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[x]
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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[ ]
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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Delaware
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13-3971809
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(State
or other jurisdiction of
incorporation
or organization)
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|
(I.R.S.
Employer Identification No.)
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Class
|
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Outstanding
at March 31, 2006
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||
Common
Stock, $.001 par value
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Page
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PART
I
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4
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|
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Item 1.
Description of Business
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|
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15
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Item
2. Description of Property
|
15
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||||
Item
3. Legal Proceedings
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16
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||||
Item
4. Submission of Matters to a Vote of Security
Holders
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16
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||||
PART
II
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16
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||||
Item
5. Market for Common Equity and Related Shareholder
Matters
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16
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||||
Item
6. Management’s Discussion and Analysis or Plan of
Operation
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16
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||||
Item
7. Financial Statements
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F-1
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||||
Item
8. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
|
35
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||||
Item
8A. Controls and Procedures
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35
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||||
Item
8B. Other Information
|
36
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||||
PART
III
|
36
|
||||
Item
9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a) of the Exchange Act
|
36
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||||
Item
10. Executive Compensation
|
36
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||||
Item
11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
|
36
|
||||
Item
12. Certain Relationships and Related
Transactions
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36
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||||
Item
13. Exhibits
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36
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||||
Item
14. Principal Accountant Fees and Services
|
36
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||||
SIGNATURES
|
|
|
38
|
|
· |
OLpūr
MDHDF
filter series (currently consisting of our MD190 and MD220 diafilters)
designed expressly for HDF therapy and employing our proprietary
Mid-Dilution Diafiltration
technology;
|
· |
OLpūr
H2H,
our add-on module designed to allow the most common types of hemodialysis
machines to be used for HDF therapy;
and
|
· |
OLpūr NS2000
system, our stand-alone HDF machine and associated filter
technology.
|
· |
Peritoneal
Dialysis,
or PD, uses the patient’s peritoneum, the membrane lining covering the
internal abdominal organs, as a filter by introducing injectable-grade
dialysate solution into the peritoneal cavity through a surgically
implanted catheter. After some period of time, the fluid is drained
and
replaced. PD is limited in use because the peritoneal cavity is subject
to
scarring with repeated episodes of inflammation of the peritoneal
membrane, reducing the effectiveness of this treatment approach.
With
time, a PD patient’s kidney function continues to deteriorate and
peritoneal toxin removal alone may become insufficient to provide
adequate
treatment. In such case the patient may switch to an extracorporeal
renal
replacement therapy such as hemodialysis or
hemodiafiltration.
|
· |
Hemodialysis
uses
an artificial kidney machine to remove certain toxins and fluid from
the
patient’s blood while controlling external blood flow and monitoring
patient vital signs. Hemodialysis patients are connected to a dialysis
machine via a vascular access device. The hemodialysis process occurs
in a
dialyzer cartridge with a semi-permeable membrane which divides the
dialyzer into two chambers: while the blood is circulated through
one
chamber, a premixed solution known as dialysate circulates through
the
other chamber. Toxins and excess fluid from the blood cross the membrane
into the dialysate solution through a process known as
“diffusion.”
|
· |
Hemodiafiltration,
or
HDF, in its basic form combines the principles of hemodialysis with
hemofiltration. Hemofiltration is a cleansing process without dialysate
solution where blood is passed through a semi-permeable membrane,
which
filters out solute particles. HDF uses dialysate solution with a
negative
pressure (similar to a vacuum effect) applied to the dialysate solution
to
draw additional toxins from the blood and across the membrane. This
process is known as “convection.” HDF thus combines diffusion with
convection, offering efficient removal of small solutes by diffusion,
with
improved removal of larger substances (i.e., middle molecules) by
convection.
|
· |
With
pre-dilution, substitution fluid is added to the blood before the
blood
enters the dialyzer cartridge. In this process, the blood can be
over-diluted, and therefore more fluid can be drawn across the membrane.
This enhances removal of toxins by convection. However, because the
blood
is diluted before entering the device, it actually reduces the rate
of
removal by diffusion; the overall rate of removal, therefore, is
reduced
for small molecular weight toxins (such as urea) that rely primarily
on
diffusive transport.
|
· |
With
post-dilution, substitution fluid is added to blood after the blood
has
exited the dialyzer cartridge. This is the currently preferred method
because the concentration gradient is maintained at a higher level,
thus
not impairing the rate of removal of small toxins by diffusion. The
disadvantage of this method, however, is that there is a limit in
the
amount of plasma water that can be filtered from the blood before
the
blood becomes too viscous, or thick. This limit is approximately
20% to
25% of the blood flow rate. This limit restricts the amount of convection,
and therefore limits the removal of middle and larger
molecules.
|
(1)
|
the
DSU is,
to our knowledge, the only water filter that provides the user with
a
simple sight verification that the filter is properly performing
its
cleansing function due to our unique dual-stage architecture;
|
(2)
|
the
DSU filters finer contaminants than other filters of which we are
aware in
the water filtration marketplace;
|
(3)
|
the
DSU filters relatively large volumes of water before requiring
replacement; and
|
(4) |
the
DSU continues to protect the user even if the flow is reduced
by
contaminant volumes, because contaminants do not cross the filtration
medium.
|
· |
continuing
our efforts to develop, have manufactured and sell products which,
when
compared to existing products, perform more efficiently and are available
at prices that are acceptable to the
market;
|
· |
displaying
our products and providing associated literature at major industry
trade
shows in the United States, our Target European Market and
Asia;
|
· |
initiating
discussions with dialysis clinic medical directors, as well as
representatives of dialysis clinical chains, to develop interest
in our
products;
|
· |
offering
the OLpūr
H2H
at a price that does not provide us with significant positive margins
in
order to encourage adoption of this product and associated demand
for our
dialyzers; and
|
· |
pursuing
alliance opportunities in certain territories for distribution of
our
products and possible alternative manufacturing
facilities.
|
· |
developing
and marketing products that are designed to meet critical and specific
customer needs more effectively than competitive
devices;
|
· |
offering
unique attributes that illustrate our product reliability,
“user-friendliness,” and performance
capabilities;
|
· |
selling
products to specific customer groups where our unique product attributes
are mission-critical; and
|
· |
pursuing
alliance opportunities for joint product development and
distribution.
