0001493152-22-005242.txt : 20220223 0001493152-22-005242.hdr.sgml : 20220223 20220223163403 ACCESSION NUMBER: 0001493152-22-005242 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20220223 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20220223 DATE AS OF CHANGE: 20220223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEPHROS INC CENTRAL INDEX KEY: 0001196298 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 133971809 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-32288 FILM NUMBER: 22664349 BUSINESS ADDRESS: STREET 1: 380 LACKAWANNA PLACE CITY: SOUTH ORANGE STATE: NJ ZIP: 07079 BUSINESS PHONE: 201.343.5202 MAIL ADDRESS: STREET 1: 380 LACKAWANNA PLACE CITY: SOUTH ORANGE STATE: NJ ZIP: 07079 8-K 1 form8-k.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

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

 

Date of Report (Date of earliest event reported): February 23, 2022

 

NEPHROS, INC.

(Exact name of Registrant as Specified in its Charter)

 

Delaware   001-32288   13-3971809

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

380 Lackawanna 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 communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement 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 of each class   Trading Symbol(s)   Name of each exchange on which registered
Common stock, $0.001 par value   NEPH   The 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. ☐

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On February 23, 2022, Nephros, Inc. (the “Company”) issued a press release in which it disclosed its fourth quarter and fiscal year 2021 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.

 

(d) Exhibits

 

Exhibit No.   Description
99.1   Nephros, Inc. Press Release, dated February 23, 2022.

 

 

 

 

 

SIGNATURES

 

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: February 23, 2022 By: /s/ Andrew Astor
      Andrew Astor
      Chief Executive Officer

 

 

 

EX-99.1 2 ex99-1.htm

 

Exhibit 99.1

 

Nephros, Inc.
380 Lackawanna Place
South Orange NJ 07079
Call: 201 343 5202

nephros.com

 

Nephros Announces Fourth Quarter and Fiscal Year 2021 Financial Results

 

Reports Full-Year Net Revenue of $10.4 Million, a 22% Year-Over-Year Increase and
Fourth Quarter Net Revenue of $2.8 Million, an 18% Year-Over-Year Increase;
Reaffirms Fiscal Year 2022 Guidance of $13.0 Million to $13.5 Million in Annual Revenue

 

SOUTH ORANGE, NJ, February 23, 2022 – Nephros, Inc. (Nasdaq: NEPH), a leading water technology company providing filtration and pathogen detection solutions to the medical and commercial markets, today announced financial results for the fourth quarter and fiscal year ended December 31, 2021.

 

Financial Highlights

 

Fourth Quarter Ended December 31, 2021 – Water Filtration Business Segment

 

  Net revenue was $2.7 million, compared with $2.3 million in 2020, up 16%
  Operating loss was ($0.7 million), compared to ($0.3 million) in 2020
  Adjusted Operating Loss was ($64,000), compared with ($10,000) in 2020

 

Fourth Quarter Ended December 31, 2021 – Consolidated

 

  Net revenue was $2.8 million, compared with $2.3 million in 2020, up 18%
  Net loss was ($1.0 million), compared with ($0.8 million) in 2020, up 37%
  Adjusted EBITDA was ($0.4 million), compared with ($0.5 million) in 2020

 

Year-End 2021 – Water Filtration Business Segment

 

  Net revenue was $10.2 million, compared with $8.5 million in 2020, up 20%
  Operating loss was ($2.9 million), compared with a net loss of ($2.0 million) in 2020
  Adjusted Operating Loss was ($1.3 million) in 2021 and 2020

 

Year-end 2021 – Consolidated

 

  Net revenue was $10.4 million, compared with $8.6 million in 2020, up 22%
  Net loss was ($3.9 million), compared with ($4.5 million) in 2020, down 15%
  Adjusted EBITDA was ($2.6 million), compared with ($3.6 million) in 2020

 

“We are pleased to report that Nephros delivered four consecutive quarters of year-over-year growth averaging 19%, ending the year at a new revenue record for the company,” said Andy Astor, President and Chief Executive Officer of Nephros. “Looking forward to 2022, we believe our recent investments into a scalable sales and marketing infrastructure, along with the expected retreat of COVID-19 to endemic state, will bring our growth rates even higher, as evidenced by our recent revenue guidance of $13.0-13.5 million, or 25-30% growth.”

