Sales-based royalties, for which the license is the predominant item to which the royalties relate, are recognized (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Service revenue is recognized at a point in time when service is completed. The Company is not entitled to payment until the point at which the service is completed.

To recognize revenue for contracts that include a combination of products and services, we allocate the transaction price for the contract among the identified performance obligations on a relative standalone selling price basis. We establish standalone selling price for our products based on the observable price of the respective product. For services where the standalone selling price is not directly observable through historical transactions, we estimate standalone selling price using expected cost-plus margin based on management judgment by considering available data, such as labor cost of providing the services and internal margin objectives which include market and competitive conditions. Standalone selling prices for our products and services are evaluated on a periodic basis using updated observable inputs and market information to ensure they continue to reflect an appropriate estimate of the price at which we would sell each promised good or service on a standalone basis.

Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of financial statements in accordance with GAAP requires application of management’s subjective judgments, often requiring estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our actual results may differ substantially from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in “Note 2 – Summary of Significant Accounting Policies,” to our financial statements included in Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K, we believe that the following accounting policies require the application of significant judgments and estimates.

InventoryReserves

We value our inventories at the lower of cost or net realizable value using the first-in, first-out method, whereby we make estimates regarding the value of our inventories, including an assessment of excess and obsolete inventories. We utilize both specific product identification and historical product demand as the basis for estimating our excess or obsolete inventory reserve. A portion of our inventories are subject to expiration dating, which can be extended in certain circumstances. We continually evaluate quantities on hand and the carrying value of our inventories to determine the need for reserves for excess and obsolete inventories, and apply a consistent policy to estimate the reserve, unless circumstances change that would require us to reassess our policy such as a sudden and significant decline in demand for our products, new technology, or macroeconomic conditions. If inventory is written down, a new cost basis is established that cannot be increased in future periods.

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Resultsof Operations

Fluctuationsin Operating Results

Our results of operations have fluctuated significantly from period to period in the past, including recently, and are likely to continue to do so in the future. We anticipate that our annual results of operations will be impacted for the foreseeable future by several factors, including market acceptance of our products, expense management, and progress in continuing to achieve positive operating cash flow.

FiscalYear Ended December 31, 2025, compared to the Fiscal Year Ended December 31, 2024

The following table sets forth our summarized, results of operations for the years ended December 31, 2025, and 2024 (in thousands except percentages):

	Years<br> Ended December 31,						Increase		%<br> <br>Increase
	2025			2024			(Decrease)		(Decrease)
Total net revenues	$	18,789		$	14,162					33	%
Cost of goods sold		7,164			5,439					32	%
Gross margin		11,625			8,723					33	%
Gross margin %		62	%		62	%				0	%
Research and development expenses		1,339			906					48	%
Depreciation and amortization expenses		140			135					4	%
Selling, general and administrative<br> expenses		9,000			7,676					17	%
Operating Income		1,146			6					19,000	%
Interest expense		(1	)		(1	)				0	%
Interest income		139			94					48	%
Other expense net		(78	)		(10	)		)		680	%
Income before income taxes		1,206			89					1,255	%
Income tax expense		(12	)		(15	)				(20	)%
Net Income	$	1,194		$	74					1,514	%

All values are in US Dollars.

NetRevenues.

Total net revenues increased 33% in the year ended December 31, 2025. This increase was primarily driven by higher programmatic revenue, reflecting strong reorder activity and the addition of several new active sites. In addition, we experienced solid growth in our emergency response business as well as significant growth in our service revenue.

GrossProfit Margin

Gross profit margin was approximately 62% for the years ended December 31, 2025 and December 31, 2024. Although we achieved higher margins during the first half of fiscal 2025, those margins eroded somewhat during the second half of the year primarily due to the impact of tariffs. We anticipate that tariffs will continue to affect our gross profit margins in future periods unless there is a change in U.S. tariff policy.

Researchand Development Expenses

Research and development expenses increased 48% primarily due to an increase in headcount , and the related salary expense, as well as higher accrual for employee bonuses.

Depreciationand Amortization Expense

Depreciation and amortization expenses were approximately $0.1 million for the year ended December 31, 2025, and for the year ended December 31, 2024, respectively.

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Selling,General and Administrative Expenses

Selling, general and administrative expenses increased $1.3 million or 17%, primarily due to higher sales commissions and higher accrual for employee bonuses.

InterestIncome

Interest income was approximately $139,000 for the year ended December 31, 2025, compared to approximately $94,000 for the ended December 31, 2024. The increase in interest income is due to higher cash balances as well as higher interest rates earned on invested cash balances.

Other(Expense), net

Other expense was approximately $78,000 for the year ended December 31, 2025, compared to $10,000 for the year ended December 31, 2024. This increase is primarily a result of losses on foreign currency transactions in 2025.

Liquidityand Capital Resources

The following table summarizes our liquidity and capital resources as of December 31, 2025 and 2024 and is intended to supplement the more detailed discussion that follows. The amounts stated are expressed in thousands.

	As<br> of December 31,
Liquidity<br> and Capital Resources	2025		2024
Cash and cash equivalents	$	5,400	$	3,760
Other current assets		5,823		4,538
Working capital		8,456		6,736
Stockholders’ equity		10,202		8,585

We operate under an Investment, Risk Management and Accounting Policy adopted by our Board of Directors. Such policy limits the types of instruments or securities in which we may invest our excess funds: U.S. Treasury Securities; Certificates of Deposit issued by money center banks; Money Funds by money center banks; Repurchase Agreements; and Eurodollar Certificates of Deposit issued by money center banks. This policy provides that our primary objectives for investments are the preservation of principal and achieving sufficient liquidity to meet our forecasted cash requirements. In addition, provided that such primary objectives are met, we may seek to achieve the maximum yield available under such constraints.

As of December 31, 2025, we had an accumulated deficit of $143.1 million. Although, we were profitable in the quarter and year ended December 31, 2025, and the full year ended December 31, 2024, we may incur future operating losses if we are unable to maintain or increase our revenue.

Based on cash that is available for our operations and projections of our future operations, we believe that our cash balances will be sufficient to fund our current operating plan through at least the next 12 months from the date of issuance of the financial statements in this Annual Report on Form 10-K. Additionally, our operating plans are designed to help control operating costs, to increase revenue so we can continue to generate sufficient cash flows to fund operations. If there were a decrease in the demand for our products due to either economic or competitive conditions, or if we are otherwise unable to achieve our plan or achieve our anticipated operating results, there could be a significant reduction in liquidity due to our possible inability to cut costs sufficiently. In such event, the Company may need to take further actions to reduce its discretionary expenditures, including further reducing headcount, reducing spending on R&D projects, and reducing other variable costs.

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Our future liquidity sources and requirements will depend on many other factors, including:

●	the<br> market acceptance of our products, and our ability to effectively and efficiently produce, market and sell our products;
●	the<br> costs involved in filing and enforcing patent claims and the status of competitive products; and
●	the<br> cost of litigation, including potential patent litigation and any other actual or threatened litigation.

We expect to put our current capital resources toward the development, marketing, and sales of our water filtration products and working capital purposes.

Net cash provided by operating activities was $1.6 million for the year ended December 31, 2025 compared to net cash used in operating activities of approximately $0.5 million for the year ended December 31, 2024. Net cash provided by operating activities in 2025 was primarily due to net income of approximately $1.2 million, and increase in accrued expenses of approximately $1 million, an increase in accounts payable of approximately $0.3 million, offset by an increase in accounts receivable of approximately $0.6 million, and an increase in inventory of approximately $0.7 million. Net cash used in operating activities in 2024 was primarily due to an increase in accounts receivable of approximately $0.3 million, a decrease in accounts payable and accrued expenses of approximately $0.2 million each, offset by an increase in inventory impairments and write-offs of approximately $0.3 million.

Net cash used in investing activities was approximately $0 and $50,000 for the years ended December 31, 2025 and 2024 respectively.

Net cash used in financing activities was approximately $5,000 for each of the years ended December 31, 2025 and 2024. This was primarily from principal payments on our finance lease obligation.

Item7A. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

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Item8. Financial Statements and Supplementary Data

Reportof Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Nephros, Inc.

Opinionon the Financial Statements

We have audited the accompanying balance sheets of Nephros, Inc. (the “Company”) as of December 31, 2025 and 2024, the related statements operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basisfor Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provides a reasonable basis for our opinion.

CriticalAudit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Baker Tilly US, LLP

Tewksbury, Massachusetts

March 12, 2026

We have served as the Company’s auditor since 2015.

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NEPHROS,

INC.

BALANCE

SHEETS

(Inthousands, except share and per share amounts)

			December<br> 31, <br>2024
ASSETS
Current assets:
Cash and cash<br> equivalents	5,400		$	3,760
Accounts receivable, net	2,414			1,781
Inventory	3,232			2,615
Prepaid<br> expenses and other current assets	177			142
Total current assets	11,223			8,298
Property and equipment, net	106			161
Lease right-of-use assets	1,021			1,377
Intangible assets, net	318			349
Goodwill	759			759
License and supply agreement, net	164			216
Other assets	50			50
TOTAL ASSETS	13,641		$	11,210
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	914			649
Accrued expenses	1,462			565
Current<br> portion of lease liabilities	391			348
Total current liabilities	2,767			1,562
Lease liabilities, net<br> of current portion	672			1,063
TOTAL LIABILITIES	3,439			2,625
STOCKHOLDERS’ EQUITY:
Preferred stock, .001<br> par value; 5,000,000 shares authorized at December 31, 2025 and 2024; no shares issued and outstanding at December 31, 2025 and<br> 2024	-			-
Common stock, .001<br> par value; 40,000,000 shares authorized at December 31, 2025 and 2024; 10,644,268 and 10,544,691 shares issued and outstanding<br> at December 31, 2025 and 2024, respectively	11			11
Additional paid-in capital	153,329			152,906
Accumulated<br> deficit	(143,138	)		(144,332	)
TOTAL STOCKHOLDERS’<br> EQUITY	10,202			8,585
TOTAL LIABILITIES AND<br> STOCKHOLDERS’ EQUITY	13,641		$	11,210

All values are in US Dollars.

The

accompanying notes are an integral part of these financial statements.

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NEPHROS,

INC.

STATEMENTS

OF OPERATIONS

(Inthousands, except share and per share amounts)

	2025			2024
	Years<br> Ended December 31,
	2025			2024
Net revenue:
Product revenues	$	18,234		$	14,035
Royalty<br> and other revenues		555			127
Total net revenues		18,789			14,162
Cost of goods sold		7,164			5,439
Gross<br> Margin		11,625			8,723
Operating expenses:
Research and development		1,339			906
Depreciation and amortization		140			135
Selling,<br> general and administrative		9,000			7,676
Total operating expenses		10,479			8,717
Operating income		1,146			6
Other (expense) income:
Interest expense		(1	)		(1	)
Interest income		139			94
Other<br> expense net		(78	)		(10	)
Total<br> other income		60			83
Income before income taxes		1,206			89
Income tax expense		(12	)		(15	)
Net income		1,194			74
Net income per common share, basic	$	0.11		$	0.01
Net income per common share, diluted	$	0.11		$	0.01
Weighted average common shares outstanding, basic		10,612,288			10,525,197
Weighted average common shares outstanding, diluted		10,968,063			10,602,004

The

accompanying notes are an integral part of these financial statements.

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NEPHROS,

INC.

STATEMENTS

OF CHANGES IN STOCKHOLDERS’ EQUITY

(Inthousands, except share amounts)

	Common<br> Stock				Additional<br> Paid-in			Accumulated			Total<br> Stockholders’
	Shares		Amount		Capital			Deficit			Equity
Balance, December 31, 2023		10,501,508	$	10	$	152,754		$	(144,406	)	$	8,358
Net income		-		-		-			74			74
Cashless exercise of stock options		1,016		-		-			-			-
Restricted stock vesting		42,164		1		(1	)		-			-
Stock-based compensation		-		-		153			-			153
Balance, December 31, 2024		10,544,691	$	11	$	152,906		$	(144,332	)	$	8,585
Balance		10,544,691	$	11	$	152,906		$	(144,332	)	$	8,585
Net income									1,194			1,194
Cashless exercise of stock options		28,869		-		-			-			-
Restricted stock vesting		70,708		-		147			-			147
Stock-based compensation		-		-		276			-			276
Balance, December 31, 2025		10,644,268	$	11	$	153,329		$	(143,138	)	$	10,202
Balance		10,644,268	$	11	$	153,329		$	(143,138	)	$	10,202

The

accompanying notes are an integral part of these financial statements.

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NEPHROS,

INC.

STATEMENTS

OF CASH FLOWS

(Inthousands)

	2025			2024
	Years<br> Ended December 31,
	2025			2024
OPERATING ACTIVITIES:
Net income	$	1,194		$	74
Adjustments to reconcile net income to net<br> cash provided by (used in) operating activities:
Depreciation of property<br> and equipment		55			46
Amortization of intangible<br> assets, license and supply agreement and finance lease right-of-use asset		84			91
Stock-based compensation		296			153
Inventory impairments and<br> writeoffs		68			262
Change in right-of-use<br> asset		356			447
Gain on asset disposal		-			(5	)
(Gain) or loss on foreign<br> currency transactions		5			(6	)
Decrease (Increase) in operating assets:
Accounts receivable		(633	)		(285	)
Inventory		(685	)		(407	)
Prepaid expenses and other<br> current assets		(35	)		(10	)
Other assets		-			36
(Decrease) Increase in operating liabilities:
Accounts payable		259			(220	)
Accrued expenses		1,024			(226	)
Lease<br> liabilities		(343	)		(442	)
Net cash provided by (used<br> in) operating activities		1,645			(492	)
INVESTING ACTIVITIES:
Sale of property and equipment		-			5
Purchase<br> of property and equipment		-			(55	)
Net cash used in investing<br> activities		0			(50	)
FINANCING ACTIVITIES:
Principal<br> payments on finance lease liability		(5	)		(5	)
Net<br> cash used in financing activities		(5	)		(5	)
Net increase (decrease)<br> in cash and cash equivalents		1,640			(547	)
Cash<br> and cash equivalents, beginning of year		3,760			4,307
Cash<br> and cash equivalents, end of year	$	5,400		$	3,760
Supplemental disclosure<br> of cash flow information
Cash<br> paid for interest expense	$	1		$	2
Supplemental disclosure<br> of noncash investing and financing activities
Right-of-use asset obtained<br> in exchange for finance lease liability	$	-		$	22

The

accompanying notes are an integral part of these financial statements.

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NEPHROS,

INC.

NOTES

TO FINANCIAL STATEMENTS

Note1 - Organization and Nature of Operations

Nephros, Inc. (“Nephros” or the “Company”) was incorporated under the laws of the State of Delaware on April 3, 1997. The Company was founded by health professionals, scientists and engineers affiliated with Columbia University to develop advanced end stage renal disease (“ESRD”) therapy technology and products.

Beginning in 2009, Nephros introduced high-performance liquid purification filters to meet the demand for water purification in certain medical markets. The Company’s filters, generally classified as ultrafilters, are primarily used in hospitals for the prevention of infection from waterborne pathogens, such as Legionella and Pseudomonas, and in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate. The Company also develops and sells water filtration products for commercial applications, focusing on the hospitality and foodservice markets.

