Nephros Reports 2007 Fourth Quarter and Full Year Financial Results

NEW YORK, NY, Mar 31 (MARKET WIRE) --
Nephros, Inc. (AMEX: NEP) announced today financial results for the twelve
month period ended December 31, 2007.

2007 Highlights

-- Increased product revenues by 51% to $1,196,000
-- Received approval to market OLpur(TM) MD Hemodiafilter series in
Canada
-- Commenced pivotal U.S. trial for the OLpur(TM) H2H(TM)
Hemodiafiltration Module and OLpur(TM) MD 220 Hemodiafilter
-- Awarded $2MM appropriation from U.S. Dept. of Defense for continued
development of Nephros Dual Stage Ultra Reliable Filter
-- Raised $12.7MM in new capital
-- Converted outstanding notes and ended 2007 with no long-term debt
-- Restructured Board of Directors

"The changes we've implemented in 2007 have paved the way for
progress at Nephros in 2008 and beyond," said Norman J. Barta, Chairman and
CEO of Nephros. "We completed an important financing, simplified our capital
structure, and restructured our Board leadership to better position the
Company for current and future success. Our current Board of Directors includes
representatives of Wexford Capital LLC, our largest investor, who are
supporting our efforts to maximize Nephros shareholder value."

Financial Performance for the Year Ended December 31, 2007:

Product revenues for the twelve months ended December 31, 2007 were
$1,196,000
compared to $794,000 in the corresponding period of 2006, an increase of
approximately 51%. The Company's net loss was $26,356,000 or $1.68 per basic
and diluted common share for the twelve months ended December 31, 2007 compared
with $8,013,000 or $0.65 per basic and diluted common share for the
corresponding
period of 2006. Included in the Company's net loss is approximately
$17,985,000 of non-cash expenses related to the conversion of approximately $18
million principal amount of the Company's notes and accrued interest thereon
into shares of Nephros common stock on November 14, 2007. Such non-cash
expenses
includedapproximately $13,429,000 for the amortization beneficial conversion
features and
approximately $4,556,000 for the amortization of debt discount.

As of December 31, 2007, Nephros had cash, cash equivalents and short-term
investments of $8,148,000. Of that amount the Company had $4,700,000 invested
in
short-term auction rate securities. The recent credit market environment has
negatively affected the liquidity of this market. Nephros anticipates that the
liquidity issues related to these short-term investments will be resolved prior
to
having an adverse effect on the Company's operations. Nonetheless, the
Company is presently evaluating options to address any issues due to these
investments which might arise in the future. Additionally, the Board of
Directors has ratified a formal Investment Policy for Nephros to strengthen its
cash management practices on an on-going basis.

The Company's independent registered public accountants, Rothstein Kass &
Company, P.C. included a going concern explanatory paragraph in its audit
report covering the Company's financial statements for the year ended December
31, 2007. This announcement is intended to comply with AMEX Company Guide
Section 610(b) requiring a public announcement of the receipt of an audit report
that contains a going concern qualification. For information regarding the
going concern qualification, and management's response please see Nephros's
Annual
Report on Form 10-KSB for the year ended December 31, 2007, which is available
free of charge on the Securities and Exchange Commission's web site at
www.sec.gov.

Financial Performance for the Fourth Quarter Ended December 31, 2007.
(Unaudited)

For the quarter ended December 31, 2007, Nephros reported product revenues
of
$441,000, attributable to sales of its OLpur(TM) MD190 and MD220 products in
Europe, compared with $153,000 in the corresponding period of 2006, an
increase of 188%. The Company's net loss was $21,693,000 or $0.85 per basic
and diluted common share for the fourth quarter of 2007 versus a net loss
of $2,255,000 or $0.18 per basic and diluted common share in the fourth
quarter of 2006. The Company's net loss was increased in the current quarter
primarily due to the conversion of the Company's notes into the Company's
common stock on November 14, 2007, as described above.

Outlook for 2008

In 2008, Nephros plans to continue to develop as a commercial stage company.

The Company is seeking to recruit strategic employees, pursue new product
approvals, and solidify the Company's finances. Primary goals for Nephros in
2008 include aggressive expansion of its product sales in currently approved
markets and preparation for the anticipated launch of the Company's
OLpur(TM) H2H(TM) Hemodiafiltration Module and OLpur(TM) MD 220
Hemodiafilter products in the U.S.

ESRD Clinical Trial Update

In the first quarter of 2008, the Company completed enrollment in its
pivotal
U.S. clinical trial for the OLpur(TM) H2H(TM) Hemodiafiltration Module and
OLpur(TM) MD 220
Hemodiafilter products for the treatment of patients with end-stage renal
disease (ESRD). As of March 31, 2008, over half of the enrolled patients have
completed the study protocol, and the Company anticipates final completion of
all patient treatments in the second quarter of 2008.