 

1

 

 

Nephros, Inc.
380 Lackawanna Place
South Orange NJ 07079
Call: 201 343 5202

nephros.com

 

Financial Performance for the Fourth Quarter and Year Ended December 31, 2021

 

Net revenue for the year ended December 31, 2021 was $10.4 million, compared with $8.6 million in 2020, an increase of 22%. Net revenues for the fourth quarter of 2021 were $2.8 million, compared with $2.3 million in the fourth quarter of 2020, an increase of 18%.

 

Cost of goods sold for the year ended December 31, 2021 was $4.7 million, compared with $3.6 million in 2020, an increase of 28%. Cost of goods sold for the fourth quarter of 2021 was $1.3 million, compared with $1 million in the fourth quarter of 2020, an increase of 26%.

 

Gross margins for the year ended December 31, 2021 were 55%, compared with 57% in 2020. Gross margins for the fourth quarter of 2021 were 53%, compared with 56% in the fourth quarter of 2020.

 

Selling, general and administrative expenses for the year ended December 31, 2021 were $7.7 million, compared with $6.5 million in 2020, an increase of 19%. Selling, general and administrative expenses for the fourth quarter of 2021 were approximately $2 million compared with approximately $1.4 million in the fourth quarter of 2020, an increase of 44%.

 

Research and development expenses for the year ended December 31, 2021 were $2.2 million, compared with $2.8 million in 2020, a decrease of 21%. Research and development expenses for the fourth quarter of 2021 were $0.5 million, compared with $0.6 million in the fourth quarter of 2020, a decrease of 19%.

 

Depreciation and amortization expenses for the year ended December 31, 2021 were approximately $202,000, compared with approximately $192,000 in 2020, an increase of 5%. Depreciation and amortization expenses for the fourth quarter of 2021 were approximately $51,000, compared with approximately $50,000 in the fourth quarter of 2020, an increase of 2%.

 

Net loss for the year ended December 31, 2021 was ($3.9 million), compared with a net loss of ($4.5 million) in 2020, a 15% decrease in loss. Net loss for the fourth quarter of 2021 was approximately ($1 million), compared with a net loss of approximately ($0.8 million) in the fourth quarter of 2020, a 37% increase.

 

Adjusted EBITDA for the year ended December 31, 2021 was ($2.6 million), compared with ($3.6 million) in 2020, a 29% decrease. Adjusted EBITDA for the fourth quarter 2021 was approximately ($0.4 million), compared with approximately ($0.5 million) in the fourth quarter of 2020, a 11% decrease.

 

As of December 31, 2021, Nephros had cash and cash equivalents of approximately $7.0 million.

 

2

 

 

Nephros, Inc.
380 Lackawanna Place
South Orange NJ 07079
Call: 201 343 5202

nephros.com

 

Water Filtration Adjusted Operating Loss Definition and Reconciliation to GAAP Financial Measures

 

Water Filtration Adjusted Operating Loss is calculated by taking operating loss calculated in accordance with generally accepted accounting principles (“GAAP”) and excluding all non-recurring expenses and income, and non-cash items, including depreciation and amortization and non-cash compensation. The following table presents a reconciliation of Water Filtration Adjusted Operating Loss to operating loss, the most directly comparable GAAP financial measure for segment reporting, for the 2021 and 2020 fiscal years:

 

Water Filtration

(unaudited)

 

2021  Three Month Period Ended   Annual 
   3/31/2021   6/30/2021   9/30/2021   12/31/2021   Totals 
                     
Operating loss  $(634)  $(875)  $(755)  $(670)  $(2,934)
                          
Adjustments:                         
Depreciation of property and equipment   7    7    7    16    37 
Amortization of other assets   46    48    46    74    214 
Non-cash stock-based compensation   265    269    257    422    1,213 
Other non-cash items   5    24    90    94    213 
                          
Adjusted EBITDA  $(311)  $(527)  $(355)  $(64)  $(1,257)

 

2020  Three Month Period Ended   Annual 
   3/31/2020   6/30/2020   9/30/2020   12/31/2020   Totals 
                     
Operating loss  $(548)  $(852)  $(311)  $(285)  $(1,996)
                          