The Company’s primary facility is located at 380 Lackawanna Place, South Orange, New Jersey 07079. This location along with our Whippany, NJ facility, houses the Company’s corporate headquarters, research, manufacturing, and distribution facilities.

Note2 - Summary of Significant Accounting Policies

Useof Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amount of revenues and expenses, during the reporting period. Actual results could differ materially from those estimates. Included in these estimates are assumptions about the collection of accounts receivable, value of inventories, standalone selling prices, useful life of fixed assets and intangible assets, the assessment of expected cash flows used in evaluating goodwill and other long-lived assets, the assessment of the ability to continue as a going concern and assumptions used in determining stock compensation such as expected volatility and risk-free interest rate.

Liquidity

The

Company generated net income for the year ended December 31, 2025, and had positive cash flow from operations of approximately $1.6 million for the same period. Our operations have consumed substantial amounts of cash since inception, generating an accumulated deficit of $143.1 million as of December 31, 2025. The Company continues to focus on growth in sales and managing expenses with the goal of maintaining cash flow positive from operations.

Concentrationof Credit Risk

The Company deposits its cash in financial institutions. At times, such deposits may be in excess of insured limits. To date, the Company has not experienced any impairment losses on its cash. The Company also limits its credit risk with respect to accounts receivable by performing credit evaluations when deemed necessary.

MajorCustomers

For the years ended December 31, 2025 and 2024, the following customers accounted for the following percentages of our revenues, respectively:

Schedule of Revenues and Accounts Receivable Percentage of Major Customers

Customer
A	22	%	25	%
B	12	%	3	%
C	10	%	8	%
Total	44	%	36	%

As of December 31, 2025 and 2024, the following customer accounted for the following percentage of our accounts receivable:

Customer
A	17	%	13	%
C	16	%	4	%
D	11	%	6	%
Total	44	%	23	%
Concentration risk percentage	44	%	23	%

Cashand Cash Equivalents

The Company considers all highly liquid money market instruments with an original maturity of three months or less when purchased to be cash equivalents. The company also classifies, as cash equivalents, certificates of deposit with an original maturity of greater than three months for which there is no cost to withdrawal funds prior to maturity date. At December 31, 2025 and 2024, cash and cash equivalents were deposited in financial institutions and consisted entirely of immediately available fund balances. The Company maintains its cash deposits and cash equivalents with financial institutions it believes to be well known and stable.

AccountsReceivable

The

Company recognizes an allowance that reflects a current estimate of credit losses expected to be incurred over the life of a financial asset, including trade receivables. The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses. The Company determines its allowance for credit losses by considering a number of factors, including the length of time balances are past due, the Company’s previous loss history, the customer’s current ability to pay its obligations to the Company and the expected condition of the general economy and the industry as a whole. The Company writes off accounts receivable when they are determined to be uncollectible. There was no allowance for credit losses as of December 31, 2025. The allowance for credit losses was approximately $11,000 as of December 31, 2024.

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Inventory

For all medical device products and some commercial products, the Company engages third parties to manufacture and package its finished goods, which are shipped to the Company for warehousing, until sold to distributors or end customers. Some commercial products are manufactured at Company facilities. Inventory consists of finished goods and raw materials and is valued at the lower of cost or net realizable value using the first-in, first-out method.

Reserve assessments include inventory obsolescence based upon expiration date, damaged, or rejected product, slow-moving products, and other considerations.

Licenseand Supply Rights

The Company’s rights under the License and Supply Agreement with Medica are capitalized and stated at cost, less accumulated amortization, and are amortized using the straight-line method over the term of the License and Supply Agreement, which is from April 23, 2012 through December 31, 2030. The Company determines amortization periods for licenses based on its assessment of various factors impacting estimated useful lives and cash flows of the acquired rights. The intangible asset is being amortized as an expense over the life of the License and Supply Agreement. See Note 8 – License and Supply Agreement, net for further discussion.

Leases

The Company determines if an arrangement contains a lease at inception. Leases are included in lease right-of-use (“ROU”) assets and lease liabilities on the balance sheet.

Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset includes any lease payments made and initial direct costs incurred and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

The Company has elected as an accounting policy not to apply the recognition requirements in ASC 842 to short-term leases. Short-term leases are leases that have a term of 12 months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes the lease payments for short-term leases on a straight-line basis over the lease term.

The Company has also elected, as a practical expedient, by underlying class of asset, not to separate lease components from non-lease components and, instead, account for them as a single component.

Propertyand Equipment, net

Property and equipment, net is stated at cost less accumulated depreciation. These assets are depreciated over their estimated useful lives of three3 to seven years using the straight-line method.

The Company adheres to ASC 360 and periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived assets, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. For long-lived assets, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The Company reports an asset to be disposed of at the lower of its carrying value or its fair value less costs to sell. There were no impairment losses for long-lived assets recorded for the year ended December 31, 2025 and 2024.

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Direct internal and external costs to implement internal-use software are capitalized. Capitalized costs are depreciated over the estimated useful life of the software, generally five years, beginning when software is ready for its intended use.

IntangibleAssets

The Company’s intangible assets include finite lived assets. Finite lived intangible assets, consisting of customer relationships, tradenames, service marks and domain names are amortized on a straight-line basis over the estimated useful lives of the assets.

Finite lived intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Impairment testing requires management to estimate the future undiscounted cash flows of an intangible asset using assumptions believed to be reasonable, but which are unpredictable and inherently uncertain. Actual future cash flows may differ from the estimates used in the impairment testing.

Goodwill

Goodwill represents the excess of purchase price over the fair value of net assets acquired. In accordance with ASC 350, “Goodwill and Other Intangibles,” rather than recording periodic amortization, goodwill is subject to an annual assessment for impairment by applying a fair value-based test. If the fair value of the reporting unit exceeds the reporting unit’s carrying value, including goodwill, then goodwill is considered not impaired, making further analysis not required. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable.

FairValue Measurements

The Company measures certain financial instruments and other items at fair value.

To determine the fair value, the Company uses the fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use to value an asset or liability and are developed based on market data obtained from independent sources. Unobservable inputs are inputs based on assumptions about the factors market participants would use to value an asset or liability.

To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable:

Level1 - Quoted prices in active markets for identical assets or liabilities.

Level2 - Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.

Level3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Value is determined using pricing models, discounted cash flow methodologies, or similar techniques and also includes instruments for which the determination of fair value requires significant judgment or estimation.

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RevenueRecognition

The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers.” ASC 606 prescribes a five-step model for recognizing revenue, which includes (i) identifying contracts with customers; (ii) identifying performance obligations; (iii) determining the transaction price; (iv) allocating the transaction price; and (v) recognizing revenue. See Note 3 – Revenue Recognition for further discussion.

Shippingand Handling Costs

Shipping

and handling costs charged to customers are recorded as revenue and as cost of goods sold and were approximately $198,000 and $126,000 for the years ended December 31, 2025 and 2024, respectively. The company has elected the practical expedient and treats shipping and handling as a fulfillment cost.

WarrantyCosts

The Company’s customers may return products due to defects, malfunctions, or if no longer needed (credit) within 30 days from the date of the original purchase, subject to inspection and approval by the Company. However, return quantities have historically been minimal/insignificant due to the Company’s rigorous pre-shipment inspection processes and ongoing customer support. The Company does not therefore accrue for warranty expense.

Researchand Development Costs

Research and development costs represent a significant part of our business. Costs included in research and development are expensed as incurred and relate to the processes of discovering, testing and developing new products, improving existing products and regulatory compliance prior to FDA approval. Research and development costs include, but are not limited to, personnel expenses, consulting costs and equipment depreciation.

Stock-BasedCompensation

The fair value of stock options is recognized as stock-based compensation expense in the Company’s statement of operations. The Company calculates stock-based compensation expense in accordance with ASC 718. The fair value of the Company’s stock option awards is estimated using a Black-Scholes option valuation model. This model requires the input of assumptions and elections including expected stock price volatility and the estimated life of each award. The fair value of stock-based awards is amortized over the vesting period of the award. For stock awards that vest based on performance conditions (e.g., achievement of certain milestones), expense is recognized when it is probable that the condition will be met.

OtherIncome and Expense, net

Other

expense of approximately $78,000 and $10,000 for the years ended December 31, 2025 and 2024, respectively, primarily resulted from losses on foreign currency transactions.

IncomeTaxes

The Company accounts for income taxes in accordance with ASC 740, which requires accounting for deferred income taxes under the asset and liability method. Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable in future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities.

For financial reporting purposes, the Company has incurred a loss in each period since its inception until 2024 Based on available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2025 and 2024.

ASC 740 prescribes, among other things, a recognition threshold and measurement attributes for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a company’s income tax return. ASC 740 utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. Step two, or measurement, is based on the largest amount of benefit that is more likely than not to be realized on settlement with the taxing authority. The Company is subject to income tax examinations by major taxing authorities for all tax years subsequent to 2017. During the years ended December 31, 2025 and 2024, the Company recognized no adjustments for uncertain tax positions. However, management’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulation and interpretations, thereof.

See Note 11 – Income Taxes for further discussion.

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NetIncome per Common Share

Basic income per common share is calculated by dividing net income available to common shareholders by the number of weighted average common shares issued and outstanding. Diluted income per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares issued and outstanding for the period, plus amounts representing the dilutive effect from the exercise of stock options and warrants and unvested restricted stock, as applicable. The Company calculates dilutive potential common shares using the treasury stock method, which assumes the Company will use the proceeds from the exercise of stock options and warrants to repurchase shares of common stock to hold in its treasury stock reserves.

A reconciliation of the Company’s basic and diluted income per common share is as follows:

Schedule of Basic and Diluted Income (Loss) Per Common Share

	Year<br> Ended December 31,
(In thousands,<br> except share and per share data)	2025		2024
Numerator:
Net income	$	1,194	$	74
Denominator:
Basic weighted average common shares outstanding		10,612,288		10,525,197
Effect<br> of potentially dilutive options		355,775		76,807
Diluted weighted average common shares<br> outstanding		10,968,063		10,602,004
Income per common share:
Basic	$	0.11	$	0.01
Diluted	$	0.11	$	0.01

The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as they would be antidilutive:

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

	December<br> 31,
	2025		2024
Shares underlying options outstanding		989,785		1,161,986
Unvested restricted stock		-		-

ForeignExchange Transaction Gains/Losses

Transactions denominated in a currency other than an entity’s functional currency may give rise to transaction gains and losses. The Company recognizes transaction gains and losses within other (expense) income, net, within the statements of operations.

SegmentReporting

The Company operates in only one business segment from which the Company’s chief operating decision maker evaluates the financial performance of the Company.

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RecentlyAdopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures. The guidance is effective for the Company’s annual reporting period ending December 31, 2025. The adoption of this standard during the year ended December 31, 2025, did not have a material impact on the Company’s financial statements.

RecentAccounting Pronouncements, Not Yet Effective

In November 2024, the FASB issued ASU 2024-03, “ASC 220- Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures,” which requires entities, in the notes to financial statements, to disclose specified information about certain costs and expenses. The guidance is effective for the Company’s annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is assessing the impact of adopting this guidance on its financial statements.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements” (“ASU 2025-11”). ASU 2025-11 is intended to update the guidance in Topic 270 by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 will be effective for the interim reporting periods within annual reporting periods beginning after December 15, 2027, with the option to early adopt at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is assessing the impact of adopting this guidance on its financial statements.

Note3 – Revenue Recognition

The

Company recognizes revenue related to product sales at a point-in-time when product is shipped via external logistics providers and the other criteria of ASC 606 are met. Product revenue is recorded net of variable consideration which includes prompt pay discounts, other discounts, and returns and allowances. The allowance for sales returns was approximately $1,000 as of December 31, 2025 and $5,000 as of December 31, 2024.

The Company recognizes revenue related to royalty, service, and other agreements in accordance with the five-step model in ASC 606. Sales-based royalties, for which the license is the predominant item to which the royalties relate, are recognized (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Service revenue is recognized at a point in time when service is provided. The Company is not entitled to payment until the point at which the service is completed. Certain contracts include additional product and related services in cases of emergencies. These performance obligations are separately invoiced at the time of the emergency and are not included in the initial customer contract price.

Revenue from contracts with customers may include multiple deliverables which include a combination of the product and service performance obligations discussed above. The Company has determined that these performance obligations are distinct and therefore should be accounted for as separate revenue transactions for recognition purposes. For these contracts, revenue is allocated to each performance obligation based on its relative standalone selling price basis by maximizing the use of observable inputs to determine the standalone selling price for each performance obligation. If the standalone selling price is unknown, management uses an expected cost-plus margin approach to determine the standalone selling price in order to allocate the transaction price.

The Company combines contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation.

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Royalty and other revenues recognized for the years ended December 31, 2025 and 2024 (in thousands) is comprised of:

Schedule of Royalty and Other Revenues

	2025		2024
	Years Ended<br> <br>December 31,
	2025		2024
Service	$	520	$	78
Other revenue		24		43
Royalty<br> revenue under the Sublicense Agreement with CamelBak ^(1)^		11		6
Total royalty and other<br> revenues	$	555	$	127
^(1)^	In<br> May 2015, the Company entered into a Sublicense Agreement (the “Sublicense Agreement”) with CamelBak Products, LLC (“CamelBak”).<br> Under this Sublicense Agreement, the Company granted CamelBak an exclusive, non-transferable, worldwide (with the exception of Italy)<br> sublicense and license, in each case solely to market, sell, distribute, import and export the IWTD. In exchange for the rights granted<br> to CamelBak, CamelBak agreed, through December 31, 2022, to pay the Company a percentage of the gross profit on any sales made to<br> a branch of the U.S. military, subject to certain exceptions, and to pay a fixed per-unit fee for any other sales made. CamelBak<br> was also required to meet or exceed certain minimum annual fees payable to the Company, and, if such fees are not met or exceeded,<br> the Company was able to convert the exclusive sublicense to a non-exclusive sublicense with respect to non-U.S. military sales. In<br> the first quarter of 2019, the Sublicense Agreement was amended to eliminate the minimum fee obligations starting May 6, 2018 and,<br> as such, CamelBak has no further minimum fee obligations. The Sublicense Agreement expired on December 31, 2022, though we and CamelBak<br> thereafter orally agreed to continue operating under the terms of the Sublicense agreement. In March 2024, we entered into a further<br> written amendment to the Sublicense Agreement, which was made effective December 31, 2022, that extended the term of the Sublicense<br> Agreement through December 31, 2025. In March 2026, we entered into a further written amendment to the Sublicense Agreement, which<br> was made effective January 1, 2026, that extended the term of the Sublicense Agreement through December 31, 2027.
---	---

Note4 – Fair Value Measurements

Assetsand Liabilities Measured at Fair Value on a Recurring Basis

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification for each reporting period.

At December 31, 2025 and December 31, 2024, the Company’s cash equivalents consisted of money market funds. The Company values its cash equivalents using observable inputs that reflect quoted prices for securities with identical characteristics and classify the valuation techniques that use these inputs as Level 1.

