Nano-Proprietary, Inc Completes 25-Inch Color Proof Of Concept

September 7, 2005 – AUSTIN, TX – Applied Nanotech, Inc. ("ANI"), a subsidiary of Nano-Proprietary(OTC BB: NNPP), today announced that in conjunction with its consortium of six prominent Japanesedisplay component manufacturers (see press release of September 30, 2003), it has completed its proof ofconcept of a high resolution, full color, 25-inch diagonal carbon nanotube (CNT) TV (280 x 200 colorlines or pixels).

A demonstration video of the proof of concept in operation is available to view on the Company'swebsite, www.nano-proprietary.com, under the ANI tab by selecting Demonstrations. The video clipclearly shows that, as with the 14-inch, the video image does not suffer from the "ghost images", that canbe observed in large LCD and plasma TVs as a tail of the image moving across the screen. As expected,the image and its characteristics are similar to the cathode ray tube, since CNT TVs are a flat and thinextension of the CRT technology.

The proof of concept has a 25-inch diagonal glass substrate with a 22-inch diagonal viewing area, andoperates at a voltage that is fully compatible with low cost CMOS drivers. The distance betweensubpixels, which is a little larger than .5mm, was selected so that the printing techniques utilized arecompatible with 60-inch diagonal Advanced TV format and 80-inch diagonal High Definition TV.

"This proof of concept is a critical achievement in that the processes, including printing-like processes,used in creating the display will allow manufacturers to dramatically reduce the capital investmentneeded to produce CNT TVs," said Dr. Zvi Yaniv, Chief Executive Officer of Applied Nanotech.

As the industry moves from ATV format to HDTV format (720 x 1280 lines), the 25-inch diagonalconcept proves that ANI CNT technology is fully capable of HDTV format on 80-inch diagonal TVs(defined by the Japanese National Broadcasting Corporation NHK as the main target for consumerTVs).

"Although we are obviously not television manufacturers, I am extremely proud of our team'saccomplishment of perfecting the processes necessary for the production of CNT TVs," said Marc Eller,Chief Executive Officer of Nano-Proprietary, Inc. "This greatly improves the chances of getting apartner to initiate pilot production."

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties concerningNano-Proprietary's business, products, and financial results. Actual results may differ materially fromthe results predicted. More information about potential risk factors that could affect our business,products, and financial results is included in Nano-Proprietary's annual report on Form 10-K/A for thefiscal year ended December 31, 2004, and in reports subsequently filed by Nano-Proprietary with theSecurities and Exchange Commission ("SEC"). All documents are available through the SEC's ElectronicData Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov or from Nano-Proprietary'sweb site listed below. Nano-Proprietary hereby disclaims any obligation to publicly update theinformation provided above, including forward-looking statements, to reflect subsequent events orcircumstances.

About Nano-Proprietary, Inc.

Nano-Proprietary, Inc. is a holding company with two operating subsidiaries. Applied Nanotech Inc. is apremier research and development organization dedicated to developing applications for nanotechnologywith an extremely strong position in the field of electron emission applications from carbonfilm/nanotubes. Electronic Billboard Technology, Inc. (EBT) possesses technology related to electronicdigitized sign technology. Nano-Proprietary's website is www.nano-proprietary.com.

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

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