-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Aqk7j5lQtk42EvMpA6VodX79Ldk3HxS7Nc8bmdFIopObRxpC/sLEOaNETMCBAf3D 2NW1Ge8Dxli910yVvHoBqQ== 0000950131-01-502877.txt : 20010814 0000950131-01-502877.hdr.sgml : 20010814 ACCESSION NUMBER: 0000950131-01-502877 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NANOPHASE TECHNOLOGIES CORPORATION CENTRAL INDEX KEY: 0000883107 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS PRIMARY METAL PRODUCTS [3390] IRS NUMBER: 363687863 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22333 FILM NUMBER: 1706603 BUSINESS ADDRESS: STREET 1: 453 COMMERCE ST CITY: BURR RIDGE STATE: IL ZIP: 60521 BUSINESS PHONE: 6303231200 MAIL ADDRESS: STREET 1: 453 COMMERCE STREET CITY: BURR RIDGE STATE: IL ZIP: 60521 10-Q 1 d10q.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- Form 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended: June 30, 2001 Commission File Number: 0-22333 Nanophase Technologies Corporation (Exact name of registrant as specified in its charter) Delaware 36-3687863 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1319 Marquette Drive, Romeoville, Illinois 60446 (Address of principal executive offices, and zip code) Registrant's telephone number, including area code: (630) 771-6708 ---------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of August 10, 2001, there were outstanding 13,704,760 shares of common stock, par value $.01, of the registrant. NANOPHASE TECHNOLOGIES CORPORATION QUARTER ENDED JUNE 30, 2001 INDEX
Page ---- PART I - FINANCIAL INFORMATION............................................ 3 Item 1. Financial Statements............................................ 3 Balance Sheets as of June 30, 2001 (unaudited) and December 31, 2000............................................. 3 Statements of Operations (unaudited) for the three months ended June 30, 2001 and 2000 and the six months ended June 30, 2001 and 2000...................................................... 4 Statements of Cash Flows (unaudited) for the six months ended June 30, 2001 and 2000........................................ 5 Notes to Financial Statements (unaudited)....................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....................................... 8 Item 3. Quantitative and Qualitative Disclosures About Market Risk...... 10 PART II - OTHER INFORMATION............................................... 11 Item 1. Legal Proceedings............................................... 11 Item 2. Changes in Securities and Use of Proceeds....................... 11 Item 4. Submissions of Matters to a Vote of Security Holders............ 11 Item 5. Other Information............................................... 12 Item 6. Exhibits and Reports on Form 8-K................................ 12 SIGNATURES................................................................ 13
2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements NANOPHASE TECHNOLOGIES CORPORATION BALANCE SHEETS
June 30, December 31, 2001 2000 ------------- ------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents................................................. $ 995,065 $ 473,036 Investments............................................................... 11,784,333 16,831,721 Trade accounts receivable, less allowance for doubtful accounts 1,238,334 of $200,000 at June 30, 2001 and $81,450 at December 31, 2000........... 541,546 Other receivable, net..................................................... 93,466 144,818 Inventories, net.......................................................... 2,034,359 892,674 Prepaid expenses and other current assets................................. 691,151 770,200 ----------- ------------ Total current assets.................................................... 16,139,920 20,350,783 Equipment and leasehold improvements, net................................... 6,697,507 3,266,245 Other assets, net........................................................... 263,310 213,135 ----------- ------------ $23,100,737 $ 23,830,163 =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings..................................................... $ 308,707 $ 285,316 Accounts payable.......................................................... 1,583,283 824,338 Accrued expenses.......................................................... 887,969 884,780 ----------- ------------ Total current liabilities............................................... 2,779,959 1,994,434 Long-term debt............................................................ 1,433,667 827,984 Contingent liabilities...................................................... - - Stockholders' equity: Preferred stock, $.01 par value, 24,088 shares authorized and no shares issued and outstanding.......................................... - - Common stock, $.01 par value, 25,000,000 shares authorized; 13,699,760 and 13,593,914 shares issued and outstanding at June 30, 2001 and December 31, 2000, respectively....................................... 136,998 135,939 Additional paid-in capital.................................................. 50,170,062 49,885,751 Accumulated deficit......................................................... (31,419,949) (29,013,945) ----------- ------------ Total stockholders' equity................................................ 18,887,111 21,007,745 ----------- ------------ $23,100,737 $ 23,830,163 =========== ============
