UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2025 OR ☐ 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 as specified in its charter) DELAWARE 13-3971809 (State or other jurisdiction of ...

Exhibit 99.1 Nephros Announces Financial Results for Quarter Ended March 31, 2025 First-Quarter Net Revenue of $4.9 million; Robust Growth Drives 38% Increase in Net Revenue SOUTH ORANGE, NJ, May 8, 2025 – Nephros, Inc. (Nasdaq: NEPH), a leading water technology company providing filtration solutions to the medical and commercial markets, today announced financial results for the first quarter ended March 31, 2025. Financial Highlights "Q1 2025 marked a strong start to the year, with a record quarterly net ...

Financial Performance - Total net revenues for the year ended December 31, 2024, decreased by 1% to $14,162,000 compared to $14,238,000 in 2023, primarily due to reduced emergency response orders [152]. - Net income for the year ended December 31, 2024, was $74,000, a significant improvement from a net loss of $1,575,000 in 2023 [152]. - The accumulated deficit as of December 31, 2024, was $144.3 million, indicating ongoing challenges in achieving profitability [163]. Expenses - Research and development expenses rose by 4% to $906,000 in 2024, mainly due to an increase in headcount [155]. - Selling, general and administrative expenses decreased by $1,235,000 or 14% to $7,676,000, primarily due to lower stock compensation and bonus expenses [157]. Cash Flow - Cash and cash equivalents decreased to $3,760,000 as of December 31, 2024, from $4,307,000 in 2023 [161]. - Net cash used in operating activities was $500,000 for the year ended December 31, 2024, compared to net cash provided of approximately $800,000 in 2023 [165]. Gross Margin and Income - Gross margin increased to 62% for the year ended December 31, 2024, up from 59% in 2023, reflecting more favorable terms with the largest supplier [154]. - Interest income increased to approximately $94,000 in 2024, up from $64,000 in 2023, due to higher interest rates on invested cash balances [158]. Future Plans - The company plans to allocate current capital resources toward the development, marketing, and sales of water filtration products [164].

Financial Performance - Full-year net revenue for 2024 was $14.2 million, remaining flat compared to 2023[6] - Fourth-quarter net revenue was $3.9 million, an increase of 19% from $3.3 million in Q4 2023[6] - Net income for the fourth quarter was $349,000, compared to a net loss of $654,000 in the same period of 2023[6] - Adjusted EBITDA for the fourth quarter was $466,000, compared to a loss of $51,000 in Q4 2023[6] - Total net revenues for Q4 2024 were $3,870,000, an increase of 18.9% compared to $3,254,000 in Q4 2023[31] - Operating income for Q4 2024 was $317,000, compared to an operating loss of $649,000 in Q4 2023[31] - Net income for Q4 2024 was $349,000, a significant turnaround from a net loss of $654,000 in Q4 2023[31] - The company reported a basic net income per share of $0.03 for Q4 2024, compared to a loss of $0.06 per share in Q4 2023[31] Revenue and Sales - The company added nearly 600 new customer sites, contributing almost $2 million in sales, representing over 13% of annual revenue[5] - Product revenues for the twelve months ended December 31, 2024, were $14,035,000, a slight decrease of 0.5% from $14,110,000 in 2023[31] Expenses and Margins - Gross margin for the year was 62%, up from 59% in 2023, and for Q4 it was 64%, compared to 62% in Q4 2023[10] - Selling, general and administrative expenses decreased by 14% year-over-year to $7.7 million for 2024[11] - Research and development expenses for the year remained steady at $0.9 million, with a 21% increase in Q4 due to higher headcount[12] - Research and development expenses for the twelve months ended December 31, 2024, were $906,000, an increase of 3.8% from $873,000 in 2023[31] - Gross margin for Q4 2024 improved to $2,475,000, representing a 22.5% increase from $2,021,000 in Q4 2023[31] Assets and Liabilities - Total current assets decreased to $8,298,000 in 2024 from $8,405,000 in 2023, reflecting a decline of 1.3%[28] - Total liabilities decreased to $2,625,000 in 2024, down 25.1% from $3,503,000 in 2023[28] - Stockholders' equity increased to $8,585,000 in 2024, up 2.7% from $8,358,000 in 2023[28] Product Development - The company launched the 20" HydraGuard Ultrafilter, targeting industries such as sterile processing and manufacturing[4] - Nephros achieved profitability for the first time in Q3 2024, attributed to effective cost control[5]

