Alps Engineering Co., Ltd. And Nano-Proprietary, Inc. To Collaborate In Nanotechnology Research And Development

August 5, 2004 – AUSTIN, TX – Austin, Texas-based Nano-Proprietary, Inc. (OTC BB: NNPP), through its subsidiary, Applied Nanotech, Inc. (ANI), today announced that it has entered into a research and development agreement with Alps Engineering Co., Ltd., a Japanese equipment manufacturer.

The purpose of the agreement is to expand the usage of the current equipment designed and produced by Alps Engineering to various nanotechnology applications. Special efforts are being directed toward the use of Alps Engineering's Micro-blast machine, a very precise "sand blast" piece of equipment with high accuracy and productivity. These machines are currently used in the manufacturing process for flat panel displays, silicon chips, and the patterning of various substrates such as glass, carbon and ceramic. The collaboration between the companies has already resulted in a new activation process, one of the most critical phases necessary for the production of carbon nanotube TVs. The results were presented at Finetech conference in Japan in June 2004 at Tokyo Big Sight Exhibition Center. Similar nano-blast processes were demonstrated in the implantation of nanomaterials in the surface of thin films for altering in a controlled manner the properties of such surfaces.

The agreement also makes ANI the exclusive representative for Alps Engineering in North America and Europe. ANI has installed a fully operational nano-blast machine at its facilities in Austin to be used for research and development and to also function as an experimental center for expanding the nano-blast processes to other interested companies.

For more information please refer to www.nano-proprietary.com in the section "Conferences" under "Finetech 2004" and in the section "R&D" under the heading "Nanoparticle implantation using the nano-blast technique."

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-KSB for the fiscal year ended December 31, 2003, 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 field of electron emission applications from carbon film/nanotubes. Electronic Billboard Technology, Inc. (EBT) possesses technology related to electronic digitized sign technology. Nano-Proprietary's website is www.nano-proprietary.com.

ALPS ENGINEERING CO., LTD.

Alps Engineering Co., Ltd. is a private company with the head office in Hamamatsu City Japan and is a well-recognized design and manufacturer of high precision flat panel and semiconductor manufacturing equipment.

Company Contact:
Doug Baker
Applied Nanotech Holdings, Inc.
248.391.0612
dbaker(at)appliednanotech.net

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