Applied Nanotech Announces Strategic Relationship with YHCC

Applied Nanotech Holdings, Inc. announced that it has formed a strategic relationship with Sichuan Anxian Yinhe Construction and Chemical Group Co., Ltd (YHCC). The companies signed a letter of intent, giving YHCC the exclusive right to license and commercialize two of APNT’s technologies.

Any licenses signed will be exclusive in China and other specific parts of Asia, and nonexclusive for the rest of the world. This right is valid until Aug. 31, 2011, and can be extended further upon mutual agreement of the parties. YHCC is providing APNT with a deposit, for this exclusive right, which will be applied against the upfront payment on the two licenses, if and when completed.

YHCC has expressed a strong interest in licensing additional technologies from APNT, after successful conclusion of the first two, with the ultimate goal of commercializing or representing all APNT technologies in China.

In addition to the letter of intent, YHCC is making a strategic investment of $2.5 million in APNT, for which it will receive 6,578,948 shares of restricted common stock and a board seat on APNT’s Board of Directors. Terms were agreed upon in January 2011 with final documents signed on Feb. 13, 2011 in Mianyang, China. The share price of $0.38 was based on the market price of APNT’s common stock at the time the terms of the agreement were reached.

“Along with their strong interest in licensing our technology, YHCC’s strategic investment clearly demonstrates both their commitment and confidence in our technologies. With YHCC, we believe we have found the right partner in China with the financial resources and know-how to help us commercialize our technology,” commented Dr. Zvi Yaniv, CEO of Applied Nanotech, Inc.

Founded in 1965, YHCC has a history of more than 40 years of successful manufacturing and commercialization of products. YHCC is a diversified construction, manufacturing and chemical company. YHCC has assets of 1.56 billion yuan ($250 million), more than 2,000 employees, and, in 2010, YHCC’s revenue exceeded 2 billion yuan ($330 million), up 100 % from its 2007 level of $1 billion yuan, and expects to see similar growth levels in the coming years. .

“We are thrilled to have found a partner like YHCC in China,” stated Doug Baker, CEO of Applied Nanotech Holdings, Inc. “Their commercialization expertise is a perfect match with our technology and we strongly believe that we will receive substantial financial and strategic benefits from having YHCC as a long-term partner. We are pleased that they have expressed an interest in investing in APNT and being on our Board of Directors, which demonstrates their intention of being a long- term shareholder, and recognition of the significant value a long-term relationship can create.”

“After searching top R&D companies around the world, we made the careful decision to partner with APNT,” said Xianrong LI, chairman and CEO of YHCC. “We are confident that our skills in commercialization, combined with APNT’s technologies, give us the right combination of talents to deliver significant long-term value to both our organizations.”