See Notes to Financial Statements. 3 NANOPHASE TECHNOLOGIES CORPORATION STATEMENTS OF OPERATIONS (Unaudited)
Three months ended June 30, Six months ended June 30, --------------------------------------- ---------------------------------------- 2001 2000 2001 2000 ---------------- ------------------ ------------------ ----------------- Revenue: Product revenue...................... $ 957,314 $ 1,000,836 $ 1,937,489 $ 1,488,007 Other revenue........................ 92,065 104,500 183,815 236,250 --------------- ----------------- ----------------- ---------------- Total revenue...................... 1,049,379 1,105,336 2,121,304 1,724,257 Operating expense: Cost of revenue...................... 1,006,749 1,305,233 1,857,122 2,123,985 Research and development expense..... 362,519 452,950 800,189 1,042,612 Selling, general and administrative expense............................. 1,090,995 899,435 2,226,949 1,827,725 --------------- ----------------- ----------------- ---------------- Total operating expense............ 2,460,263 2,657,618 4,884,260 4,994,322 --------------- ----------------- ----------------- ---------------- Loss from operations................... (1,410,884) (1,552,282) (2,762,956) (3,270,065) Interest income........................ 124,164 299,515 356,952 582,739 --------------- ----------------- ----------------- ---------------- Net loss............................... $ (1,286,720) $ (1,252,767) $ (2,406,004) $ (2,687,326) =============== ================= ================= ================ Net loss per share- basic and diluted.. $ (0.09) $ (0.09) $ (0.18) $ (0.20) =============== ================= ================= ================ Weighted average number of common shares outstanding.................... 13,643,771 13,451,344 13,628,562 13,230,156 =============== ================= ================= ================
See Notes to Financial Statements. 4 NANOPHASE TECHNOLOGIES CORPORATION STATEMENTS OF CASH FLOWS (Unaudited)
Six months ended June 30, ----------------------------------- 2001 2000 ------------ ------------ Operating activities: Net loss.............................................................. $ (2,406,004) $ (2,687,326) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization.................................. 379,755 355,998 Allowance for excess inventory quantities...................... (12,172) (60,768) Provision for asset write-down................................. 14,086 - Changes in assets and liabilities related to operations: Trade accounts receivable...................................... 696,788 (752,430) Other receivable............................................... 51,352 (365,121) Inventories.................................................... (1,129,513) (123,267) Prepaid expense and other assets............................... 25,072 (43,956) Accounts payable............................................... 758,945 191,122 Accrued liabilities............................................ 3,189 118,276 ------------ ------------ Net cash used in operating activities................................. (1,618,502) (3,367,472) Investing activities: Acquisition of equipment and leasehold improvements................... (3,821,301) (180,698) Purchases of held-to-maturity investments............................. (36,035,911) (38,323,803) Maturities of held-to-maturity investments............................ 41,083,299 40,754,599 ------------ ------------ Net cash provided by investing activities............................. 1,226,087 2,250,098 Financing activities: Principal payment on debt obligation.................................. (153,259) - Proceeds from borrowing............................................... 782,333 - Proceeds from sale of common stock.................................... 285,370 997,646 ------------ ------------ Net cash provided by financing activities............................. 914,444 997,646 ------------ ------------ Increase (decrease) in cash and cash equivalents...................... 522,029 (119,728) Cash and cash equivalents at beginning of period...................... 473,036 624,509 ------------ ------------ Cash and cash equivalents at end of period............................ $ 995,065 $ 504,781 ============ ============
See Notes to Financial Statements. 5 NANOPHASE TECHNOLOGIES CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) (1) Basis of Presentation The accompanying unaudited interim financial statements of Nanophase Technologies Corporation (the "Company") reflect all adjustments (consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation of the financial position and operating results of the Company for the interim periods presented. Operating results for the three and six month periods ended June 30, 2001 are not necessarily indicative of the results that may be expected for the year ended December 31, 2001. These financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 2000, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000, as filed with the Securities and Exchange Commission. (2) Description of Business The Company was incorporated on November 30, 1989, for the purpose of developing nanocrystalline materials for commercial production and