At December 31, 2025 and December 31, 2024, the fair value measurements of the Company’s assets and liabilities measured on a recurring basis were as follows:

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

	Fair<br> Value Measurements at Reporting Date Using
	Quoted<br> <br>Prices in<br> <br>Active<br> <br>Markets for<br> <br>Identical<br> <br>Assets<br> <br>(Level 1)		Significant<br> <br>Other<br> <br>Observable<br> <br>Inputs<br> <br>(Level 2)		Significant<br> <br>Unobservable<br> <br>Inputs<br> <br>(Level 3)
			(in thousands)
December 31, 2025
Money<br> market funds	$	4,205		-		-
Cash<br> equivalents	$	4,205	$	-	$	-
December 31, 2024
Money<br> market funds	$	1,866		-		-
Cash<br> equivalents	$	1,866	$	-	$	-

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Assetsand Liabilities Not Measured at Fair Value on a Recurring Basis

The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value as of December 31, 2025 and 2024 due to the short-term maturity of these instruments.

The carrying amounts of the lease liabilities and equipment financing approximate fair value as of December 31, 2025 and 2024 because those financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit.

Note5 - Inventory

Inventory is stated at the lower of cost or net realizable value using the first-in, first-out method and consists of raw materials and finished goods. The Company’s inventory components as of December 31, 2025 and December 31, 2024, were as follows:

Schedule of Inventory, Net

	2025		2024
(In thousands)	December<br> 31,
	2025		2024
Finished goods	$	2,973	$	2,261
Raw material		259		354
Total inventory	$	3,232	$	2,615

Note6 - Property and Equipment, Net

Property and equipment as of December 31, 2025, and 2024 was as follows (in thousands):

Schedule of Property and Equipment, Net

	Estimated <br>Useful	December<br> 31,
	Life	2025			2024
Manufacturing and research equipment	3-7 years	$	899		$	899
Capitalized internal use software and website<br> development	5 years		103			103
Computer equipment	3-4 years		43			43
Furniture and fixtures	7 years		37			37
Leasehold improvements	Life of lease		88			88
Property and equipment, gross			1,170			1,170
Less: accumulated depreciation			(1,064	)		(1,009	)
Property and equipment,<br> net		$	106		$	161

Depreciation

expense for the years ended December 31, 2025 and 2024 was approximately $55,000 and $46,000, respectively.

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Note7 – Intangible Assets and Goodwill

IntangibleAssets

Intangible assets at December 31, 2025 and December 31, 2024, are set forth in the table below. Gross carrying values and accumulated amortization of the Company’s intangible assets by type are as follows:

Schedule of Intangible Assets

	December<br> 31, 2025							December<br> 31, 2024
	Cost		Accumulated<br> Amortization			Net		Cost		Accumulated<br> Amortization			Net
	(in thousands)
Customer relationships	$	540		(222	)		318		540		(191	)		349
Total intangible assets	$	540	$	(222	)	$	318	$	540	$	(191	)	$	349

The

Company recognized amortization expense of approximately $32,000 for the years ended December 31, 2025, and 2024, respectively, which is included in selling, general, and administrative expenses on the accompanying statement of operations.

As of December 31, 2025, future amortization expense for each of the next five years is (in thousands):

Schedule of Future Amortization Expense

Fiscal<br> Years
2026	$	32
2027		32
2028		32
2029		32
2030		32

Goodwill

Goodwill

had a carrying value on the Company’s balance sheets of $0.8 million at December 31, 2025 and 2024, respectively. The Company concluded the carrying value of goodwill was not impaired as of December 31, 2025, or 2024 as the Company determined that it was not more likely than not that the fair value of goodwill was less than its carrying value.

Note8 – License and Supply Agreement, net

On April 23, 2012, the Company entered into a License and Supply Agreement (as thereafter amended, the “License and Supply Agreement”) with Medica S.p.A. (“Medica”), an Italy-based medical product manufacturing company, for the marketing and sale of certain filtration products based upon Medica’s proprietary Medisulfone ultrafiltration technology in conjunction with the Company’s filtration products, and for an exclusive supply arrangement for the filtration products. Medica is currently the Company’s sole supplier of the filter material used in certain of the Company’s products. Under the License and Supply Agreement, Medica granted to the Company an exclusive license, with right of sublicense, to market, promote, distribute, offer for sale and sell the filtration products worldwide, with certain limitations on territory, during the term of the License and Supply Agreement. In addition, the Company granted Medica an exclusive license under the Company’s intellectual property to make the filtration products during the term of the License and Supply Agreement. The filtration products covered under the License and Supply Agreement include both certain products based on Medica’s proprietary Versatile microfiber technology and certain filtration products based on Medica’s proprietary Medisulfone ultrafiltration technology. In December 2023, the Company signed a new agreement with Medica which had extended the term until December 31, 2028. In November 2025, the Company signed a new agreement with Medica which extends the term until December 31, 2030, unless earlier terminated by either party in accordance with the terms of the License and Supply Agreement. As of November 21, 2025 the Company has agreed with Medica to pay interest per month at the EURIBOR 360-day rate plus 500 basis points calculated on the principal amount of any outstanding invoices that are overdue by more than 15 days beyond the original payment terms.

In

exchange for the rights granted, we have agreed to make minimum annual aggregate purchases from Medica of €4,629,000, €4,976,000, €5,349,000, €5,750,000, €6,000,000, €6,300,000 for the years 2025, 2026, 2027, 2028, 2029 and 2030, respectively. The Company satisfied its minimum purchase requirement for 2025, but if the Company is unable to satisfy its remaining minimum purchase commitment for 2026 and beyond, it will be in breach of the License and Supply Agreement, giving Medica a right of termination.

In

exchange for the license, the gross value of the intangible asset capitalized was $2.3 million. License and supply agreement, net, on the balance sheet is $0.2 million as of December 31, 2025 and 2024, respectively. Accumulated amortization is $2.1 million as of December 31, 2025 and 2024, respectively. The intangible asset is being amortized as an expense over the life of the License and Supply Agreement. Amortization expense of $52,000 and $54,000 was recognized for the years ended December 31, 2025 and 2024, respectively, in the statement of operations.

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As of November 21, 2025, the Company has contractually agreed to pay interest per month at the EURIBOR 360-day rate plus 500 basis points calculated on the principal amount of any outstanding invoices that are overdue by more than 15 days beyond the original payment terms. There was no interest recognized for the years ended December 31, 2025 or 2024.

Note9 – Leases

The Company has operating leases for corporate offices, and office equipment. The leases have remaining lease terms of 2 to 3 years.

Lease cost, as presented below, includes costs associated with leases for which right-of-use (“ROU”) assets have been recognized as well as short-term leases.

The components of total lease costs were as follows (in thousands):

Schedule of Components of Lease Cost

	Year ended<br> <br>December 31, 2025		Year ended<br> <br>December 31, 2024
Operating lease cost	$	351	$	447
Finance lease cost:
Amortization of right-of-use<br> assets		5		5
Interest<br> on lease liabilities		1		2
Total finance lease cost		6		7
Variable lease cost		105		108
Total lease cost	$	462	$	562

Supplemental cash flow information related to leases was as follows (in thousands):

Schedule of Supplemental Cash Flow Information Related to Leases

	Year ended<br> <br>December 31, 2025		Year ended<br> <br>December 31, 2024
Cash paid for amounts included in the measurement<br> of lease liabilities:
Operating<br> cash flows from operating leases	$	435	$	562
Financing<br> cash flows from finance leases	$	5	$	5

Supplemental balance sheet information related to leases was as follows (in thousands except years):

Schedule of Supplemental Balance Sheet Information Related to Leases

	December<br> 31, 2025			December<br> 31, 2024
Operating<br> lease right-of-use assets	$	1,004		$	1,355
Finance lease right-of-use<br> assets	$	17		$	22
Current portion of operating lease liabilities	$	386		$	343
Operating lease liabilities,<br> net of current portion		661			1,046
Total operating lease liabilities	$	1,047		$	1,389
Current portion of finance lease liabilities	$	5		$	5
Finance lease liabilities,<br> net of current portion		11			17
Total<br> finance lease liabilities	$	16		$	22
Weighted average remaining lease term
Operating leases		2.6<br> years			3.6<br> years
Finance leases		2.8<br> years			3.8<br> years
Weighted average discount rate
Operating leases		8.0	%		8.0	%
Finance leases		8.0	%		8.0	%

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As of December 31, 2025, maturities of lease liabilities were as follows (in thousands):

Schedule of Maturities of Lease Liabilities

	Operating<br> Leases			Finance<br> Leases
2026	$	450		$	7
2027		450			7
2028		251			5
Total future minimum lease<br> payments		1,151			19
Less imputed interest		(104	)		(3	)
Total	$	1,047		$	16

Note10 - Accrued Expenses

Accrued expenses as of December 31, 2025 and 2024 were as follows (in thousands):

Schedule of Accrued Expenses

	2025		2024
	December<br> 31,
	2025		2024
Accrued bonus	$	1,019	$	209
Accrued directors’ fees		29		129
Accrued legal		60		7
Accrued sales commission		171		123
Accrued sales tax payable		15		35
Accrued taxes		93		9
Accrued other		75		53
Accrued expenses	$	1,462	$	565

Note11 - Income Taxes

The components of the provision for income taxes for the years ended December 31, 2025 and 2024 consisted of the following:

Schedule of Components of Provision (Benefit) for Income Taxes

(in<br> thousands)	2025		2024
	Year<br> Ended December 31,
(in<br> thousands)	2025		2024
Current
Federal		-		-
State and local	$	12		15
Total Current	$	12		15
Deferred:
Federal		-		-
State and local		-		-
Total Deferred		-		-
Total provision (benefit) for income taxes	$	12		15

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A reconciliation of the income tax benefit computed at the statutory tax rate to the Company’s effective tax rate for the years ended December 31, 2025, and 2024 is as follows:

Schedule of Effective Income Tax Rate Reconciliation

	in thousands		Percent			in thousands		Percent
	Years<br> Ended December 31,
	2025					2024
	in thousands		Percent			in thousands		Percent
U.S. Federal Statutory Rate				21.00	%				21.00	%
State income tax expense, net of federal income<br> tax effect*				15.52	%				55.78	%
Tax Credits				7.26	%				121.37	%
Expired NOLs				32.30	%				940.83	%
Stock-based Compensation				17.84	%				63.65	%
Other Nontaxable or Nondeductible Items				0.03	%				0.09	%
Valuation Allowance		)		-92.96	%		)		-1186.05	%
Effective Tax Rate				0.99	%				16.67	%

All values are in US Dollars.

The majority of the state tax expense relates to operations in New Jersey, Arizona, and California.

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Significant components of the Company’s deferred tax assets (liabilities) as of December 31, 2025 and 2024 are as follows (in thousands):

Schedule of Deferred Tax Assets

	December<br> 31,
	2025			2024
Deferred tax assets:
Net operating loss carry forwards	$	15,082		$	15,628
Research and development credits		893			980
Nonqualified stock option compensation expense		395			601
Lease liabilities		255			348
Capital loss carryforwards		2,035			2,090
Fixed and intangible basis difference		-			-
Other temporary book -<br> tax differences		652			857
Total deferred tax assets		19,312			20,504
Deferred tax liabilities:
Lease right-of-use assets		(245	)		(339	)
Fixed and intangible asset<br> basis difference		(158	)		(134	)
Total deferred tax liabilities		(403	)		(473	)
Deferred tax assets, net		18,909			20,031
Valuation allowance for<br> deferred tax assets		(18,909	)		(20,031	)
Net deferred tax assets<br> after valuation allowance	$	-		$	-

A

valuation allowance has been recognized to offset the Company’s net deferred tax asset as it is more likely than not that such net asset will not be realized. The Company primarily considered its historical loss and potential Internal Revenue Code Section 382 limitations to arrive at its conclusion that a valuation allowance was required. The Company’s valuation allowance decreased approximately $1.1 million from December 31, 2024 to December 31, 2025.

At

December 31, 2025, the Company had Federal income tax net operating loss carryforwards of $70 million and State income tax net operating loss carryforwards of $5.3 million. The Company had Federal research and development tax credit carryforwards of $0.90 million at December 31, 2025. The Company’s net operating losses and research and development tax credits may ultimately be limited by Section 382 of the Internal Revenue Code and, as a result, the Company may be unable to offset future taxable income (if any) with losses, or its tax liability with credits, before such losses and credits expire. Included in the Federal net operating loss carryforwards are $14 million of losses generated from 2018 onward that have an indefinite carryover period. The remaining Federal and State net operating loss carryforwards and Federal and State tax credit carryforwards will expire at various times between 2025 and 2044 unless utilized.

The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions. The Company is subject to income tax examinations by major taxing authorities for all tax years subsequent to 2021 and does not anticipate a change in its uncertain tax positions within the next twelve months. The Company’s policy is to report interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Income

taxes paid, net of refunds received during the year were not material. Such payments primarily related to U.S State jurisdictions. The total tax paid, net of refunds, during the year ended on December 31, 2025, was $2,000.

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Note12 - Stock Plans and Share-Based Payments

The fair value of stock options and restricted stock is recognized as stock-based compensation expense in the Company’s statement of operations. The Company calculates stock-based compensation expense in accordance with ASC 718. The fair value of stock-based awards is amortized over the vesting period of the award.

StockPlans

In 2024, the Board of Directors adopted the Nephros, Inc. 2024 Equity Incentive Plan (“2024 Plan”). As of December 31, 2025, options to purchase 212,755 shares of common stock had been issued to employees under the 2024 Plan and were outstanding. The options issued to employees expire on various dates between November 6, 2034 and November 10, 2035. As of December 31, 2025, there were 1,294,708 shares available for future grant under the 2024 Plan.

Generally,

grants vest based on a service condition only and vest between two to four years. The share reserve under the 2024 Plan is be automatically increased from time to time for shares subject to outstanding stock awards under the 2015 Plan (as defined below) and that following the effective date of the 2024 Plan: (i) are not issued because such stock award or any portion thereof expires or otherwise terminates without all of the shares covered by such stock award having been issued; (ii) are not issued because such stock award or any portion thereof is settled in cash; (iii) are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares; (iv) are withheld or reacquired to satisfy the exercise, strike or purchase price; or (v) are withheld or reacquired to satisfy a tax withholding obligation. However, the maximum number of shares that may be available for issuance under the 2024 Plan cannot exceed 2,616,875. The maximum contractual term for stock options granted under the 2024 Plan is 10 years.

The Company had previously adopted the Nephros, Inc. 2015 Equity Incentive Plan (“2015 Plan”), pursuant to which the Company granted equity awards to its officers, directors, employees and other service providers. Following the adoption of the 2024 Plan, the Company ceased using the 2015 Plan for granting equity awards.

As of December 31, 2025, options to purchase 1,010,281 shares of common stock had been issued to employees under the 2015 Plan and were outstanding. The options issued to employees expire on various dates between May 14, 2026 and May 14, 2034. No shares are available for future grants under the 2015 Plan.

In

2023, the Company issued 122,524 stock options outside of the 2015 Plan to the Company’s new Chief Financial Officer. The terms for these options are identical to those issued to employees under the 2015 Plan.

StockOptions

The

Company has elected to recognize forfeitures as they occur. Stock-based compensation expense related to stock options was approximately $0.3 million and $0.1 million for the years ended December 31, 2025, and 2024, respectively.

