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 21, 2021 (April 21, 2021)
NANOPHASE TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 0-22333 | 36-3687863 |
| (State or other | (Commission | (IRS Employer |
| jurisdiction of | File Number) | Identification No.) |
| incorporation) |
1319 Marquette Drive, Romeoville, Illinois 60446
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (630) 771-6700
Not applicable
(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 (see General Instruction A.2. below):
☐ 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 (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. |
On April 21, 2021, Nanophase Technologies Corporation (the “Company”) entered into the Fourth Amendment (the “Amendment”), to the Business Loan Agreement, dated November 19, 2018 (the “Business Loan Agreement”), between the Company and Beachcorp, LLC. Beachcorp, LLC is an affiliate of Mr. Bradford T. Whitmore, who beneficially owns a majority of the Company’s common stock and is the brother of Ms. R. Janet Whitmore, a director of the Company and the chair of the Company’s board of directors. Mr. Whitmore is also a direct lender to the Company under the 2% Secured Convertible Promissory Note, dated November 20, 2019, made by the Company in favor of Mr. Whitmore in the principal amount of $2,000,000, which principal amount is due on May 15, 2024 (unless earlier converted into shares of the Company’s common stock) and which accrues interest at the rate of 2.0% per year.
The Amendment changes the terms of both the Company’s asset-based revolving loan facility (the “Revolver Facility”), and the secured advance (“Term Loan”) under the Business Loan Agreement. The maximum borrowing amount under the Revolver Facility increases from $4,000,000 to $6,000,000, with a borrowing base consisting of qualified accounts receivable of the Company. The Amendment also extends the date for which all principal and accrued interest under the Revolver Facility is due from March 31, 2022 to March 31, 2023, and reduces interest on related outstanding borrowings from the prime rate plus 3%, with an 8.25% minimum floor, to the prime rate plus 2%, with no minimum rate floor. The Term Loan was increased from $500,000 to $1,000,000, and its fixed interest rate was reduced from 8.25% per year to 5.25% per year. The maturity date of the term loan, as previously amended, remains March 31, 2022. Both the Revolver Facility and the Term Loan are secured by all the unencumbered assets of the Company and subordinated to the Company’s revolving line of credit with Libertyville Bank & Trust.
This Item 1.01 is qualified in its entirety by reference to the complete text of the Amendment, which is filed as an exhibit to this current report on Form 8-K.
| Item 2.03 | Creation of a Direct Financial Obligation. |
Item 1.01 of this current report on Form 8-K is incorporated into this Item 2.03.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit | Description |
| 10.1 | Fourth Amendment, dated April 21, 2021, to Business Loan Agreement between Nanophase Technologies Corporation and Beachcorp, LLC |
SIGNATURES
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.
Dated: April 21, 2021
| NANOPHASE TECHNOLOGIES CORPORATION | |||
| By: | /s/ JESS JANKOWSKI | ||
| Name: Jess Jankowski | |||
| Title: Chief Executive Officer | |||
NANOPHASE TECHNOLOGIES CORPORATION 8-K
Exhibit 10.1
FOURTH AMENDMENT TO BUSINESS LOAN AGREEMENT
This Fourth Amendment is dated as of April 21, 2021 and is by and between NANOPHASE TECHNOLOGIES CORPORATION, a Delaware corporation (“Borrower”) in favor of BEACHCORP, LLC, a Delaware limited liability company (“Lender”) and amends that certain Business Loan Agreement dated as of November 19, 2018 ( as amended, “Loan Agreement”) between Borrower and Lender (the “Loan Agreement”).
1. Borrower and Lender hereby agree to amend the Loan Agreement as follows:
(a) Section 1.1(b) is hereby amended in its entirety to read as follows
“(b) Term Loan. Lender will make a $1,000,000.00 non-revolving term loan (the “Term Loan”) to Borrower. Borrower shall make quarterly payments of interest only, with the first such payment due on April 30, 2021 and then on the last day of each calendar quarter thereafter with a final payment of all principal and unpaid interest due on March 31, 2022 (the “Term Maturity Date”). The Term Loan shall be evidenced by the Term Note. The Term Loan may be prepaid at any time without penalty or fee.
(b) Section 1.1(c) is hereby amended by substituting the amount “$6,000,000.00” for the amount “$4,000,000.00”.
(c) Section 1.5(a) is hereby amended in its entirety to read as follows
“(a) Interest on Loan.
(i) The unpaid principal amount of the Term Loan shall bear interest from the date thereof until the Term Maturity Date (whether by acceleration or otherwise) at 5.25% fixed.
(ii) The unpaid principal amount of the aggregate outstanding balance of the Revolving Loan shall bear interest from the date of each advance thereof until the Revolving Maturity Date, at the Prime Rate plus 2.0% floating.
(c) Section 7.1 is hereby amended by amending the definition of “Revolving Maturity Date” in its entirety to read as follows:
“Revolving Maturity Date. The words “Revolving Maturity Date” mean “March 31, 2023.”
(d) Section 7.1 is hereby amended by amending the definition of “Revolving Note” in its entirety to read as follows:
“Revolving Note. The words “Revolving Note” mean the Replacement Promissory Note (Revolving Note) from Borrower to Lender dated as of April 21, 2021 in the principal amount of $6,000,000.00, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for such promissory note.”
(e) Section 7.1 is hereby amended by amending the definition of “Term Note” in its entirety to read as follows:
“Term Note. The words “Term Note” mean the Replacement Promissory Note (Term Note) from Borrower to Lender dated as of April 21, 2021 in the principal amount of $1,000,000.00, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for such promissory note.”
2. Borrower represents to the Lender that it has no defenses, setoffs, claims or counterclaims of any kind or nature whatsoever against Lender in connection with the Loan Agreement or any Related Documents (as defined therein (collectively with the Loan Agreement, the “Loan Documents”), and any amendments to said documents or any action taken or not taken by the Lender with respect thereto or with respect to the collateral. Without limiting the generality of the foregoing, Borrower hereby releases and forever discharges Lender, its affiliates, and each of its officers, managers, agents, employees, attorneys, insurers, successors and assigns, from any and all liabilities, or causes of action, known or unknown, arising out of any action or inaction with respect to the Loan Documents.
3. Except as modified hereby, the Loan Agreement is hereby ratified and affirmed in all respects.
| NANOPHASE TECHNOLOGIES CORPORATION | BEACHCORP, LLC | ||||
| By: | /s/ Jess Jankowski | By: | /s/ Bradford T. Whitmore | ||
| Jess Jankowski | Bradford T. Whitmore | ||||
| President & Chief Executive Officer | Manager | ||||
Acknowledged:
| SOLÉSENCE, LLC | |||
| By: | /s/ JESS JANKOWSKI | ||
| Name: | Jess Jankowski | ||
| Its: | President & Chief Executive Officer | ||