8-K

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UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

FORM8-K

CURRENTREPORT

Pursuantto Section 13 or 15(d) of the Securities Exchange Act of 1934

Dateof Report (Date of earliest event reported): May 6, 2020

NEPHROS,INC.

(Exact name of Registrant as Specified in its Charter)

Delaware	001-32288	13-3971809
(State<br> or other jurisdiction<br><br> <br>of<br> incorporation)	(Commission<br><br> <br>File<br> Number)	(IRS<br> Employer<br><br> <br>Identification<br> No.)

380Lackawanna Place, South Orange, New Jersey 07079

(Address of principal executive offices, including ZIP code)

(201)343-5202

(Registrant’s telephone number, including area code)

n/a

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]	Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]	Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]	Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]	Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title<br> of each class	Trading<br> Symbol(s)	Name<br> of each exchange on which registered
Common<br> stock, $0.001 par value	NEPH	The<br> Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging 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. [  ]

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Item 2.02.	Results of Operations and Financial Condition.

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On May 6, 2020, Nephros, Inc. (the “Company”) issued a press release in which it disclosed its first quarter 2020 financial results. A copy of this press release is furnished herewith as Exhibit 99.1.

Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein and in this Item 2.02 have been furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing regardless of any general incorporation language.

Item 9.01.	Financial Statements and Exhibits.

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(d)	Exhibits

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Exhibit No.	Description
99.1	Nephros, Inc. Press Release, dated May 6, 2020.

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SIGNATURES

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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	Nephros, Inc.
Dated:<br> May 7, 2020	By:	/s/ Andrew Astor
		Andrew<br> Astor
		Chief<br> Financial Officer

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Exhibit99.1

NephrosReports First Quarter Financial Results

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ProductRevenue up 43% over Q1 2019

SOUTH ORANGE, NJ, May 6, 2020 – Nephros, Inc. (Nasdaq:NEPH), a commercial-stage company that develops and sells high performance water purification products and pathogen detection systems to the medical and commercial markets, today announced financial results for the three months ended March 31, 2020.

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FinancialHighlights

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WaterFiltration Business Segment Highlights

●	Net<br> revenue was $2.5 million, up 43% compared with $1.8 million in 2019
●	Net<br> loss was $0.6 million, compared with $0.8 million in 2019
●	Adjusted<br> EBITDA was ($0.4 million) compared with ($0.5 million) in 2019

ConsolidatedHighlights

●	Net<br> revenue was $2.5 million, up 43% compared with $1.8 million in 2019
●	Net<br> loss was $1.1 million, compared with $1.3 million in 2019
●	Adjusted<br> EBITDA was ($0.8 million), compared with ($0.9 million) in 2019

“We would like to take this opportunity to thank all the health care workers supporting COVID-19 patients,” said Daron Evans, President and CEO of Nephros. “We are always grateful to be part of an infrastructure of people and equipment that protects patients from waterborne pathogens, and in these challenging times, our purpose is even more resolute. To that end, we have accelerated our pathogen detection efforts to better support our water treatment partners. As America transitions back to work over the coming months, our partners will be working tirelessly to help them ensure that under-used buildings are safe to reoccupy.”

ConsolidatedFinancial Performance for the Quarter Ended March 31, 2020

Net revenue for the quarter ended March 31, 2020 was $2.5 million, compared with $1.8 million in 2019, an increase of 43%.

Net loss for the quarter ended March 31, 2020 was $1.1 million, compared with a net loss of $1.3 million in 2019, a 19% improvement.

Adjusted EBITDA for the quarter ended March 31, 2020 was ($0.8 million), compared with ($0.9 million) in 2019, a 7% improvement.

Cost of goods sold for the quarter ended March 31, 2020 was $1.0 million, compared with $0.8 million in 2019, an increase of 35%. Gross margins for the quarter ended March 31, 2020 were 59%, compared with 56% in 2019. Management expects future gross margins to continue in the range of 55% to 60%.

Research and development expenses for the quarter ended March 31, 2020 were $0.6 million, compared with $0.8 million in 2019, a decrease of 26%.

Depreciation and amortization expenses for the quarter ended March 31, 2020 were approximately $46,000, compared with approximately $50,000 in 2019, a decrease of 8%.

Selling, general and administrative expenses for the quarter ended March 31, 2020 were $1.9 million, compared with $1.5 million in 2019, an increase of 30%.

As of March 31, 2020, Nephros had cash and cash equivalents of $9.0 million.

