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Applied Nanotech Holdings and Nanofilm Enter LOI to Combine Through a Stock Swap Transaction

Applied Nanotech Holdings, Inc., a global leader in nanotechnology research and development, and Nanofilm, Ltd., a private company with a leading market position for specialty optical coatings, cleaners and nano-composite products, jointly announce they have signed a Letter of Intent (“LOI”) to combine through a stock swap transaction.

The new combined company will have expanded capability to deliver innovative nanotechnology-based products. The new company will build on the 25-year success of Nanofilm in developing and commercializing technologies that enhance a variety of consumer and industrial products. APNT and Nanofilm will combine their technologies and commercialization capabilities to create a broad array of next generation products. Based on 2012 pro forma financials, assuming the merger had occurred at the beginning of 2012, the new combined company would have 2012 revenues exceeding $14 million. The new company will have the personnel, development facilities, operating facilities, and customer relations to support its projected rapid revenue growth.

The new company’s Chairman and Chief Executive Officer will be Dr. Scott Rickert, who holds similar positions with Nanofilm. Dr. Rickert commented, “I’ve long had a vision for a growth company using nanotechnologies producing high margin products. I am enthusiastic to have this expanded base to enhance the growth of this new combined company, selling nanotechnology products in the worldwide marketplace.”

Dr. Robert Ronstadt, APNT’s Chairman, noted, “Both APNT and Nanofilm bring valuable resources to this union. APNT has outstanding R&D capabilities while Nanofilm brings strong management, manufacturing, marketing, and sales capabilities. This is an ideal combination for both companies.”

Dr. Zvi Yaniv, President and Chief Operating Officer of APNT commented, “I am excited about the opportunities that await us as I join in the creative efforts of the new innovation team that Dr. Rickert is establishing to develop and commercialize nanotechnology-enhanced products.”

The closing of the proposed merger is conditioned upon APNT and Nanofilm obtaining working capital financing; completion of due diligence; signing of a definitive merger agreement containing customary representations, warranties, and closing conditions; SEC approval of APNT’s proxy statement; approval by the respective boards of directors; approval by the shareholders of APNT; and approval by the members of Nanofilm.

About APNT (OTCQB: APNT)

Applied Nanotech Holdings, Inc. (APNT) is an Austin, Texas-based global leader in nanotechnology research and development and has ongoing research programs and license agreements with product innovators around the world. For information about Applied Nanotech Holdings, Inc., please visit www.appliednanotech.net.

About Nanofilm, Ltd.

Nanofilm, Ltd. is a Valley View, Ohio private company that develops nano-layer coatings, nano-based cleaners, and nano-composite products. Nanofilm’s primary commercial products center around its unique eyecare glass cleaning and de-fogging products; other products include precision mold release treatments, stay-clean surface treatments for ceramic insulators, and scuff-resistant treatments for commercial dinnerware. For information about Nanofilm, please visit www.nanofilmtechnology.com.

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