Basis of Presentation

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

(1) Basis of Presentation 

The accompanying unaudited consolidated condensed interim financial statements of Nanophase Technologies Corporation (“Nanophase”, “Company”, “we”, “our”, or “us”) reflect all adjustments (consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair statement of our financial position and operating results for the interim periods presented. All statements include the results from both Nanophase and our wholly-owned subsidiary, Solésence, LLC (“Solésence,” or our “Solésence® subsidiary”). Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

During the quarter ending June 30, 2021, an error was detected in the timing of the recognition of the forgiveness of the Company’s PPP loan. In June of 2021, management was made aware that the PPP loan had been forgiven, effective February 2021. “Other income, net” was presumed to be zero for the quarter ending March 31, 2021, absent direct communication from the Company’s bank, or the SBA, regarding the timing of forgiveness. Management agreed that the PPP loan had been legally forgiven in the first quarter. This error resulted in the incorrect presentation of the PPP Loan (SBA) and the accumulated deficit on the Company’s balance sheet, and other income on the Company’s Statements of Operations, as well as the related items on the Statements of Shareholders’ Equity and Statements of Cash Flows.

We evaluated the restatement in accordance with Accounting Standards Codification (ASC) 250, Accounting Changes and Error Corrections, and evaluated the materiality of the restatement on our first quarter 2021 financial statements, in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 108, Quantifying Financial Statement Errors. We concluded that the changes to the financial statements were material to the first quarter 2021 financial statements, while having no impact on the six-month results. Our conclusion was that we should restate our first quarter 2021 financial statements to reflect changes to that quarter’s net income, balance sheet categories, and the related items on the Statements of Shareholders’ Equity and the Statements of Cash Flows.

Balance Sheets	As Previously Reported Three Months Ended March 31, 2021			Correction			As Restated
PPP Loan (SBA)	$	952		$	(952	)	$	—
Total long-term liabilities liabilities - current		4,061			(952	)		3,109
Accumulated deficit		(99,409	)		952			(98,457	)
Total Shareholder’s equity		3,132			952			4,084
Statements of Operations
Other income, net	$	—		$	952		$	952
Net income		358			952			1,310
Net income per share (basic and diluted)	$	0.01		$	0.02		$	0.03
Statements of Shareholders’ Equity
Net income for the three months ended March 31, 2021	$	358		$	952		$	1,310
Total Accumulated deficit on March 31, 2021		(99,409	)		952			(98,457	)
Balance on March 31, 2021		3,132			952			4,084
Statements of Cash Flows
Net income(loss)	$	358		$	952		$	1,310
Other income, PPP loan forgiveness		—			(952	)		(952	)

These financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the Securities and Exchange Commission.