|
· |
Class
I devices are medical devices for which general controls are deemed
sufficient to ensure their safety and effectiveness. General controls
include provisions related to (1) labeling, (2) producer registration,
(3)
defect notification, (4) records and reports and (5) quality service
requirements, or QSR.
|
· |
Class
II devices are medical devices for which the general controls for
the
Class I devices are deemed not sufficient to ensure their safety
and
effectiveness and require special controls in addition to the general
controls. Special controls include provisions related to (1) performance
and design standards, (2) post-market surveillance, (3) patient registries
and (4) the use of FDA guidelines.
|
· |
Class
III devices are the
most regulated medical devices and are generally limited to devices
that
support or sustain human life or are of substantial importance in
preventing impairment of human health or present a potential, unreasonable
risk of illness or injury. Pre-market approval by the FDA is the
required
process of scientific review to ensure the safety and effectiveness
of
Class III devices.
|
· |
that
we will not need to reevaluate the applicability of the Section 510(k)
pre-market notification process to our ESRD therapy products in the
future;
|
· |
that
the FDA will agree with our determination that we are eligible to
use the
Section 510(k) pre-market notification process;
or
|
· |
that
the FDA will not in the future require us to submit a Section 515
pre-market approval application, which would be a more costly, lengthy
and
uncertain approval process.
|
· |
the
FDA’s failure to schedule advisory review
panels;
|
· |
changes
in established review guidelines;
|
· |
changes
in regulations or administrative interpretations;
or
|
· |
determinations
by the FDA that clinical data collected is insufficient to support
the
safety and effectiveness of one or more of our products for their
intended
uses or that the data warrants the continuation of clinical
studies.
|
· |
the
design and manufacturing processes be regulated and controlled by
the use
of written procedures;
|
· |
the
ability to produce medical devices which meet the manufacturer’s
specifications be validated by extensive and detailed testing of
every
aspect of the process;
|
· |
any
deficiencies in the manufacturing process or in the products produced
be
investigated;
|
· |
detailed
records be kept and a corrective and preventative action plan be
in place;
and
|
· |
manufacturing
facilities be subject to FDA inspection on a periodic basis to monitor
compliance with QSR regulations.
|
· |
all
medical device manufacturers and distributors register with the FDA
annually and provide the FDA with a list of those medical devices
which
they distribute commercially;
|
· |
information
be provided to the FDA on death or serious injuries alleged to have
been
associated with the use of the products, as well as product malfunctions
that would likely cause or contribute to death or serious injury
if the
malfunction were to recur; and
|
· |
certain
medical devices not cleared with the FDA for marketing in the United
States meet specific requirements before they are
exported.
|
Quarter
Ended
|
High
|
Low
|
September
30, 2004
|
$6.27
|
$4.76
|
December
31, 2004
|
$5.70
|
$3.90
|
March
31, 2005
|
$5.72
|
$3.34
|
June
30, 2005
|
$4.04
|
$2.08
|
September
30, 2005
|
$3.55
|
$2.80
|
December
31, 2005
|
$2.95
|
$1.35
|
(1) |
the
completion and success of additional clinical trials and of our regulatory
approval processes for each of our ESRD therapy products in our target
territories;
|
(2) |
the
market acceptance of HDF therapy in the United States and of our
technologies and products in each of our target
markets;
|
(3) |
our
ability to effectively and efficiently manufacture, market and distribute
our products;
|
(4) |
our
ability to sell our products at competitive prices which exceed our
per
unit costs; and
|
(5) |
the
consolidation of dialysis clinics into larger clinical
groups.
|
· |
the
market acceptance of our products, and our ability to effectively
and
efficiently produce and market our products;
|
· |
the
availability of additional financing, through the sale of equity
securities or otherwise, on commercially reasonable terms or at
all;
|
· |
the
timing and costs associated with obtaining the Conformité Européene, or
CE, mark, which demonstrates compliance with the relevant European
Union
|
· |
requirements
and is a regulatory prerequisite for selling our ESRD therapy products
in
the European Union and certain other countries that recognize CE
marking
(for
|
· |
products
other than our OLp⑀∴r
MDHDF filter series, for which the CE mark was obtained in July
2003), or
United States regulatory approval;
|
· |
the
continued progress in and the costs of clinical studies and other
research
and development programs;
|
· |
the
costs involved in filing and enforcing patent claims and the status
of
competitive products; and
|
· |
the
cost of litigation, including potential patent litigation and any
other
actual or threatened litigation.
|
· |
for
the marketing and sales of our products;
|
· |
to
complete certain clinical studies, obtain appropriate regulatory
approvals
and expand our research and development with respect to our ESRD
therapy
products;
|
· |
to
continue our ESRD therapy product engineering;
|
· |
to
pursue business opportunities with respect to our DSU water-filtration
product;
|
· |
to
pay the Receiver of Lancer Offshore, Inc. amounts due under the
settlement
with respect to the Ancillary Proceeding between us and the Receiver
(See
“Note 10—
|
· |
Commitments
and Contingencies—Settlement Agreements” to the Condensed Consolidated
Financial Statements for a description of the settlement);
|
· |
to
pay severance to our former Senior Vice President, Marketing
and Sales;
|
· |
to
pay a former supplier, Plexus Services Corp., amounts due under
our
settlement agreement; and
|
· |
for
working capital purposes and for additional professional fees
and expenses
and other operating costs.
|
Payments
Due in Period
|
|||||||||||||
Contractual
Obligations
|
Within
|
Years
|
Years
|
||||||||||
Total
|
1
Year
|
1
-
3
|
3
-
5
|
||||||||||
Open
Purchase Orders
|
$
|
52,306
|
$
|
52,306
|
|||||||||
Leases
|
$
|
90,504
|
$
|
90,504
|
$
|
-
|
$
|
-
|
|||||
Employment
Contracts
|
$
|
427,500
|
$
|
285,000
|
$
|
142,500
|
$
|
-
|
|||||
Total
|
$
|
570,310
|
$
|
427,810
|
$
|
142,500
|
$
|
-
|
· |
the
completion and success of additional clinical trials and of our regulatory
approval processes for each of our ESRD therapy products in our target
territories;
|
· |
the
market acceptance of HDF therapy in the United States and of our
technologies and products in each of our target
markets;
|
· |
our
ability to effectively and efficiently manufacture, market and distribute
our products;
|
· |
our
ability to sell our products at competitive prices which exceed our
per
unit costs; and
|
· |
the
consolidation of dialysis clinics into larger clinical
groups.
