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$1.6 Million for Developing Biological Threat and Chemical Air Purification System

Nano-Proprietary, Inc., through its subsidiary, Applied Nanotech, Inc. (ANI), today announced that as a result of the successful completion of its initial project, it will receive $1.6 million for further development of its PhotoScrub® concept, a thin film coating on a flexible fiberglass cloth that decomposes pollutants at the molecular level in gases and liquids. This funding was included in the 2008 Defense Appropriations Bill recently signed by the President.

The PhotoScrub® concept is based on an air-purification technology originally developed by one of our strategic partners, Andes Electric, Co. Ltd., and currently uses nano-structured photocatalyst materials that decompose air contaminants and pollutants at the molecular level in solid, liquid and gaseous samples. The funds will be utilized to integrate the PhotoScrub® concept into an HVAC system and build a prototype integrated unit.

"This is another example of our ability to develop processes at the nano-level that result in useful applications," said Dr. Zvi Yaniv, CEO of Applied Nanotech. "We are also pleased to have our PhotoScrub® concept featured in the U.S. Army Space and Missile Defense Command/Army Forces Strategic Command brochure celebrating 50 years of Army Space and Missile Defense."

More information on the brochure is available at our website listed below under the heading Technology Platforms - Nanomaterials - Photoscrub.

Our goal is to develop technology that is more effective and reliable in fighting airborne biological and chemical contaminants, while at the same time being more affordable than existing methods. The next step in the process is to structure a formal agreement with the Department of Defense for the project which would be expected to begin in early 2008.

"We're enthusiastic about being approved for these funds, which add to our ever growing revenue backlog," said Tom Bijou, CEO of Nano-Proprietary. "This award, in addition to our recently announced contracts in the sensor and electron emissions area, highlights the applicability of our intellectual property to a broad range of developing markets."

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