NANOPHASE ANNOUNCES

RIGHTS OFFERING TO STOCKHOLDERS

 

Romeoville, Ill., January 5, 2024 – Nanophase Technologies Corporation (OTCQB: NANX), a leader in minerals-based and scientifically-driven health care solutions across beauty and life science categories — with innovations that protect skin from environmental aggressors and aid in medical diagnostics — today announced that it has filed a registration statement on Form S-1 with the Securities and Exchange Commission (the "SEC") for a rights offering to existing holders of its common stock, par value $0.01 per share.  Nanophase expects to receive gross proceeds of approximately $2.0 million, less expenses of the rights offering.

The rights offering will be made through the distribution to existing shareholders of non-transferable subscription rights to purchase their pro rata portion of 5,000,000 shares of the Company's common stock at a subscription price of $0.40 per share.  Each shareholder will receive subscription rights to purchase 0.1 shares of stock for every share held as of the record date for the distribution of the rights, which is December 20, 2023.  The Company has decided to extend the subscription period to run through February 2, 2024, which will be the expiration  date of the rights offering.  

The purpose of this rights offering is to raise equity capital in a cost-effective manner that gives Nanophase's stockholders the opportunity to participate.  The net proceeds will be used to satisfy a bridge loan from an affiliate of Bradford T. Whitmore, in the amount of $2.0 million which is being used for general corporate purposes.  Mr. Whitmore is the Company’s largest shareholder.

The rights offering includes an over-subscription privilege which permits each rights holder that exercises its rights in full to purchase additional shares of common stock that remain unsubscribed at the expiration of the offering.  This over-subscription privilege is subject to the availability and allocation of shares among holders exercising this over-subscription privilege, as further described in the rights offering documents.

We have entered into a Rights Offering Backstop Agreement with Mr. Whitmore and certain of his affiliates (the “Backstop Purchasers”).  In addition to the rights that all shareholders have been given, the Backstop Purchasers have agreed  to purchase any and all shares of Common Stock that other securityholders do not subscribe for in our Rights Offering, subject to the terms, conditions and limitations of the Backstop Agreement as filed.

A registration statement relating to these securities has been filed with the SEC and was declared effective on December 21, 2023.  A copy of the prospectus forming a part of the registration statement may be obtained free of charge at the website maintained by the SEC at www.sec.gov or by contacting Nanophase at (630) 771-6736.  The rights will be issued to holders of the Company's common stock as of the record date, December 20, 2023.  This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

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 engineered materials, ingredients, and fully formulated products; 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 29, 2023. 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.

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Investor Relations Contact:

(630) 771-6736