|
· |
information
contained in the MDRs could trigger FDA regulatory actions such as
inspections, recalls and patient/physician
notifications;
|
· |
because
the reports are publicly available, MDRs could become the basis for
private lawsuits, including class actions;
and
|
· |
if
we fail to submit a required MDR to the FDA, the FDA could take
enforcement action against us.
|
· |
to
obtain product liability insurance;
or
|
· |
to
indemnify manufacturers against liabilities resulting from the sale
of our
products.
|
· |
fines;
|
· |
injunctions;
|
· |
civil
penalties;
|
· |
recalls
or seizures of our products;
|
· |
total
or partial suspension of the production of our
products;
|
· |
withdrawal
of any existing approvals or pre-market clearances of our
products;
|
· |
refusal
to approve or clear new applications or notices relating to our
products;
|
· |
recommendations
by the FDA that we not be allowed to enter into government contracts;
and
|
· |
criminal
prosecution.
|
· |
such
products will be safe for use;
|
· |
such
products will be effective;
|
· |
such
products will be cost-effective;
|
· |
we
will be able to demonstrate product safety, efficacy and
cost-effectiveness;
|
· |
there
are unexpected side effects, complications or other safety issues
associated with such products; and
|
· |
government
or third party reimbursement for the cost of such products is available
at
reasonable rates, if at all.
|
· |
fluctuations
in exchange rates of the United States dollar could adversely affect
our
results of operations;
|
· |
we
may face difficulties in enforcing and collecting accounts receivable
under some countries’ legal
systems;
|
· |
local
regulations may restrict our ability to sell our products, have our
products manufactured or conduct other
operations;
|
· |
political
instability could disrupt our
operations;
|
· |
some
governments and customers may have longer payment cycles, with resulting
adverse effects on our cash flow;
and
|
· |
some
countries could impose additional taxes or restrict the import of
our
products.
|
· |
authorizing
our board of directors to issue “blank check” preferred stock without
stockholder approval;
|
· |
providing
for a classified board of directors with staggered, three-year
terms;
|
· |
prohibiting
us from engaging in a “business combination” with an “interested
stockholder” for a period of three years after the date of the transaction
in which the person became an interested stockholder unless certain
provisions are met;
|
· |
prohibiting
cumulative voting in the election of
directors;
|
· |
prohibiting
stockholder action by written consent unless the written consent
is signed
by all stockholders entitled to vote on the
action;
|
· |
limiting
the persons who may call special meetings of stockholders;
and
|
· |
establishing
advance notice requirements for nominations for election to our board
of
directors or for proposing matters that can be acted on by stockholders
at
stockholder meetings.
|
· |
the
market acceptance of our products, and our ability to effectively
and
efficiently produce and market our
products;
|
· |
the
availability of additional financing, through the sale of equity
securities or otherwise, on commercially reasonable terms or at
all;
|
· |
the
timing and costs associated with obtaining the Conformité Européene, or
CE, mark, which demonstrates compliance with the relevant European
Union
requirements and is a regulatory prerequisite for selling our ESRD
therapy
products in the European Union and certain other countries that recognize
CE marking (for products other than our OLpūr
MDHDF filter series, for which the CE mark was obtained in July
2003),
or United States regulatory
approval;
|
· |
the
continued progress in and the costs of clinical studies and other
research
and development programs;
|
· |
the
costs associated with manufacturing
scale-up;
|
· |
the
costs involved in filing and enforcing patent claims and the status
of
competitive products; and
|
· |
the
cost of litigation, including potential patent litigation and actual,
current and threatened litigation
|
· |
the
development of new medications, or improvements to existing medications,
which help to delay the onset or prevent the progression of ESRD
in
high-risk patients (such as those with diabetes and
hypertension);
|
· |
the
development of new medications, or improvements in existing medications,
which reduce the incidence of kidney transplant rejection;
and
|
· |
developments
in the use of kidneys harvested from genetically-engineered animals
as a
source of transplants.
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Financial
Statements
|
|
Consolidated
Balance Sheets
|
F-3
|
Consolidated
Statements of Operations
|
F-4
|
Consolidated
Statement of Changes in Stockholders’ Equity
|
F-5
|
Consolidated
Statements of Cash Flows
|
F-6
|
Notes
to Consolidated Financial Statements
