Nano-Proprietary, Inc. Awarded Homeland Security Contract for Cargo Shipping Container Sensor

Will develop a low cost, highly reliable chemical sensor to detect humans hiding in cargo


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 extremely strong positions in the fields of electron emission applications from carbon film/nanotubes, sensors, functionalized nanomaterials, and nanoelectronics. Electronic Billboard Technology, Inc. (EBT) possesses technology related to electronic digitized sign technology. The Companies have over 200 patents or patents pending. Nano-Proprietary's website is www.nano-proprietary.com.

COMPANY CONTACT Doug Baker Chief Financial Officer Nano-Proprietary, Inc. 248.391.0612dbaker@appliednanotech.net MEDIA CONTACT William J. Spina 781.383.0369wjs_ptnrs@msn.com

<<Market Wire -- 09/13/06>>