Carbon Nanotechnologies, Inc. to Merge with Unidym, Inc. to Create a Formidable Force in Carbon Nanotube-Enabled Products

Business Wire, March 22, 2007

HOUSTON & MENLO PARK, Calif. -- Carbon Nanotechnologies, Inc. (CNI) and Unidym, Inc. announced today that they have entered into a definitive agreement to merge the two companies. The transaction is expected to be completed in early April. The combined company will operate under the name Unidym and be headquartered in Menlo Park, California.

As a result of the merger, Unidym will hold the leading portfolio of intellectual property on carbon nanotubes (also known as buckytubes) and be strongly positioned in the broad array of markets for the enabling material. The Company will also have substantial production and processing capabilities in carbon nanotubes and significant market traction in at least three promising applications. The Company plans to integrate CNI's carbon nanotube manufacturing capabilities into Unidym's ongoing development of transparent, conductive films. The manufacturing and development facilities for carbon nanotubes will remain in CNI's facilities in Houston.

"The combination of these two companies represents a watershed moment in the development of carbon nanotube-enabled products," said Bob Gower, President & CEO of CNI. "It has become clear to us that aligning our production and development capabilities with promising and highly valuable product applications is the clearest path to making buckytubes all they can be. We chose Unidym as our partner because Unidym has the most advanced carbon nanotube-based electronic products with billion dollar market potential, as well as an impressive carbon nanotube patent portfolio of its own. Unidym and CNI are uniquely suited to forge this path as a combined company."

"Unidym now has critical mass," stated Sean Olson, President of Unidym. "Unidym will use its expansive patent portfolio to protect its first three products - transparent electrodes, fuel cell electrodes, and thin film transistors - and to immediately pursue licensing opportunities for a range of other nanotube-based products such as targeted therapeutics, medical devices, field emission displays, batteries, sporting goods, and composite materials."

Unidym, founded by distinguished UCLA professor Dr. George Gruner and a majority owned subsidiary of Arrowhead Research Corporation (NASDAQ:ARWR), is developing carbon nanotube-based products for the electronics industry. The company's first product is a transparent electrode that is intended to replace the indium tin oxide (ITO) electrodes in products such as touch screens, solar cells, flat-panel displays, and solid state lighting. The total existing market for this product is approximately $1 billion. Unidym's second product is a thin film transistor (TFT) intended for the emerging flexible (also known as printable) electronics industry. Unidym is further developing nanotube-based fuel cells to meet the near-term needs for powering portable electronics and to address the longer term potential markets associated with the hydrogen-based energy economy.

"Since so much of the intellectual property can now be licensed from one company, we believe this deal is transformational for the industry and will enable more rapid commercialization of products incorporating nanotubes," said R. Bruce Stewart, Arrowhead's Chairman.

CNI is the world leader in the production of single-wall carbon nanotubes (SWNT) and other small-diameter carbon nanotubes, and holder of a broad portfolio of technology covering production processes as well as enabling and end-use technologies. Unidym possesses unique technology to exploit the growing field of transparent conductive films.

About Carbon Nanotechnologies, Inc.

CNI was founded in 2000 by the late Rice University professor Richard Smalley, who received the Nobel Prize for his discovery of a new class of molecules - fullerenes. His pioneering work further led to a suite of patents that covers technologies being used today to develop nanotube-based products.

CNI has more than 100 patents and patent applications, with a total of about 5,000 claims in various stages of prosecution. The portfolio of 100 patents and applications includes about 850 composition of matter claims. CNI has several pilot plants to produce single-wall and other small-diameter carbon nanotubes in operation at its location in west Houston.

About Unidym, Inc.

Unidym, Inc. is developing low-cost, carbon-based materials, processes, and devices for the electronics industry. The Company's initial product is a thin, transparent film of carbon nanotubes that replaces the expensive, failure-prone materials currently employed by manufacturers of devices such as touch screens, flat panel displays, and solid state lighting. Unidym is also developing novel carbon nanotube-based transistors and conductive inks for the printable electronics industry to replace today's complex and capital intensive semiconductor manufacturing processes with inexpensive, solution-based printing processes. Unidym differentiates itself through its emphasis on low-cost materials and processes, in-house carbon nanotube production, aggressive partnership strategy, and significant intellectual property portfolio that includes foundational IP in both of its initial applications.