|
F-7
|
December
31,
|
December
31,
|
||||||
2005
|
2004
|
||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash and cash equivalents
|
$
|
746,581
|
$
|
3,719,181
|
|||
Short-term investments
|
4,500,000
|
5,995,940
|
|||||
Accounts receivable, less allowances: 2005: $18,697; 2004:
$0
|
244,100
|
174,797
|
|||||
Inventory
|
814,548
|
653,351
|
|||||
Prepaid expenses and other current assets
|
358,306
|
468,355
|
|||||
Total current assets
|
6,663,535
|
11,011,624
|
|||||
Property and equipment, net
|
1,143,309
|
1,191,856
|
|||||
Other assets
|
17,731
|
3,822
|
|||||
Total assets
|
$
|
7,824,575
|
$
|
12,207,302
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current liabilities:
|
|||||||
Accounts payable
|
$
|
766,158
|
$
|
629,814
|
|||
Accrued expenses
|
769,359
|
362,789
|
|||||
Deferred revenue
|
-
|
64,058
|
|||||
Note Payable - short-term portion
|
295,838
|
-
|
|||||
Total current liabilities
|
1,831,355
|
1,056,661
|
|||||
Notes
Payable-long-term portion
|
613,727
|
1,500,000
|
|||||
Total Liabilities
|
2,445,082
|
2,556,661
|
|||||
Stockholders'
equity
|
|||||||
Preferred stock, $.001 par value; 5,000,000 and 31,000,000 shares
authorized
|
|||||||
at December 31, 2005 and 2004, respectively; no shares issued and
outstanding
|
|||||||
at December 31, 2005 and 2004
|
-
|
-
|
|||||
Common stock, $.001 par value; 25,000,000 and 49,000,000 shares
authorized
at
|
|||||||
December 31, 2005 and December 31, 2004, respectively; 12,313,494
and
|
|||||||
12,120,248 shares issued and outstanding at December 31, 2005 and
2004,
respectively
|
12,313
|
12,120
|
|||||
Additional paid-in capital
|
54,848,711
|
53,740,171
|
|||||
Deferred compensation
|
(2,189,511
|
)
|
(2,479,317
|
)
|
|||
Accumulated other comprehensive income (loss)
|
(49,137 |
)
|
152,373 | ||||
Accumulated deficit
|
(47,242,883
|
)
|
(41,774,706
|
)
|
|||
Total stockholders' equity
|
5,379,493
|
9,650,641
|
|||||
Total liabilities and stockholders' equity
|
$
|
7,824,575
|
$
|
12,207,302
|
Year
Ended
|
|||||||
December
31
|
|||||||
2005
|
2004
|
||||||
Contract
revenues
|
$
|
1,750,000
|
$
|
-
|
|||
Net
product revenues
|
674,483
|
138,406
|
|||||
Net revenues
|
2,424,483
|
138,406
|
|||||
Cost
of product revenue
|
379,462
|
211,942
|
|||||
Gross
profit (loss)
|
2,045,021
|
(73,536
|
)
|
||||
Operating
expenses:
|
|||||||
Research and development
|
1,756,493
|
2,352,604
|
|||||
Selling, general and administrative
|
6,294,639
|
5,220,250
|
|||||
Severance expense
|
318,360
|
-
|
|||||
Total operating expenses
|
8,369,492
|
7,572,854
|
|||||
Loss
from operations
|
(6,324,471
|
)
|
(7,646,390
|
)
|
|||
Other
income, net:
|
|||||||
Interest income
|
233,207
|
49,910
|
|||||
Gain on settlement agreement
|
623,087
|
-
|
|||||
Total other income, net
|
856,294
|
49,910
|
|||||
Net
loss
|
(5,468,177
|
)
|
(7,596,480
|
)
|
|||
Dividends
and accretion to redemption value of redeemable
|
|||||||
convertible preferred stock
|
-
|
(11,734,533
|
)
|
||||
Net
loss attributable to common stockholders
|
(5,468,177
|
)
|
(19,331,013
|
)
|
|||
Basic
and diluted net loss attributable to common
|
$
|
(0.45
|
)
|
$
|
(4.38
|
)
|
|
stockholders per common share
|
|||||||
Shares
used in computing basic and diluted net loss
|
12,269,054 | 4,412,254 |
Accumulated
|
||||||||||||||||||||||||||||
Series
A
|
|
Additional
|
Other
|
|||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Deferred
|
Paid-in
|
Comprehensive
|
Accumulated
|
|||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Compensation
|
Capital
|
Income
|
Deficit
|
Total
|
||||||||||||||||||||
Balance,
January 1, 2004
|
4,000,000
|
$
|
4,000
|
1,593,659
|
$
|
1,594
|
$
|
(2,049,940
|
)
|
$
|
19,005,356
|
$
|
100,337
|
$
|
(22,443,693
|
)
|
$
|
(5,382,346
|
)
|
|||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(7,596,480
|
)
|
(7,596,480
|
)
|
|||||||||||||||||
Net unrealized gains on foreign currency
|
||||||||||||||||||||||||||||
translation
|
-
|
-
|
-
|
-
|
-
|
-
|
56,096
|
-
|
56,096
|
|||||||||||||||||||
Net
unrealized losses on available-for-sale
|
||||||||||||||||||||||||||||
securities
|
-
|
-
|
-
|
-
|
-
|
-
|
(4,060
|
)
|
-
|
(4,060
|
)
|
|||||||||||||||||
Comprehensive loss
|
(7,544,444
|
)
|
||||||||||||||||||||||||||
Noncash stock-based compensation
|
-
|
-
|
-
|
-
|
(1,223,133
|
)
|
1,223,133
|
-
|
-
|
-
|
||||||||||||||||||
Beneficial conversion recognized in connection
|
-
|
|||||||||||||||||||||||||||
with issuance of preferred stock
|
-
|
-
|
-
|
-
|
-
|
3,811,538
|
-
|
-
|
3,811,538
|
|||||||||||||||||||
Amortiztion of deferred compensation
|
-
|
-
|
-
|
-
|
793,756
|
-
|
-
|
-
|
793,756
|
|||||||||||||||||||
Cumulative preferred dividend and accretion
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(11,734,533
|
)
|
(11,734,533
|
)
|
|||||||||||||||||
Exercise of warrants
|
87,500
|
88
|
-
|
-
|
-
|
87,412
|
-
|
-
|
87,500
|
|||||||||||||||||||
