8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington D.C., 20549

Form 8-K

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date Of Report (Date Of Earliest Event Reported): April 26, 2007

NANOPHASE TECHNOLOGIES
CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Commission File Number: 0-22333

Delaware	36-3687863
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1319 Marquette Drive, Romeoville, Illinois 60446

(Address of Principal Executive Offices, Including Zip Code)

(630) 771-6700

(Registrant’s Telephone Number, Including Area Code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Press Release

Items to be Included in this Report

Item 2.02. Results of Operations and Financial Condition

      On April 26, 2007, the Company issued a press release announcing financial results for the quarterly fiscal period ended March 31, 2007. A copy of the press release is being furnished as Exhibit 99.1 to this report.

Item 9.01. Financial Statements and Exhibits

Exhibit 99.1 Press Release dated April 26, 2007

Signature(s)

      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 hereunto duly authorized.

	Nanophase Technologies Corporation
Date: April 26, 2007	By:	/s/ JESS JANKOWSKI
		JESS JANKOWSKI
		Chief Financial Officer

EX-99.1

Exhibit 99.1

NANOPHASE ANNOUNCES RECORD FIRST QUARTER REVENUE
Revenues Increase 45% and Gross Margin increases 46% Year-Over-Year

Romeoville, IL, April 26, 2007 — Nanophase Technologies (Nasdaq: NANX), a technology leader in nanomaterials and advanced nanoengineered products, announced that for the quarter ending March 31, 2007, total revenue was $2.9 million compared to $2.0 million for the first quarter of 2006. This represents 45% year-over-year revenue growth compared with first quarter 2006 and amounts to the highest quarterly revenue in the company’s history. The first quarter of 2007 is the company’s ninth consecutive quarter of record annual quarter-over-quarter revenue.

Nanophase also narrowed its losses compared with last year. Nanophase reported a first quarter 2007 net loss of $1.2 million, 51% of which was due to noncash items, or $0.06 per share (fully diluted), compared to $1.5 million, or $0.09 per share (fully diluted), in the first quarter of 2006. Measured as a percent of revenue, gross margin grew to 25%, compared to 17% in the first quarter of 2006, for an increase of 46% year-over-year. First quarter gross profit was $713,162 compared with $337,817 a year ago.

“During the quarter, we scaled and delivered eight new commercial volume nanomaterial dispersion products and developed and produced nine new nanomaterial dispersion products at the pilot plant stage, primarily for the industrial coatings and plastic markets,” noted Joseph Cross, Nanophase’s president and CEO. “We were able to expand product sales with several customers and believe that this trend should continue. To meet increased manufacturing requirements, we added over 10% to our manufacturing workforce to be able to meet delivery commitments and forecasted needs going forward.”

“Despite unusually high overtime expense in the first quarter, which was about four times normal, due to scale-up activities and training new personnel, Nanophase was able to grow gross margin on sales year-over-year. Increasing gross margin on sales is a key management goal for 2007-2008. We continue to be optimistic about revenue growth in 2007 and 2008 based on increases in industrial coatings and personal care, as well as throughout our product line.”

Nanophase has scheduled its quarterly conference call for April 26 at 4:00 CDT, 5:00 EDT, which will be hosted by Joseph Cross, president and CEO, and Jess Jankowski, CFO. The call may be accessed through the Company’s website, http://www.nanophase.com, and clicking on the link under Investor Relations and Calendar of Events. If you are unable to attend, a replay will be available through May 3, 2007 by dialing 706-645-9291 and entering code 5970400, or by logging onto the Company’s website and following the above directions.

Nanophase Technologies Corporation (NANX), www.nanophase.com, is a leader in nanomaterials technologies and provides nanoengineered solutions for multiple industrial product applications. Using a platform of patented and proprietary integrated nanomaterial technologies, the Company creates products with unique performance attributes from two ISO 9001:2000 and ISO 14001 facilities. Nanophase delivers commercial quantity and quality nanoparticles, coated nanoparticles, and nanoparticle dispersions in a variety of media. The Company owns or licenses 18 United States and 48 foreign patents and patent applications. Information about Nanophase may be found in the Company’s public filings or on its website.