AdjustedEBITDA Definition and Reconciliation to GAAP Financial Measures

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Adjusted EBITDA is calculated by taking net (loss) income calculated in accordance with generally accepted accounting principles (“GAAP”) and excluding all interest-related expenses and income, tax-related expenses and income, non-recurring expenses and income, and non-cash items, including depreciation and amortization and non-cash compensation. The following table presents a reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP financial measure, for the first quarter of the 2020 and 2019 fiscal years for both Nephros (on a consolidated basis) and the Water Filtration Business Segment:

	3<br> Months Ended Mar 31,
Water<br> Filtration Business Segment	2020			2019
Net<br> loss		(620	)		(778	)
Adjustments:
Depreciation<br> of property and equipment		5			8
Amortization<br> of other assets		45			44
Interest<br> expense		43			46
Noncash<br> interest expense		-			-
Interest<br> income		(1	)		-
Change<br> in fair value of contingent consideration		(42	)		(10	)
Noncash<br> compensation		190			158
Other<br> noncash items		11			35
Adjusted<br> EBITDA		(369	)		(497	)
	3<br> Months Ended Mar 31,
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Consolidated<br> Results	2020			2019
Net<br> loss		(1,098	)		(1,349	)
Adjustments:
Depreciation<br> of property and equipment		5			8
Amortization<br> of other assets		45			44
Interest<br> expense		43			46
Noncash<br> interest expense		-			-
Interest<br> Income		(1	)		-
Change<br> in fair value of contingent consideration		(42	)		(10	)
Noncash<br> compensation		222			158
Other<br> noncash items		11			35
Sub-Total		(815	)		(1,068	)
Non-recurring<br> pathogen detection product development		-			188
Adjusted<br> EBITDA		(815	)		(880	)

Nephros believes that Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to Nephros’s financial condition and results of operations. Management does not consider Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA is that it excludes significant expenses and income that are required by GAAP to be recognized in Nephros’s consolidated financial statements. In addition, Adjusted EBITDA is subject to inherent limitations as it reflects the exercise of judgments by management about which expenses and income are excluded or included in determining Adjusted EBITDA. In order to compensate for these limitations, management presents Adjusted EBITDA in connection with net (loss) income, the most directly comparable GAAP financial measure. Nephros urges investors to review the reconciliation of Adjusted EBITDA to net (loss) income and not to rely on any single financial measure to evaluate the business.

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ConferenceCall Today at 4:30 p.m. ET

Nephros will host a conference call today at 4:30 PM Eastern Time, during which management will discuss Nephros’s financial results and provide a general business overview.

Participants may dial into the following number to access the call: 1-888-220-8474. International callers may use 1-323-794-2588. Please ask to be joined into the Nephros conference call. A replay of the call can be accessed until May 20, 2020 at 1-844-512-2921 or 1-412-317-6671 for international callers and entering replay access code: 5796707. An audio archive of the call will be available shortly after the call on the Nephros investor relations page at https://investors.nephros.com/events/.

AboutNephros

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Nephros is a commercial-stage company that develops and markets high performance water purification products and pathogen detection systems for medical and commercial markets.

Nephros ultrafilters are used in hospitals, medical clinics, and commercial facilities to retain bacteria and viruses from water, providing barriers that aid in infection control for showers, sinks, and ice machines. Nephros ultrafilters are also used in dialysis centers to aid in the removal of endotoxins and other biological contaminants from water and bicarbonate concentrate in hemodialysis machines.

Nephros pathogen detection systems, including the PluraPath™ system, provide real-time data on waterborne bacteria and virus content to medical and water quality professionals. Our products integrate Nephros ultrafilters with quantitative polymerase chain reaction (qPCR) technology to deliver actionable water pathogen information within an hour.

Nephros commercial filters, including AETHER™ brand filters, improve the taste and odor of water, and reduce scale build-up in downstream equipment. Nephros and AETHER™ products are used in the health care, food service, hospitality, and convenience store markets.

For more information about Nephros, please visit its website at www.nephros.com.

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Forward-LookingStatements

This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding the potential for further growth and the expected growth in medical, commercial and industrial filter sales, management’s expectations regarding future gross margins, Nephros’s ability to respond to outbreaks in water borne pathogens and other statements that are not historical facts, including statements which may be accompanied by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including the impact of Covid-19, uncertainty in clinical outcomes, potential delays in the regulatory approval process, changes in business, economic and competitive conditions, the availability of capital when needed, dependence on third-party manufacturers and researchers, regulatory reforms, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in our reports filed with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2019. Nephros does not undertake any responsibility to update the forward-looking statements in this release.

Contacts:

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InvestorRelations

Kirin Smith, President

PCG Advisory, Inc.