Issuance of common stock in connection with
|
||||||||||||||||||||||||||||
initial public offering
|
-
|
-
|
2,100,000
|
2,100
|
-
|
10,732,486
|
-
|
-
|
10,734,586
|
|||||||||||||||||||
Conversion of preferred stock into common
|
||||||||||||||||||||||||||||
upon initial public offering
|
(4,087,500
|
)
|
(4,088
|
)
|
8,426,589
|
8,426
|
-
|
18,880,246
|
-
|
-
|
18,884,585
|
|||||||||||||||||
Balance,
December 31, 2004
|
-
|
-
|
12,120,248
|
12,120
|
(2,479,317
|
)
|
53,740,171
|
152,373
|
(41,774,706
|
)
|
9,650,641
|
|||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(5,468,177
|
)
|
(5,468,177
|
)
|
|||||||||||||||||
Net unrealized losses on foreign currency
|
||||||||||||||||||||||||||||
translation
|
-
|
-
|
-
|
-
|
-
|
-
|
(205,570
|
)
|
-
|
(205,570
|
)
|
|||||||||||||||||
Net unrealized gains on available-for-sale
|
||||||||||||||||||||||||||||
securities
|
-
|
-
|
-
|
-
|
-
|
-
|
4,060
|
-
|
4,060
|
|||||||||||||||||||
Comprehensive loss
|
(5,669,687
|
)
|
||||||||||||||||||||||||||
Amortization
of deferred compensation
|
-
|
-
|
-
|
-
|
378,430
|
-
|
-
|
-
|
378,430
|
|||||||||||||||||||
Noncash stock-based compensation | - | - | - | - | (173,347 | ) | 173,347 | - | - | - | ||||||||||||||||||
Cancelled
shares due to terminations
|
-
|
-
|
-
|
-
|
84,723
|
(84,723
|
)
|
-
|
-
|
-
|
||||||||||||||||||
Exercise
of stock options
|
-
|
-
|
8,996
|
9
|
-
|
2,870
|
-
|
-
|
2,879
|
|||||||||||||||||||
Adjustment
to issuance of common stock in
|
||||||||||||||||||||||||||||
connection with initial public offering
|
-
|
-
|
-
|
-
|
-
|
44,361
|
-
|
-
|
44,361
|
|||||||||||||||||||
Issuance
of common stock in connection with
|
||||||||||||||||||||||||||||
private placement
|
-
|
-
|
184,250
|
184
|
-
|
955,337
|
-
|
-
|
955,521
|
|||||||||||||||||||
Issuance
of warrants in connection with
|
||||||||||||||||||||||||||||
settlement agreement
|
-
|
-
|
-
|
-
|
-
|
17,348
|
-
|
-
|
17,348
|
|||||||||||||||||||
Balance,
December 31, 2005
|
-
|
$
|
-
|
12,313,494
|
$
|
12,313
|
$
|
(2,189,511
|
)
|
$
|
54,848,711
|
$
|
(49,137
|
)
|
$
|
(47,242,883
|
)
|
$
|
5,379,493
|
Year
Ended December
31
|
|||||||
2005
|
2004
|
||||||
Operating
activities
|
|||||||
Net Loss
|
$
|
(5,468,177
|
)
|
$
|
(7,596,480
|
)
|
|
Adjustments to reconcile net loss to net
|
|||||||
cash used in operating activities:
|
|||||||
Depreciation
|
305,601
|
199,241
|
|||||
Noncash stock-based compensation
|
374,529
|
793,756
|
|||||
Gain on settlement agreement
|
(623,087
|
)
|
-
|
||||
Change in provision for returns
|
18,697
|
-
|
|||||
(Increase) decrease in operating assets:
|
|||||||
Accounts receivable
|
(133,066
|
)
|
(174,797
|
)
|
|||
Prepaid expenses
|
87,360
|
(249,742
|
)
|
||||
Inventory, net
|
(280,613
|
)
|
(451,387
|
)
|
|||
Other assets
|
(13,909
|
)
|
-
|
||||
Increase (decrease) in operating liabilities:
|
|||||||
Accounts payable and accrued expenses
|
660,123
|
(423,630
|
)
|
||||
Deferred revenue
|
(64,058
|
)
|
64,058
|
||||
Other liabilities
|
32,652
|
|
-
|
||||
Net cash used in operating activities
|
(5,103,948
|
)
|
(7,838,981
|
)
|
|||
Investing
activities
|
|||||||
Purchase of property and equipment
|
(397,290
|
)
|
(902,872
|
)
|
|||
Redemption (purchase) of short-term investments
|
1,500,000
|
(6,000,000
|
)
|
||||
Net
cash provided by (used in) investing activities
|
1,102,710
|
(6,902,872
|
)
|
||||
Financing
activities
|
|||||||
Proceeds from issuance of preferred stock, net
|
-
|
3,811,538
|
|||||
Proceeds from private placement of common stock
|
955,521
|
-
|
|||||
Payment of preferred dividends
|
-
|
(349,949
|
)
|
||||
Proceeds from initial public offering of common stock
|
-
|
10,734,586
|
|||||
Adjustment to proceeds from IPO of common stock
|
44,361
|
-
|
|||||
Proceeds from exercise of stock options
|
2,879
|
-
|
|||||
Proceeds from the exercise of warrants
|
-
|
87,500
|
|||||
Net
cash provided by financing activities
|
1,002,761
|
14,283,675
|
|||||
Effective
exchange rates on cash
|
(25,877
|
)
|
56,096
|
||||
Net
decrease in cash and cash equivalents
|
(2,972,600
|
)
|
(402,082
|
)
|
|||
Cash
and cash equivalents, beginning of period
|
3,719,181
|
4,121,263
|
|||||
Cash
and cash equivalents, end of period
|
$
|
746,581
|
$
|
3,719,181
|
|||
Supplemental disclosure of cash flow information cash paid for taxes | $ | - | $ | 3,339 |
December
31,
|
|||||||
2005
|
2004
|
||||||
Raw
Materials
|
$
|
153,299
|
$
|
467,655
|
|||
Finished
Goods
|
661,249
|
185,696
|
|||||
Total Inventory
|
$
|
814,548
|
$
|
653,351
|
Years
Ended December 31
|
||||||||||||||||
2005
|
2004
|
|||||||||||||||
Net
loss attributable to common stockholders:
|
||||||||||||||||
As
reported
|
$
|
(5,468,177
|
)
|
$
|
(19,331,013
|
)
|
||||||||||
Less
-
compensation recognized under the
|
||||||||||||||||
intrinsic
value
method
|
378,430
|
793,756
|
||||||||||||||
Add
-
compensation recognized under the
|
||||||||||||||||
