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SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended: March 31, 2007
 Commission File Number: 0-22333
 Nanophase Technologies Corporation
  Delaware
    
    36-3687863(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 1319 Marquette Drive, Romeoville, Illinois 60446
 (630) 771-6708
 
 o þ
  o þ o
 o þ




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##### 



NANOPHASE TECHNOLOGIES CORPORATION
 QUARTER ENDED MARCH 31, 2007
 INDEX
 PagePART I  FINANCIAL INFORMATION
    
    
    3Item 1.
    
    Financial Statements
    
    
    3Unaudited Balance Sheets as of March 31, 2007 and December 31, 2006
    
    
    3Unaudited Statements of Operations for the three months ended March 31, 2007 and
2006
    
    
    4Unaudited Statements of Cash Flows for the three months ended March 31, 2007 and
2006
    
    
    5Notes to unaudited Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    10Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 4.
    
    Controls and Procedures
    
    
    15PART II  OTHER INFORMATION
    
    
    16Item 1.
    
    Legal Proceedings
    
    
    16Item 1A.
    
    Risk Factors
    
    
    16Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    16Item 3.
    
    Defaults Upon Senior Securities.
    
    
    16Item 4.
    
    Submission of Matters to a Vote of Security Holders.
    
    
    16Item 5.
    
    Other Information
    
    
    16Item 6.
    
    Exhibits
    
    
    16SIGNATURES
    
    
    23Certification of Chief Executive OfficerCertification of Chief Financial OfficerSection 1350 Certifications
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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 NANOPHASE TECHNOLOGIES CORPORATION
 
 BALANCE SHEETS
 (Unaudited)
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    967,731
    
    
    $
    132,387Investments
    
    
    6,430,275
    
    
    
    8,434,793Trade accounts receivable, less allowance for doubtful accounts
of $22,000 on March 31, 2007 and December 31, 2006
    
    
    1,455,313
    
    
    
    1,459,391Inventories, net
    
    
    1,395,873
    
    
    
    923,223Prepaid expenses and other current assets
    
    
    556,663
    
    
    
    534,407Total current assets
    
    
    10,805,855
    
    
    
    11,484,201Equipment and leasehold improvements, net
    
    
    7,500,448
    
    
    
    7,608,326Other assets, net
    
    
    698,508
    
    
    
    651,218$
    19,004,811
    
    
    $
    19,743,745LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of capital lease obligations
    
    $
    40,294
    
    
    $
    32,972Current portion of deferred other revenue
    
    
    127,273
    
    
    
    127,273Accounts payable
    
    
    906,823
    
    
    
    478,694Accrued expenses
    
    
    1,375,689
    
    
    
    1,643,585Total current liabilities
    
    
    2,450,079
    
    
    
    2,282,524Long-term debt, less current maturities and unamortized debt discount
    
    
    1,414,414
    
    
    
    1,383,707Long-term portion of capital lease obligations
    
    
    64,124
    
    
    
    50,552Deferred other revenue, less current portion
    
    
    169,697
    
    
    
    201,5151,648,235
    
    
    
    1,635,774Contingent 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
    
    
    
    189,956Additional paid-in capital
    
    
    78,685,670
    
    
    
    78,380,962Accumulated deficit
    
    
    (63,969,498
    )
    
    
    (62,745,471
    )Total stockholders equity
    
    
    14,906,497
    
    
    
    15,825,447$
    19,004,811
    
    
    $
    19,743,745
 See Notes to Financial Statements.
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NANOPHASE TECHNOLOGIES CORPORATION
 
 STATEMENTS OF OPERATIONS
 (Unaudited)
 Three months endedMarch 31,2007
    
    
    2006Revenue:Product revenue
    
    $
    2,794,141
    
    
    $
    1,918,046Other revenue
    
    
    112,296
    
    
    
    87,522Total revenue
    
    
    2,906,437
    
    
    
    2,005,568Operating expense:Cost of revenue
    
    
    2,193,275
    
    
    
    1,667,751Gross Profit
    
    
    713,162
    
    
    
    337,817Research and development expense
    
    
    524,164
    
    
    
    547,146Selling, general and administrative
expense
    
    
    1,410,259
    
    
    
    1,387,454Loss from operations
    
    
    (1,221,261
    )
    
    
    (1,596,783
    )Interest income
    
    
    99,626
    
    
    
    82,713Interest expense
    
    
    (33,047
    )
    
