SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person* WEXFORD CAPITAL LLC (Last) (First) (Middle) 411 WEST PUTNAM AVENUE (Street) GREENWICH CT 06830 (City) (State) (Zip)	2. Date of Event Requiring Statement (Month/Day/Year) 09/19/2007	3. Issuer Name and Ticker or Trading Symbol NEPHROS INC [ NEP ]
		4. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director X 10% Owner Officer (give title below) Other (specify below)	5. If Amendment, Date of Original Filed (Month/Day/Year)
			6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Series A 10% Secured Convertible Note due 2008	(1)	(2)	Common Stock and Warrants to Purchase Common Stock	21,246,459(3)	$0.706(4)	I	By Lambda Investors LLC(5)

1. Name and Address of Reporting Person* WEXFORD CAPITAL LLC (Last) (First) (Middle) 411 WEST PUTNAM AVENUE (Street) GREENWICH CT 06830 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* JACOBS JOSEPH (Last) (First) (Middle) (Street) X1 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* DAVIDSON CHARLES E (Last) (First) (Middle) (Street) X1 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

Explanation of Responses:

1. The Note will automatically convert on the twenty-first (21st) day after the issuer sends or gives its stockholders a definitive Schedule 14C information statement relating to certain actions taken by stockholders of the issuer by written consent (the ?Automatic Conversion Date?).

2. The maturity date of the Note is September 19, 2008.

3. The number reported includes 14,164,306 shares of Common Stock and warrants to purchase an additional 7,082,153 shares of Common Stock. The number of shares and warrants reported is based on the original principal amount of the Note ($10,000,000). The Note accrues interest at a rate of 10% per annum, and the accrued interest will automatically be converted into shares of Common Stock on the Automatic Conversion Date at the same conversion rate as the rate that applies to the original principal amount. The number of warrants issued upon conversion of the Note will increase by 50% of the number of shares of Common Stock issued with respect to the accrued interest.

4. The amount reported represents the conversion price used to determine the number of shares of Common Stock issuable upon the conversion of the Note. The exercise price of the warrants that will be issued upon the conversion of the Note is $0.90 per share.

5. The Note is owned by Lambda Investors LLC (?Lambda?). Wexford Capital LLC (?Wexford?), as manager of Lambda, may be deemed to beneficially own the Note. Charles E. Davidson (?Davidson?) and Joseph M. Jacobs (?Jacobs?) are the managing members of Wexford. Davidson and Jacobs may also be deemed to beneficially own the Note. Wexford, Davidson and Jacobs each disclaims beneficial ownership of the securities reported hereby and this report shall not be deemed as an admission that they are the beneficial owners of such securities except in the case of Davidson and Jacobs to the extent of their interests in each member of Lambda.

Remarks:

	Arthur H. Amron as Partner and Secretary of Wexford Capital LLC	10/01/2007
	Charles E. Davidson	10/01/2007
	Joseph M. Jacobs	10/01/2007
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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