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Nephros Provides Corporate Update
Date:11/20/2008

uce operating expenses and preserve its cash resources. Nephros has reduced its R&D staff to reflect the completion of its U.S. clinical trial and submission of the 510k application for the associated products.

"We have taken difficult, but necessary actions, to reduce fixed costs and redirect valuable cash resources to our revenue generating efforts. We appreciate the dedication and past efforts of those employees affected by this transition and thank them for their contributions," said Mr. Elgin.

Separately, Nephros has signed a lease for a new, less costly location in River Edge, NJ. Nephros has applied, and has been approved, for a grant from New Jersey's Business Employment Incentive Program (BEIP). The BEIP is an incentive grant from the State of New Jersey's Business Development Agency to help offset overhead expenses to attract companies to move to New Jersey. As a result of this program, Nephros will receive annual cash grants based on the number of new jobs it moves to New Jersey and all new jobs created by Nephros in the State of New Jersey for a ten year period. Nephros's relocation is anticipated to be completed by year-end.

The combined benefits of the reduction in headcount and the relocation of Nephros's offices will significantly reduce Nephros's fixed expenses going forward.

Outlook for Fourth Quarter and 2009

For the remainder of 2008, Nephros plans to focus its efforts on commercialization activities. Primary goals for Nephros in 2009 include expansion of DSU product sales for institutional infection control and preparation for the anticipated launch of Nephros's OLpur MD 220 Hemodiafilter, OLpur H2H Hemodiafiltration Module, and DSU products for dialysis centers in the U.S.

"For the immediate future, we are taking steps to increase our DSU marketing efforts and sales to hospitals, assisted living facilities, and rel
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SOURCE Nephros, Inc.
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