Segment Reporting

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Reporting

Note 17 – Segment Reporting

During the three months ended September 30, 2018, the Company began reporting the results of SRP as a new segment as a result of the July 2018 formation of the Company’s new subsidiary, SRP. Prior to the formation of SRP, the Company had only a single operating segment. The Company has reflected these new segment measures beginning in the quarter ended September 30, 2018 and prior periods have been restated for comparability.

The Company has defined its two reportable segments as Water Filtration and Renal Products. The Water Filtration segment develops and sells high performance liquid purification filters, known as ultrafilters. The Renal Products segment is focused on the development of medical device products for patients with renal disease, including a 2^nd generation hemodiafiltration system, for the treatment of patients with ESRD.

The Company’s chief operating decision maker evaluates the financial performance of the Company’s segments based upon segment revenues, gross margin and operating expenses which include research and development and selling, general and administrative expenses.

The accounting policies for the Company’s segments are the same as those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 with the exception of the adoption of ASC 842 on January 1, 2019.

The tables below present segment information reconciled to total Company loss from operations, with segment operating loss including gross profit less direct research and development expenses and direct selling, general and administrative expenses to the extent specifically identified by segment:

	Three Months Ended September 30, 2019
	Water Filtration			Renal Products			Nephros, Inc. Consolidated
Total net revenues	$	3,095,000		$	-		$	3,095,000
Gross margin		1,819,000			-			1,819,000
Research and development expenses		411,000			366,000			777,000
Depreciation and amortization expense		44,000			-			44,000
Selling, general and administrative expenses		1,756,000			31,000			1,787,000
Change in fair value of contingent consideration		(94,000	)		-			(94,000	)
Total operating expenses		2,117,000			397,000			2,514,000
Loss from operations	$	(298,000	)		(397,000	)		(695,000	)

	Nine Months Ended September 30, 2019
	Water Filtration			Renal Products			Nephros, Inc. Consolidated
Total net revenues	$	7,173,000			-		$	7,173,000
Gross margin		4,184,000			-			4,184,000
Research and development expenses		1,190,000			1,136,000			2,326,000
Depreciation and amortization expense		142,000			-			142,000
Selling, general and administrative expenses		4,577,000			116,000			4,693,000
Change in fair value of contingent consideration		(113,000	)		-			(113,000	)
Total operating expenses		5,796,000			1,252,000			7,048,000
Loss from operations	$	(1,612,000	)		(1,252,000	)		(2,864,000	)

	Three Months Ended September 30, 2018
	Water Filtration			Renal Products			Nephros, Inc. Consolidated
Total net revenues	$	1,724,000		$	-		$	1,724,000
Gross margin		952,000			-			952,000
Research and development expenses		147,000			205,000			352,000
Depreciation and amortization expense		42,000			-			42,000
Selling, general and administrative expenses		970,000			99,000			1,069,000
Total operating expenses		(1,159,000	)		(304,000	)		(1,463,000	)
Loss from operations	$	(207,000	)	$	(304,000	)	$	(511,000	)

	Nine Months Ended September 30, 2018
	Water Filtration			Renal Products			Nephros, Inc. Consolidated
Total net revenues	$	4,075,000		$	-		$	4,075,000
Gross margin		2,249,000			-			2,249,000
Research and development expenses		598,000			395,000			993,000
Depreciation and amortization expense		123,000			-			123,000
Selling, general and administrative expenses		3,298,000			122,000			3,420,000
Total operating expenses		(4,019,000	)		(517,000	)		(4,536,000	)
Loss from operations	$	(1,770,000	)	$	(517,000	)	$	(2,287,000	)

As of September 30, 2019, approximately $1,255,000 of total assets are in the Renal Products segment. The $1,255,000 consisted primarily of the remaining cash received of approximately $1,041,000 from the sale of Series A Preferred during the year ended December 31, 2018 and prepaid expenses and other current assets of approximately $200,000.

As of December 31, 2018, approximately $2,500,000 of total assets are in the Renal Products segment. The $2,500,000 consisted of the remaining cash received of approximately $2,300,000 from the sale of Series A Preferred during the year ended December 31, 2018 and prepaid expenses and other current assets of approximately $200,000.