Nephros(NEPH) - 2022 Q4 - Annual Report

Financial Performance - Total net revenues for the fiscal year ended December 31, 2022, were $9.975 million, a decrease of 2% from $10.217 million in 2021[169] - Gross margin for the fiscal year ended December 31, 2022, was approximately 47%, down from 55% in 2021, reflecting an 8% decrease due to increased shipping costs and inventory reserves[171] - Net loss attributable to Nephros, Inc. shareholders for the fiscal year ended December 31, 2022, was $7.382 million, an increase of 80% from $4.107 million in 2021[169] - Loss from discontinued operations was approximately $2.8 million for the year ended December 31, 2022, compared to $1.1 million in 2021, primarily due to asset impairment[180] - The company incurred a net loss of $3.2 million for the year ended December 31, 2022[187] Expenses - Research and development expenses decreased by 16% to $1.255 million in 2022, primarily due to reduced investment in the Water Filtration segment[172] - Selling, general and administrative expenses increased by 6% to $7.593 million in 2022, attributed to higher sales headcount and associated costs[174] Cash Flow and Liquidity - Cash and cash equivalents decreased to $3.634 million as of December 31, 2022, down from $6.973 million in 2021[181] - The accumulated deficit as of December 31, 2022, was $142.8 million, with expectations of incurring additional operating losses until profitability is achieved[183] - Net cash used in operating activities increased to $3.2 million for the year ended December 31, 2022, compared to $1.4 million in 2021, an increase of $1.8 million[187] - Net cash provided by financing activities was approximately $43,000 for the year ended December 31, 2022, primarily from proceeds of $0.2 million from warrant exercises[189] - The company believes that existing cash resources and anticipated revenue will be sufficient to fund operations for at least the next 12 months[185] - Future liquidity sources will depend on the development, marketing, and sales of water filtration products[186] Operational Changes - The company plans to wind down Specialty Renal Products, Inc. operations and liquidate its assets due to limited capital and lack of strategic partnerships[162] - The company may need to reduce discretionary expenditures, including headcount and R&D spending, if demand for products decreases[185] Purchase Commitments - The company has agreed to make minimum annual aggregate purchases from Medica of €3.5 million (approximately $3.7 million) for the year ended December 31, 2022[191] - Aggregate purchase commitments for the year ended December 31, 2022, totaled €3.2 million (approximately $3.4 million)[191] - The company has a commitment to make up a €0.3 million purchase shortfall based on anticipated future revenues[191] Segment Performance - Total net revenues in the Water Filtration segment decreased by 2% in the year ended December 31, 2022[169] - Net cash used in investing activities remained stable at $0.1 million for both years ended December 31, 2022, and 2021[188]