For

the year ended December 31, 2025, approximately $266,000 and $11,000 are included in selling, general and administrative expenses and research and development expenses, respectively, on the accompanying statement of operations. For the year ended December 31, 2024, $131,000 and approximately $6,000 are included in selling, general and administrative expenses and research and development expenses, respectively, on the accompanying statement of operations.

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The following table issued summarizes the option activity for the years ended December 31, 2025:

Summary of Option Activity

	Shares			Weighted<br> <br>Average <br>Exercise <br>Price
Outstanding at December 31, 2024		1,238,793		$	3.20
Options granted		221,304			1.82
Options forfeited		(60,737	)		4.50
Options expired		(1,667	)		7.11
Options exercised (1)		(52,132	)		1.96
Outstanding at December 31, 2025		1,345,561		$	2.96
(1)	52,132<br> options were exercised via cashless exercise which resulted in 28,869 shares issued.
---	---

The following table summarizes the options exercisable and vested and expected to vest as of December 31, 2025.

Summary of Options Exercisable Vested and Expected to Vest

	Shares		Weighted<br> <br>Average <br>Exercise <br>Price
Vested at December 31, 2025		890,653	$	3.60
Vested and expected<br> to vest at December 31, 2025		1,263,633	$	3.04

The grant date fair value of each option grant was estimated throughout the year using the Black-Scholes option-pricing model using the following weighted-average assumptions:

Schedule of Fair Value Assumptions

Assumption for Option Grants
Stock Price Volatility	63.43	%	69.54	%
Risk-Free Interest Rates	4.22	%	4.45	%
Expected Life (in years)	6.03		6.08
Expected Dividend Yield	0	%	0	%

Expected volatility is based on historical volatility of the Company’s common stock at the time of grant. The risk-free interest rate is based on the U.S. Treasury yields in effect at the time of grant for periods corresponding with the expected life of the options. For the expected life, the Company is using the simplified method as described in the SEC Staff Accounting Bulletin 107. This method assumes that stock option grants will be exercised based on the average of the vesting periods and the option’s life.

The

weighted-average fair value of options granted in 2025 and 2024 is $1.13 and $1.40, respectively. The aggregate intrinsic values of stock options outstanding and stock options vested or expected to vest as of December 31, 2025 was approximately $3.2 million and $2.9 million respectively. A stock option has intrinsic value, at any given time, if and to the extent that the exercise price of such stock option is less than the market price of the underlying common stock at such time. The weighted-average remaining contractual life of options vested or expected to vest as of December 31, 2025 was approximately 6.1 years.

The

intrinsic values of stock options exercised was approximately $125,000 and $2,000 for the years ended December 31, 2025, and 2024 respectively.

As

of December 31, 2025, there was $0.4 million of total unrecognized compensation cost related to unvested share-based compensation awards granted under the equity compensation plans which will be amortized over the weighted average remaining requisite service period of 2.03 years.

The Company did not recognize an income tax benefit for the years ended December 31, 2025, and 2024. While the Company generated taxable income during the year ended December 31, 2025, this income was fully offset by the utilization of net operating loss carryforwards for which the company continues to maintain a full valuation allowance against its deferred tax assets as of December 31, 2025.

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RestrictedStock

The Company has issued restricted stock as compensation for the services of certain employees and non-employee directors. The grant date fair value of restricted stock is based on the fair value of the common stock on the date of grant, and compensation expense is recognized based on the period in which the restrictions lapse.

The following table summarizes restricted stock activity for the years ended December 31, 2025, and 2024:

Summary of Restricted Stock Activity

			Weighted<br> <br>Average <br>Grant Date <br>Fair Value
Nonvested at December 31, 2023	42,167		$	3.18
Granted	-			-
Vested	(42,167	)		3.18
Nonvested at December 31, 2024	-		$	-
Granted	70,708			2.07
Vested	(70,708	)		2.07
Nonvested at December 31, 2025	-		$	-

The

total fair value of restricted stock that vested during each of the years ended December 31, 2025 and 2024 was approximately $0.1 million.

Total

stock-based compensation expense for restricted stock was approximately $19,000 and $15,000 for the year ended December 31, 2025 and 2024, respectively and is recognized in selling, general and administrative expenses on the accompanying statement of operations.

As of December 31, 2025 and December 31, 2024, there was no unrecognized compensation expense related to restricted stock-based awards granted under the equity compensation plans.

Note13 – Savings Incentive Match Plan

On

January 1, 2017, the Company established a Savings Incentive Match Plan for Employees Individual Retirement Account (SIMPLE IRA), which covers all employees. The SIMPLE IRA Plan provides for voluntary employee contributions up to statutory IRA limitations. The Company matches 100% of employee contributions to the SIMPLE IRA Plan, up to 3% of each employee’s salary. The Company contributed and expensed approximately $115,000 and $105,000 to the SIMPLE IRA in 2025 and 2024, respectively.

Note14 – Segment Information

The Company operates in one operating segment, and therefore one reportable segment, focused on the development and sale of high-performance water solutions to the medical and commercial markets. The Company manages business activities primarily through the development and commercialization of water filtration products, which are sold to U.S. and international customers.

The accounting policies for the Company’s single operating segment are the same as those described in the summary of significant accounting policies. The Company’s Chief Executive Officer is the Chief Operating Decision Maker (“CODM”). The CODM manages the Company’s business activities as a single operating and reportable segment. Accordingly, our CODM uses net income (loss) to measure segment profit or loss, allocate resources, and assess performance. The measure of segment assets is reported on the balance sheet as total assets.

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The following is a summary of the significant revenue and expense categories, and net income provided to the CODM (in thousands):

Schedule of Net Income for Segment

	2025			2024
	Years<br> Ended December 31,
	2025			2024
Net revenue:
Product revenues	$	18,234		$	14,035
Royalty<br> and other revenues		555			127
Total net revenues		18,789			14,162
Cost of goods sold		7,164			5,439
Gross<br> Margin		11,625			8,723
Operating expenses:
Research and development		1,339			906
Selling, general and administrative		9,000			7,676
Other<br> operating expenses (1)		140			135
Total<br> operating expenses		10,479			8,717
Operating income		1,146			6
Other income		60			83
Income tax expense		(12	)		(15	)
Net income		1,194			74
(1)	Other<br> operating expenses is comprised of depreciation and amortization.
---	---

Note15 – Subsequent Events

On February 20, 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs, thereby invalidating prior IEEPA-based tariff programs previously announced by the current U.S. Administration. Following the decision, the President issued an executive order directing that the collection of such IEEPA-based duties end “as soon as practicable.” Although the Supreme Court ruling may allow importers to claim refunds of such previously paid IEEPA-related duties, no refund mechanism has been established, and recovery may require administrative proceedings or litigation, with timing and outcomes uncertain. On the same date, the U.S. Administration announced new temporary global tariffs under Section 122 of the Trade Act of 1974 to take effect February 24, 2026. The Company is assessing the effects of these developments. No asset or gain related to potential tariff refunds has been recognized due to uncertainty regarding eligibility, amount, and timing.

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Item9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item9A. Controls and Procedures

DisclosureControls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, the Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures as of December 31, 2025. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were not effective as of December 31, 2025, due to the existence of a material weakness in our internal control over financial reporting. Notwithstanding such material weakness, management believes that the financial statements included in this Annual Report on Form 10-K present fairly in all material respects the financial position, results of operations and cash flows for the period presented.

Management’sReport on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision of the Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of the internal control over financial reporting as of December 31, 2024 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework”. Based on the assessment, management concluded that the internal control over financial reporting was not effective as of December 31, 2025.

MaterialWeakness in Internal Control Over Financial Reporting

As previously disclosed in Part I, Item 4 of our Quarterly Report on Form 10-Q for the period ended March 31, 2025, management identified a material weakness in our internal control over financial reporting related to the recognition of revenue from contracts that included a combination of products sales and service-based deliverables and the application of ASC 606. While management determined that both performance obligations were delivered at a point-in-time, the contract’s transaction price was not allocated based on the respective performance obligations’ relative standalone selling price. Management noted a lack of internal control over contract identification as well as a lack of internal control over evaluating contracts for proper revenue recognition under U.S. GAAP. The material weakness described above did not result in any material misstatement in our financial statements or disclosures for any period presented in the accompanying financial statements.

In response to the material weakness, with the oversight of the board of directors, management worked with its outside accounting consultants to establish controls and protocols designed to properly recognize revenue from contracts with multiple performance obligations while ensuring appropriate accounting for all material sales contracts. Specifically, we developed a process to correctly price product and service revenues on a standalone basis in order to properly allocate revenue from combined contracts between product and other revenues (service). We also implemented new controls to ensure that we properly recognize the specific point in time at which contracted services are completed and approved by the customer. In addition to developing internal processes and controls, we provided additional training to our sales team, to properly capture the relevant information needed when we price contracts and when contracted services are completed by us and approved by the customer. We will consider the material weakness to be fully remediated once the applicable controls operate for a sufficient period of time and our management has concluded, through testing, that these controls are operating effectively.

Changesin Internal Control Over Financial Reporting

Other than our remediation efforts with respect to the material weakness described above, there were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item9B. Other Information

During the three months ended December 31, 2025, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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PART

III

Item10. Directors, Executive Officers and Corporate Governance

The information set forth under the captions “Proposal No. 1 – Election of Directors,” “Corporate Governance” and “Delinquent Section 16(a) Reports” in the 2025 Proxy Statement is incorporated herein by reference.

Item11. Executive Compensation

The information set forth under the caption “Compensation Matters” in the 2025 Proxy Statement is incorporated herein by reference.

Item12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information set forth under the captions “Stock Ownership of Management and Principal Stockholders” and “Compensation Matters” in the 2025 Proxy Statement is incorporated herein by reference.

Item13. Certain Relationships and Related Transactions, and Director Independence

The information set forth under the captions “Corporate Governance” and “Certain Relationships and Related Transactions” in the 2025 Proxy Statement is incorporated herein by reference**.**

Item14. Principal Accounting Fees and Services

The information set forth under the caption “Proposal No. 2 – Ratification of Selection of Independent Registered Public Accounting Firm” in the 2025 Proxy Statement is incorporated herein by reference.

PART

Item15. Exhibits, Financial Statement Schedules

(a)Documents filed as part of this report:

(1)Financial Statements of Nephros, Inc.

Report of independent registered public accounting firm, Baker Tilly US, LLP. 1 Highwood Drive, Tewksbury, MA 01876, Firm ID - 23
Balance sheets as of December 31, 2025 and 2024.
Statements of operations for the years ended December 31, 2025 and 2024.
Statements of changes in stockholders’ equity for the years ended December 31, 2025 and 2024.
Statements of cash flows for the years ended December 31, 2025 and 2024.
Notes to financial statements.

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(2)Exhibits:

Exhibit No.	Description
2.1	Agreement for Purchase and Sale of Assets, dated October 4, 2022, by and between Nephros, Inc. and BWSI, LLC, incorporated by reference to Exhibit 2.1 to Nephros Inc.’s Current Report on Form 8-K, filed with the SEC on November 21, 2022 (pursuant to Item 601(b)(2)(ii) of Regulation S-K, certain information contained in this Exhibit 2.1 has been redacted as indicated therein).
3.1	Conformed Copy of the Fourth Amended and Restated Certificate of Incorporation, incorporating those Certificates of Amendment dated June 4, 2007; June 29, 2007; November 13, 2007; October 23, 2009; March 10, 2011; March 11, 2011 and July 8, 2019, incorporated by reference to Exhibit 3.1 to Nephros, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, filed with the SEC on August 7, 2019.
3.2	Second Amended and Restated By-Laws of the Registrant, incorporated by reference to Exhibit 3.1 to Nephros, Inc.’s Current Report on Form 8-K, filed with the SEC on December 3, 2007.
4.1	Specimen of Common Stock Certificate of the Registrant, incorporated by reference to Exhibit 4.1 to Nephros, Inc.’s Amendment No. 1 to Registration Statement on Form S-1/A (Reg. No. 333-116162), filed with the SEC on July 20, 2004.
4.2	Description of Capital Stock, incorporated by reference to Exhibit 4.5 to Nephros, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 27, 2020.
10.1	Nephros, Inc. 2015 Equity Incentive Plan, incorporated by reference to Exhibit 10.2 to Nephros, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 15, 2015. †
10.2	Form of Incentive Stock Option Agreement under the 2015 Equity Incentive Plan, incorporated by reference to Exhibit 10.3 to Nephros, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 15, 2015. †
10.3	Form of Non-Qualified Stock Option Agreement under the 2015 Equity Incentive Plan, incorporated by reference to Exhibit 10.4 to Nephros, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 15, 2015. †
10.4	Form of Restricted Stock Agreement under the 2015 Equity Incentive Plan, incorporated by reference to Exhibit 10.5 to Nephros, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 15, 2015. †
10.5	Form of Restricted Stock Unit Agreement under the 2015 Equity Incentive Plan, incorporated by reference to Exhibit 10.6 to Nephros, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 15, 2015. †
10.6	Nephros, Inc. 2024 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to Nephros, Inc.’s Current Report on Form 8-K, filed with the SEC on May 24, 2024. †
10.7	Form of Stock Option Agreement under 2024 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 to Nephros, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024). †
10.8	Form of Restricted Stock Grant Notice under 2024 Equity Incentive Plan (incorporated by reference to Exhibit 10.8 to Nephros, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024). †

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| --- | | 10.22 | Nephros, Inc. Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.1 to Nephros, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, filed with the SEC on November 6, 2025). | | --- | --- | | 10.23 | License and Supply Agreement, dated November 21, 2025, between Nephros, Inc. and Medica S.p.A. (pursuant to Item 601(b)(2)(ii) of Regulation S-K, certain information contained in this Exhibit 10.23 has been redacted as indicated therein).+ * | | 19.1 | Nephros, Inc. Insider Trading Policy (incorporated by reference to Exhibit 19.1 to Nephros, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024). | | 23.1 | Consent of Baker Tilly US, LLP Independent Registered Public Accounting Firm. * | | 24.1 | Power of Attorney (included on the signature page). * | | 31.1 | Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * | | 31.2 | Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * | | 32.1 | Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. * | | 32.2 | Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. * | | 97.1 | Nephros, Inc. Policy for Recoupment of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97.1 to Nephros, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023). | | 101 | Interactive Data File. * | | * | Filed herewith. | | --- | --- | | † | Management contract or compensatory plan arrangement. | | + | Confidential treatment has been granted for certain portions omitted from this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |

Item16. Form 10-K Summary

Not applicable.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NEPHROS, INC.
Date:<br> March 12, 2026
	By:	/s/ Robert Banks
	Name:	Robert<br> Banks
	Title:	President,<br> Chief Executive Officer (Principal Executive Officer)
Date:<br> March 12, 2026
	By:	/s/ Judy Krandel
	Name:	Judy<br> Krandel
	Title:	Chief<br> Financial Officer (Principal Financial and Accounting Officer)

POWER

OF ATTORNEY

We, the undersigned directors and officers of Nephros, Inc., hereby severally constitute and lawfully appoint Robert Banks, our true and lawful attorney-in-fact with full power to him to sign for us, in our names in the capacities indicated below, the Annual Report on Form 10-K for the fiscal year ended December 31, 2025 of Nephros, Inc. and any and all amendments thereto, and to file the same with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Robert Banks	President,<br> Chief Executive Officer	March<br> 12, 2026
Robert<br> Banks	(Principal<br> Executive Officer)
/s/ Judy Krandel	Chief<br> Financial Officer	March<br> 12, 2026
Judy<br> Krandel	(Principal<br> Financial and Accounting Officer)
/s/ Arthur H. Amron	Director	March<br> 12, 2026
Arthur<br> H. Amron
/s/ Oliver Spandow	Director	March<br> 12, 2026
Oliver<br> Spandow
/s/ Lisa Nettis	Director	March<br> 12, 2026
Lisa Nettis
/s/ Joe Harris	Director	March<br> 12, 2026
Joe<br> Harris

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Exhibit10.23

Pursuantto Item 601 of Regulation S-K, certain information in this Exhibit 10.23 has been redacted. Information that was redacted has been notedin this document with a placeholder identified by the mark “[*****].” The registrant believes the redacted information isboth (i) not material and (ii) the type that the Registrant treats as private or confidential. If requested by the Commission or itsstaff, the Registrant will promptly provide on a supplemental basis an unredacted copy of this exhibit and its materiality and privacyor confidentiality analyses.