Company Participation - Nephros, Inc. will participate in the Benchmark Company 13th Annual Discovery One-on-One Investor Conference on December 11, 2024, at the New York Athletic Club in New York City [1] - CEO Robert Banks and CFO Judy Krandel will host one-on-one and group investor meetings during the conference [2] Company Overview - Nephros is a water technology company focused on providing filtration solutions for medical and commercial markets, emphasizing water safety and quality [4] - The company aims to improve the human relationship with water through innovative filtration products and services, along with water-quality education [4]

Company Overview - The company develops and sells high-performance water filtration solutions primarily for medical and commercial markets[84]. - The company previously held a majority stake in Specialty Renal Products, which was liquidated in March 2023 due to capital exhaustion, with an outstanding loan balance of approximately $1.5 million[87]. - The company entered into a new supply agreement in January 2023 with a partner to be the exclusive distributor for food, beverage, and hospitality industries[110]. - The company entered into a License and Supply Agreement with Medica S.p.A. for the marketing and sale of filtration products based on Medica's ultrafiltration technology[151]. Medical Products - Medical water filters, classified as ultrafilters, capture contaminants as small as 0.005 microns, minimizing exposure to various pathogens[85]. - The company has FDA 510(k) clearance for multiple medical device products, including the DSU-H and SSU-H ultrafilters, with product life spans of up to 6 months in hospital settings[100]. - There are approximately 7,100 dialysis clinics in the U.S. servicing around 500,000 patients annually, with over 100,000 hemodialysis machines in operation[105]. - The company’s commercial products include the NanoGuard ultrafilter, which provides dual-stage retention of particles larger than 15,000 Daltons[113]. Financial Performance - Total net revenues decreased by $0.2 million, or 6%, for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to underperformance in programmatic business[121]. - Consolidated gross margin increased to approximately 61% for the three months ended September 30, 2024, up from approximately 59% in the same period of 2023, driven by favorable pricing terms[122]. - Selling, general and administrative expenses decreased by $416,000, or 19%, primarily due to a reduction in bonus accrual and other expenses related to facilities consolidation[123]. - Research and development expenses decreased by approximately $17,000 for the three months ended September 30, 2024, due to a reduction in bonus accrual[124]. - Net income for the three months ended September 30, 2024, was $183,000, compared to a net loss of $182,000 in the same period of 2023, representing a turnaround of $365,000[120]. - Total net revenues decreased by $0.7 million, or 6%, for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to decreased revenue from emergency response orders[127]. - Consolidated gross margin for the nine months ended September 30, 2024, was approximately 61%, up from approximately 58% in the same period of 2023, attributed to favorable pricing terms and reduced shipping expenses[128]. - Net cash used in operating activities was $1.8 million for the nine months ended September 30, 2024, compared to net cash provided by operating activities of approximately $1.1 million for the same period in 2023[140]. - Cash and cash equivalents decreased to $2.457 million as of September 30, 2024, down from $4.307 million as of December 31, 2023[136]. - The company had an accumulated deficit of $144.7 million as of September 30, 2024, indicating potential ongoing operating losses until profitability is achieved[134]. Risks and Compliance - The company maintains effective disclosure controls and procedures as evaluated by the Chief Executive Officer and Chief Financial Officer[148]. - There were no changes in internal control over financial reporting that materially affected the company's reporting[149]. - The company is subject to risks related to minimum purchase obligations under the License and Supply Agreement, which could impact financial results[150]. - Failure to meet minimum purchase commitments could result in termination of the agreement, adversely affecting the company's ability to supply filtration products[152]. - The company anticipates that water safety management programs currently in medical facilities will migrate to commercial markets, potentially increasing future revenue[111]. Operational Challenges - The company’s results of operations have fluctuated significantly, influenced by market acceptance of products and expense management[118].

