SOURCE: Nano-Proprietary, Inc.

November 28, 2005 08:55 ET

Nano-Proprietary, Inc. and Shimane Masuda Electronics Co. Ltd. to Establish Joint Pilot Line

AUSTIN, TX -- (MARKET WIRE) -- November 28, 2005 -- Nano-Proprietary, Inc. (OTC BB: NNPP) today announced that its subsidiary, Applied Nanotech, Inc. ("ANI"), has entered into an agreement with Shimane Masuda Electronics Co., Ltd. ("SME") to establish a joint pilot line for the development and production of carbon nanotube electron emission based lighting devices.

The pilot line will be located in an SME facility and SME will supply all necessary equipment and all necessary personnel to develop, engineer, and operate the line. ANI will contribute technical support, intellectual property, and know-how. The pilot period is expected to extend through June 30, 2006.

Should SME decide to go into volume production upon conclusion of the pilot period, SME will license ANI's technology in exchange for an upfront payment of 10 to 25 million yen (approximately $84,000 to $210,000 at current exchange rates) and an ongoing royalty rate of 5% of product sales for all products using CNT electron sources.

"We are extremely pleased that SME is making this substantial investment in the pilot line," said Dr. Zvi Yaniv, Chief Executive Officer of Applied Nanotech, Inc. "To our knowledge it is the first pilot line dedicated to developing and manufacturing a product using carbon nanotube electron emission."

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties concerning Nano-Proprietary's business, products, and financial results. Actual results may differ materially from the results predicted. More information about potential risk factors that could affect our business, products, and financial results are included in Nano-Proprietary's annual report on Form 10-K/A for the fiscal year ended December 31, 2004, and in reports subsequently filed by Nano-Proprietary with the Securities and Exchange Commission ("SEC"). All documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval System (EDGAR) at www.sec.gov or from Nano-Proprietary's web site listed below. Nano-Proprietary hereby disclaims any obligation to publicly update the information provided above, including forward-looking statements, to reflect subsequent events or circumstances.

ABOUT SHIMANE MASUDA ELECTRONICS CO., LTD.

Shimane Masuda Electronics, Co., Ltd. (SME), founded in 1984, is headquartered in Masuda, Japan (Shimane Prefecture). SME manufactures a variety of electronic products related to the mobile phone industry; data transmission and radio integrated circuit amplifiers utilizing microelectronic processes, such as surface mount assembly; ceramic packaging; high resolution bonding; and other areas. SME's customers include Mitsubishi, Sony, Sharp and other major manufacturers.

ABOUT NANO-PROPRIETARY, INC.

Nano-Proprietary, Inc. is a holding company consisting of two wholly owned operating subsidiaries. Applied Nanotech Inc. is a premier research and commercialization organization dedicated to developing applications for nanotechnology with an extremely strong position in the field of electron emission applications from carbon film/nanotubes. Electronic Billboard Technology, Inc. (EBT) possesses technology related to electronic digitized sign technology. Nano-Proprietary's website is www.nano-proprietary.com.

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