    
    (31,224
    )Other, net
    
    
    (69,345
    )
    
    
    2,040Loss 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
 See Notes to Financial Statements.
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NANOPHASE TECHNOLOGIES CORPORATION
 
 STATEMENTS OF CASH FLOWS
 (Unaudited)
 Three months ended
    
    
    Three months endedMarch 31,
    
    
    March 31,2007
    
    
    2006Operating activities:Net loss
    
    $
    (1,224,027
    )
    
    $
    (1,543,254
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation and amortization
    
    
    354,540
    
    
    
    307,724Amortization of debt discount
    
    
    30,707
    
    
    
    28,092Amortization of deferred revenue
    
    
    (31,818
    )
    
    
    Stock compensation expense
    
    
    206,336
    
    
    
    195,230Allowance for excess inventory quantities
    
    
    (12
    )
    
    
    (245,464
    )Loss on disposal of equipment
    
    
    
    
    
    
    6,128Write-down of equipment
    
    
    69,587
    
    
    
    Abandonment of pending patents
    
    
    
    
    
    
    111,162Changes in assets and liabilities related to operations:Trade accounts receivable
    
    
    4,078
    
    
    
    (217,932
    )Inventories
    
    
    (472,638
    )
    
    
    349,286Prepaid expenses and other assets
    
    
    (22,256
    )
    
    
    (4,315
    )Accounts payable
    
    
    434,832
    
    
    
    399,763Accrued liabilities
    
    
    (270,749
    )
    
    
    6,128Net cash used in operating activities
    
    
    (921,420
    )
    
    
    (607,452
    )Investing activities:Proceeds from disposal of equipment
    
    
    8,100
    
    
    
    Acquisition of equipment and leasehold improvements
    
    
    (228,821
    )
    
    
    (279,475
    )Acquisition of Patents
    
    
    (57,373
    )
    
    
    (30,653
    )Payment of accounts payable incurred for the purchase
of equipment and leasehold improvements
    
    
    (60,900
    )
    
    
    (14,121
    )Purchases of investments
    
    
    (17,336,761
    )
    
    
    (20,211,959
    )Sales of investments
    
    
    19,341,279
    
    
    
    21,329,246Net cash provided by investing activities
    
    
    1,665,524
    
    
    
    793,038Financing activities:Principal payment on debt obligations, including capital leases
    
    
    (9,006
    )
    
    
    Proceeds from sale of common stock, net, and exercise of stock options
    
    
    100,246
    
    
    
    53,492Net cash provided by financing activities
    
    
    91,240
    
    
    
    53,492Increase in cash and cash equivalents
    
    
    835,344
    
    
    
    239,078Cash and cash equivalents at beginning of period
    
    
    132,387
    
    
    
    340,860Cash and cash equivalents at end of period
    
    $
    967,731
    
    
    $
    579,938Supplemental cash flow information:Interest paid
    
    $
    2 ,340
    
    
    $
    3,132Supplemental non-cash investing and financing activities:Accounts receivable paid through offset of long-term debt
    
    $
    
    
    
    $
    140,100Capital lease obligation incurred for purchase of equipment
    
    $
    29,900
    
    
    $
    Accounts payable incurred for the purchase
of equipment and leasehold improvements
    
    $
    54,197
    
    
    $
    474,788
 See Notes to Financial Statements.
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NANOPHASE TECHNOLOGIES CORPORATION
 
 NOTES TO FINANCIAL STATEMENTS
 (Unaudited)
 (1) Basis of Presentation
   (2) Description of Business
   (3) Inventories
  March 31, 2007
    
    
    December 31, 2006Raw materials
    
    $
    300,168
    
    
    $
    173,750Finished goods
    
    
    1,439,047
    
    
    
    1,092,8271,739,215
    
    
    
    1,266,577Allowance for excess inventory quantities
    
    
    (343,342
    )
    
    
    (343,354
    )$
    1,395,873
    
    
    $
    923,223
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(4) Income Taxes
  (5) Share-Based Compensation
       7




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March 31,
    
    
    March 31,2007
    
    
    2006Total share-based compensation expense
    
    $
    141,563
    
    
    $
    115,305Weighted average grant date fair value, options
    
    $
    5.72
    
    
    
    Weighted average grant date fair value, restricted stock
    
    
    
    
    
