Applied Nanotech Holdings, Inc. Expands Research Agreement and Enters Negotiations to Finalize an Exclusive License Agreement With Leading Industrial Chemical Products Company

Applied Nanotech Holdings, Inc. (OTCBB: APNT) today announced that the third phase of its research project with a leading industrial chemical products company in Japan, announced on September 29, 2008, has been expanded and the previously announced funding of $700,000 has been increased to $1.2 million over the next twelve months in order to accelerate the prototyping of copper inkjettable inks and product introduction. The parties also expect a fourth phase of the project, of at least the same magnitude, to begin in October 2009 to expand the applications.

In addition, the companies agreed to enter negotiations to finalize an exclusive worldwide license to Applied Nanotech's copper inks technology within the parameters set forth in the current research agreement between the companies. These parameters include an upfront payment of up to $2.0 million and a running royalty rate of 4% on sales of the copper ink product. The parties agreed to finalize and execute the license agreement no later than April 15, 2009. During the period until then, the parties will formulate a comprehensive worldwide license agreement drafted in both English and Japanese, based on the results of the R&D partnership.

"I believe that the almost immediate expansion of this program by $500,000 following on the heals of last week's announcement, along with the significant agreement for the overall terms for a license, show the seriousness of this application in the minds of our customer. Printable inks may redefine the manufacturing process for a wide variety of electronic devices and ANI is at the forefront of these developments, with this partner, as well as two additional Phase I studies that we have underway," said Tom Bijou, Chairman and CEO of Applied Nanotech Holdings, Inc.

ABOUT APPLIED NANOTECH HOLDINGS, INC.

Applied Nanotech Holdings, 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. It also possesses investments related to electronic digitized sign technology. ANI has over 250 patents or patents pending. Its business model is to license its technology to partners that will manufacture and distribute products using the technology. ANI's website is www.appliednanotech.net .

SAFE HARBOR STATEMENT

This press release contains forward-looking statements that involve risks and uncertainties concerning our 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 our annual report on Form 10-K for the fiscal year ended December 31, 2007, and in reports subsequently filed by us 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 our website listed above. We hereby disclaim any obligation to publicly update the information provided above, including forward-looking statements, to reflect subsequent events or circumstances.

COMPANY CONTACT Doug Baker Applied Nanotech Holdings, Inc. 248.391.0612 Email Contact MEDIA CONTACT William J. Spina 781.378.2000 Email Contact