LICENSEAND SUPPLY AGREEMENT

This LICENSE and SUPPLY AGREEMENT (this “Agreement”) is entered into as of November 21, 2025 (the “Effective Date”) by and between Nephros, Inc., a Delaware corporation with its principal office at 380 Lackawanna Place, South Orange, New Jersey 07079, U.S.A. (“Nephros”), and Medica S.p.A., with registered office in Medolla (MO), Via Degli Artigiani, 7 –

41036, Italy (“Medica”), and sometimes herein referred to individually as a “Party” and collectively, as the “Parties”.

RECITALS

1. Medica develops, manufactures, markets, and sells filtration products based in part upon a proprietary filtration technology.

2. Nephros currently markets and sells filtration products based upon its own proprietary filtration technology and products based in part upon Medica’s proprietary filtration technology.

3. The Parties are currently parties to that certain License and Supply Agreement, dated December 11, 2023, as amended from time to time (collectively, the “Prior Agreement”) pursuant to which Medica exclusively supplies Nephros, and Nephros exclusively markets and sells, the Medica Products (defined below) within the Territory (defined below) in conjunction with the Nephros Products (defined below).

5. Nephros and Medica desire to terminate the Prior Agreement and to enter into this new License and Supply Agreement setting forth the Parties’ understanding with respect to the supply of Medica Products and Nephros Products and related marketing rights within the Territory, and the ownership and licensing of Intellectual Property, among other things.

NOW, THEREFORE, in consideration of the foregoing and of the mutual representations, warranties and covenants contained herein, the Parties agree as follows:

1.	Definitions

1.1 “Affiliate” of a Party hereto means any entity which controls, is controlled by or is under common control with, such Party, For purposes of this definition, a Party shall be deemed to control another entity if it owns or controls, directly or indirectly, at least fifty percent (50%) of the voting equity of another entity (or other comparable ownership interest for an entity other than a corporation) or if it has management control of the other entity. Any reference in this Agreement to a Party shall include the Affiliates of that Party (unless the context requires otherwise).

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1.2 “Agents” shall mean any officer, director, employee, agent, subcontractor, or other authorized representative of a Party or Person.

1.3 “Applicable Law” shall mean: (a) all laws, statutes, constitutions, treaties, rules, regulations, ordinances, codes, guidance, and common law, and (b) all judicial, executive, legislative, administrative or military orders, directives, decrees, injunctions, judgments, Permits, agreements, and other legal requirements, in each case, of, with, or adopted or imposed by any Governmental Authority, now or hereafter in effect and, in each case, as amended from time to time, including, without limitation, any of the foregoing that relate to or govern (i) the manufacture, quality, marketing, sale, promotion, storage handling, distribution or disposal of the Product and (ii) health, safety, industrial hygiene, or sanitation.

1.4 “cGMP’” means the current applicable regulatory requirements for current good manufacturing practices promulgated by the FDA applicable to the Products as well as those required by other Regulatory Authorities in the Territory, as the same may be amended from time to time.

1.5 “Change of Control” shall mean, with respect to a Party, any event in which: (a) any Person or group (as such term is defined in the U.S. Securities Exchange Act of 1934, as amended) acquires beneficial ownership of securities of such Party representing more than fifty percent (50%) of the voting power of the then outstanding securities of such Party with respect to the election of directors of such Party; (b) a Party enters into a merger, consolidation, or similar transaction with any Person in which such Party is not the surviving entity in such transaction; or (c) a Party enters into a transaction to sell to any Person, in one or more related transactions, assets (i) representing all or substantially all of such Party’s assets, (ii) representing all or substantially all of such Party’s assets, or (iii) solely with respect to Medica, all or substantially all of its assets relating to the Products, including without limitation, the Medica IP; provided, however, that with respect to Nephros, no transaction with Wexford Capital LC or any Affiliate thereof shall constitute a Change of Control.

1.6 “Claim” shall mean any claim, suit, action, cause of action, proceeding, investigation, dispute, demand, order, directive, obligation, loss, injury, liability, damage, deficiency, assessment, fine, penalty, forfeiture, judgment, lien, diminution of value, notice of violation or non-compliance, cost, and expense, including, without limitation, attorneys’ fees and expenses incurred to enforce this Agreement, cost of defense, and cost of settlement.

1.7 “Commercialization” means any and all activities directed to marketing, promoting, distributing, offering for sale and selling the Products. When used as a verb “Commercialize” means to engage in Commercialization.

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1.8 “Confidential Information” shall have the meaning ascribed to such term in Section 8.1.

1.9 “Direct Claim” shall have the meaning ascribed to such term in Section 9.5.

1.10 “Disclosing Party” shall have the meaning ascribed to such term in Section 8.1.

1.11 “FDA” shall mean the U.S. Food and Drug Administration.

1.12 “Governmental Authority” shall mean any national, state, commonwealth, provincial, local or foreign governmental authority, entity, body, branch, agency, department, bureau, board, commission, officer, official, court, adjudicator, tribunal, or other entity, including any Agent, division or subdivision thereof in the Territory exercising executive, legislative, judicial, regulatory or administrative authority over the manufacture, quality, marketing, sale, promotion, storage, handling, testing, labeling, packaging, distribution, supply or disposal of medical device products, including, without limitation, any and all state, commonwealth, provincial, local and foreign equivalents.

1.13 “Indemnitee” shall have the meaning ascribed to such term in Section 9.3.1.

1.14 “Indemnitor” shall have the meaning ascribed to such term in Section 9.3.1.

1.15 “Installment Payments” shall have the meaning ascribed to such term in Section 4.1.

1.16 “Intellectual Property” means all worldwide patents, copyrights, trademarks, service marks, logos, package designs, trade names, trade secrets, rights in data and all other intellectual property rights (in each case whether registered or unregistered), and including all applications and registrations with respect thereto.

1.17 “Invalidity Claim” shall have the meaning ascribed to such term in Section 7.3.1.

1.18 “Joint Invention” means, whether or not protected or protectable, and whether or not Confidential Information, all enhancements, technical modifications, inventions, improvements, technology, data, works, designs, discoveries, tool drawings, manufacturing processes and revisions to the Products that are conceived, reduced to practice, created, written, designed, developed, authored, or made by a Party, its Affiliates or Agents, or any Person on behalf of a Party alone or in combination with others, directly relating to the Products, or derived from a Party’s practice of the Joint Patents.

1.19 “Joint Patents” means: (a) the Patents Rights recited in Schedule 1; (b) the Patent Rights covered by the Joint Inventions; and (c) any and all divisions, continuations, continuations in-part, patents of addition, reissues, renewals, extensions, registrations, confirmations, reexaminations, supplementary protection certificates or the like of any such Patent Rights and any patents issuing thereon, and foreign equivalents of any of the foregoing in the Territory to the extent such Patent Rights relate to (a) or (b) of this Section 1.19.

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1.20 “Minimum Purchase Requirement” shall have the meaning ascribed to such term in Section 3.2.

1.21 “Medica IP’’ means Intellectual Property owned or controlled by Medica and which is used in or to develop or manufacture the Products, including without limitation, Medica’s right, title and interest in and to the Joint Patents and the Joint Inventions.

1.22 “Medica Products” shall mean any Medica water filtration products based in whole or in part upon Medica’s proprietary Medisulfone® fiber technology and/or other polysulfone based hollow fiber, and Versatile-PES® fiber technology or other polyethersulfone based hollow fiber, or upon technology in existence as of the Effective Date or developed at any time during the Term, including without limitation, those covered under Schedule 2 (the “Product Schedule”), but subject to the exclusions set forth in the Product Schedule.

1.23 “Nephros IP” means Intellectual Property owned or controlled by Nephros and which is used in or to develop or manufacture the Products, including without limitation, Nephros’ right, title and interest in and to the Joint Patents and the Joint Inventions.

1.24 “Nephros Products” shall mean any Nephros filtration products based in whole or in part upon Nephros’ proprietary filtration technology in existence as of the Effective Date or developed at any time during the Term, including, without limitation, those covered under the Product Schedule.

1.25 “Net Sales” means, for any period of determination, the aggregate amount invoiced by Nephros for any Affiliate, permitted successor, permitted assignee, or agent of Nephros) to a third puny distributor, agent, contractor or end user for the sale of a Products during such period less the following amounts that are actually incurred, allowed and taken or specifically allocated and not already reflected in the amount invoiced: (a) reasonable credits, refunds and allowances for spoiled, damaged, outdated and returned Products, (b) trade volume and cash discounts and rebates (including coupons and government charge-backs) in amounts that are usual and customary to the trade, and (c) sales, use, and other like taxes, excluding income tax. The amounts of any deductions accrued pursuant to clauses (a) — (c) shall be determined from books and records maintained in accordance with U.S. GAAP, consistently applied, and shall only be deducted once and only to the extent not otherwise deducted from the aggregate amount invoiced, “Net Sales” shall not include revenue received by Nephros (or any of its Affiliates) from transactions with an Affiliate, where the Product in question will be resold to an independent third party distributor, agent or end user by the Affiliate where such revenue received by the Affiliate from such resale is included in Net Sales.

1.26 “Patent Rights” means all existing patents and patent applications and all patent applications hereafter filed, including any continuations, continuations-in-part, divisions, or any substitute applications, any patent issued with respect to any such patent applications, any reissue, reexamination, renewal or extension (including any supplementary protection certificate) of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent, and all foreign counterparts of any of the foregoing, or as applicable portions thereof or individual claims therein.

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1.27 “Permit” shall main any application permit, authorization, license, approval, registration, franchise, certificate, permission, exemption, consent, variance, or equivalent decision or document of, from, or required or issued by any Governmental Authority or under any Applicable Law, as amended or supplemented from time to time.

1.28 “Person” shall mean and include, without limitation: (a) any corporation, partnership, Limited liability company, joint venture, joint stock company, association, trust, business trust, estate, unincorporated organization, or other business entity recognized under Applicable Law, other than the Nephros or Medica; (b) any Governmental Authority; or (c) any individual.

1.29 “Pricing Schedule” means the prices for the Products as set forth in Schedule 3 attached hereto.

1.30 “Prior Agreement” shall have the meaning ascribed to such term in the Recitals.

1.31 “Products” shall mean collectively, the Medica Products and the Nephros Products.

1.32 “Raw Materials” shall have the meaning ascribed to such term in Section 5.2.

1.33 “Receiving Party” shall have the meaning ascribed to such term in Section 8.1.

1.34 “Regulatory Authority” means any national, regional, state, provincial or local regulatory agency, department, bureau, commission, council or other governmental authority in the Territory involved in the granting of approvals (including pricing and reimbursement approvals), licenses, registrations or authorizations for the marketing, sale, manufacturing, testing, labeling, packaging, shipping or supply of medical devices.

1.35 “Specifications” means the written specifications for a Product mutually agreed upon by the Parties including us are mutually agreed in writing by the Parties from time to time after the Effective Date and during the Term, which shall become a part of and incorporated by reference in this Agreement.

1.36 “Supply” means the manufacture, processing, testing, storing, labeling and packaging for and sale and delivery of the Products by Medial for Nephros and its Affiliates and Nephros’ designated sublicensees and distributors.

1.37 “Supply Interruption” shall have the meaning ascribed to such term in Section 5.5.

1.38 “Term” shall have the meaning ascribed to such term in Section 10.1.

1.39 “Territory” means North America, Brazil,

1.40 “Third Party” means any Person other than Nephros and Medica and their respective Affiliates.

1.41 “Third Party Claim” shall have the meaning ascribed to such term in Section 9.3.1.

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| --- | | 2. | Licenses and Grants. | | --- | --- |

2.1 Commercialization License. Subject to the terms and conditions of this Agreement, Medica hereby grants to Nephros, and Nephros accepts, an exclusive, with right of sublicense, under Medica’s IP to Commercialize the Products in the Territory. Medica covenants and agrees with Nephros that during the Term Medica will not grant any license or similar right with respect to the Products to Commercialize, or to make or have made the Products for sale in the Territory.

2.2 Manufacturing License. Subject to the terms and conditions of this Agreement, Nephros hereby grants to Medica, and Medica accepts an exclusive, worldwide license under the Nephros IP to make and have made the Products during the Term under the terms and conditions set forth in this Agreement. Nephros covenants and agrees with Medica that during the Term Nephros will not grant any license or similar right to make or have made the Products for sale in the Territory.

2.3 Joint Inventions. Each Party hereby grants to the other Party an exclusive (as to Third Parties), royalty-free, license under the Joint Inventions solely in furtherance of the license grants set forth in Section 2.1 and Section 2.2.

2.4 Trademarks. Subject to the terms and conditions of this Agreement, Medica hereby grants to Nephros, and Nephros accepts, an exclusive, license to use Medica’s Versatile-PES®” and “Medisulfone®” marks and variations of same in the Territory solely in conjunction with the sale and distribution of the Products.

2.5 Reservation of Rights. Each Party retains all rights in and to its Intellectual Property not specifically granted to the other Party in Section 2.1 through Section 2.4.

3.	Other<br> Risks and Obligations of the Parties.

3.1 Diligent Efforts. Nephros shall: (a) exercise diligent efforts to promote, market and establish and/or increase the sales of the Medica Products in the Territory to customers in both the private and institutional sectors; (b) schedule periodic discussions, or as Medica may request, between Medica’s representatives and Nephros’ personnel in order to facilitate the dissemination of information about the Medica Products and any promotional and marketing programs related to the Medica Products; (c) inform each of its customers in a timely manner of such programs; and (d) prominently display and actively promote the Medica Products at any tradeshows and other trade meetings which Nephros attends when consistent with the application of the Medica Products. Nephros shall further, employ and maintain at all times, at its cost and expense, professional service representatives in sufficient number for the full promotion, marketing and sale of the Medica Products in the Territory. Any and all such professional service representatives shall be deemed Agents of Nephros and not those of Medica, and Nephros shall train such professional service representatives and direct their activities.