Financial Performance - Third-quarter net revenue was $3.5 million, an 8% increase from Q2 2024 but a 6% decrease compared to Q3 2023[2] - The company achieved a net income of $0.2 million, compared to a net loss of $0.2 million in the same period last year[2] - Adjusted EBITDA for the quarter was $295,000, a significant increase from $11,000 in Q3 2023[9] - Gross margins improved to 61% in Q3 2024, up from 59% in Q3 2023, due to better terms with the largest supplier[5] - Selling, general and administrative expenses decreased to $1.7 million from $2.1 million in the same period last year, attributed to lower stock compensation and bonus accruals[7] Cash Flow and Assets - Cash and cash equivalents as of September 30, 2024, were $2.5 million, down from $4.3 million at the end of 2023, primarily due to operating losses in the first half of 2024[10] - Total current assets decreased to $7,356,000 from $8,405,000, a decline of approximately 12.5%[22] - Cash and cash equivalents decreased to $2,457,000 from $4,307,000, a decline of approximately 42.9%[22] - Accounts receivable increased to $1,691,000 from $1,496,000, an increase of approximately 13.0%[22] - Inventory increased to $3,099,000 from $2,470,000, an increase of approximately 25.4%[22] Liabilities and Equity - Total liabilities decreased to $2,212,000 from $3,503,000, a decline of approximately 37.0%[22] - Current liabilities decreased to $1,058,000 from $2,113,000, a decline of approximately 50.0%[22] - Lease liabilities decreased to $1,154,000 from $1,390,000, a decline of approximately 17.0%[22] - Total stockholders' equity decreased to $8,174,000 from $8,358,000, a decline of approximately 2.2%[22] - Accumulated deficit increased to $(144,681,000) from $(144,406,000) indicating a deeper loss[22] - Additional paid-in capital increased slightly to $152,844,000 from $152,754,000[22] Operational Focus - The South Central region underperformed, leading to a reorganization, despite overall solid growth in most sales regions[3] - The company is preparing to launch digital support for filter installation and is enhancing service capabilities to improve customer compliance with filter change schedules[3] - Nephros is focused on maintaining positive cash flow and profitability while managing expenses and improving operational efficiency[19] Research and Development - Research and development expenses remained stable at $0.2 million for both Q3 2024 and Q3 2023[6]