fair
value method
|
(730,143
|
)
|
(1,047,571
|
)
|
||||||||||||
Pro
Forma
|
$
|
(5,819,890
|
)
|
$
|
(19,584,828
|
)
|
||||||||||
Net
loss per share:
|
||||||||||||||||
As
reported
|
$
|
(0.45
|
)
|
$
|
(4.38
|
)
|
||||||||||
Pro
Forma
|
$
|
(0.47
|
)
|
$
|
(4.44
|
)
|
December
31,
|
|||||||
2005
|
2004
|
||||||
Prepaid
insurance premiums
|
$
|
94,556
|
$
|
181,500
|
|||
Advances
on product development
services
|
96,565
|
130,000
|
|||||
Other
|
167,185
|
156,855
|
|||||
Total
|
$
|
358,306
|
$
|
468,355
|
December
31,
|
||||||||||
Life
|
2005
|
2004
|
||||||||
Manufacturing
equipment
|
5
Years
|
$
|
1,280,054
|
$
|
1,103,186
|
|||||
Research
equipment
|
5
Years
|
499,609
|
465,206
|
|||||||
Computer
equipment
|
4
Years
|
158,673
|
155,591
|
|||||||
Furniture
and fixtures
|
7
years
|
79,757
|
52,003
|
|||||||
|
2,018,093
|
1,775,986
|
||||||||
Less:
accumulated depreciation
|
(874,784
|
)
|
(584,130
|
)
|
||||||
|
$
|
1,143,309
|
$
|
1,191,856
|
· |
Each
outstanding share of the Company’s series A convertible preferred stock
was converted into 0.2841 shares of its common stock resulting in
the
issuance of 1,161,256 shares of common
stock;
|
· |
Each
outstanding share of series B convertible preferred stock was converted
into 0.2841 shares of common stock, and all accrued and unpaid dividends
through May 31, 2004 on each such share was converted into common
stock at
a conversion price of approximately $3.03 per share resulting in
the
issuance of 845,287 shares of common
stock;
|
· |
Each
outstanding share of series C convertible preferred stock was converted
into 0.2841 shares of common stock, and all accrued and unpaid dividends
through May 31, 2004 on each such share was converted into common
stock at
a conversion price of approximately $3.52 per share resulting in
the
issuance of 1,170,397 shares of common stock;
and
|
· |
Each
outstanding share of series D convertible preferred stock was converted
into 0.4310 shares of common stock, and all accrued and unpaid dividends
through May 31, 2004 on each such share was converted into
|
Total
Outstanding Warrants
|
||||||||
Title
of Warrant
|
Date
Issued
|
Expiry
Date
|
Exercise
Price
|
Total
Common Shares Issuable
|
||||
Lancer
Notes & Warrants
|
1/18/2006
|
1/18/2009
|
$
1.50
|
21,308
|
||||
Underwriter
Warrants
|
3/24/2005
|
9/20/2009
|
$
7.50
|
200,000
|
||||
Plexus
Warrants
|
6/19/2002
|
6/19/2007
|
$10.56
|
170,460
|
||||
Joe
Giamanco Warrants
|
9/22/2003
|
9/11/2006
|
$
8.80
|
4,439
|
||||
George
Hatsopoulos Warrants
|
9/22/2003
|
9/11/2006
|
$
8.80
|
1,110
|
Weighted
- average
|
|||||||
Shares
|
exercise
price
|
||||||
Outstanding
at January 1, 2004
|
1,438,825
|
1.51
|
|||||
Options
granted
|
434,454
|
3.04
|
|||||
Options
canceled
|
(20,739
|
)
|
2.62
|
||||
Outstanding
at December 31, 2004
|
1,852,540
|
1.85
|
|||||
Options
Granted
|
65,000
|
3.49
|
|||||
Options
exercised
|
(8,997
|
)
|
0.32
|
||||
Options
canceled
|
(24,006
|
)
|
2.60
|
||||
Outstanding
at December 31, 2005
|
1,884,537
|
1.91
|
|||||
Excercisable
at December 31, 2005
|
1,232,977
|
1.48
|
Options
Outstanding
|
Options
Exercisable
|
|||||||||||||||
|
Number
|
Weighted-
|
|
Number
|
|
|||||||||||
outstanding
as of
|
average
remaining
|
Weighted-
|
exercisable
as of
|
Weighted-
|
||||||||||||
Range
of exercise prices
|
December
31, 2005
|
contractual
life in years
|
average
exercise price
|
December
31, 2005
|
average
exercise price
|
|||||||||||
$0.32
|
524,970
|
4.07
|
$
|
0.32
|
524,970
|
$
|
0.32
|
|||||||||
$1.76
|
499,732
|
7.39
|
1.76
|
400,354
|
1.76
|
|||||||||||
$2.32
to 2.39
|
311,250
|
8.44
|
2.39
|
75,770
|
2.39
|
|||||||||||
$2.64
to 2.78
|
374,586
|
7.11
|
2.77
|
154,550
|
2.78
|
|||||||||||
$3.40
to 3.70
|
65,000
|
9.32
|
3.49
|
21,667
|
3.49
|
|||||||||||
$4.80
to 5.45
|
109,000
|
8.93
|
4.98
|
55,667
|
4.88
|
|||||||||||
1,884,537
|
1,232,977
|
Year
ending December 31,
|
||||
2006
|
90,504
|
|||
$
|
90,504
|
December
31, 2005
|
||||||||||
Gross
|
||||||||||
Unrealized
|
Gross
Fair
|
|||||||||
Cost
|
Losses
|
Value
|
||||||||
Auction
rate securities
|
$
|
4,500,000
|
$
|
-
|
$
|
4,500,000
|
||||
Total
securities
|
$
|
4,500,000
|
$
|
-
|
$
|
4,500,000
|
||||
|
December
31, 2004
|
|||||||||
|
Gross
|
|||||||||
|
Unrealized
|
Gross
Fair
|
||||||||
Cost
|
Losses
|
Value
|
||||||||
Auction
rate securities
|
$
|
5,000,000
|
$
|
-
|
$
|
5,000,000
|
||||
Other
debt securities
|
1,000,000
|
4,060
|
$
|
995,940
|
||||||
Total
securities
|
$
|
6,000,000
|
$
|
4,060
|
$
|
5,995,940
|
Payments
Due in Period
|
|||||||||||||
Contractual
Obligations
|
Total
|
Within
1
Year
|
Years
1
-
3
|
Years
3
-
5
|
|||||||||
Open
Purchase Orders
|
$
|
52,306
|
$
|
52,306
|
$
|
-
|
$
|
-
|
|||||
Leases
|
90,504
|
90,504
|
-
|
-
|
|||||||||
Employment
Contracts
|
427,500
|
285,000
|
142,500
|
-
|
|||||||||
Total
|
$
|
570,310
|
$
|
427,810
|
$
|
142,500
|
$
|
-
|
2005
|
2004
|
||||||
U.S.
