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): August 6, 2020  

NANOPHASE TECHNOLOGIES CORPORATION
(Exact Name of Registrant as Specified in Charter)

Delaware	0-22333	36-3687863
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

1319 Marquette Drive, Romeoville, Illinois 60446

(Address of Principal Executive Offices) (Zip Code)

(630) 771-6700
(Registrant's telephone number, including area code)

Not applicable
(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:
	[   ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	[   ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	[   ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	[   ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	NANX	OTCQB

Item 2.02. Results of Operations and Financial Condition.

On August 6, 2020, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated August 6, 2020

SIGNATURE

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: August 6, 2020	By:	/s/ Jess Jankowski
		Jess Jankowski
		Chief Executive Officer

EX-99.1 2 exh_991.htm PRESS RELEASE

EXHIBIT 99.1

Nanophase Reports Record Second Quarter 2020 Financial Results

Announces 32% Growth for Quarter, 20% Year-Over-Year, Doubling of Formulated Product Sales and YTD Profitability

ROMEOVILLE, Ill., Aug. 06, 2020 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (OTCQB: NANX), a leader in minerals-based personal care ingredients and formulated products for protecting skin from environmental aggressors, such as UV light and pollution, today reported financial results for the first quarter and six-month periods ended June 30, 2020. 

“The current environment we are working through has offered opportunity along with the health challenges we all share. We have grown our Solésence business rapidly and, driven by Covid-19-related applications, our medical diagnostics materials are selling at a record pace. Looking at our three key business areas over the six month period, we have seen our Solésence and Advanced Materials businesses grow significantly, offset by a reduction in our Personal Care Ingredients business due to soft demand for sunscreens, which we believe to be influenced by the global reaction to Covid-19,” commented Jess Jankowski, President and CEO. 

Second Quarter and YTD 2020 Financial Highlights

• Revenue for the second quarter was $4.3 million, vs. $3.3 million for the same period in 2019. Revenue for the six-month period was $8.4 million vs. $7.0 million for the same period in 2019.

For the six-month period of 2020:

- Solésence revenue was $2.8 million, up 120% from $1.3 million in 2019
- Advanced Materials revenue was $2.1 million, up 31% from $1.6 million in 2019
- Personal Care Ingredients revenue was $3.4 million, down 17% from $4.1 million in 2019

• Net income for the quarter was $0.5 million in 2020, or $0.01 per share, compared to a net loss of $0.6 million, or $0.02 per share, for 2019. Net income for the six-month period was $0.4 million in 2020, or $0.01 per share, compared to a net loss of $1.2 million, or $0.03 per share, for 2019. We note that the PPP funding we received in the second quarter of 2020 is recorded on the balance sheet as a liability and has not had any impact on our income statement to date.

• The Company finished the quarter with approximately $1.8 million in cash and cash equivalents.

Jankowski continued, ”The growth we are seeing in our Solésence business is exciting. Six clients make up 90% of the $2.8 million in first half revenue, with our two largest Solesence clients expected to exceed $1 million in revenue this year. Our Advanced Materials business has seen growth driven by the current expanded medical testing requirements related to the Covid-19 pandemic. Our material is used in a testing regime that is applicable to identifying a series of viruses, and while not predictable going forward, we believe this business will remain strong, even if not at current levels.” 

Jankowski continued, “In terms of our expectations through 2020, we have reasonable visibility through November. We are expecting second half volume to remain strong compared to last year, driven by the continued expansion of our Solésence business and demand for our medical diagnostics materials, offset by diminished Personal Care Ingredients sales, which we believe has been impacted by both the Covid-19 pandemic and typical North American seasonality.

“Looking at our gross profits and bottom line growth, we can see the results of the operational and strategic changes we’ve made to our organization to reduce costs and increase efficiency. We expect these efforts to continue to improve our profitability over the next year.

“We continue to operate as an essential service, with our main concern being to protect our employees, their families, and our community during this disruption,” added Jankowski. “We continue to take necessary precautions, while manufacturing products that are critical to global Covid-19 testing, as well as skin health. We are both honored and proud to be able to contribute to our national public health, economic security, and safety through the materials we make for use in medical diagnostics.” 

Use of Non-GAAP Financial Information
Nanophase believes that the presentation of results excluding certain items, such as non-cash equity compensation charges, provides meaningful supplemental information to both management and investors, facilitating the evaluation of performance across reporting periods. The Company uses these non-GAAP measures for internal planning and reporting purposes. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or net income per share prepared in accordance with generally accepted accounting principles.

About Nanophase Technologies
Nanophase Technologies Corporation (NANX), www.nanophase.com, is a leader in minerals-based personal care ingredients and formulated products for protecting skin from environmental aggressors, such as UV light and pollution, as well as providing solutions for medical diagnostic and industrial product applications. Using a platform of patented and proprietary integrated technologies, the Company creates products with unique performance attributes from two ISO 9001 and ISO 14001 registered facilities. Nanophase delivers commercial quantity and quality engineered materials both as ingredients, and as part of fully formulated products, in a variety of formats. 

Forward-Looking Statements
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 risks and uncertainties include, without limitation, 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; the impact of any potential new government regulations that could be difficult to respond to or too costly to comply with while remaining financially viable; the ability of the Company to maintain an appropriate electronic trading venue; and other factors described in the Company’s Form 10-K filed March 30, 2020. 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.