sale in domestic and international markets. In the course of its corporate development, the Company has experienced net losses and negative cash flows from operations. Historically, the Company has funded its operations primarily through the issuance of equity securities. Revenue from international sources approximated $625,000 and $267,500 for the six months ended June 30, 2001 and 2000, respectively. (3) Investments Investments are classified by the Company at the time of purchase for appropriate designation and such designations are reevaluated as of each balance sheet date. Investments are classified as held-to maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to maturity securities are stated at amortized costs and are adjusted to maturity for the amortization of premiums and accretion of discounts. Such adjustments for amortization and accretion are included in interest income. (4) Inventories Inventories consist of the following:
June 30, 2001 December 31, 2000 --------------- ------------------- Raw materials........................................... $ 307,462 $ 328,786 Finished goods.......................................... 1,806,313 655,475 --------------- ------------------- 2,113,775 984,261 Allowance for excess inventory quantities............... (79,416) (91,587) --------------- ------------------- $ 2,034,359 $ 892,674 =============== ===================
6 NANOPHASE TECHNOLOGIES CORPORATION NOTES TO FINANCIAL STATEMENTS - (Continued) (Unaudited) (5) Stock Options and Warrants During the six months ended June 30, 2001, 99,041 shares of Common Stock were issued pursuant to exercises of stock options, compared to 319,092 shares of Common Stock in the same period in 2000. In the same six-month period in 2000, 372,579 shares of Common Stock were issued pursuant to exercises of warrants. (6) Contingent Liabilities Five separate complaints were filed in the United States District Court for the Northern District of Illinois, each alleging that the Company, certain of its officers and directors, and the underwriters of the Company's initial public offering of Common Stock ("the Offering") were liable under the federal Securities Act of 1933 for making supposedly negligent or reckless material misstatements or omissions of fact in the Registration Statement and Prospectus relating to the Offering. A consolidated complaint was filed in those cases in October 1998. The consolidated complaint alleged that the action should be maintained as (i) a plaintiff class action on behalf of certain persons who purchased the Common Stock from November 26, 1997 through January 8, 1998, and (ii) a defendant class action against the underwriters who participated in the Offering. The consolidated complaint sought unquantified damages, pre- and post- judgment interest, attorneys'and expert witness fees. After the Court granted in part and denied in part certain motions to dismiss the consolidated complaint, each defendant filed its respective answer to the remaining claims in the consolidated complaint in November 1999. Following certain discovery, the Company agreed to settle all claims against all defendants in the consolidated complaint for $4,025,000. The settlement is not an admission of liability by any party. Because the settlement has been funded by the Company's directors and officers liability insurance, the settlement payment has not had a material adverse effect on the Company's financial condition or results of operations. The Court ordered final approval of the settlement and dismissed the consolidated complaint with prejudice as to all defendants on March 27, 2001. The above-described settlement did not resolve a separate complaint filed in the Northern District of Illinois in November 1998, alleging that the Company, certain of its officers and directors, and the underwriters of the Company's Offering are liable under the federal Securities Exchange Act of 1934 for making supposedly fraudulent material misstatements and omissions of fact in connection with the solicitation of consents to proceed with the Offering from certain of the Company's preferred stockholders. The complaint alleges that the action should be maintained as a plaintiff class action on behalf of certain former preferred stockholders whose shares of preferred stock were converted into Common Stock on or about the date of the Offering. The complaint seeks unquantified damages, pre- and post-judgment interest, attorneys' and expert witness fees. After the Court denied defendants' joint motion to dismiss, each defendant filed its respective answer to the preferred stockholders' complaint in September 2000. Upon completing certain discovery, the Company recently reached an oral agreement in principle to settle all claims against all defendants in the preferred stockholders' complaint for $800,000, including 7 up to an additional $50,000 for the cost of settlement administration. The Company anticipates that the settlement will be funded by the Company's directors and officers liability insurance, and that the settlement payment therefore will not have a material adverse effect on the Company's financial condition or results of operations. The tentative settlement is subject both to the parties preparing and signing a definitive Stipulation of Settlement, and to subsequent submission of that formal Stipulation to the Court for preliminary and final approval. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Since January 1, 1997, Nanophase Technologies Corporation (the "Company") has been engaged in the commercial production and sale of its nanocrystalline materials. All of the Company's revenue since January 1, 1997 has been generated through commercial sources. From its inception in November 1989 through June 30, 2001, the Company was primarily capitalized through the private offering of approximately $19,558,000 of equity securities and its initial public offering of $28,838,000 of the Company's common stock (the "Common Stock"), each net of issuance costs. The Company has incurred cumulative losses of $31,419,949 from inception through June 30, 2001. Results of Operations Product revenue is recorded when title transfers, other revenue is recorded when specific milestones are met regarding development arrangements or when the Company licenses its technology and transfers proprietary information. Total revenue decreased to $1,049,379 for the three months ended June 30, 2001, compared to $1,105,336 for the same period in 2000. Total revenue increased to $2,121,304 for the six months ended June 30, 2001, compared to $1,724,257 for the same period in 2000. Product revenue decreased to $957,314 for the three months ended June 30, 2001, compared to $1,000,836 for the same period in 2000. Product revenue increased to $1,937,489 for the six months ended June 30, 2001, compared to $1,488,007 for the same period in 2000. Increases in total product revenue were attributed to additional customers and growth with existing customers. Other revenue decreased to $92,065 and $183,815 for the three and six-month periods ended June 30, 2001, compared to $104,500 and $236,250 for the same periods in 2000. The majority of the revenue generated during the three and six months ended June 30, 2001 was from customers in the healthcare and catalyst markets. Cost of revenue generally includes costs associated with commercial production, customer development arrangements, the transfer of technology, and licensing fees. Cost of revenue decreased to $1,006,749 and $1,857,122 for the three and six months, respectively, ended June 30, 2001, compared to $1,305,233 and $2,123,985 for the same periods in 2000. The decrease in cost of revenue was generally attributed to anticipated manufacturing cost-saving measures being recognized fully in production in the second quarter of 2001 and a favorable product mix. Cost of revenue as a percentage of total revenue decreased for the three and six months, respectively, ended June 30, 2001, compared to the same period in 2000, due primarily to efficiencies gained in the manufacture of the Company's products as well as a more favorable product mix, specifically in the three months ended March 31, 2001. Research and development expense primarily consists of costs associated with the Company's development or acquisition of new product applications and coating formulations and the cost of enhancing the Company's manufacturing processes. Research and development expense decreased to $362,519 and $800,189 for the three and six months, respectively, ended June 30, 2001, compared to $452,950 and $1,042,612 for the same periods in 2000. The decrease in research and development expense was largely attributed to the capitalization of a portion of engineering salaries attributed to the 8 build out of the Company's new pilot manufacturing and powder coating facilities in the six months ended June 30, 2001, a reduction in fees and expenses paid to outside consultants in 2001, more research personnel being hired in this period in 2000, to whom the Company paid negotiated bonuses and recruiting and relocation costs, and fewer travel expenses being incurred for this period in 2001 than in the same period in 2000. Selling, general and administrative expense increased to $1,090,995 and $2,226,949 for the three and six-month periods, respectively, ended June 30, 2001, compared to $899,435 and $1,827,725 for the same periods in 2000. The net increase was primarily attributed to rent and associated expenses relating to the Company's new facility, bad debt expense related to an estimated reserve for a portion of a customer's account currently under negotiation, insurance, and printing costs. These increases were somewhat offset by reductions in legal expenses and expenditures for marketing and promotional materials. Interest income decreased to $124,164 and $356,952 for the three- and six-month periods, respectively, ended June 30, 2001, compared to $299,515 and $582,739 for the same periods in 2000. This decrease was primarily due to a reduction in funds available for investment and reduced investment yields. Liquidity and Capital Resources The Company's cash, cash equivalents and investments amounted to $12,779,398 at June 30, 2001, compared to $17,304,757 at December 31, 2000. The net cash used in the Company's operating activities was $1,618,502 for the six months ended June 30, 2001, compared to $3,367,472 for the same period in 2000. The net cash used in operating activities for the six-month period ended June 30, 2001 was primarily for the further development of product applications, the funding of research and