Adjustments:                         
Depreciation of property and equipment   5    6    7    7    25 
Amortization of other assets   45    45    46    47    183 
Change in FV of contingent consideration   (42)   -    (187)   -    (229)
Non-cash stock-based compensation   190    166    160    200    716 
Other non-cash items   11    12    2    21    46 
                          
Adjusted EBITDA  $(339)  $(623)  $(283)  $(10)  $(1,255)

 

3

 

  

Nephros, Inc.
380 Lackawanna Place
South Orange NJ 07079
Call: 201 343 5202

nephros.com

 

Consolidated Adjusted EBITDA Definition and Reconciliation to GAAP Financial Measures

 

Consolidated Adjusted EBITDA is calculated by taking net loss calculated in accordance with generally accepted accounting principles (“GAAP”) and excluding all interest-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 Consolidated Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, for the 2021 and 2020 fiscal years:

 

  

Consolidated

(unaudited)

     
2021  Three Month Period Ended   Annual 
Consolidated  3/31/2021   6/30/2021   9/30/2021   12/31/2021   Totals 
                     
Net loss  $(537)  $(1,126)  $(1,163)  $(1,041)  $(3,867)
                          
Adjustments:                         
Depreciation of property and equipment   7    8    7    16    38 
Amortization of other assets   46    48    46    74    214 
Interest expense   13    11    10    7    41 
Interest income   (3)   (3)   (2)   (2)   (10)
Non-cash stock-based compensation   276    281    268    434    1,259 
Other non-cash items   5    24    90    97    216 
PPP Loan Forgiveness   (482)   -    -    -    (482)
                          
Adjusted EBITDA  $(675)  $(757)  $(744)  $(415)  $(2,591)

 

2020  Three Month Period Ended   Annual 
Consolidated  3/31/2020   6/30/2020   9/30/2020   12/31/2020   Totals 
                     
Net loss  $(1,098)  $(1,657)  $(1,012)  $(759)  $(4,526)
                          
Adjustments:                         
Depreciation of property and equipment   5    6    7    7    25 
Amortization of other assets   45    45    46    47    183 
Interest expense   43    30    22    15    110 
Interest income   (1)   (4)   (3)   (3)   (11)
Change in FV of contingent consideration   (42)   -    (187)   -    (229)
Non-cash stock-based compensation   222    179    172    206    779 
Other non-cash items   11    12    2    21    46 
                          
Adjusted EBITDA  $(815)  $(1,389)  $(953)  $(466)  $(3,623)

 

4

 

 

Nephros, Inc.
380 Lackawanna Place
South Orange NJ 07079
Call: 201 343 5202

nephros.com

 

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, the most directly comparable GAAP financial measure. Nephros urges investors to review the reconciliation of Adjusted EBITDA to net loss and not to rely on any single financial measure to evaluate the business.

 

Conference Call Today at 4:30pm Eastern Time

 

Nephros will host a conference call today at 4:30pm ET, 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 (844) 808-7106. International callers may use 1 (412) 317-5285. Please ask to be joined into the Nephros conference call. A replay of the call can be accessed until March 2, 2022 at 1 (877) 344-7529 or 1 (412) 317-0088 for international callers and entering replay access code: 8949087. 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/.

 

About Nephros

 

Nephros, Inc. is a company committed to improving the human relationship with water through leading, accessible technology. We provide innovative filtration and pathogen detection as part of an integrated approach to water safety that combines science, solutions, and support services. Nephros products serve the needs of customers within the healthcare and commercial markets, offering both proactive and emergency responses for water management. For more information about Nephros, please visit www.nephros.com.

 

Forward-Looking Statements

 

This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding Nephros’s expected revenue for the quarter and year ended December 31, 2021, expected future revenue growth and the timing of such growth, and other statements that are not historical facts, including statements that 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 the ongoing COVID-19 pandemic, 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 Nephros’s reports filed with the U.S. Securities and Exchange Commission. Nephros does not undertake any responsibility to update the forward-looking statements in this release.

  

Investor Relations Contacts:

 

Kirin Smith, President

PCG Advisory, Inc.

(646) 823-8656

ksmith@pcgadvisory.com

Andy Astor, CEO

Nephros, Inc.