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3.2 Minimum Purchase Requirement. During each calendar year during the Term, Nephros shall make minimum annual aggregate purchases (“Minimum Purchase Requirement”) from Medica as follows:

Year	Minimum<br> <br>Purchase<br> <br>Requirement
2026	€	4,976,000
2027	€	5,349,000
2028	€	5,750,000
2029	€	6,000,000
2030	€	6,300,000

The Minimum Purchase Requirement will be measured by purchase orders submitted by Nephros in each calendar year. In the event that Medica is unable to deliver Products that are included Nephros’ forecast, as described in Section 5.4.1., and that have binding purchase orders, the Minimum Purchase Requirement set forth for a given year above will be divided by twelve (12) and for every month when there are Products delivered by Medica more than ten (10) weeks later than the forecasted Products requirement, the Minimum Purchase Requirement in that month will be reduced by 8%. In addition, in the case that Medica goes on backorder for longer than 2 consecutive weeks, Medica must provide an 8-week rolling production plan and update this plan weekly until the backorder is resolved. In the case that in a certain calendar year the minimum purchase commitment is not met for reason not related to force majeure per section 11.7, Medica reserves the right to cancel the exclusivity terms of the agreement.

3.3 Information Sharing. Each Party shall provide the other Party with marketing materials, clinical trial data, other information relating to clinical use of the Products, quality control, approvals, recalls, adverse events and any other information developed or received by the other Party concerning the Products promptly upon such information being developed or becoming available to the other Party and in any event upon the request of Nephros or Medica, as applicable.

3.4 Right to Audit. Each Party shall ensure that the other Party’s authorized representatives and, to the extent permitted by Applicable Law, each Governmental Authority, having jurisdiction, may examine and inspect, during regular business hours, its facilities or, subject to any reasonable confidentiality restrictions or obligations relating thereto, such Party’s facilities and the facilities of any subcontractor used by it in the performance of this Agreement. This right to inspect may be exercised upon reasonable written notice but no earlier than five (5) business days, at any time during the Term of this Agreement, or such longer period as shall be required by Applicable Law.

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| --- | | 4. | Payments and Reports. | | --- | --- |

4.1 Manner of Payment. All sums (“Installment Payments”) due under this Agreement shall be payable in Euros by bank wire in immediately available funds to such bank account(s) as Medica shall designate. All amounts overdue to Medica hereunder by more than 15 days shall bear interest per month at the EURIBOR 360 Day rate + 500 basis points (calculated as a monthly equivalent rate) as published in the Financial Times as of the first business day of the month in which the overdue payment is due.

4.2 Terms and Withholding. Except as set forth in this Section 4.2, all payments under this Agreement will be made without any deduction or withholding for or on account of any tax, duties, levies, or other charges unless such deduction or withholding is required by Applicable Law or regulations to be assessed against Medica. If Nephros is so required to deduct or withhold, Nephros will: (a) notify Medica of such requirement in writing; (b) pay to the relevant authorities the full amount required to be deducted or withheld promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Medica; and (c) forward to Medial an official receipt (or certified copy) or other documentation reasonably acceptable to Medica evidencing such payment to such authorities.

4.3 Financial Record Keeping; Audits. Nephros shall keep books and accounts of record in connection with sales of the Products in sufficient detail to permit accurate determination of all figures necessary for verification of royalties to be paid hereunder, Nephros shall maintain such records for a period of at least five (5) years atter the end of the calendar quarter in which they were generated; provided, however, that if any records are in dispute and Nephros has received written notice from Medica of the records which are in dispute, Nephros shall keep such records until the later of one (1) year or until such dispute is resolved.

5.	Manufacturing<br> and Supply.

5.1 Supply. Subject to the terms and conditions hereof and in the Schedules, during the Term, Medica shall exclusively Supply Nephros and Nephros Affiliates and their respective sublicensees and distributors with, and Nephros shall exclusively purchase from Medica (excluded products not in competition with Medica product or technology), all of Nephros’ and its Affiliates’ or their respective sublicensees and distributors’ requirements for the Products in the Territory during the Term, pursuant to purchase orders delivered by Nephros or its Affiliates or Nephros’ Third Party distributor to Medica in accordance with Section 5.4.

5.2 Raw Materials. Medica shall have responsibility for the procurement, manufacture, quality control, processing, testing, storage, treatment and handling of all packaging, raw materials, work-in-process and other materials used for Supply (collectively, “Raw Materials”). Medica shall Supply the Products in accordance with the terms and conditions of this Agreement and the applicable Product Schedule, Specifications, and cGMP. Medica shall be solely responsible for disposing of all Raw Materials and wastes arising from its performance hereunder and for performance of its obligations hereunder in accordance with Applicable Law in effect at the time and place of manufacture of the Products.

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5.3 Quality Control. All quality control processes and procedures relating to the Products shall be the sole cost and responsibility of Medica. Medica shall conduct quality control testing of Products prior to shipment in accordance with the applicable Specifications and Applicable Law. Medica shall prepare and retain records pertaining to such testing as required by Applicable Law and Medical’s standard operating procedures. With every finished lot Medica will provide Nephros with a certificate of conformity and applicable device history records (i.e Product Record, Bioburden, Sterilization, etc.) showing that the Products have been manufactured to Specifications and pass all quality control testing.

5.4 Forecasts, Order and Delivery of Products.

5.4.1 Nephros shall deliver to Medica monthly rolling forecasts of the quantities of the Products required by Nephros (and/or its Affiliates or their respective sublicensees and distributors) for the following four months. The quantities of Product set forth in the first 12 weeks contained in any such forecast and issued via a purchase order shall be firm and binding on Nephros during the Term. The forecast quantities of Products set forth in the remaining months of the forecast period shall be non-binding good faith estimates of Nephros’ Product requirements for such months and shall be used by Medica for production planning. Medica shall, no later than ten (10) days after receipt of each such forecast notify Nephros in writing of any objections or prospective problems in meeting Nephros’ forecasted requirements.

5.4.2 Nephros shall furnish to Medica binding purchase orders for the quantities of Products which Nephros shall purchase and Medica shall deliver. Such purchase orders shall be delivered by Nephros at least twelve (12) weeks in advance of the delivery date specified therein. Medica shall not maintain a quantity of safety stock of the Products. Each such purchase order shall designate the quantity of Product ordered and the date by which Medica must deliver the Product to Nephros or to any Nephros Affiliate or any Third Party designated by Nephros. No provision of any purchase order submitted by Nephros or its Affiliate or any Third Party designated by Nephros, or of any confirmation or acknowledgement submitted by Medica, shall be controlling to the extent it sets forth any terms or conditions that are additional to, or in conflict or inconsistent with, the terms or conditions of this Agreement or the Supply Schedule.

5.4.3 Medica shall deliver the quantities of Product set forth in each purchase order Ex Works Incoterms 2020, published by the International Chamber of Commerce at Medica’s facility to Nephros’ designated carrier as specified by Nephros in the applicable purchase order. Nephros reserves the right to designate the carrier for shipment from Medica’s facility, provided that Medica has approved such carrier for the facility, such approval not to be unreasonably withheld, conditioned, or delayed. Risk of loss and damage and title to Product shall pass to Nephros when the Product is delivered to Nephros’ designated carrier.

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5.5 Supply Interruption. A “Supply Interruption” will be deemed to have occurred and continuing if Nephros has ordered Product from Medica, and Nephros documents that during a period of at least two (2) consecutive months Nephros has not received at least ninety percent (90%) of those quantities of Product so ordered. In the event of a Supply Interruption (other than as a result of an act or omission by Nephros or any of its Affiliates or sublicensees or distributors), which Medica has not cured within thirty (30) days after receipt of written notice from Nephros detailing the Supply Interruption, including a listing of all outstanding purchase orders, not in limitation of any other rights or remedies available to Nephros under this Agreement or otherwise, Nephros shall be entitled to a reduction of 1% of the purchase price on the affected Products during the duration of the Supply Interruption and, once cured, for an additional period equivalent to the duration of the Supply Interruption. Notwithstanding the foregoing, no Supply Interruption will be deemed to have occurred if the applicable outstanding purchase orders referenced above exceed one hundred twenty percent (120%) of the applicable quantities of Product set forth in the forecast delivered by Nephros for the calendar quarter immediately preceding such purchase order. Medica shall be deemed to have cured such Supply Interruption upon delivery to Nephros of quantities of Product covered under such outstanding orders but only for that amount which does not exceed one hundred twenty percent (120%) of the applicable quantities of Product set forth in the forecast delivered by Nephros for the calendar quarter immediately preceding such purchase order.

5.6 Invoice. Medica shall invoice Nephros for all quantities of Product delivered in accordance herewith. Each invoice shall be delivered concurrently with each shipment of Product. In accordance with Section 4.5, payment shall be due within forty five (45) days after delivery of the invoice to Nephros; provided, however, that if Nephros rejects such shipment pursuant to Section 5.8, then payment shall be due within forty five (45) days after receipt by Nephros of replacement Product.

5.7 Price; Price Escalation. The price for Product delivered hereunder, including any applicable discounts relating to samples, shall be as set forth in the Pricing Schedule. Prices shall be subject to increase no more than once per annum, based upon documented increases in direct labor and material costs. Any price increase hereunder shall be implemented in the calendar year following the year in which the increase occurred and shall be subject to a three percent (3%) annual increase limit.

5.8 Product Not in Compliance with Purchase Order. Within thirty (30) days after receipt of any Product, Nephros or its agent shall perform an examination of the documentation, if any, provided with each shipment of Product, and shall determine whether such Product meets the requirements of the applicable purchase order. In the event that Nephros determines, within such thirty (30) day period, that any Product supplied by Medica does not conform to the applicable purchase order, Nephros shall give Medica written notice thereof and the reason(s) therefor within thirty (30) days after receipt thereof. If Nephros does not submit written notice of rejection within such thirty day period, such Product shall be deemed accepted by Nephros. If a shipment is rejected, Medica shall have the right, and if such right is exercised shall not be deemed in default hereunder to: (a) correct such shipment to conform to the applicable purchase order; or (b) grant Nephros a credit on that portion of the shipment that is nonconforming.

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5.9 Inspections by Regulatory Authorities. Medica shall allow representatives of any Regulatory Authority to inspect the relevant parts of the facility where the Supply of Product is carried out and to inspect the lot, batch and other manufacturing records to verify compliance with cGMP and ISO 13485 and other Applicable Law and practices and shall promptly notify Medica of the scheduling of any such inspection relating to Supply, Medica shall promptly send to Nephros a copy of any reports, citations, or warning letters received by Medica in connection with an inspection by a Regulatory Authority to the extent such documents relate to or affect Supply.

6.	Representations<br> and Warranties.

6.1 Representations of Medica. Medica hereby represents and warrants to Nephros that the following statements are and shall be true and correct in all material respects.

6.1.1 Organization and Good Standing. Medica: (a) is an entity duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation; (b) has the entity power and authority to conduct the business in which it presently is engaged, to enter into this Agreement, and to perform its obligations hereunder; (c) is qualified to do business in, and is in good standing in, each jurisdiction where the nature of its business in such jurisdiction requires it to be so qualified; and (d) is in good standing with regard to manufacturing quality control with aspect to the requirements of the FDA and ISO or other jurisdictions in the Territory which Nephros intends to sell the Products.

6.1.2 Authorization and Binding Effect. All corporate action on the part of Medica and its officers and directors necessary for the authorization, execution, and delivery of this Agreement and for the performance of all of Medica’s obligations hereunder has been taken, and this Agreement, when executed and delivered, shall constitute a valid and legally binding obligation of Medica enforceable against Medica in accordance with the terms of this Agreement, except as enforceability may be limited by bankruptcy, insolvency, and other laws affecting creditors’ rights generally or by general equitable principles.

6.1.3 Execution, Delivery and Performance. The execution, delivery, and performance by Medica of this Agreement do not: (a) violate or breach the certificate of incorporation, articles of association, bylaws, or other constituent documents of Medica; (b) violate or conflict with any Applicable Law; (c) violate, breach, cause a default under, or otherwise give rise to a right of termination, cancellation, or acceleration with respect to (presently, with the giving of notice or the passage of time), any agreement, contract, or instrument to which Medica is a party or by which any of its assets are bound; or (d) result in creation or imposition of any lien, pledge, mortgage, claim, charge, or encumbrance upon any assets of Medica.

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6.1.4 Governmental and Other Consents. No consent, authorization, license, Permit, registration or approval of, or exemption or other action by, any Person is required in connection with Medica’s execution and delivery of this Agreement or with the performance by Medica of its obligations hereunder that has not been obtained.

6.1.5 Litigation. To Medica’s knowledge, no Third Party has filed, or threatened in writing to file any claim, lawsuit, charge, complaint or other action alleging infringement of any Medica IP in the Territory.

6.1.6 Existence and Validity of Medica IP. Any registered Medica IP is valid and subsisting in the Territory.

6.1.7 Inconsistent Obligations. Medica has, as of the Effective Date, no obligation or commitment, and will not, during the Term, assume or undertake any obligation or commitment, that is inconsistent with its obligations under, or the terms and conditions of, this Agreement.

6.1.8 Supply of Product. Medica shall ensure its ability to supply Product in accordance with the terms of this Agreement.

6.1.9 Specifications and Regulatory Compliance. When supplied, the Products shall be manufactured in accordance with the applicable Specifications, and all other requirements of the FDA and other Applicable Laws and in accordance with cGMP and current E.U. Good Manufacturing Practices.

6.1.10 Approval. Medica has, and during the Term Medica shall maintain, all necessary and appropriate approvals with the FDA and each other applicable Governmental Authority to qualify Medica as a supplier of the Products, and Medica shall: (a) respond fully and accurately to all inquiries directed to it by any Governmental Authority (and Medici shall promptly notify Nephros of same and provide copies of all such written inquiries and Medica’s written responses and submissions relating thereto); (b) assist Nephros in responding to inquiries directed to any of them by any Governmental Authority and relating to the Products; and (c) provide a Governmental Authority with such information and data as is requested by such Governmental Authority with respect to the manufacture of the Products (and Medial shall promptly provide copies thereof to Nephros).

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6.2 Representations of Nephros. Nephros hereby represents and warrants to Medica that the following statements are and shall be true and correct in all material respects:

6.2.1 Organization and Good Standing. Nephros: (a) is a corporation duly organized, validly existing, and in good standing under the laws of Delaware; (b) has the corporate power and authority to conduct the business in which it presently is engaged, to enter into this Agreement, and to perform its obligations hereunder; and (c) is qualified to do business in, and is in good standing in, each jurisdiction where the nature of its business in such jurisdiction requires it to be so qualified.

6.2.2 Authorization and Binding Effect. All corporate action on the part of Nephros and its officers and directors necessary for the authorization, execution, and delivery of this Agreement and for the performance of all of Nephros’ obligations hereunder has been taken, and this Agreement, when executed and delivered, shall constitute a valid and legally binding obligation of Nephros enforceable against Nephros in accordance with the terms of this Agreement, except as enforceability may be limited by bankruptcy, insolvency, and other laws affecting creditors’ rights generally or by general equitable principles.

6.2.3 Execution, Delivery and Performance. The execution, delivery, and performance by Nephros of this Agreement do not: (a) violate or breach the certificate of incorporation, articles of association, bylaws, or other constituent documents of Nephros; (b) to the best of Nephros’ knowledge, violate or conflict with any Applicable Law; (c) violate, breach, cause a default under, or otherwise give rise to a right of termination, cancellation, or acceleration with respect to (presently, with the giving of notice or the passage of time), any agreement, contract, or instrument to which Nephros is a party or by which any of its assets are bound; or (d) result in creation or imposition of any lien, pledge, mortgage, claim, charge, or encumbrance upon any assets of Nephros.