This press release contains words such as “expects”, ”shall”, “will” , “believes” and similar expressions that are intended to identify forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such statements in this announcement are made based on the Company’s current beliefs, known events and circumstances at the time of publication, and as such, are subject in the future to unforeseen risks and uncertainties that could cause the Company’s results of operations, performance and achievements to differ materially from current expectations expressed in, or implied by, these forward-looking statements. These risk and uncertainties include the following: a decision by a customer to cancel a purchase order or supply agreement in light of the Company’s dependence on a limited number of key customers; uncertain demand for, and acceptance of, the Company’s nanocrystalline materials; the Company’s manufacturing capacity and product mix flexibility in light of customer demand; 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 in which the Company may become involved; and other risks described in the Company’s Form 10K filed March 14, 2007, and other filings with the Securities and Exchange Commission. In addition, the Company’s forward-looking statements could be affected by general industry and market conditions and growth rates. Except as required by federal securities laws, the Company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties or other contingencies. Based on the detailed financial statements accompanying this release, the Company’s results are stated in approximate terms herein with earnings per share as fully diluted.

NANOPHASE TECHNOLOGIES CORPORATION

BALANCE SHEETS
(Unaudited)

	March 31,			December 31,
	2007			2006
ASSETS
Current assets:
Cash and cash equivalents	$	967,731		$	132,387
Investments		6,430,275			8,434,793
Trade accounts receivable, less allowance for doubtful accounts of $22,000 on March 31, 2007 and December 31, 2006		1,455,313			1,459,391
Inventories, net		1,395,873			923,223
Prepaid expenses and other current assets		556,663			534,407
Total current assets		10,805,855			11,484,201
Equipment and leasehold improvements, net		7,500,448			7,608,326
Other assets, net		698,508			651,218
	$	19,004,811		$	19,743,745
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of capital lease obligations	$	40,294		$	32,972
Current portion of deferred other revenue		127,273			127,273
Accounts payable		906,823			478,694
Accrued expenses		1,375,689			1,643,585
Total current liabilities		2,450,079			2,282,524
Long-term debt, less current maturities and unamortized debt discount		1,414,414			1,383,707
Long-term portion of capital lease obligations		64,124			50,552
Deferred other revenue, less current portion		169,697			201,515
		1,648,235			1,635,774
Contingent liabilities:		—			—
Stockholders’ equity:
Preferred stock, $.01 par value, 24,088 shares authorized and no shares issued and outstanding		—			—
Common stock, $.01 par value, 30,000,000 shares authorized; 19,032,509 and 18,995,581 shares issued and outstanding on March 31, 2007 and December 31, 2006, respectively		190,325			189,956
Additional paid-in capital		78,685,670			78,380,962
Accumulated deficit		(63,969,498	)		(62,745,471	)
Total stockholders’ equity		14,906,497			15,825,447
	$	19,004,811		$	19,743,745

NANOPHASE TECHNOLOGIES CORPORATION

STATEMENTS OF OPERATIONS
(Unaudited)

	Three months ended
	March 31,
	2007			2006
Revenue:
Product revenue	$	2,794,141		$	1,918,046
Other revenue		112,296			87,522
Total revenue		2,906,437			2,005,568
Operating expense:
Cost of revenue		2,193,275			1,667,751
Gross Profit		713,162			337,817
Research and development expense		524,164			547,146
Selling, general and administrative expense		1,410,259			1,387,454
Loss from operations		(1,221,261	)		(1,596,783	)
Interest income		99,626			82,713
Interest expense		(33,047	)		(31,224	)
Other, net		(69,345	)		2,040
Loss before provision for income taxes		(1,224,027	)		(1,543,254	)
Provision for income taxes		—			—
Net loss	$	(1,224,027	)	$	(1,543,254	)
Net loss per share-basic and diluted	$	(0.06	)	$	(0.09	)
Weighted average number of basic and diluted common shares outstanding		19,005,846			17,993,237