development activities and sales efforts, and the funding of inventories, which was offset by an increase in accounts payable and a decrease in accounts receivable. Net cash provided by investing activities, which is due to maturities of securities largely offset by capital expenditures and purchases of securities, amounted to $1,226,087 for the six months ended June 30, 2001 compared to $2,250,098 of net cash provided by investing activities for the same period in 2000. Capital expenditures, primarily related to the build out of the Company's new pilot manufacturing and powder blending facilities within its Romeoville, Illinois facility and further expansion of the Company's existing manufacturing facility in Burr Ridge, Illinois and the purchase of related operating equipment, amounted to $3,821,301 for the six months ended June 30, 2001, compared to $180,698 for the same period in 2000. Net cash provided by financing activities, which related to a loan from a customer and other financing agreements, and the issuance of shares of Common Stock pursuant to the exercise of options, offset somewhat by principal payments on debt obligations, amounted to $914,444 for the six-month period ended June 30, 2001, compared to $997,646 for the same period in 2000. Net cash provided by financing activities for the same period in 2000 related only to the issuance of shares of Common Stock pursuant to the exercise of options and warrants. The Company believes that cash from operations and cash on hand, together with the remaining net proceeds from the Company's initial public offering of Common Stock ("the Offering") and interest income thereon, will be adequate to fund the Company's current operating plans. The Company's actual future capital requirements will depend, however, on many factors, including customer acceptance of the Company's current and potential nanocrystalline materials and product applications, continued progress in the Company's research and development activities and product testing programs, the magnitude of these activities and programs, and the costs necessary to increase and expand the Company's manufacturing capabilities and to market and sell the Company's materials and product applications. Depending on future requirements, the Company may seek additional funding through public or private 9 financing, collaborative relationships, government contracts or additional licensing agreements. Additional financing may not be available on acceptable terms or at all, and any such additional financing could be dilutive to the Company's stockholders. At June 30, 2001, the Company had a net operating loss carryforward of approximately $31.4 million for income tax purposes. Because the Company may have experienced "ownership changes" within the meaning of the U.S. Internal Revenue Code in connection with its various prior equity offerings, future utilization of this carryforward may be subject to certain limitations as defined by the Internal Revenue Code. If not utilized, the carryforward expires at various dates between 2005 and 2015. As a result of the annual limitation, a portion of this carryforward may expire before ultimately becoming available to reduce income tax liabilities. At June 30, 2001, the Company also had a foreign tax credit carryforward of $186,000, which could be used as an offsetting tax credit to reduce U.S. income taxes. The foreign tax credit will expire in 2016 if not utilized before that date. Legal Proceedings See Note 6 to the Financial Statements for additional information. Safe Harbor Provision Because the Company wants to provide investors with more meaningful and useful information, the Quarterly Report on Form 10-Q contains certain "forward- looking statements" (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended). Statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect the Company's current expectations regarding its future results of operations, performance, and achievements and are based on information currently available to the Company. The Company has tried, wherever possible, to identify these forward-looking statements by using words such as "intends," "believes," "estimates," "expects," "plans," and similar expressions. These statements are subject to certain risks, uncertainties, and factors which could cause the Company's actual results, performance, and achievements in 2001 and beyond to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, and factors include, without limitation: uncertain demand for, and acceptance of, the Company's nanocrystalline materials; the Company's dependence on a limited number of key customers; the Company's limited manufacturing capacity and experience; the Company's limited marketing experience; changes in development and distribution relationships; the impact of competitive products and technologies; the Company's dependence on patents and protection of proprietary information; the resolution of litigation the Company is involved in; and other risks set forth in the Company's previous filings with the Securities and Exchange Commission. Readers of this Quarterly Report on Form 10-Q should not place undue reliance on any forward-looking statements. Except as required by federal securities laws, the Company undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company