| Nanophase Technologies Corporation | |||
| Ticker: | NANX | 453 Commerce Street | |
| Exchange: | NASDAQ-National Market | Burr Ridge, IL 60521 | |
| Industry: | Manufacturing (SIC Code 3399) | (630) 323-1200 | |
| # of Employees: | 61 | ||
| Type of Shares: | Common Shares | Filing Date: | 10/1/97 | |
| U.S. Shares: | 4,000,000 | Offer Date: | 11/25/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $8.00 - $10.00 | |
| Primary Shares: | 4,000,000 | Offer Price: | $8.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.56 | |
| Offering Amount: | $36,000,000 | Selling: | $0.32 | |
| Expenses: | $750,000 | Reallowance: | $0.10 | |
| Shares Out After: | 13,234,029 |
| Manager | Tier | Phone |
| Donaldson, Lufkin & Jenrette Securities Corp. | Lead Manager | (212) 371-0641 |
| Furman Selz Incorporated | Co-manager | (212) 309-8285 |
| Oppenheimer & Company, Inc. | Co-manager | (212) 667-7400 |
| Issuer's Law Firm: | Katten Muchin & Zavis |
| Bank's Law Firm: | Latham & Watkins |
| Auditor: | Ernst & Young |
| Registrar/Transfer Agent: | LaSalle National Trust, N.A. |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $0.60 | $1.03 | $0.13 | Assets: | $6.27 |
| Net Income: | -$5.58 | -$2.29 | -$2.91 | Curr Assets: | $5.68 |
| EPS: | -$0.76 | -$0.29 | Liabilities: | $1.34 | |
| Prior EPS: | -$1.63 | -$2.81 | Curr Liabilities: | $1.34 | |
| Cash Flow/Oper: | -$5.80 | $1.66 | $7.19 | Equity: | $4.94 |
| Cash Flow/Fin: | $7.10 | $1.84 | -$4.52 | Cash: | $2.49 |
| Cash Flow/Inv: | -$0.95 | $1.84 | Working Cap: | $4.35 | |
| Business Description |
| The company develops and markets nanocrystalline materials for use as ingredients and components in a wide range of commercial applications. The Company began manufacturing nanocrystalline materials in commercial quantities in the fourth quarter of 1996. Nanocrystalline materials are metallic and ceramic materials that generally consist of particles that are less than 100 nanometers (billionths of a meter) in diameter and contain only a few thousand or tens of thousands of atoms, rather than the millions or billions of atoms in particles of most conventional materials. By processing materials in this near-atomic size range, the Company is able to engineer the structure of particles and exploit the properties of their surface atoms to enhance the performance of basic raw materials such as aluminum, iron, titanium and zinc, as well as to molecularly engineer new composite materials. Compared to conventional materials, the Company believes its nanocrystalline materials generally exhibit superior chemical, mechanical, electronic, magnetic and optical properties. The Company believes that through its extensive proprietary research and development programs, combined with its proprietary and patented production processes, it has established new standards for high-performance commercially produced nanocrystalline materials. |
| Competition |
| The advanced materials industry is highly competitive. The market for materials having the characteristics and potential uses of the Company's nanocrystalline materials is the subject of intensive research and development efforts by both governmental entities and private enterprises around the world. The Company believes that the level of competition will increase further as more product applications with significant commercial potential are developed. The nanocrystalline product applications being developed by the Company will compete directly with products incorporating conventional and advanced materials and technologies. While the Company is not currently aware of the existence of commercially available competitive products with the same attributes as those offered by the Company, there can be no assurance that such competitive products will not be introduced by third parties, or that competing materials based on different or new technologies may not become commercially available. There can be no assurance that the Company's competitors will not succeed in developing or marketing materials, technologies and products that exhibit superior performance, are more commercially desirable or are more cost effective than those developed or marketed by the Company. In addition, many potential competitors of the Company have substantially greater financial and technical resources, larger research and development staffs, and greater manufacturing and marketing capabilities than the Company. Failure of the Company's current and potential nanocrystalline product applications to improve performance sufficiently at an acceptable price, achieve commercial acceptance or otherwise compete with conventional materials would have a material adverse effect on the Company's business, results of operations and financial condition. |
| Business Plan |
| To take advantage of the broad potential applicability of nanocrystalline materials, the Company has adopted a strategy to develop a variety of value-added applications in targeted industries where the potential for future growth is substantial. The Company intends to establish itself as the leading manufacturer of nanocrystalline materials for these targeted application areas by continuously enhancing its technologies, product applications and customer base. Specific elements of the Company's business strategy include the following: (I) Target Innovative Commercial Applications, (ii) Establish Collaborative Relationships with Marquee Customers, (iii) Expand Product Applications and Broaden the Customer Base and (iv) Maintain Technical and Commercial Leadership. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to expand the company's manufacturing facilities and for working capital and other general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Grace Investment, Ltd. | 12.70% | 7.80% |
| Batterson Johnson & Wang L.P. | 12.70% | 8.00% |
| ARCH Venture Fund Limited Partnership | 9.10% | 5.70% |
| ARCH Venture Fund II Limited Partnership | 8.60% | 5.30% |
| Harris & Harris Group, Inc. | 8.20% | 5.10% |
| UVCC II Parallel Fund, L.P. | 5.40% | 3.40% |
| UVCC Fund II | 5.40% | 3.40% |
| AMT Associates Ltd. | 5.40% | 3.40% |
| Officer Name | Title | Age |
| Leonard A. Batterson | Chairman of the Baord of Directors | 53 |
| Robert W. Cross | President, Chief Executive Officer and Director | 59 |
| Robert M. Kelly | Vice President--Cosmetic Products | 51 |
| Dennis J. Nowak | Vice President--Finance and Administration, Chief Financial Officer, Treasurer and Secretary | 47 |
| Dennis J. Nagle | Vice President--Manufacturing | 45 |
| Richard W. Brotzman, Ph.D. | Vice President--Research and Development | 44 |
| John C. Parker, Ph.D. | Vice President--Technology | 36 |