    
    Total unrecognized compensation cost
    
    $
    1,172,000
    
    
    $
    409,000Remaining weighted average period cost will be
recognized over
    
    6.72 years
    
    
    6.68 yearsProceeds from option exercises
    
    $
    100,610
    
    
    $
    53,492Intrinsic value of option exercises
    
    $
    71,482
    
    
    $
    110,507
 (6) Significant Customers and Contingencies
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(7) Business Segmentation and Geographical Distribution
   (8) Administrative Actions
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(9) New Accounting Pronouncements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Fair Value Measurements
 
 Item 2. Management s Discussion and Analysis of Financial Condition and Results of Operations
 Overview
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Results of Operations
     11




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12




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Inflation
  Liquidity and Capital Resources
     13




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,
   14




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Safe Harbor Provision
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
 Disclosure controls
  Internal control over financial reporting
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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibit 2
    
    Plan and Agreement of Merger dated as of November 25, 1997 by and between the
Company and its Illinois predecessor, incorporated by reference to Exhibit 2 to the
Companys Annual Report on Form 10-K for the year ended December 31, 1997 (the
1997 10-K).Exhibit 3(I).1
    
    Certificate of Incorporation of the Company, incorporated by reference to
Exhibit 3.1 to the 1997 10-K.Exhibit 3(I).2
    
    First Amendment to the Certificate of Incorporation of Nanophase
Technologies Corporation dated July 27, 2006, incorporated by reference to Exhibit
99.3 to the Companys Current Report on Form 8-K filed July 27, 2006.Exhibit 3(II).1
    
    Bylaws of the Company, incorporated by reference to Exhibit 3.2 to the
1997 10-K.Exhibit 4.1
    
    Specimen stock certificate representing common stock, incorporated by
reference to Exhibit 4.1 to the Companys Registration Statement on Form S-1 (File
No. 333-36937) (the IPO S-1).Exhibit 4.2
    
    Form of Warrants, incorporated by reference to Exhibit 4.2 to the IPO S-1.Exhibit 4.3
    
    Rights Agreement dated as of October 28, 1998 by and between the Company and
LaSalle National Bank, incorporated by reference to Exhibit 1 to the Companys
Registration Statement on Form 8-A, filed October 28, 1998.Exhibit 4.4
    
    Certificate of Designation of Series A Junior Participating Preferred Stock
incorporated by reference to Exhibit 4.4 to the Companys Annual
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Report on Form 10-K for the year ended December 31, 1998 (the 1998
10-K).Exhibit 4.5
    
    Amendment to Rights Agreement dated August 1, 2001 between the Company and
LaSalle National Association, as Rights Agent, incorporated by reference to Exhibit
4.5 to the Companys Quarterly Report on Form 10-Q for the quarter ended June 30,
2001.Exhibit 4.6
    
    2001 Nanophase Technologies Corporation Equity Compensation Plan,
incorporated by reference to Exhibit 4.3 to the Companys Registration Statement on
Form S-8 (File No. 333-74170).Exhibit 4.7
    
    Second Amendment to Rights Agreement dated May 24, 2002 between the Company
and LaSalle National Association, as Rights Agent, incorporated by reference to
Exhibit 4.3 to the Companys Registration Statement on Form S-3 (File No.
333-90326) filed June 12, 2003.Exhibit 4.8
    
    Third Amendment to Rights Agreement dated September 5, 2003 between the
Company and LaSalle National Association, as Rights Agent, incorporated by
reference to Exhibit 99.1 to the Companys Current Report on Form 8-K filed
September 10, 2003.Exhibit 4.9
    
    Subscription Agreement dated September 8, 2003 between the Company and Grace
Brothers, Ltd., incorporated by reference to Exhibit 99.2 to the Companys Current
Report on Form 8-K filed September 10, 2003.Exhibit 4.10
    
    Stock Purchase Agreement dated March 23, 2004 between the Company and
Altana Chemie AG, incorporated by reference to Exhibit 4.10 to the Companys Annual
Report on Form 10-K filed March 30, 2004.Exhibit 4.11
    
    Registration Rights Agreement dated March 23, 2004 between the Company and
Altana Chemie AG, incorporated by reference to Exhibit 4.11 to the Companys Annual
Report on Form 10-K filed March 30, 2004.Exhibit 4.12
    
    2004 Nanophase Technologies Corporation 2004 Equity Compensation Plan,
(2004 Equity Plan) incorporated by reference to Exhibit 4 to the Companys
Registration Statement on Form S-8 (File No. 333-119466).Exhibit 4.13
    