federal statutory rate
|
35.00
|
%
|
35.00
|
%
|
|||
State
& local taxes
|
6.13
|
%
|
8.14
|
%
|
|||
Tax
on foreign operations
|
(10.68
|
)%
|
(6.19)
|
%
|
|||
Other
|
0.10
|
%
|
(0.81)
|
%
|
|||
Valuation
Allowance
|
(30.55)
|
%
|
(36.14)
|
%
|
|||
Effective
tax rate
|
0.00
|
%
|
0.00
|
%
|
2005
|
2004
|
||||||
Deferred
tax assets:
|
|||||||
Net
operating loss carryforwards
|
$
|
12,077,036
|
$
|
10,584,348
|
|||
Research
and development credits
|
745,141
|
651,498
|
|||||
Nonqualified
stock option compensation expense
|
1,130,179
|
969,779
|
|||||
Other
Temporary Book - Tax differences
|
52,968
|
(6,036
|
)
|
||||
Total deferred tax assets
|
14,005,324
|
12,199,589
|
|||||
Valuation
allowance for deferred tax assets
|
(14,005,324
|
)
|
(12,199,589
|
)
|
|||
Net
deferred tax assets
|
$
|
—
|
$
|
—
|
US
|
IRELAND
|
Total
|
|||||||||||||||||
2005
|
2004
|
2005
|
2004
|
2005
|
2004
|
||||||||||||||
Net
Operating Loss Carryforwards
|
$
|
24,579,888
|
$
|
22,030,079
|
$
|
4,836,445
|
$
|
2,692,672
|
$
|
29,416,333
|
$
|
24,722,751
|
|||||||
Net
Loss
|
$
|
2,872,981
|
$
|
5,540,679
|
$
|
2,595,196
|
$
|
2,055,801
|
$
|
5,468,177
|
$
|
7,596,480
|
a. |
In
April 2002, the Company issued convertible notes in the aggregate
principal amount of $250,000, pursuant to which the Company agreed
to pay
to each holder the principal amount due under such holder’s convertible
note, together with interest on the unpaid principal amount at the
rate of
6% per annum, compounded semi-annually, from the date of the convertible
note.
|
b. |
In
May 2003, the Company entered into a Commitment Agreement with a
holder of
more than 5% of the Company’s stock, pursuant to which, the Company agreed
to sell convertible bridge notes in the aggregate principal amount
of
$1,000,000 at face value. The outstanding principal amount of such
convertible bridge notes, together with interest at the rate of 6%
per
annum, would become due and payable on January 26, 2004. Pursuant
to the
Commitment Agreement, the Company offered the holders of its then
outstanding capital stock and convertible notes the opportunity to
invest
in a portion of the bridge notes pro rata, in accordance with the
number
of shares of common stock then held, or issuable upon conversion
of the
capital stock and convertible notes then held, by them. Under the
Commitment Agreement, such 5% holder had agreed to purchase additional
bridge notes, if and to the extent that the other security holders
elected
not to purchase their respective pro rata shares of the bridge notes,
thus
ensuring that the Company would sell exactly $1,000,000 in aggregate
principal amount of bridge notes. In June 2003, the Company sold
the
convertible bridge notes to twenty-three of the Company’s security
holders. Pursuant to the Commitment Agreement, the 5% holder had
the right
to elect whether he and the other holders would have the option to
convert
the bridge notes and purchase additional shares of series D convertible
preferred stock at any time prior to the earlier of (i) 10 days after
the
Company notified such 5% holder that the Company obtained a CE mark
on the
initial product and (ii) January 15, 2004. The Company received such
CE
mark on July 31, 2003 and promptly notified such 5% holder thereof.
On
August 1, 2003, the 5% holder elected to proceed with the conversion
and
purchase. As of September 11, 2003, each of the holders converted
its
bridge note into shares of series D convertible preferred stock at
a
conversion price equal to the liquidation preference of the series
D
convertible preferred stock, in accordance with the terms
thereof.
|
c.
|
The
Chairman of the Company’s Board is the Chairman of Columbia
University’s Department of Surgery. The Company licenses
the right to use approximately 2,678 square feet of office
space from the
Trustees of Columbia University. The term
of the license agreement is for one year through June 30,
2006 at a
monthly cost of $10,184, including monthly internet
access. The Company does not currently have any other material
relationship with Columbia
University.
|
3.1
|
|
Fourth
Amended and Restated Certificate of Incorporation of the Registrant.
(5)
|
3.2
|
|
Amended
and Restated By-laws of the Registrant. (1)
|
4.1
|
|
Specimen
of Common Stock Certificate of the Registrant. (1)
|
4.2
|
|
Form
of Underwriter’s Warrant. (1)
|
4.3
|
|
Form
of Convertible Promissory Note due August 7, 2002.
(1)
|
4.4
|
|
Form
of Senior Convertible Bridge Notes due 2004. (1)
|
4.5
|
|
Class
C Warrant for the Purchase of Shares of Common Stock, dated September
22,
2003, issued to Joseph Giamanco by the Registrant. (1)
|
4.6
|
|
Class
C Warrant for the Purchase of Shares of Common Stock, dated September
22,
2003, issued to George Hatsopoulous by the Registrant.
(1)
|
4.7
|
|
Stock
Purchase Warrant, dated June 19, 2002, issued to Plexus Services
Corp. by
the Registrant. (1)
|
4.8
|
|
Class
A Warrant for the Purchase of Shares of Common Stock, dated August
5,
2002, issued to Lancer Offshore, Inc. (1)
|
4.9
|
Warrant
for the purchase of shares of common stock dated January 18, 2006,
issued
to Marty Steinberg, Esq., as Court-appointed
Receiver for Lancer Offshore, Inc.
|
|
10.1
|
|
Amended
and Restated 2000 Nephros Equity Incentive Plan. (1)
(2)
|
10.2
|
|
2004
Nephros Stock Incentive Plan. (1) (2)
|
10.3
|
|
Form
of Subscription Agreement dated as of June 1997 between the Registrant
and
each Purchaser of Series A Convertible Preferred Stock.
(1)
|
10.4
|
|
Amendment
and Restatement to Registration Rights Agreement, dated as of May
17, 2000
and amended and restated as of June 26, 2003, between the Registrant
and
the holders of a majority of Registrable Shares (as defined therein).
(1)
|
10.5
|
|
Employment
Agreement dated as of November 21, 2002 between Norman J. Barta and
the
Registrant. (1) (2)
|
10.6
|
|
Amendment
to Employment Agreement dated as of March 17, 2003 between Norman
J. Barta
and the Registrant. (1) (2)
|
10.7
|
|
Amendment
to Employment Agreement dated as of May 31, 2004 between Norman J.