is exposed to interest rate risk on its investment portfolio. A 1% fluctuation in interest rate would result in a change in the portfolio earnings of approximately $130,000 per year. 10 PART II - OTHER INFORMATION Item 1. Legal Proceedings See Note 6 to the Financial Statements for additional information. Item 2. Changes in Securities and Use of Proceeds On November 26, 1997 (the "Effective Date"), the Company's Registration Statement on Form S-1 (File No. 333-36937) relating to the Offering was declared effective by the Securities and Exchange Commission. Since the Effective Date, of its $28,837,936 of net proceeds from the Offering, the Company has used approximately $6,619,000 for capital expenditures primarily related to the further expansion of the Company's existing manufacturing facility and the purchase of operating equipment and approximately $9,439,000 for working capital and other general corporate purposes. The remainder of the net proceeds has been invested by the Company, pending its use, in short-term, investment grade, interest-bearing obligations. Item 4. Submissions of Matters to a Vote of Security Holders. a) The 2001 Annual Meeting of Stockholders of the Company was held on June 5, 2001. b) The stockholders voted to re-elect one Class I director to the Company's Board of Directors. Results of the voting were as follows:
Directors For Authority Withheld Abstentions Broker Non-Votes --------- --- ------------------ ----------- ---------------- James A. McClung, Ph.D 12,370,761 132,119 - -
Edward E. Hagenlocker, Ph.D. chose not to run for re-election to the Company's Board of Directors. Joseph E. Cross, Jerry K. Pearlman, Donald S. Perkins, and Richard W. Siegel, Ph.D. continued their terms of office as directors of the Company after the 2001 Annual Meeting of Stockholders. c) The stockholders also voted to ratify the appointment by the Company's Board of Directors of Ernst & Young LLP as the independent auditors of the Company's financial statements for the year ended December 31, 2001. Results of the voting were as follows:
For Against Abstentions Broker Non-Votes --- ------- ----------- ---------------- 12,289,120 111,360 102,400 -
d) The stockholders also voted to approve the adoption of the Nanophase Technologies Corporation 2001 Equity Compensation Plan. Results of the voting were as follows:
For Against Abstentions Broker Non-Votes --- ------- ----------- ---------------- 5,715,278 740,763 38,531 6,008,308
11 Item 5. Other Information On July 10, 2001, the Company's Board of Directors appointed James A. Henderson as a Class I Director of the Company. Item 6. Exhibits and Reports on Form 8-K A. Exhibits. Exhibit 4.5 -- Amendment to Rights Agreement dated August 1, 2001 between the Company and LaSalle National Association as Rights Agent. B. Reports on Form 8-K. The Company did not file any Current Reports on Form 8-K during the second quarter of 2001. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NANOPHASE TECHNOLOGIES CORPORATION Date: August 13, 2001 By: /s/ JOSEPH E. CROSS ------------------- Joseph E. Cross President, Chief Executive Officer (principal executive officer) and a Director Date: August 13, 2001 By: /s/ JESS A. JANKOWSKI --------------------- Jess A. Jankowski Acting Chief Financial Officer, Corporate Controller, Secretary, and Treasurer (principal financial and accounting officer) 13 EX-4.5 3 dex45.txt AMENDMENT TO RIGHTS AGREEMENT Exhibit 4.5 AMENDMENT TO RIGHTS AGREEMENT THIS AMENDMENT TO RIGHTS AGREEMENT (this "Amendment") is made this 1st day of August, 2001 by Nanophase Technologies Corporation (the "Company") and LaSalle National Bank, as Rights Agent (the "Rights Agent") under that certain Rights Agreement dated October 28, 1998 (the "Rights Agreement") between the Company and the Rights Agent. This Amendment only amends certain portions of the Rights Agreement and is effective as of 12:00 p.m. (Eastern Time), August 1, 2001. All provisions of the Rights Agreement which are not amended by this Amendment shall remain in full force and effect. 1. Section 1(a) of the Rights Agreement is hereby amended by deleting the word "15%" in each place that it appears in such section and replacing it with the word "20%". In addition, any corresponding reference to a term defined in such Section 1(a) shall be similarly amended. It is the intent of the Company and the Rights Agent that the 15% ownership threshold referenced in such Section 1(a) be increased to 20%. Accordingly, any provision of the Rights Agreement inconsistent with such purpose is hereby also amended. 2. Except as specifically set forth herein, all other terms and conditions as set forth in the Rights Agreement shall remain in full force and effect, and are not otherwise amended, altered, modified, or revised. 3. This document may be executed in one or more counterparts, each of which so executed and delivered shall be deemed an original, but all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day and year first above written. Nanophase Technologies Corporation LaSalle National Association as Rights Agent By: /s/ Jess Jankowski By: /s/ Gregory Malatia ----------------------------- -------------------------------- Jess Jankowski, Secretary Name: Gregory Malatia Its: First Vice President -----END PRIVACY-ENHANCED MESSAGE-----