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 27, 2006

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:

¨  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(17CFR240.14a-12)

¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17CFR240.14d-2(b))

¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17CFR240.13e-4(c))

Items to be Included in this Report

Item 2.02. Results of Operations and Financial Condition

On April 27, 2006, the Corporation issued a press release announcing financial results for the quarterly fiscal period ended March 31, 2006. A copy of the press release is being furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01. Financial Statements and Exhibits

Exhibit 99.1 Press Release dated April 27, 2006

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 27, 2006	By:	/s/    JOSEPH CROSS
		JOSEPH CROSS Chief Executive Officer

EX-99.1

Exhibit 99.1

NANOPHASE TECHNOLOGIES ANNOUNCES RECORD FIRST QUARTER REVENUE

24% Year-Over-Year Revenue Growth

Romeoville, IL, April 27, 2006 – Nanophase Technologies (Nasdaq: NANX), a technology leader in nanomaterials and advanced nanoengineered products, announced the highest first quarter revenue in the Company’s history. Based on the financial data accompanying this release, the Company’s results are stated approximately as follows.

For the quarter ending March 31, 2006, total revenue increased to $2 million compared to $1.6 million in the first quarter of 2005, representing a 24% revenue increase year-over-year. Nanophase reported a first quarter net loss of $1.5 million, or $0.09 per share, compared with a net loss of $1.4 million, or $0.08 per share, in the first quarter of 2005. Nanophase noted that the first quarter of 2006 was negatively impacted by noncash charges of $300,000, or $0.02 per share, for option compensation expense under new accounting rules and a one time expense for discontinuing patent applications that are no longer of business value due to recent advances in the Company’s technologies. The Company also noted that despite rapidly escalating world commodity costs during the first quarter, gross profit on product sales increased to 13% of product sales versus 5% in the same period of 2005.

“First quarter revenue marks a solid start to 2006 and continues the product sales growth trend the Company experienced in 2005,” stated Joseph Cross, Nanophase’s president and CEO. “Our first priority remains continuing revenue growth along a planned path to profitability while increasing gross margins on product sales. We anticipate continuing revenue growth during 2006, especially during the second half, as new product introductions through our market partners and customers continue to grow.”

Nanophase has scheduled its quarterly conference call for April 27 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, 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 4, 2006 by dialing 706-645-9291 and entering code 7969944, 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 20 United States and 44 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 15, 2006 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.

NANOPHASE TECHNOLOGIES CORPORATION

BALANCE SHEETS

(Unaudited)

	March 31, 2006			December 31, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	579,938		$	340,860
Investments		7,050,805			8,168,092
Trade accounts receivable, less allowance for doubtful accounts of $23,533 on March 31, 2006 and December 31, 2005		1,257,949			1,180,117
Inventories, net		697,395			801,217
Prepaid expenses and other current assets		418,678			414,363
Total current assets		10,004,765			10,904,649
Equipment and leasehold improvements, net		7,023,392			6,587,787
Other assets, net		592,358			680,908
	$	17,620,515		$	18,173,344
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debts	$	60,154		$	200,254
Current portion of deferred other revenue		85,135			56,757
Accounts payable		1,131,385			285,076
Accrued expenses		1,159,529			1,152,127
Total current liabilities		2,436,203			1,694,214
Long-term debt, less current maturities and unamortized debt discount		1,293,967			1,265,875
Deferred other revenue, less current portion		264,865			293,243
		1,558,832			1,559,118
Contingent liabilities:		—			—
Stockholders’ equity:
Preferred stock, $.01 par value; 24,088 authorized and no shares issued and outstanding		—			—
Common stock, $.01 par value; 25,000,000 shares authorized; 18,004,264 and 17,976,592 shares issued and outstanding on March 31, 2006 and December 31, 2005, respectively		180,043			179,766
Additional paid-in capital		72,556,332			72,307,887
Accumulated deficit		(59,110,895	)		(57,567,641	)
Total stockholders’ equity		13,625,480			14,920,012
	$	17,620,515		$	18,173,344

NANOPHASE TECHNOLOGIES CORPORATION

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
	2006			2005
Revenue:
Product revenue	$	1,918,046		$	1,526,304
Other revenue		87,522			87,078
Total revenue		2,005,568			1,613,382
Operating expense:
Cost of revenue		1,667,751			1,444,500
Research and development expense		547,146			494,439
Selling, general and administrative expense		1,387,454			1,143,144
Total operating expense		3,602,351			3,082,083
Loss from operations		(1,596,783	)		(1,468,701	)
Interest income		82,713			65,047
Interest expense		(31,224	)		(11,899	)
Other, net		2,040			13
Loss before provision for income taxes		(1,543,254	)		(1,415,540	)
Provision for income taxes		—			—
Net loss	$	(1,543,254	)	$	(1,415,540	)
Net loss per share-basic and diluted	$	(0.09	)	$	(0.08	)
Weighted average number of common shares outstanding		17,993,237			17,907,063