Barta
and the Registrant. (1) (2)
|
10.8
|
|
Form
of Employee Patent and Confidential Information Agreement.
(1)
|
10.9
|
|
Form
of Employee Confidentiality Agreement. (1)
|
10.10
|
|
Settlement
Agreement dated June 19, 2002 between Plexus Services Corp. and the
Registrant. (1)
|
10.11
|
|
Settlement
Agreement dated as of January 31, 2003 between Lancer Offshore, Inc.
and
the Registrant. (1)
|
10.12
|
|
Settlement
Agreement dated as of February 13, 2003 between Hermitage Capital
Corporation and the Registrant. (1)
|
10.13
|
|
License
Agreement dated as of July 1, 2003 between the Trustees of Columbia
University in the City of New York and the Registrant.
(1)
|
10.14
|
|
Form
of Transmittal Letter Agreement, dated as of April 28, 2004, between
each
holder of convertible promissory notes due August 7, 2002 and the
Registrant. (1)
|
10.15
|
|
Commitment
Agreement between Ronald Perelman and the Registrant, dated as of
May 30,
2003. (1)
|
10.16
|
|
Form
of Subscription Agreement between the Registrant and each purchaser
of
Senior Convertible Bridge Notes due 2004. (1)
|
10.17
|
|
Supply
Agreement between Nephros, Inc. and Membrana GmbH, dated as of December
17, 2003. (1) (3)
|
10.18
|
|
Employment
Agreement dated as of June 16, 2004 between Marc L. Panoff and the
Registrant. (1) (2)
|
10.19
|
|
Manufacturing
and Supply Agreement between Nephros, Inc. and Medica s.r.l., dated
as of
May 12, 2003. (1) (3)
|
10.20
|
|
License
Agreement dated as of July 1, 2005 between the Trustees of Columbia
University in the City of New York and the Registrant. (1)
|
10.21
|
HDF-Cartridge
License Agreement dated as of March 2, 2005 between Nephros, Inc.
and
Asahi Kasei Medical Co., Ltd. (4)
|
|
10.22
|
Subscription
Agreement dated as of March 2, 2005 between Nephros, Inc. and Asahi
Kasei
Medical Co., Ltd. (4)
|
|
10.23
|
Amendment
No. 1 to 2004 Nephros Stock Incentive Plan. (2) (5)
|
|
10.24
|
Non-employee
Director Compensation Summary. (2)
(6)
|
10.25
|
Named
Executive Officer Summary of Changes to Compensation. (2)
(6)
|
|
10.26
|
Stipulation
of Settlement Agreement between Lancer Offshore, Inc. and Nephros,
Inc.
approved on December 19, 2005.
|
|
10.27
|
Consulting
Agreement, dated as of January 11, 2006, between the Company and
Bruce
Prashker. (2)
|
|
10.28
|
Summary
of Changes to Chief Executive Officer’s Compensation.
(2)
|
|
10.29
|
Employment
Agreement, dated as of February 28, 2006, between the Company and
Mark W.
Lerner. (2)
|
|
10.30
|
Amended
Supply Agreement between Nephros, Inc. and Membrana GmbH dated as
of June
16, 2005. (3) (7)
|
|
10.31
|
Amended
Manufacturing and Supply Agreement between Nephros, Inc. and Medica
s.r.l., dated as of March 22, 2005. (3)
|
|
21.1
|
|
Subsidiaries
of Registrant.
|
23.1 | Consent of Deloitte & Touche LLP, dated as of April 18, 2006. | |
31.1
|
|
Certification
by the Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification
by the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification
by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
32.2
|
|
Certification
by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
(1)
|
Incorporated
by reference to Nephros, Inc.’s Registration Statement on Form S- 1, File
No. 333-116162.
|
(2)
|
Management
contract or compensatory plan arrangement.
|
(3)
|
Portions
omitted pursuant to a request for confidential
treatment.
|
(4)
|
Incorporated
by reference to Nephros, Inc.’s Report on Form 8-K Filed with the
Securities and Exchange Commission on March 3, 2005.
|
(5)
|
Incorporated
by reference to Nephros, Inc.’s Registration Statement on Form S-8 (No.
333-127264), as filed with the Securities and Exchange Commission
on
August 5, 2005.
|
(6)
|
Incorporated
by reference to Nephros, Inc.’s Quarterly Report on Form 10-QSB, filed
with the Securities and Exchange Commission on May 16,
2005.
|
(7)
|
Incorporated
by reference to Nephros, Inc.’s Quarterly Report on Form 10-QSB, filed
with the Securities and Exchange Commission on August 15,
2005.
|
|
|
|
|
|
|
|
|
|
NEPHROS
INC.
|
||||
|
|
|
|
|
|
|
Date:
April 19, 2006
|
|
By:
|
|
|
|
/s/
Norman J.
Barta
|
|
|
|
|
|
Norman
J. Barta
|
|
|
|
|
|
|
President
and Chief Executive Officer
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
Signature
|
Title
|
Date
|
|
/s/
Norman J
Barta
Norman
J. Barta
|
President,
Chief Executive Officer and Director (Principal Executive
Officer)
|
April
19, 2006
|
|
/s/
Mark W.
Lerner
Mark
W. Lerner
|
Chief
Financial Officer (Principal Financial Officer and Principal Accounting
Officer)
|
April
19, 2006
|
|
/s/
Eric A. Rose,
M.D.
Eric
A. Rose, M.D.
|
Chairman
of the Board of Directors and Director
|
April
19, 2006
|
|
/s/
Lawrence J.
Centella
Lawrence
J. Centella
|
Director
|
April
19, 2006
|
|
/s/
Donald G. Drapkin
Donald
G. Drapkin
|
Director
|
April
19, 2006
|
|
/s/
Howard
Davis
Howard
Davis
|
Director
|
April
19, 2006
|
|
/s
William J.
Fox
William
J. Fox
|
Director
|
April
19, 2006
|
|
/s/
Bernard Salick,
M.D.
Bernard
Salick, M.D.
|
Director
|
April
19, 2006
|
|
/s/
W. Townsend Ziebold, Jr.
W.
Townsend Ziebold, Jr.
|
Director
|
April
19, 2006
|