    Form of Stock Option Agreement under the 2004 Equity Plan, incorporated by
reference to Exhibit 4.13 to the Companys Annual Report on Form 10-K filed March
15, 2005.Exhibit 4.14
    
    Form of Restricted Share Grant Agreement under the 2004 Equity Plan,
incorporated by reference to Exhibit 4.14 to the Companys Annual Report on Form
10-K filed March 15, 2005.Exhibit 4.15
    
    Form of Performance Share Grant Agreement under the 2004 Equity Plan,
incorporated by reference to Exhibit 4.15 to the Companys Annual Report on Form
10-K filed March 15, 2005.Exhibit 4.16
    
    2005 Nanophase Technologies Corporation Equity Compensation Plan,
incorporated by reference to Exhibit 4 to the Companys Non-Employee Director
Restricted Stock Plan, incorporated by reference to Exhibit A to
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the Companys Definitive Proxy Statement on Form DEF14A filed May 17,
2005.Exhibit 4.17
    
    First Amendment to the Nanophase Technologies Corporation 2005 Non-Employee
Director Restricted Stock Plan, incorporated by reference to Exhibit 99.1 to the
Companys Current Report on Form 8-K filed January 9, 2006.Exhibit 10.1
    
    The Nanophase Technologies Corporation Amended and Restated 1992 Stock
Option Plan, as amended (the Stock Option Plan), incorporated by reference to
Exhibit 10.1 to the IPO S-1.Exhibit 10.2
    
    Form of Indemnification Agreement between the Company and each of its
directors and executive officers, incorporated by reference to Exhibit 10.2 to the
IPO S-1.Exhibit 10.3
    
    Amended and Restated Registration Rights Agreements dated as of March 16,
1994, as amended, incorporated by reference to Exhibit 10.2 to the IPO S-1.Exhibit 10.4
    
    License Agreement dated June 1, 1990 between the Company and ARCH
Development Corporation, as amended, incorporated by reference to Exhibit 10.7 to
the IPO S-1.Exhibit 10.5
    
    License Agreement dated October 12, 1994 between the Company and Hitachi,
incorporated by reference to Exhibit 10.8 to the IPO S-1.Exhibit 10.6
    
    License Agreement dated May 31, 1996 between the Company and Research
Development Corporation of Japan, incorporated by reference to Exhibit 10.9 to the
IPO S-1.Exhibit 10.7
    
    License Agreement dated April 1, 1996 between the Company and Cornell
Research Foundation, incorporated by reference to Exhibit 10.10 to the IPO S-1.Exhibit 10.8*
    
    Consulting and Stock Purchase Agreement between Richard W. Siegel and the
Company dated as of May 9, 1990, as amended February 13, 1991, November 21, 1991
and January 1, 1992, incorporated by reference to Exhibit 10.11 to the IPO S-1.Exhibit 10.9
    
    Lease Agreement between the Village of Burr Ridge and the Company, dated
September 15, 1994, incorporated by reference to Exhibit 10.12 to the IPO S-1.Exhibit 10.10
    
    Distribution Agreement between the Company and C.I. Kasei, Ltd., (a
subsidiary of Itochu Corporation) dated as of October 30, 1996, incorporated by
reference to Exhibit 10.15 to the IPO S-1.Exhibit 10.11
    
    Supply Agreement between the Company and Schering-Plough HealthCare
Products, Inc. dated as of March 15, 1997, incorporated by reference to Exhibit
10.17 to the IPO S-1.
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Exhibit 10.12
    
    License Agreement between the Company and C.I. Kasei Co., Ltd. (a
subsidiary of Itochu Corporation) dated as of December 30, 1997, incorporated by
reference to Exhibit 10.17 to the 1997 10-K.Exhibit 10.13*
    
    Employment Agreement dated as of November 9, 1999 between the Company and
Joseph Cross, incorporated by reference to Exhibit 10.15 to the 1999 10-K.Exhibit 10.14*
    
    Employment Agreement dated as of March 15, 1999 between the Company and
Daniel S. Bilicki, incorporated by reference to Exhibit 10.19 to the 1998 10-K.Exhibit 10.15*
    
    Form of Options Agreement under the Stock Option Plan, incorporated by
reference to Exhibit 4.5 to the Companys Registration Statement on Form S-8 (File
No. 333-53445).Exhibit 10.16**
    