(201) 345-0824

andy.astor@nephros.com

 

5

 

 

Nephros, Inc.
380 Lackawanna Place
South Orange NJ 07079
Call: 201 343 5202

nephros.com

 

NEPHROS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

 

   December 31, 2021   December 31, 2020 
   (unaudited)     
ASSETS          
Current assets:          
Cash and cash equivalents  $6,973   $8,249 
Accounts receivable, net   1,641    1,364 
Inventory   4,795    5,304 
Prepaid expenses and other current assets   225    237 
Total current assets   13,634    15,154 
Property and equipment, net   366    295 
Lease right-of-use assets   730    1,037 
Intangible assets, net   1,536    506 
Goodwill   759    759 
License and supply agreement, net   536    670 
Other assets   89    89 
TOTAL ASSETS  $17,650   $18,510 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Current portion of secured note payable  $248   $229 
Accounts payable   1,334    423 
Accrued expenses   444    341 
Current portion of lease liabilities   364    332 
Total current liabilities   2,390    1,325 
Secured note payable, net of current portion   95    364 
PPP loan   -    482 
Equipment financing, net of current portion   4    7 
Lease liabilities, net of current portion   412    759 
TOTAL LIABILITIES   2,901    2,937 
           
COMMITMENTS AND CONTINGENCIES          
           
STOCKHOLDERS’ EQUITY:          
Preferred stock, $.001 par value; 5,000,000 shares authorized at December 31, 2021 and 2020; no shares issued and outstanding at December 31, 2021 and 2020   -    - 
Common stock, $.001 par value; 40,000,000 shares authorized at December 31, 2021 and 2020; 10,258,444 and 9,873,006 shares issued and outstanding at December 31, 2021 and 2020, respectively   10    10 
Additional paid-in capital   147,346    144,296 
Accumulated other comprehensive income   64    74 
Accumulated deficit   (135,725)   (131,858)
Subtotal   11,695    12,522 
Noncontrolling interest   3,054    3,051 
TOTAL STOCKHOLDERS’ EQUITY   14,749    15,573 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $17,650   $18,510 

 

6

 

 

Nephros, Inc.
380 Lackawanna Place
South Orange NJ 07079
Call: 201 343 5202

nephros.com

 

NEPHROS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)

 

   Years Ended December 31, 
   2021
(unaudited)
   2020 
Net revenue:          
Product revenues  $10,204   $8,453 
Royalty and other revenues   200    108 
Total net revenues   10,404    8,561 
Cost of goods sold   4,661    3,648 
Gross margin   5,743    4,913 
Operating expenses:          
Selling, general and administrative   7,710    6,466 
Research and development   2,166    2,759 
Depreciation and amortization   202    192 
Change in fair value of contingent consideration   -    (229)
Total operating expenses   10,078    9,188 
Loss from operations   (4,335)   (4,275)
Other income (expense):          
Interest expense   (41)   (110)
Interest income   10    11 
Extinguishment of PPP loan   482    - 
Other income (expense), net   17    (152)
Total other income (expense):   468    (251)
Net loss   (3,867)   (4,526)
Less: Undeclared deemed dividend attributable to noncontrolling interest   (240)   (240)
Net loss attributable to Nephros, Inc. shareholders  $(4,107)  $(4,766)
           
Net loss per common share, basic and diluted  $(0.41)  $(0.52)
Weighted average common shares outstanding, basic and diluted   10,017,830    9,078,549 
           
Comprehensive loss:          
Net loss  $(3,867)  $(4,526)
Other comprehensive (loss) gain, foreign currency translation adjustments   (10)   9 
Comprehensive loss   (3,877)   (4,517)
Comprehensive loss attributable to noncontrolling interest   (240)   (240)
Comprehensive loss attributable to Nephros, Inc. shareholders  $(4,117)  $(4,757)

 

7

 

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Cover
Feb. 23, 2022
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Feb. 23, 2022
Entity File Number 001-32288
Entity Registrant Name NEPHROS, INC.
Entity Central Index Key 0001196298
Entity Tax Identification Number 13-3971809
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 380 Lackawanna Place
Entity Address, City or Town South Orange
Entity Address, State or Province NJ
Entity Address, Postal Zip Code 07079
City Area Code (201)
Local Phone Number 343-5202
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.001 par value
Trading Symbol NEPH
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
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