Nano-Proprietary, Inc. Announces Continuation of Joint Development Agreement With Prominent Sporting Goods Manufacturer

Nano-Proprietary, Inc. (OTCBB: NNPP), through its subsidiary, Applied Nanotech, Inc. (ANI), today announced that has entered into a follow-on agreement with one of the most advanced sporting goods companies in the world. Following successful completion of the initial program which developed improved base materials using composites, the companies have now moved to the next phase to integrate these improved materials into the manufacturing process. The sporting goods manufacturer will continue to fund the project, which may take up to one year.

The initial program (See press release of September 8, 2005) involved three distinct projects involving different areas. As manufacturing processes are finalized for these separate areas, we expect to enter into license and technology transfer agreements for each area.

"Nano-Composite materials have the potential to yield fundamental improvements in the performance of sporting good equipment," said Tom Bijou, Chief Executive Officer of Nano-Proprietary, Inc. "The effort required to formulate, test and to begin to integrate these materials into the manufacturing process has been significant. Although not yet ready for volume production and mass market sales, we and our partner are making steady progress toward that goal."

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 for the fiscal year ended December 31, 2005, 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 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 fields of electron emission applications from carbon film/nanotubes, sensors, functionalized nanomaterials, and nanoelectronics. Electronic Billboard Technology, Inc. (EBT) has a financial interest in technology related to electronic digitized sign technology. Nano-Proprietary's website is www.nano-proprietary.com .

COMPANY CONTACT: Doug Baker Chief Financial Officer Nano-Proprietary, Inc. 248.391.0612 Email Contact