NANOPHASE TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited Consolidated Condensed)
			June 30,			December 31,
ASSETS				2020			2019
Current assets:
	Cash and cash equivalents		$	1,773,322		$	1,193,994
	Trade accounts receivable, less allowance for doubtful accounts
		of $9,000 on June 30, 2020 and on December 31, 2019		2,210,108			970,472
	Inventories, net			2,457,441			2,553,620
	Prepaid expenses and other current assets			560,792			266,587
		Total current assets		7,001,663			4,984,673
	Equipment and leasehold improvements, net			2,362,119			2,255,158
	Operating lease right-of-use assets			2,003,839			2,118,883
	Other assets, net			11,406			12,528
			$	11,379,027		$	9,371,242
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Line of credit, bank		$	500,000		$	500,000
	Line of credit, related party			1,488,759			223,871
	Current portion of long-term debt, related party			500,000			500,000
	Current portion of finance lease obligations			195,728			218,345
	Current portion of operating lease obligations			392,690			356,949
	Accounts payable			1,319,764			1,748,021
	Current portion of deferred revenue			304,595			482,349
	Accrued expenses			506,925			379,314
		Total current liabilities		5,208,461			4,408,849
	Long-term portion of finance lease obligations			194,179			287,660
	Long-term portion of operating lease obligations			1,876,201			2,034,592
	Long-term convertible loan, related party			963,467			829,721
	PPP SBA Loan			951,600			-
	Long-term portion of deferred revenue			-			92,750
	Asset retirement obligations			210,238			206,221
		Total long-term liabilities		4,195,685			3,450,944
Stockholders' equity:
	Preferred stock, $.01 par value, 24,088 shares authorized and
		no shares issued and outstanding		-			-
	Common stock, $.01 par value, 55,000,000 shares authorized; 38,136,792 and 33,911,792
		shares issued and outstanding on June 30, 2020 and December 31, 2019, respectively		381,368			381,368
	Additional paid-in capital			101,984,959			101,886,411
	Accumulated deficit			(100,391,446	)		(100,756,330	)
		Total stockholders' equity		1,974,881			1,511,449
			$	11,379,027		$	9,371,242

NANOPHASE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited Consolidated Condensed)
				Three months ended					Six months ended
				June 30,					June 30,
					2020		2019			2020		2019
Revenue:
	Product revenue, net			$	4,141,090	$	3,257,175		$	8,102,578	$	6,753,908
	Other revenue				194,321		36,310			272,230		294,708
		Net revenue			4,335,411		3,293,485			8,374,808		7,048,616
Operating expense:
	Cost of revenue				2,624,174		2,462,062			5,629,020		5,332,723
		Gross profit			1,711,237		831,423			2,745,788		1,715,893
	Research and development expense				358,294		485,321			730,904		961,848
	Selling, general and administrative expense				698,199		943,571			1,403,807		1,821,054
Income/(Loss) from operations					654,744		(597,469	)		611,077		(1,067,009	)
Interest income					-		-			-		-
Interest expense					122,403		50,039			246,193		93,143
Other, net					-		-			-		-
Income/(Loss) before provision for income taxes					532,341		(647,508	)		364,884		(1,160,152	)
Provision for income taxes					-		-			-		-
Net income/(loss)				$	532,341	$	(647,508	)	$	364,884	$	(1,160,152	)
Net income/(loss) per basic shares				$	0.01	$	(0.02	)	$	0.01	$	(0.03	)
Weighted average number of basic common
	shares outstanding				36,136,792		36,136,759			36,136,792		35,030,422
NANOPHASE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE
(Unaudited Consolidated Condensed)
				Three months ended					Six months ended
				June 30,					June 30,
					2020		2019			2020		2019
Revenue:
	Product revenue, net			$	4,141,090	$	3,257,175		$	8,102,578	$	6,753,908
	Other revenue				194,321		36,310			272,230		294,708
		Net revenue			4,335,411		3,293,485			8,374,808		7,048,616
Operating expense:
	Cost of revenue detail:
	Depreciation				72,862		60,396			144,006		119,882
	Non-Cash equity compensation				9,007		12,280			18,660		20,312
	Other costs of revenue				2,542,305		2,389,386			5,466,354		5,192,529
		Cost of revenue			2,624,174		2,462,062			5,629,020		5,332,723
			Gross profit		1,711,237		831,423			2,745,788		1,715,893
	Research and development expense detail:
	Depreciation				10,499		12,444			21,176		24,449
	Non-Cash equity compensation				14,274		11,979			28,867		26,392
	Other research and development expense				333,521		460,898			680,861		911,007
		Research and development expense			358,294		485,321			730,904		961,848
	Selling, general and administrative expense detail:
	Depreciation and amortization				5,034		5,350			10,154		10,789
	Non-Cash equity compensation				23,734		33,907			51,021		68,668
	Other selling, general and administrative expense				669,431		904,314			1,342,632		1,741,597
		Selling, general and administrative expense			698,199		943,571			1,403,807		1,821,054
Income/(Loss) from operations					654,744		(597,469	)		611,077		(1,067,009	)
Interest income					-		-
Interest expense					122,403		50,039			246,193		93,143
Other, net					-		-
Income/(Loss) before provision for income taxes					532,341		(647,508	)		364,884		(1,160,152	)
Provision for income taxes					-		-			-		-
Net income/(loss)				$	532,341	$	(647,508	)	$	364,884	$	(1,160,152	)
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):
	Addback Interest, net				122,403		50,039			246,193		93,143
	Addback Depreciation/Amortization				88,395		78,190			175,336		155,120
	Addback Non-Cash Equity Compensation				47,015		58,166			98,548		115,372
	Adjusted EBITDA			$	790,154	$	(461,113	)	$	884,961	$	(796,517	)

COMPANY CONTACT
Investor Relations
630-771-6700

EX-99.1

EdgarFiling