    Zinc Oxide Supply Agreement dated as of September 16, 1999 between the
Company and BASF Corporation, as assignee, incorporated by reference to Exhibit
10.22 to the 1999 10-K.Exhibit 10.17*
    
    Employment Agreement dated as of November 2, 2000 between the Company and
Robert Haines, incorporated by reference to Exhibit 10.22 to the Companys Annual
Report on Form 10-K for the year ended December 31, 2000 (the 2000 10-K).Exhibit 10.18
    
    Lease Agreement between Centerpointe Properties Trust and the Company,
dated June 15, 2000, incorporated by reference to Exhibit 10.23 to the 2000 10-K.Exhibit 10.19**
    
    Amendment No. 1 to Zinc Oxide Supply Agreement dated as of January, 2001
between the Company and BASF Corporation, incorporated by reference to Exhibit
10.24 to the 2000 10-K.Exhibit 10.20
    
    Promissory Note dated as of September 14, 2000 between the Company and
BASF Corporation, incorporated by reference to Exhibit 10.25 to the 2000 10-K.Exhibit 10.21**
    
    Cooperation Agreement dated June 24, 2002 between the Company and Rodel,
Inc., incorporated by reference to Exhibit 10.23 to the Companys Quarterly Report
on Form 10-Q for the quarter ended June 30, 2002.Exhibit 10.22*
    
    Consulting Agreement dated December 12, 2002 between the Company and Dr.
Gina Kritchevsky, incorporated by reference to Exhibit 10.24 to the Companys
Annual Report on Form 10-K for the year ended December 31, 2002.Exhibit 10.23
    
    First Amendment to Promissory Note dated as of March 11, 2003 between the
Company and BASF Corporation, incorporated by reference to Exhibit 10.25 to the
Companys Annual Report on Form 10-K for the year ended December 31, 2002.Exhibit 10.24
    
    Amendment No. 2. to Zinc Oxide Supply Agreement dated as of March 17, 2003
between the Company and BASF Corporation, incorporated by
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reference to Exhibit 10.25 to the Companys Annual Report on Form
10-K for the year ended December 31, 2002.Exhibit 10.25*
    
    Employment Agreement dated March 24, 2003 between the Company and Mr.
Edward G. Ludwig, Jr., incorporated by reference to Exhibit 10.25 to the Companys
Annual Report on Form 10-K for the year ended December 31, 2002.Exhibit 10.26*
    
    Employment Agreement dated February 17, 2000 between the Company and Mr.
Jess Jankowski, incorporated by reference to Exhibit 10.26 to the Companys Annual
Report on Form 10-K filed March 30, 2004.Exhibit 10.27*
    
    Employment Agreement dated September 26, 2001 between the Company and
Dr. Richard W. Brotzman, incorporated by reference to Exhibit 10.27 to the
Companys Annual Report on Form 10-K filed March 30, 2004.Exhibit 10.28***
    
    Amendment No. 1 to Cooperation Agreement dated February 25, 2004
between the Company and Rohm and Haas Electronic Materials CMP Inc. (formerly known
as Rodel, Inc.), incorporated by reference to Exhibit 10.28 to the Companys Annual
Report on Form 10-K filed March 30, 2004.Exhibit 10.29
    
    Joint Development Agreement dated March 23, 2004 between the Company and
Altana Chemie AG., incorporated by reference to Exhibit 10.29 to the Companys
Quarterly Report on Form 10-Q filed August 13, 2004Exhibit 10.30
    
    Amendment No. 1 to License Agreement dated July 16, 2004 between the
Company and C.I. Kasei Co., Ltd., incorporated by reference to Exhibit 10.30 to the
Companys Quarterly Report on Form 10-Q filed August 13, 2004.Exhibit 10.31***
    
    Letter Agreement Amending Cooperation Agreement dated October 15, 2004
between the Company and Rohm and Haas Electronic Materials CMP Inc., incorporated
by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed
October 22, 2004.Exhibit 10.32
    
    Building Lease dated September 15, 2004 between the Company and the
Village of Burr Ridge, incorporated by reference to Exhibit 10.32 to the Companys
Annual Report on Form 10-K filed March 15, 2005.Exhibit 10.33***
    
    Second Amendment to Promissory Note dated as of May 1, 2005 between the
Company and BASF Corporation, incorporated by reference to Exhibit 10.33 to the
Companys Quarterly Report on Form 10-Q filed May 9, 2005.Exhibit 10.34
    
