Strengths: Diversified Market Segments: Nanophase has a very diversified market segment. Its major chemical products, nano-engineered elements are used in a variety of industries. These segments range from energy storage, personal care, textile to protective coatings and polishing.

Proprietary Technologies: The company owns or licenses 18 US patents and patent applications, and 48 foreign patents and patent applications. Most of the intellectual property will be safe with the company for a long time period. The company also created two manufacturing processes, PVS Plasma Vapor Synthesis and NanoArc Synthesis. These processes allow company to control nanomaterial properties, which help in increasing efficiency, productivity and customazition.

Customer direct business model: Nanophase interacts with customers directly rather than through intermediaries, demonstrating the benefits of Nanophases solutions in their products. Reduce cost and reduce the time to launch products to the market. The company has been focused towards providing customized products to these customers. R&D investments: Nanophase has had good R&D investments over the years. Company invested $1.7 million and $1.6 million in 2013 and 2012 respectively. This shows companys focus on R&D. Flexible workforce: Companys manufacturing operations employ a team-based manufacturing approach. 100% of the workforce is cross-trained to allow it to be employed broadly across the manufacturing processes. This leads to continuous improvements in the operations process.Weaknesses:

Small customer base: NanoPhases customer base is only limited to 85 organizations. Three of its largest customers accounted for 72%, 6% and 5% of its revenue in 2013. Another trend to be seen here is that the customers have varying demands over each quarter, which is a big challenge in terms of steady growth. Big dependence on collaborative relationships: A major part of nanophases research and sales is dependent on collaborative relationships with the customer base and educational institutions/research facilities. This comes out as a blessing in disguise, since the company is neither self-dependent nor self-sufficient. Weak financial standing: Companys financial standing is not really healthy. Company has averaged at about $10 million in revenues since 2010. The company has been incurring losses since its inception: at about an average of $2.4 million since 2011. As a result, company decided to delist from NASDAQ in 2012 and began trading in OTCQB marketplace. Small Employee Base: The Company has a small employee base of 43 full-time personnel, only 8 of whom hold advanced degrees. There are no collective bargaining agreements in place. Management Inefficiency: We believe that Nanophases current situation has a lot to do with management inefficiency. Looking at the timeline of the companys operations, there hasnt a great improvement in profitability, customer base or any considerate financial improvement. A big reason here is the imbalance between managerial expertise and nanotechnology insight.