Financial Data and Key Metrics Changes - For Q3 2024, the company reported net revenue of $3.5 million, an 8% increase over Q2 2024 but a 6% decline compared to Q3 2023 [8][15] - The company achieved a net income of $0.2 million, compared to a net loss of $0.2 million in Q3 2023, marking its first profitable quarter since inception [8][16] - Gross margin improved to 61% from 59% in Q3 2023, reflecting better terms with the largest supplier [9][16] - Adjusted EBITDA for Q3 was $295,000, a significant improvement from $11,000 in the same quarter last year [9][16] - SG&A expenses were reduced to $1.7 million from $2.1 million in Q3 2023, driven by lower stock compensation and bonus accruals [10][17] Business Line Data and Key Metrics Changes - The decline in net revenue was attributed to a decrease in programmatic revenue, partially offset by an increase in emergency response revenue [15] - Programmatic sales showed a decline compared to Q3 2023, but increased by 6% over Q2 2024 [32] - The company is focusing on improving customer engagement to recover programmatic sales, which are cyclical and typically have a replacement cycle of three to six months [25][32] Market Data and Key Metrics Changes - The company is experiencing challenges in specific regions, particularly in the South Central region, which has shown slower order patterns [11][15] - The company is exploring new markets such as sterile processing, laboratories, and dental practices, where it sees clear opportunities for its products [12] Company Strategy and Development Direction - The company is ramping up digital support tools for filter installation to improve customer compliance and drive recurring revenues [11] - Strategic advancements are being made to ensure long-term growth, including exploring partnerships to address emerging issues like nano and microplastic contamination [12] - The company is focused on maintaining financial discipline while pursuing strategic growth opportunities [13][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a new phase of profitability and operational excellence, emphasizing the importance of customer engagement and service capabilities [14][22] - The company is committed to providing high-quality water filtration solutions that meet evolving customer needs [22] - Management noted that regulatory changes, such as ASHRAE guidelines, are creating increased opportunities for the company [51][52] Other Important Information - As of September 30, 2024, cash and cash equivalents stood at $2.5 million, down from $4.3 million at the end of 2023, primarily due to operating losses and inventory investments [13][20] - The company remains debt-free, providing flexibility to invest in growth initiatives [20] Q&A Session Summary Question: How does the company plan to strengthen customer engagement to recover reorders? - The company is employing online tools for automated reminders to customers about filter replacements and offering services to assist with filter changes [25][26] Question: What is the target market for the new HydroGuard UltraFilter? - The HydroGuard UltraFilter is complementary to existing products and opens up new markets, particularly in sterile processing and higher flow situations [29] Question: Can the company elaborate on the decline in programmatic business and steps to address it? - The programmatic sales have declined compared to a high quarter last year, but there is an increase over the previous quarter. The company is addressing this by realigning support and resources in underperforming regions [32][34] Question: What are the top three growth initiatives for the company moving forward? - The company is focusing on service capabilities, digitization efforts for tracking filters, and expanding into new markets beyond patient care [44][46] Question: What is the status of the commercial beverage business? - The commercial beverage business is ongoing but has not met growth expectations. The company continues to work with partners to expand this segment [60]

Core Viewpoint - Nephros, Inc. is set to announce its third-quarter financial results on November 7, 2024, and will host a conference call to discuss these results [1]. Group 1: Financial Results Announcement - Nephros will file its third-quarter financial results after market close on November 7, 2024 [1]. - A conference call will take place on the same day at 4:30 PM ET for discussing the financial results [1]. - Participants can join the call using specific domestic and international access numbers [1]. Group 2: Audio Archive and Replay - An audio archive of the conference call will be available shortly after the call on the Nephros Investor Relations page [2]. - A replay of the call can be accessed until November 14, 2024, using designated numbers and a replay access code [2]. Group 3: Company Overview - Nephros is a leading provider of filtration products for medical, commercial, and industrial markets [3]. - The company utilizes advanced hollow-fiber technology and effective commercial filter media to ensure high water quality by protecting against waterborne contaminants [3].

Core Viewpoint - Nephros, Inc. has effectively responded to recent hurricanes in the southeastern United States by providing essential water filtration solutions to healthcare and nursing facilities, ensuring safe water access during recovery efforts [1][3]. Group 1: Company Response and Capabilities - Nephros has leveraged its disaster response capabilities to deliver crucial water filtration products to affected healthcare facilities, emphasizing the importance of clean water in patient care [2][3]. - The company has shipped a significant number of filters rapidly, responding after hours and ensuring next-day delivery to federal and local disaster response partners [3]. - Nephros' filtration solutions have been deployed across multiple states, including Florida and North Carolina, where they provided immediate protection against water contamination [3]. Group 2: Product Importance and Commitment - The company's filtration products are vital for ensuring purified water for various critical applications, including drinking, dialysis, surgical operations, and general facility hygiene [3]. - Nephros is committed to providing high-quality water filtration solutions in both routine and crisis situations, highlighting the speed and efficiency of its team in maintaining service continuity [3][4]. - The advanced hollow-fiber technology and effective commercial filter media used in Nephros products help protect against waterborne contaminants, ensuring high water quality [4].