6.2.4 Governmental and Other Consents. No consent, authorization, license, Permit, registration or approval of, or exemption or other action by, any Person is required in connection with Nephros’ execution and delivery of this Agreement or with the performance by Nephros of its obligations hereunder that has not been obtained.

6.2.5 Inconsistent Obligations. Nephros has, as of the Effective Date, no obligation or commitment, and will not, during the Term, assume or undertake any obligation or commitment, that is inconsistent with its obligations under, or the terms and conditions of, this Agreement.

7.	Patents<br> and Infringement Matters.

7.1 Prosecution and Maintenance of Patents.

7.1.1 Nephros shall have the right to prepare, file, prosecute, maintain, and extend all Patent Rights covering the Joint Patents and related applications. Nephros shall use commercially reasonable efforts to prepare, file, prosecute and maintain, and shall consult with Medica prior to abandoning any Joint Patents or related applications that are material to and relevant to the matters contemplated in this Agreement. If Nephros fails to undertake (or, after commencement of such filing, prosecution and/or maintenance, ceases) the prosecution or the maintenance of any such Patent Rights, then Medica shall have the right, at its election but not obligation, and Medica shall be entitled, at its sole cost and expense, to file, prosecute and/or maintain such Joint Patent in the Territory in the name of Nephros and shall be entitled to reimbursement for its expenses upon an agreed upon recovery schedule.

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7.1.2 Each of the Parties shall execute or have executed by its appropriate agents such documents as may be necessary to obtain, perfect or maintain any Patent Rights covering the Joint Patents filed or to be filed pursuant to this Agreement, and shall cooperate with the other Party so far as reasonably necessary with respect to furnishing all information and data in its possession reasonably necessary to obtain or maintain such patent rights.

7.1.3 Nephros shall determine, in consultation with Medica, if a Joint Invention warrants patent protection, or whether it should be kept as a trade secret or know-how. If Nephros decides that a patent application should be prepared, filed and prosecuted as a Joint Invention, then the claims, strategy, timing and location of first filing said patent shall be mutually agreed upon by the Parties and costs shared equally or as otherwise agreed by the Parties. If Nephros decides not to go forward with a patent application the Joint Invention will remain know-how available to both Parties subject to Section 9 and neither Party shall publish on or license the know-how without the prior written agreement of the other Party.

7.2 Protection of the Joint Patents and Joint Inventions.

7.2.1 In case of an infringement of the Joint Patents or Intellectual Property rights covering the Joint Inventions in the Territory by a Third Party, Nephros shall decide whether to act or not in order to protect the Joint Patents or Joint Inventions in its sole discretion, Nephros shall have the sole and exclusive right to select counsel for any suit initiated pursuant to this Section 7.

7.2.2 In the event that Nephros determines not to act to protect the Joint Patents or ceases an enforcement action after commencement, Medica may, with prior written authorization by Nephros, act in order to protect the Joint Patents at its sole expense and retain any recovery in connection therewith, subject to reimbursement of any expenses incurred by Nephros in connection with an enforcement action commenced under Section 7.3.1.

7.2.3 If a Party is rewarded financially as a result of successfully enforcing the Joint Patents or Joint Inventions against an infringement, the Parties shall share in any such financial rewards in the amount determined in good faith by the Parties. If required under Applicable Law in order for the Party to initiate and/or maintain such suit, the other Party shall join as a party to the suit. The other Party shall, in any se, whether required by Applicable Law or not, offer reasonable assistance to the initiating Party in connection therewith.

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7.3 Patent Invalidity Claims; Claimed Infringement.

7.3.1 If a Third Party at any time asserts a claim that any Joint Patents are invalid or otherwise unenforceable (an “Invalidity Claim”) control of the response to such claim in the Territory shall, as between the Parties, be determined in the same manner as enforcement rights with lispct.t to such Joint Patents is determined pursuant to Section 7.2, and the non-controlling Party shall cooperate with the controlling Party in the preparation and formulation of such response, and in taking other steps reasonably necessary to respond, to such Invalidity Claim. Neither Party shall settle or compromise any Invalidity Claim without the consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. If an Invalidity Claim is asserted with respect to the Joint Patents or any Patent Rights covered by the Joint Inventions, the Parties shall cooperate and shall mutually agree upon an appropriate course of action and shall share equally in the cost and expense of such action.

7.3.2 In the event that a Party becomes aware of any claim that the practice by either Party of the Joint Patents, Intellectual Property rights covering Joint Inventions, the Medica IP, or the Nephros IP infringes the Intellectual Property rights of any Third Party, such Party shall promptly notify the other Party. In any such instance, the Parties shall cooperate and shall mutually agree upon an appropriate course of action Each Party shall provide to the other Part) copies of any notices it receives from third parties regarding any patent nullity actions, any declaratory judgment actions and any alleged infringement or misappropriation of Third Party Intellectual Property relating to the Commercialization, manufacture or supply of the Products. Such notices shall be provided promptly, but in no event after more than fifteen (15) days following receipt thereof.

8.	Confidentiality.

8.1 General. Pursuant to the terms of this Agreement, each of Nephros and Medica (in such capacity, the “Disclosing Party”) has disclosed and will be disclosing to the other Party, and to the officers, directors, employees, agents and/or representatives of each (in such capacity, the “Receiving Party”) certain secret, confidential or proprietary data, trade secrets, know-how, intellectual property and related information, including, without limitation, operating methods and procedures, marketing, manufacturing, distribution and sales methods and systems, sales figures, pricing policies and price lists and other business information (“Confidential Information”). The Receiving Party shall make no use of any Confidential Information of the Disclosing Party except in the exercise of its rights and the performance of its obligations set forth in this Agreement. The Receiving Party: (a) shall keep and hold as confidential, and shall cause its officers, directors, employees, agents and representatives to keep and hold as confidential, all Confidential Information of the Disclosing Party; and (b) shall not disclose, and shall cause its officers, directors, employees, agents and representatives not to disclose, arty Confidential Information of the Disclosing Party. A Disclosing Party’s Confidential Information shall, at all times be and remain the property of the Disclosing Party, its Affiliates and/or licensors, which shall retain the sole and exclusive right, title and/or interest thereto. A Receiving Party shall have no right to use a Disclosing Party’s Confidential Information except as expressly set forth in this Agreement.

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8.2 Exceptions. The above restrictions on the use and disclosure of Confidential Information shall not apply to any information which: (a) is already known to the Receiving Party at the time of disclosure by the Disclosing Party, as demonstrated by competent proof (other than as a result of prior disclosure under any agreement between the Parties with respect to confidentiality); (b) is or becomes generally available to the public other than through any act or omission of the Receiving Party in breach of this Agreement; (c) is acquired by the Receiving Party from a Third Party who is not directly or indirectly under an obligation of confidentiality to the Disclosing Party with respect to same; or (d) is developed independently by the Receiving Party without use, direct or indirect, of Confidential Information. In addition, nothing in this

Section 8 shall be interpreted to limit the ability of either Party to disclose its own Confidential Information to any other Person on such terms and subject to such conditions as it deems advisable or appropriate. Notwithstanding anything in this Agreement to the contrary, during the Term Medica shall keep and hold as confidential the trade secrets and know-how relating to the manufacturing of fiber for the Products without regard to Section 8.1.

8.3 Permitted Disclosure. It shall not be a breach of Section 8.1 if a Receiving Party discloses Confidential Information of a Disclosing Party: (a) pursuant to Applicable Law, including securities laws applicable to a public company, to any Governmental Authority; or (b) in a judicial, administrative or arbitration proceeding to enforce such Party’s rights under this Agreement; provided, that, the Receiving Party (i) provides the Disclosing Party with as much advance written notice as possible of the required disclosure, (ii) reasonably cooperates with the Disclosing Party in any attempt to prevent, limit or seek confidential treatment for the disclosure, and (iii) discloses only the minimum amount of Confidential Information necessary for compliance.

8.4 Confidential Terms. Each Party acknowledges and agrees that the terms and conditions of this Agreement shall be considered Confidential Information of each Party and shall be treated accordingly. Notwithstanding the foregoing, each Party acknowledges and agrees that the other may be required to disclose some or all of the information included in this Agreement in order to comply with its obligations under securities laws, and hereby consents to such disclosure to the extent deemed advisable or appropriate by its respective counsel (but only after consulting with the other to the extent practicable). The Parties may also disclose the existence of this Agreement and terms thereof to their directors, investors, officers, employees, attorneys, accountants and other advisers on a need to know basis provided such Persons are under obligations of confidentiality substantially similar to this Section 8.

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8.5 Equitable Remedies. Each Party specifically recognizes that any breach by it of this Section 8 may cause irreparable injury to the other Party and that actual damages may be difficult to ascertain, and in any event, may be inadequate. Accordingly (and without limiting the availability of legal or equitable, including injunctive, remedies under any other provisions of this Agreement), each Party agrees that in the event of any such breach, the other Party shall be entitled to seek injunctive relief and such other legal and equitable remedies as may be available.

8.6 Return. Upon the expiration or termination of this Agreement, or at any time at Disclosing Party’s request: (a) Receiving Party shall promptly return to Disclosing Party or destroy all materials (in written, electronic or other form) containing or constituting Proprietary Information of Disclosing Party, including any copies and extracts thereof; and (b) Receiving Party shall not use such Confidential Information in any way for any purpose.

8.7 Electronic Copy. As an exception to Section 8.6, the Receiving Party will be able to make an electronic copy of the materials returned to the Disclosing Party for legal compliance obligations, and the Receiving Party shall not be required to destroy any computer files stored securely by the Receiving Party that are created during automatic system back-up, provided, however, that the same confidentiality and non-use obligations as agreed in the Agreement shall remain valid for so long as such back-up exists.

9.	Indemnification;<br> Limitation of Liability.

9.1 Indemnification by Medica. Medica shall, at its cost and expense, indemnify on demand, defend, and forever hold harmless Nephros and its Affiliates from and against any Claim arising out of or resulting from: (a) any breach by Medica or any of its Agents or Affiliates of an) obligation, representation, or warranty of Medica under this Agreement; (b) any negligence, error, or omission by Medica or any of its Agents of Affiliates with respect to its or their obligations under or by reason of this Agreement; (c) any violation of Applicable Law that materially adversely impacts Nephros; (d) any fine, penalty, litigation cost, or other assessment of any kind, including, without limitation, those levied by any Governmental Authority; or (e) infringement by the Product resulting from the Improvements of a patent or trademark of any Person, except to the extent that any such Claim shall be within the indemnification obligations of Nephros under Section 9.2.

9.2 Indemnification by Nephros. Nephros shall, at its cost and expense, indemnify on demand, defend, and forever hold harmless Medica and its Affiliates from and against any Claim arising out of or resulting from: (a) any breach by Nephros or any of its Agents of any obligation, representation, or warranty of Nephros under this Agreement; (b) any negligence, ann., or omission by Nephros or any of its Agents with respect to its or their obligations under this Agreement; or (c) any violation of Applicable Law that materially adversely impacts Medica, except to the extent that any such Claim shall be within the indemnification obligations of Medica under Section 9.1.

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9.3 Procedure for Indemnification.

9.3.1 Notice. In the case of a Claim made by Third Party (a “Third Party Claim”) as to which a Party (the “Indemnitor”) may be obligated to provide indemnification pursuant to this Agreement, such Party seeking indemnification hereunder (“Indemnitee”) will notify the Indemnitor in writing of the Third Party Claim (and specifying in reasonable detail the factual basis for the Third Party Claim and to the extent known, the amount of the Third Party Claim) reasonably promptly after becoming aware of such Third Party Claim; provided, however, that failure to give such notification will not affect the indemnification provided hereunder except to the extent the Indemnitor shall have been actually materially prejudiced as a result of such failure.

9.3.2 Defense of Claim. If a Third Party Claim is made against an Indemnitee, the Indemnitor will be entitled, within thirty (30) days after receipt of written notice from the Indemnitee of the commencement or assertion of any such Third Party Claim, to assume the defense thereof by providing written notice to Indemnitee of its intention to assume the defense of such Third Party Claims within mid thirty (30) day period (at the expense of the Indemnitor) with counsel selected by the Indemnitor and reasonably satisfactory to the Indemnitee for so long as the Indemnitor is conducting a good faith and diligent defense. Should the Indemnitor so elect to assume the defense of a Third Party Claim, the Indemnitor will not be liable to the Indemnitee for any legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided, that if under applicable standards of professional conduct a conflict of interest exists between the Indemnitor and the Indemnitee in respect of such claim, such Indemnitee shall have the right to employ separate counsel to represent such Indemnitee with respect to the matters as to which a conflict of interest exists and in that event the reasonable fees and expenses of such separate counsel shall be paid by such Indemnitor; provided, further, that the Indemnitor shall only be responsible for the reasonable fees and expenses of one separate counsel for such Indemnitee. If the Indemnitor assumes the defense of any Third Party Claim, the Indemnitee shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnitor. If the Indemnitor assumes the defense of any Third Party Claim, the Indemnitor will promptly supply to the Indemnitee copies of all correspondence and documents relating to or In connection with such Third Party Claim and keep the Indemnitee informed of developments relating to or in connection with such Third Party Claim, as may be reasonably requested by the Indemnitee (including, without limitation, providing to the Indemnitee on reasonable request updates and summaries as to the status thereof). If the Indemnitor chooses to defend a Third Party Claim, all Indemnitees shall reasonably cooperate with the Indemnitor in the defense thereof (such cooperation to be at the expense, including reasonable legal fees and expenses, of the Indemnitor). If the Indemnitor does not elect to assume control by written acknowledgement of the defense of any Third Party Claim within the thirty day period set forth above, or if such good faith and diligent defense Is not being or ceases to be conducted by the Indemnitor, the Indemnitee shall have the right, at the expense of the Indemnitor, after three (3) business days’ notice to the Indemnitor of its intent to do so, to undertake the defense of the Third Party Claim for the account of the Indemnitor (with counsel selected by the Indemnitee), and to compromise or settle such Third Party Claim, exercising reasonable business judgment.

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9.3.3 Settlement of Claims. If the Indemnitor acknowledges in writing its obligation to indemnify the Indemnitee for a Third Party Claim, the Indemnitee will agree to a reasonable settlement, compromise or discharge of such Third Party Claim that the Indemnitor may recommend that by its terms obligates the Indemnitor to pay the full amount of Liabilities (whether through settlement or otherwise) in connection with such Third Party Claim and unconditionally and Irrevocably releases the Indemnitee completely from all Liabilities in connection with such Third Party Claim; provided, however, that, without the Indemnitee’s prior written consent, the Indemnitor shall not consent to any settlement, compromise or discharge (including, without limitation, the consent to entry of any judgment), and the Indemnitee may refuse to agree to any such settlement, compromise or discharge, that provides for injunctive or other nonmonetary relief affecting the Indemnitee. If the Indemnitor acknowledges in writing its obligation to indemnify the Indemnitee for a Third Party Claim, the Indemnitee shall not (unless required by Law) admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Indemnitor’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned).

