Applied Nanotech Holdings, Inc. (OTC BB: APNT) announced that as a result of the success of the joint research program of the companies, it has entered into a license agreement with a prominent sporting goods manufacturer covering Applied Nanotech’s carbon composite technology. The license grants the sporting goods manufacturer the exclusive right to use ANI’s technology in the manufacture and sale of tennis and badminton racquets in Japan and Taiwan, and the nonexclusive right to sell these products on a worldwide basis. The license agreement also contemplates the potential expansion into the golf club shaft market, defining the terms and royalties should the manufacturer choose to enter production in the future.

In exchange for this license, ANI will receive an initial royalty fee of $577,000 and an ongoing royalty of 4% based on sales of the sporting goods manufacturer’s products using the technology. The manufacturer will also fund additional development of the technology to facilitate integration of the technology into the manufacturing process.

“As we reported in our press release of June 17, 2008, ANI has achieved improvements of over 40% in flexural strength and over 30% in compression strength for epoxy/carbon nanotube composites. The properties of these new composites were successfully transferred to the process of manufacturing fiber reinforced plastics (FRP) where ANI achieved a promising 23% improvement in the flexural strength and improvements in the compression strength of the final RFP, which will allow the research and development results to be transferred to manufacturing,” said Dr. Zvi Yaniv, CEO of Applied Nanotech, Inc.

“We are pleased that our efforts in the composites area have led to this license agreement,” said Tom Bijou, Chairman and CEO of Applied Nanotech Holdings, Inc. “Although the total size of the exclusive markets for the targeted racquet products is limited, estimated at less than $150 million annually in the exclusive region, our success with this project has opened the door to opportunities with other companies and for other applications. We expect composites to be an increasingly important area of our business allowing lighter weight products with equal strength or stronger products of the same weight.”