"In the second half of 2008, we plan to seek FDA approval to market our
leading-edge products here in the U.S.," said Mr. Barta. "Physician interest in
our
products continues to be strong; we believe the nephrology community has been
waiting a long time to make therapies of this caliber available to their
patients
in the U.S., and we're excited to be moving our advanced convective therapies
forward here." Nephros believes that, if approved in 2008, its mid-dilution
HDF technology would be the first approved online HDF therapy in the U.S.

Water Ultrafiltration Products

Nephros is finalizing improvements to the functionality of its water
ultrafiltration products and has applied for water filter performance
certifications
from NSF International, an independent non-profit product evaluation laboratory.

The Company anticipates completion of required NSF testing during the second
quarter of 2008.

The Company is continuing its military product development with support from
its
U.S. Department of Defense appropriations.

"We are moving forward with our water filter marketing and sales in
hospitals, assisted living facilities, and related domains in the U.S. and
abroad," said Mr. Barta. "To that end, in the second quarter of 2008, we
plan to expand our senior ranks in the marketing and sales areas, bringing
important new talent on board that will help us position our products and
move them aggressively into the marketplace."

About Nephros, Inc.

Nephros, Inc., headquartered in New York, is a medical device company
developing
and marketing products designed to improve the quality of life for the
End-Stage Renal Disease (ESRD) patient while addressing the critical
financial and clinical needs of the care provider. ESRD is a disease state
characterized by the irreversible loss of kidney function. The Nephros HDF
system
is designed to remove a range of harmful substances more effectively, and more
cost-effectively, than existing ESRD treatment methods; particularly with
respect
to substances known collectively as "middle molecules." These molecules have
been found to contribute to such conditions as dialysis-related amyloidosis,
carpal tunnel syndrome, degenerative bone disease and, ultimately, mortality in
the
ESRD patient. Nephros products are sold and distributed throughout Europe and
are
currently being used in over fifty clinics in Europe.

Nephros also markets a line of water filtration products, the Dual Stage
Ultrafilter (DSU). The Company's patented dual stage cold sterilization
Ultrafilter has
the capability to filter out bacteria and, due to its exceptional filtration
levels, filter out many viruses and parasites. The DSU proprietary design
provides dual-stage filtration which reduces the risk of filtration failure.
With an initial focus on health care, the DSU is in a pilot-use program at a
major U.S. medical center and has been selected for further development by the
U.S. Marine Corps.

For more information on Nephros please visit the Company's website,
www.nephros.com.

Forward-Looking Statements

This news release contains certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, as amended.
Such statements include statements regarding the efficacy and intended use of
the Company's technologies under development, the timelines for bringing such
products to market and the availability of funding sources for continued
development of such products and other statements that are not historical facts,
including statements which may be preceded by the words "intends," "may,"
"will,"
"plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims,"
"believes," "hopes," "potential" or similar words. For such statements, the
Company claims the protection of the Private Securities Litigation Reform Act
of 1995.

Forward-looking statements are not guarantees of future performance, are
based on certain assumptions and are subject to various known and unknown risks
and uncertainties, many of which are beyond the Company's control. Actual
results
may differ materially from the expectations contained in the forward-looking
statements. Factors that may cause such differences include the risks that: (i)
Nephros may not be able to obtain funding if and when needed or on terms
favorable to it in order to continue operations or fund its clinical trials;
(ii) Nephros may not be able to continue as a going concern; (iii) Nephros may
not be able to liquidate its short-term investments when needed to fund its
operations; (iv) Nephros may be unable to maintain compliance with the American
Stock Exchange's continued listing standards; (v) products that appeared
promising to Nephros in research or clinical trials may not demonstrate
anticipated efficacy, safety or cost savings in subsequent pre-clinical or
clinical trials; (vi) Nephros may not obtain appropriate or necessary
governmental approvals to achieve its business plan or effectively market its
products; (vii) Nephros may encounter unanticipated internal control
deficiencies or weaknesses or ineffective disclosure controls and
procedures; (viii) HDF therapy may not be accepted in the United States
and/or Nephros' technology and products may not be accepted in current or future
target markets, which could lead to failure to achieve market penetration of
Nephros' products; (ix) Nephros may not be able to sell its ESRD therapy or
water
filtration products at competitive prices or profitably; (x) Nephros may not
be able to secure or enforce adequate legal protection, including patent
protection, for its products; and (xi) Nephros may not be able to achieve
sales growth in Europe or expand into other key geographic markets. More
detailedinformation about Nephros and the risk factors that may affect the
realization of forward-looking statements is set forth in Nephros' filings with
the Securities and Exchange Commission, including Nephros' Annual Report on Form
10-KSB filed with the SEC for the fiscal year ended December 31, 2007. Investors
and security holders are urged to read these documents free of charge on the
SEC's
web site at www.sec.gov. Nephros does not undertake to publicly update or
revise its forward-looking statements as a result of new information,
future events or otherwise.

CONTACTS:
Norman J. Barta
Nephros, Inc.
212 781-5113
Email Contact

Paul G. Henning
Cameron Associates
212 554-5462
Email Contact

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