9.4 Assumption of Defense. Notwithstanding anything to the contrary contained herein, an Indemnitee shall be entitled to assume the defense of any Third Party Claim with respect to the Indemnitee upon written notice to the Indemnitor pursuant to this Section 9.4. In which case, the Indemnitor shall be relieved of liability under Section 9.1 or 9.2, as applicable, solely for such Third Party Claim.

9.5 Direct Claims. Any Claim which does not involve a Third Party Claim (a “Direct Claim”) shall be asserted by reasonably prompt written notice (stating in reasonable detail, the basis of such claim and a reasonable estimate of the amount thereof) given by the Indemnitee to the Indemnitor. For a period of sixty (60) days from and after the receipt of the written notice the Parties shall attempt in good faith to resolve such Direct Claim. If the parties are unable to resolve such Direct Claim, the party seeking recourse may thereafter institute proceedings under Section 11.13 to enforce said Direct Claim.

9.6 Limitation of Liability. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OF ITS AFFILIATES FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, BUSINESS OR GOODWILL) SUFFERED OR INCURRED BY SUCH OTHER PARTY OR ITS AFFILIATES IN CONNECTION WITH A BREACH OR ALLEGED BREACH OF THIS AGREEMENT. THE FOREGOING SENTENCE SHALL NOT APPLY IN CASES OF FRAUD OR BREACHES OF THIS AGREEMENT MADE INTENTIONALLY IN BAD FAITH OR IN RECKLESS DISREGARD FOR THE PROVISIONS OF THIS AGREEMENT AND SHALL NOT LIMIT THE OBLIGATIONS OF EITHER PARTY TO INDEMNIFY THE OTHER PARTY FOR THIRD PARTY CLAIMS UNDER THIS SECTION 9.

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| --- | | 10. | Term and Termination. | | --- | --- |

10.1 This Agreement shall commence on the Effective Date and shall continue in effect through December 31, 2030 (“Term”), or until terminated by either Party in accordance with this Agreement.

10.2 Either Party shall have the right to terminate this Agreement at any time for a material breach of this Agreement by the other Party, provided that the non-breaching Party shall have first given thirty (30) days prior written notice to the breaching Party describing such material breach and stating the non-breaching Party’s intention to terminate this Agreement if such material breach remains uncured, and the breathing Party thereafter fails to cure such material breach within thirty (30) days thereafter.

10.3 This Agreement may be terminated by Medica upon written notice upon Nephros’ failure to cure a monetary default under this Agreement within thirty (30) days after written notice thereof is provided to Nephros.

10.4 This Agreement may be terminated by Nephros upon ninety (90) days’ written notice to Medica for convenience.

10.5 If either Party becomes insolvent, makes an assignment for the benefit of its creditors, is placed in the hands of a receiver or liquidates its business, and such action is not cured within thirty (30) days, then, in any such case, the other Party shall have the immediate right, in its sole discretion, to terminate this Agreement by giving written notice to that Party.

10.6 No termination hereunder shall constitute a waiver of any rights or causes of action that either Party may have for any acts or omissions or breach hereunder by the other Party prior to the termination date.

10.7 The following provisions shall survive the expiration or termination of this Agreement: Section 1, Section 3.4, Section 5, Section 7, Section 8, Section 9, this Section 10.7, Section 11 and provisions relating to accrued payment obligations.

11.	Miscellaneous.

11.1 Compliance with Laws. At all times during the Term, each Party shall comply in all material respects with Applicable Law in effect in the Territory that is applicable to the Products or the conduct of business under this Agreement.

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11.2 Independent Contractor. Neither Nephros nor Medica, together in each case with their respective employees or representatives, are under any circumstances to be considered as employees, partners, joint venturers, agents or representatives of the other by virtue of this Agreement, and neither shall have the authority or power to bind the other or contract in the other’s name.

11.3 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed given when so delivered in person, by overnight courier, or by facsimile transmission (with receipt confirmed by automatic transmission report), as follows:

If<br> to Nephros:	Nephros,<br> Inc.
	380 Lackawanna<br> Place
	South Orange,<br> New Jersey 07079 USA
	Attn: Mr.<br> Robert Banks, President & CEO
	[***]@nephros.com<br> and [***]@nephros.com
	Facsimile:<br> [*****]
If<br> to Medica:	Medica<br> S.p.A.
---	---
	Via Degli<br> Artigiani, 7
	41036 Medolla<br> (MO) - ITALY
	Attn: Marco<br> Fecondini, CEO
	[*****]
	Facsimile:<br> [*****]

Either Party may by notice given in accordance with this Section 11.3 to the other Party designate another address or person for receipt of notices hereunder.

11.4 Binding Effect; No Assignment; No Third Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Neither Nephros nor Medica may assign any of its respective rights or delegate any of its respective liabilities or obligations hereunder without the prior written consent of the other Party, except that without the prior consent of the other Party: (a) either Party may assign this Agreement and/or its rights and obligations under this Agreement to any purchaser of all or a substantial part of its assets or business related to such Party’s Products; and (b) either Party may assign this Agreement and/or its rights and obligations under this Agreement, in whole or in part, to any of its Affiliates and may assign any of its rights to payments or any other amounts due under this Agreement to any of its Affiliates or any Third Party. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than Medica and Nephros and their respective successors and permitted assigns any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, except for Affiliates entitled to indemnification pursuant to Section 9.

11.5 No Implied Waivers; Rights Cumulative. No failure on the part of Nephros or Medica to exercise and no delay in exercising any right, power, remedy or privilege under this Agreement, or provided by statute or at law or in equity or otherwise, including the right or power to terminate this Agreement, shall impair, prejudice or constitute a waiver of any such right, power, remedy or privilege or be construed as a waiver of any breach of this Agreement or as an acquiescence therein, nor shall any single or partial exercise of any such right, power, remedy or privilege preclude any other or further exercise thereof or the exercise of any other right, power, remedy or privilege.

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11.6 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable. The Parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that shall achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable provision.

11.7 Force Majeure. Neither Party shall be liable for delay in delivery or nonperformance (except for any obligation for the payment of money), in whole or in part, nor shall the other Party have the right to terminate this Agreement except us otherwise specifically provided in this Section 11.7, where delivery or performance has been affected by a condition beyond a Party’s reasonable control, including fires, floods, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), terrorism, insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority; provided that the Party affected by such a condition shall, within ten (10) days of its occurrence, give notice to the other Party stating the nature of the condition, its anticipated duration and any action being taken to avoid or minimize its effect. The suspension of performance shall be of no greater scope and no longer duration than is reasonably required and the nonperforming Party shall use its best efforts to remedy us inability to perform; provided, however, that in the event the suspension of performance continues for ninety (90) days after the date of the occurrence, and such failure to perform would constitute a material breach of this Agreement in the absence of such force majeure event, the nonaffected Party may terminate this Agreement immediately by written notice to the other Party.

11.8 Section Headings; Construction. The headings of Sections in this Agreement are provided for convenience only and shall not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement. All words used in this Agreement shall be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms and shall be deemed to be following by the words “without limitation.”

11.9 Amendment; Waiver. This Agreement may not be amended except by an instrument signed by each of the Parties hereto. Any Party hereto may: (a) extend the time for the performance of any of the obligations or other acts of another Party hereto; or (b) waive compliance with any of the agreements of another Party or any conditions to its own obligations, in each case only to the extent such obligations, agreements, or conditions are intended for its benefit; provided, however, that any such extension or waiver shall be binding upon a Party only if such extension or waiver is set forth in a writing executed by such Party.

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11.10 Rules of Construction. The Parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or ruling of construction providing that ambiguities in an agreement or other document shall be construed against the Party drafting such agreement or document.

11.11 Publication. Nephros and Medical agree not to issue any press relate or other public statement disclosing the existence of or relating to this Agreement or the Ancillary Agreements without the express written consent of the other Party; provided, however, that neither Party shall be prevented from complying with any duty of disclosure it may have pursuant to Applicable Law, including securities laws applicable to a public company, subject to notifying the other Party in writing and giving such other Party reasonable time to comment on the same prior to disclosure.

11.12 Expenses. Except as expressly set forth herein, each Party hereto shall bear all fees and expenses incurred by such Party in connection with, relating to or arising out of the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including attorneys’, accountants’ and other professional fees and expenses.

11.13 Governing Law/Disputes. This Agreement shall be construed and governed in all respects, and the respective rights of the Parties determined, according to the substantive laws of the State of New York, U.S., without regard to its conflict of laws principles. The application of the United Nations Convention on Contracts for the International Sales of Goods is hereby expressly excluded. Any controversy or claim arising out of or relating to this Agreement or the applicability of this Section 11.13 that is not resolved amicably will be determined by binding arbitration under the Rules of Arbitration of the International Chamber of Commerce. Such arbitration shall be conducted by a sole arbitrator mutually selected by written agreement of the Parties. In the event that the Parties are not able to mutually select the sole arbitrator, the arbitration shall be conducted by a panel of three (3) arbitrators, consisting of one neutral arbitrator to be selected by each of the Parties and a third neutral arbitrator to be selected jointly by the two (2) arbitrators selected by the Parties. Each arbitrator shall be an attorney actively engaged in the practice of law for at least ten (10) years and shall have experience with and knowledge of the medical device industry. The place of the arbitration will be New York, New York. The language of the arbitration shall be English. Prior to commencement of hearings, each of the arbitrators appointed must provide an oath of impartiality. Judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The cost of any such arbitration shall be divided equally by Nephros and Medica, with each Party bearing its own attorneys’ fees and costs. Notwithstanding anything to the contrary contained in this Agreement, either Party shall has the right to bring an action or Claim for interim measures, including specific performance or injunctive relief in order to preserve its rights or enforce the obligations of the other Party under this Agreement, in any court of competent jurisdiction or having jurisdiction over any of the Parties or their respective assets, without the need to submit such matter to arbitration under this Section 11.13.

11.14 Entire Agreement. The Parties expressly agree that the Prior Agreement is hereby terminated. This Agreement together with its Schedules, contains the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, written or oral, among the Parties thereto.

11.15 Counterparts; Electronic Transmissions. This Agreement may be executed in multiple counterparts, all of which, when executed, shall be deemed to be an original and all of which together shall constitute one and the same document. Electronic transmissions of this Agreement (e.g., fax, .pdf, etc.), and reproductions thereof, signed by the Parties shall in all respects be deemed to be originals.

[Signatureson follow page]

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INWITNESS WHEREOF, the Parties have entered into this Agreement as of the Effective Date.

NEPHROS, INC.		MEDICA, S.p.A.
By:	/s/ Robert Banks	By:	/s/ Marco Fecondini
	Robert Banks		Marco Fecondini
	President<br> & Chief Executive Officer		Chief Executive<br> Officer

Schedule1

JOINTPATENTS

Device<br> Name:	Dual-Stage Ultrafilter (DSU)
	REDUNDANT<br> ULTRAFILTRATION
Official<br> Patent Title	DEVICES

ISSUEDPATENTS

Country	Grant Date	Expiration Date	Grant No.
United<br> States	17-Aug-10	June 15,<br> 2026	7,775,375

Schedule2

Products

Any water and dialysate solution filtration products of Nephros or Medica based in whole or in part upon Medica’s proprietary Medisulfone fiber technology and/or other polysulfone based hollow fiber or technology in existence as of the Effective Date or developed at any time during the Term.

Thefollowing Medica products are excluded from this License and Supply Agreement:

●	Blood,<br> plasma and haemoderivates filtration products (not including MD220 for HDF)
●	Filtration<br> products manufactured by Medica or Medica USA and sold by Evoqua as of the date of the Asset deal signed in April 2023 between Medica<br> and Evoqua. Medica will not provide, sell, or distribute products to Evoqua consisting of membranes included in the products licensed<br> to Nephros under this agreement.
●	Medica<br> is developing for Xylem a product to take over the POSICLEAR (former Gambro product) market, also this item is excluded from the<br> exclusivity terms of this agreement. Medica commits to keep new Posiclear related project price to US dealer at list [***]% [**] than Endopur price to Nephros*.
●	Fluid<br> concentration/clarification/purification products related to the life science/bioprocessing field (perfusion and harvesting).
	Medica<br> will allow Nephros to distribute Graphene technology products to the US Military, based on the offer already submitted by Nephros<br> to the US Military (based on MAPS design).
●	Ultrafilter<br> for: Mozarc Medtronic machine, Medica will not provide, sell, or distribute these product in the US outside of Medtronic and Dianova.

Schedule3

Pricing

[*****]

Exhibit23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

We hereby consent to the incorporation by reference in the Registration Statements of Nephros, Inc. on Form S-8 (Nos 333-205167; 333-223849; 333-232707, 333-238563, 333-256712 and 333-280278) and on Form S-3 (Nos 333-232708, 333-259370 and 333-279328), of our report dated March 12, 2026, relating to the financial statements of Nephros, Inc., as of and for the years ended December 31, 2025 and 2024, which appears in this Annual Report on Form 10-K for the year ended December 31, 2025.

/s/ Baker Tilly US, LLP
Tewksbury, Massachusetts
March 12, 2026

Exhibit31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert Banks, certify that:

(1)	I<br> have reviewed this Annual Report on Form 10-K of Nephros, Inc.;
(2)	Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary<br> to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to<br> the period covered by this report;
(3)	Based<br> on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material<br> respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in<br> this report;
(4)	The<br> registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures<br> (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange<br> Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)	Designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant is made known to us by others within those entities, particularly<br> during the period in which this report is being prepared;
(b)	Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;<br> and
(d)	Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected,<br> or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5)	The<br> registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial<br> reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing<br> the equivalent functions):
(a)	All<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and
(b)	Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting.

Dated: March 12, 2026

/s/ Robert Banks
Robert<br> Banks
President,<br> Chief Executive Officer
(Principal<br> Executive Officer)

Exhibit31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Judy Krandel, certify that:

(1)	I<br> have reviewed this Annual Report on Form 10-K of Nephros, Inc.;
(2)	Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary<br> to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to<br> the period covered by this report;
(3)	Based<br> on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material<br> respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in<br> this report;
(4)	The<br> registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures<br> (as defined in Exchange Act Rules 13a-15€ and 15d-15(e)) and internal control over financial reporting (as defined in Exchange<br> Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)	Designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant is made known to us by others within those entities, particularly<br> during the period in which this report is being prepared;
(b)	Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;<br> and
(d)	Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected,<br> or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5)	The<br> registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial<br> reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing<br> the equivalent functions):
(a)	All<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and
(b)	Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting.

Dated: March 12, 2026

/s/ Judy Krandel
Judy<br> Krandel
Chief<br> Financial Officer
(Principal<br> Financial and Accounting Officer)

Exhibit32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Nephros, Inc. (the “Company”) for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert Banks, President, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)	The<br> Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The<br> information contained in the Report fairly presents, in all material respects, the financial condition and results of operations<br> of the Company.

Dated: March 12, 2026

/s/ Robert Banks
Robert<br> Banks
President,<br> Chief Executive Officer
(Principal<br> Executive Officer)

Exhibit32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Nephros, Inc. (the “Company”) for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Judy Krandel, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)	The<br> Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The<br> information contained in the Report fairly presents, in all material respects, the financial condition and results of operations<br> of the Company.

Dated: March 12, 2026

/s/ Judy Krandel
Judy<br> Krandel
Chief<br> Financial Officer
(Principal<br> Financial and Accounting Officer)