(646) 863-6519

ksmith@pcgadvisory.com

www.pcgadvisory.com

MediaRelations:

Bill Douglass

Gotham Communications, LLC

(646) 504-0890

bill@gothamcomm.com

www.gothamcomm.com

Company:

Andy Astor, COO & CFO

Nephros, Inc.

(201) 345-0824

andy@nephros.com

www.nephros.com

NEPHROS,INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Inthousands, except share and per share amounts)

(Unaudited)

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			December<br> 31, 2019
ASSETS
Current<br> assets:
Cash<br> and cash equivalents	8,962		$	4,166
Accounts<br> receivable, net	1,597			1,045
Inventory,<br> net	3,649			2,562
Prepaid<br> expenses and other current assets	601			526
Total<br> current assets	14,809			8,299
Property<br> and equipment, net	76			81
Lease<br> right-of-use assets	1,253			1,106
Intangible<br> assets, net	538			548
Goodwill	759			759
License<br> and supply agreement, net	770			804
Other<br> assets	89			32
TOTAL<br> ASSETS	18,294		$	11,629
LIABILITIES<br> AND STOCKHOLDERS’ EQUITY
Current<br> liabilities:
Secured<br> revolving credit facility	495		$	560
Current<br> portion of secured note payable	215			211
Accounts<br> payable	1,575			959
Accrued<br> expenses	308			136
Contingent<br> consideration	203			300
Current<br> portion of lease liabilities	312			262
Total<br> current liabilities	3,108			2,428
Secured<br> note payable, net of current portion	553			613
Equipment<br> financing, net of current portion	9			10
Lease<br> liabilities, net of current portion	988			889
TOTAL<br> LIABILITIES	4,658			3,940
COMMITMENTS<br> AND CONTINGENCIES (Note 14)
STOCKHOLDERS’<br> EQUITY
Preferred<br> stock, .001 par value; 5,000,000 shares authorized at March 31, 2020 and December 31, 2019; no shares issued and outstanding<br> at March 31, 2020 and December 31, 2019.	-			-
Common<br> stock, .001 par value; 40,000,000 shares authorized at March 31, 2020 and December 31, 2019; 9,016,550 and 8,058,850 shares<br> issued and outstanding at March 31, 2020 and December 31, 2019, respectively.	9			8
Additional<br> paid-in capital	138,953			131,934
Accumulated<br> other comprehensive income	64			65
Accumulated<br> deficit	(128,430	)		(127,332	)
Subtotal	10,596			4,675
Noncontrolling<br> interest	3,040			3,014
TOTAL<br> STOCKHOLDERS’ EQUITY	13,636			7,689
TOTAL<br> LIABILITIES AND STOCKHOLDERS’ EQUITY	18,294		$	11,629

All values are in US Dollars.

NEPHROS,INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Inthousands, except share and per share amounts)

(Unaudited)

	Three<br> Months Ended <br>March 31,
	2020			2019
Net<br> revenue:
Product<br> revenues	$	2,475		$	1,729
Royalty<br> and other revenues		54			40
Total<br> net revenues		2,529			1,769
Cost<br> of goods sold		1,038			771
Gross<br> margin		1,491			998
Operating<br> expenses:
Research<br> and development		563			756
Depreciation<br> and amortization		46			50
Selling,<br> general and administrative		1,950			1,503
Change<br> in fair value of contingent consideration		(42	)		(10	)
Total<br> operating expenses		2,517			2,299
Loss<br> from operations		(1,026	)		(1,301	)
Other<br> (expense) income:
Interest<br> expense		(43	)		(46	)
Interest<br> income		1			-
Other<br> expense, net		(30	)		(2	)
Net<br> loss		(1,098	)		(1,349	)
Less:<br> Undeclared deemed dividend attributable to noncontrolling interest		(59	)		(59	)
Net<br> loss attributable to Nephros, Inc. shareholders		(1,157	)		(1,408	)
Net<br> loss per common share, basic and diluted	$	(0.13	)	$	(0.20	)
Weighted<br> avg. common shares outstanding, basic and diluted		8,590,230			7,129,665
Comprehensive<br> loss:
Net<br> loss		(1,098	)		(1,349	)
Other<br> comprehensive loss, foreign currency translation adjustments, net of tax		(1	)		(3	)
Comprehensive<br> loss		(1,099	)		(1,352	)
Comprehensive<br> loss attributable to noncontrolling interest		(59	)		(59	)
Comprehensive<br> loss attributable to Nephros, Inc. shareholders	$	(1,158	)	$	(1,411	)