SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

Lambda Investors LLC

(Last)

(First)

(Middle)

411 WEST PURNAM AVENUE

SUITE 125

(Street)

GREENWICH

06830

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
NEPHROS INC [ NEP ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	X	10% Owner
	Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
03/10/2011

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

	Form filed by One Reporting Person
X	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock, par value $0.001 per share	03/10/2011		A		3,009,711⁽¹⁾⁽²⁾	A	$0⁽¹⁾⁽²⁾	3,728,792⁽²⁾⁽³⁾	I	Held directly by Lambda Investors LLC

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock Warrants (right to buy)	$0.4⁽¹⁾⁽²⁾	03/10/2011		A		60,194,226⁽¹⁾⁽²⁾		03/10/2011	03/09/2016	Common Stock, par value $0.001 per share	2,782,578⁽¹⁾⁽²⁾	$0⁽¹⁾⁽²⁾	60,194,226⁽¹⁾⁽²⁾⁽³⁾	I	Held directly by Lambda Investors LLC
Class D Common Stock Warrants (right to buy)	$0.4⁽⁴⁾⁽⁵⁾	03/10/2011		D			0⁽⁴⁾⁽⁵⁾	11/14/2007	11/14/2012⁽⁴⁾⁽⁵⁾	Common Stock, par value $0.001 per share	7,372,749⁽⁴⁾⁽⁵⁾	$0⁽⁴⁾⁽⁵⁾	0⁽³⁾⁽⁴⁾⁽⁵⁾	I	Held directly by Lambda Investors LLC
Class D Common Stock Warrants (right to buy)	$0.4⁽⁴⁾⁽⁵⁾	03/10/2011		D			0⁽⁴⁾⁽⁵⁾	⁽⁴⁾⁽⁵⁾	11/14/2012⁽⁴⁾⁽⁵⁾	Common Stock, par value $0.001 per share	8,806,575⁽⁴⁾⁽⁵⁾	$0⁽⁴⁾⁽⁵⁾	0⁽⁴⁾⁽⁵⁾	I	Held directly by Lambda Investors LLC
Class D Common Stock Warrants (right to buy)	$0.4⁽⁴⁾⁽⁵⁾	03/10/2011		A		0⁽⁴⁾⁽⁵⁾		⁽⁴⁾⁽⁵⁾	03/09/2016⁽⁴⁾⁽⁵⁾	Common Stock, par value $0.001 per share	8,806,575⁽⁴⁾⁽⁵⁾	$0⁽⁴⁾⁽⁵⁾	0⁽³⁾⁽⁴⁾⁽⁵⁾	I	Held directly by Lambda Investors LLC

1. Name and Address of Reporting Person^*

Lambda Investors LLC

(Last)

(First)

(Middle)

411 WEST PURNAM AVENUE

SUITE 125

(Street)

GREENWICH

06830

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

X	Director	X	10% Owner
	Officer (give title below)		Other (specify below)

1. Name and Address of Reporting Person^*

WEXFORD CAPITAL LP

(Last)

(First)

(Middle)

411 WEST PUTNAM AVENUE

SUITE 125

(Street)

GREENWICH

06830

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

1. Name and Address of Reporting Person^*

DAVIDSON CHARLES E

(Last)

(First)

(Middle)

411 WEST PURNAM AVENUE

SUITE 125

(Street)

GREENWICH

06830

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

1. Name and Address of Reporting Person^*

JACOBS JOSEPH

(Last)

(First)

(Middle)

411 WEST PUTNAM AVENUE

SUITE 125

(Street)

GREENWICH

06830

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

1. Name and Address of Reporting Person^*

Wexford GP LLC

(Last)

(First)

(Middle)

411 WEST PUTNAM AVENUE

SUITE 125

(Street)

GREENWICH

06830

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

Explanation of Responses:

1. On March 10, 2011, Lambda Investors LLC ("Lambda") purchased, pursuant to a purchase agreement (the "Purchase Agreement") with Nephros, Inc. (the "Issuer"), 60,194,226 units ("Units") for a purchase price of $0.02 per Unit. Each Unit consists of one share of common stock, par value $0.001 per share ("Common Stock"), of the Issuer and one warrant to purchase 0.924532845 shares of Common Stock at an exercise price of $0.02 per share until March 9, 2016. As a result of this transaction, Lambda acquired 60,194,226 shares of Common Stock and warrants to purchase 55,651,575 shares of Common Stock.

2. On March 11, 2011, the Issuer effected a 1-for-20 reverse stock split (the "Reverse Stock Split"). After giving effect to the Reverse Stock Split, the numbers of shares and warrants acquired by Lambda in the transaction described in Footnote 1 were automatically adjusted to 3,009,711 shares of Common Stock and warrants to purchase 2,782,578 shares of Common Stock at an exercise price of $0.40 per share.

3. The securities reported on this Form 4 are owned by Lambda. Wexford Capital LP ("Wexford Capital"), as managing member of Lambda, and Wexford GP LLC ("Wexford GP"), as general partner of Wexford Capital, may be deemed to beneficially own the reported securities. Charles E. Davidson ("Davidson"), the Chairman and a managing member of Wexford GP, and Joseph M. Jacobs ("Jacobs"), the President and a managing member of Wexford GP, may also be deemed to beneficially own the reported securities. Each of Wexford Capital, Wexford GP, Davidson and Jacobs disclaims beneficial ownership of the reported securities, and this report shall not be deemed to be an admission that any of Wexford Capital, Wexford GP, Davidson or Jacobs is the beneficial owner of the reported securities except in the case of Davidson and Jacobs to the extent of their respective interests in each member of Lambda.

4. On March 10, 2011, the Issuer completed a rights offering to its existing stockholders except Lambda which triggered the full-ratchet anti-dilution provisions of the Class D warrants ("Class D Warrants") to purchase Common Stock. As a result, the 7,190,811 Class D Warrants held by Lambda became exercisable for 323,586,495 shares of Common Stock at an exercise price of $0.02 per share. In connection with the rights offering and the Purchase Agreement, Lambda surrendered for cancellation Class D Warrants to purchase 147,454,988 shares of Common Stock (or 7,372,749 shares after giving effect to the Reverse Stock Split). After giving effect to the Reverse Stock Split and the anti-dilution provisions, Lambda's remaining Class D Warrants are exercisable for 8,806,575 shares of Common Stock at an exercise price of $0.40 per share.

5. In connection with the transactions described in Footnotes 1 and 4, the terms of the remaining Class D Warrants held by Lambda to purchase 8,806,575 shares of Common Stock (after giving effect to the Reverse Stock Split) were amended so that such remaining Class D Warrants expire on March 9, 2016, which is the same expiration date as the warrants issued in the rights offering and under the Purchase Agreement.

	/s/ Arthur Amron, Vice President and Assistant Secretary of Lambda Investors LLC	03/14/2011
	/s/ Arthur Amron, Vice President and Assistant Secretary of Wexford Capital LP	03/14/2011
	/s/ Charles E. Davidson	03/14/2011
	/s/ Joseph M. Jacobs	03/14/2011
	/s/ Arthur Amron, Vice President and Assistant Secretary of Wexford GP LLC	03/14/2011
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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