    Lease Amendment effective October 1, 2005 between Nanophase Technologies
Corporation and Centerpoint Properties Trust, incorporated by reference to Exhibit
99.1 to the Companys Current Report on Form 8-K filed October 20, 2005.Exhibit 10.35
    
    Promissory Note effective October 27, 2005 executed by BYK-Chemie USA in
favor of Nanophase Technologies Corporation, incorporated by
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reference to Exhibit 99.2 to the Companys Current Report on Form 8-K
filed October 27, 2005.Exhibit 10.36***
    
    Distributor Agreement dated October 24, 2005 between Johnson Matthey
Catalog Company, Inc., d/b/a ALFA AESAR, and Nanophase Technologies Corporation,
incorporated by reference to Exhibit 99.1 to the Companys Current Report on Form
8-K filed November 1, 2005.Exhibit 10.37
    
    First Amendment to 2005 Non-Employee Director Restricted Stock Plan,
incorporated by reference to Exhibit 99.1 to the Companys Current Report on Form
8-K filed January 9, 2006.Exhibit 10.38
    
    Nanophase Technologies Corporation Non-Employee Director Deferred
Compensation Plan, incorporated by reference to Exhibit 99.2 to the Companys
Current Report on Form 8-K filed January 9, 2006.Exhibit 10.39***
    
    Supply Agreement dated March 3, 2006 between Roche Diagnostics GmbH and
Nanophase Technologies Corporation, incorporated by reference to Exhibit 99.1 to
the Companys Current Report on Form 8-K filed March 9, 2006.Exhibit 10.40
    
    Z-COTE HP-2 Brand Supply Agreement dated May 15, 2006 between BASF
Corporation and Nanophase Technologies Corporation, incorporated by reference to
Exhibit 99.1 to the Companys Current Report on Form 8-K filed June 20, 2006.Exhibit 10.41
    
    Amendment to 2004 Equity Compensation Plan, incorporated by reference to
Exhibit 99.1 to the Companys Current Report on Form 8-K filed July 27, 2006.Exhibit 10.42
    
    Stock Purchase Agreement dated August 25, 2006 between Rohm and Haas
Electronic Materials CMP Holdings, Inc. and Nanophase Technologies Corporation,
incorporated by reference to Exhibit 99.1 to the Companys Current Report on Form
8-K filed August 28, 2006.Exhibit 10.43
    
    Registration Rights Agreement dated August 25, 2006 between Rohm and Haas
Electronic Materials CMP Holdings, Inc. and Nanophase Technologies Corporation,
incorporated by reference to Exhibit 99.2 to the Companys Current Report on Form
8-K filed August 28, 2006.Exhibit 10.44***
    
    Amended and Restated Cooperation Agreement dated August 25, 2006
between Rohm and Haas Electronic Materials CMP Inc. and Nanophase Technologies
Corporation, incorporated by reference to Exhibit 99.3 to the Companys Current
Report on Form 8-K filed August 28, 2006.Exhibit 10.45
    
    2006 Stock Appreciation Rights Plan, incorporated by reference to Exhibit
99.1 to the Companys Current Report on Form 8-K filed October 3, 2006.Exhibit 10.46
    
    Form of Grant Agreement, incorporated by reference to Exhibit 99.2 to the
Companys Current Report on Form 8-K filed October 3, 2006.
 21




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Exhibit 31.1
    
    Certification of Chief Executive Officer pursuant to Rules
13a-14(a) under the Exchange Act.Exhibit 31.2
    
    Certification of Chief Financial Officer pursuant to Rules
13a-14(a) and 15d-14(a) under the Exchange Act.Exhibit 32
    
    Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to 18 U.S.C. Section 1350.
 
 *
    
    Management contract or compensatory plan or arrangement.**
    
    Confidentiality previously granted for portions of this agreement.***
    
    Confidentially requested, confidential portions have been omitted and filed separately with the
Commission as required by Rule 24b-2. 22




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##### Table of Contents



SIGNATURES
  NANOPHASE TECHNOLOGIES CORPORATIONDate: May 9, 2007
    By:
    /s/  JOSEPH E. CROSSJoseph E. CrossPresident, Chief Executive Officer (principal
executive  officer) and a Director Date: May 9, 2007
    By:
    /s/  JESS JANKOWSKIJess JankowskiChief Financial Officer (principal financial
and chief accounting officer) 23