NNPP now ~ $1 - going to $5, $10, $50?

I think so, in light of this CEO letter to shareholders:

[My bolding]

A Periodic Report - March 2008

I wanted to update you on our progress during the last quarter and share some insights into the current year.

First, a few administrative details. As many of you know, the company has primarily done business as Applied Nanotech Inc. on a daily operating basis and has used Nano-Proprietary, Inc. as our public face. I haven't been with the company long enough to fully understand the reasoning behind this, but I think you will agree it no longer makes sense. At the annual meeting this year, one of the items on the agenda will be a change of the name of NPI to Applied Nanotech Holdings, Inc. This change, along with a standardization of logos and stationary is designed to present a more consistent image to the world and remove some of the confusion as to who we are. Our subsidiary, Applied Nanotech, Inc. will continue to exist primarily due to ongoing contractual obligations.

We have scheduled our annual shareholder meeting for May 20, 2008 at the Austin Renaissance Hotel. Following the meeting, which will start at 10:00 am, we will be conducting tours at our headquarters facilities. For those of you who have never had the opportunity to visit us, this is the ideal opportunity.

The last quarter, bringing 2007 to a close and ending my first year at NPI, was certainly an unexpectedly busy time. The financial results are best told by reviewing the 10K, but in summary, our 4th quarter sales of $1,077,149 and net loss of $965,511 were in line with our expectations. Adding these to our already strong year to date numbers (by historical company standards) gave us our best showing from operations in the company history. Losses were, of course, impacted by our huge legal fees from on-gong litigation. We expect these type expenses to be significantly lower in 2008. On the Canon matter, we are primarily waiting for the appeals process to grind forward. Keesmann related expenses will be sharply reduced due to the additional defendants (those other than Keesmann) offer to pay a settlement to us while simultaneously withdrawing their financial support of Keesmann. We are asking the court for an expeditious trial in the Keesmann matter with the hope of resolving this matter during 2008.

Working on the Keesmann matter was only one of the things that kept the fourth quarter busy. Final work on the hydrogen sensor and supporting the integration into our customer's product occupied the sensor team. This customer, who has already entered into a royalty bearing license and technology transfer agreement, is planning an April product announcement. We expect this agreement to be royalty bearing during 2008.

I also couldn't be happier with the progress we are making on printable copper inks. We have met our customers’ design specifications and are capable of manufacturing consistent batches of material in sufficient quantity to allow the delivery of samples to our customers' prospects. Our current activity revolves around securing sufficient quantities of nano-particles to allow production lot sizes to be manufactured by our customer. We fully expect this project to leave the development phase during 2008 resulting in a production license and royalties.

Mitsui has made the initial payment extending their "option to a license" agreement with us and we are actively negotiating a Master License with Mitsui that would allow them to issue sub-licenses within their market areas. Although we do not have complete transparency through to the end potential licensee, Mitsui has asked us to approve negotiating guidelines for two of the potential sub-licensees that they are working with. We believe they are working with a total of five potential licensees.

As significant as our business results have been, the progress in obtaining new patents and expanding the geographical coverage of our portfolio overshadows them because they are at the heart of future results. We have had our first patent issued in Japan (see press release dated 1/31/08) and our recent nano-biological patent (see press release dated 2/28/08) are key milestones.

As I am writing this, we are expecting our quarterly revenue for the almost completed first quarter to be in the $800 - $900,000 range, consistent with the past few quarters. After these billings, we will have at least $3.3 million in research backlog. We, of course, have sales efforts underway across our business lines to generate additional research projects that will hopefully yield IP with lasting value.

I continue to be optimistic about the prospects for the business and hope you will make an effort to join us for our annual shareholder meeting.

Sincerely,

Thomas F. Bijou

http://www.nano-proprietary.com/InvestorRelations/ShareHolderCommunications.asp

Nanoparticles could make hydrogen cheaper than gasoline

EE Times: Semi News

R. Colin Johnson

EE Times
(02/25/2008 9:21 AM EST)

PORTLAND, Ore. — The hydrogen economy is getting a shot in the arm from a start-up that says its nanoparticle coatings could make hydrogen easy to produce at home from distilled water, and ultimately bring the cost of hydrogen fuel cells in line with that of fossil fuels.

QuantumSphere Inc. says it has perfected the manufacture of highly reactive catalytic nanoparticle coatings that could up the efficiency of electrolysis, the technique that generates hydrogen from water. Moreover, the coatings could also eliminate the need for expensive metals like platinum in hydrogen fuel cells.

Boasting 1,000 times the surface area of traditional materials, the coatings can be used to retrofit existing electrolysers to increase their efficiency to 85 percent--exceeding the Department of Energy's goal for 2010 by 10 percent. The scheme holds the promise of 96 percent efficiency by the time cars powered by hydrogen fuel cells hit automobile showrooms, according to the Santa Ana, Calif., company.

"Instead of switching 170,000 gas stations over to hydrogen, using our electrodes could enable consumers to make their own hydrogen, either in the garage or right on the vehicle," said Kevin Maloney, president, chief executive officer and co-founder of QuantumSphere. "Our nanoparticle-coated electrodes make electrolysers efficient enough to provide hydrogen on demand from a tank of distilled water in your car."

The first commercial product inspired by QuantumSphere's technology will debut later this year: a battery using a cathode coated with the startup's nanoparticles, thereby increasing its energy density 5x over alkaline cells and boosting power by 320 percent. The first commercial nonrechargeable batteries with this increased capacity will be announced by an as-yet-unnamed major U.S. battery maker in the second half of 2008.

QuantumSphere also claims to be able to improve rechargeable nickel-metal-hydride batteries to the point where they perform better than the less environmentally friendly lithium-ion batteries popular today.

QuantumSphere's plan is first to retrofit existing electrolysis equipment with its nanoparticle electrodes to boost efficiency. Next, it intends to partner with original equipment manufacturers to design at-home and on-vehicle electrolysers for making hydrogen from water for fuel cells. Finally, the company wants to work with fuel cell makers to replace their expensive platinum electrodes with inexpensive stainless-steel electrodes coated with nickel-iron nanoparticles.

QuantumSphere's nanoparticles are available in four formulations: nickel cobalt, iron cobalt, nickel iron and silver copper. According to the Freedonia Group Inc. (Cleveland), the nanoparticles can be sold directly into the catalyst metals market, which it predicts will edge up to $4.7 billion this year.

QuantumSphere is also expected to have an impact on the battery market, which Freedonia estimates will grow to more than $5 billion by 2009. Portable fuel cells and direct hydrogen generation are markets that are growing even faster, with fuel cells estimated to top $11 billion by 2013, according to Wintergreen Research Inc. (Lexington, Mass.), and hydrogen generation to exceed $15 billion by 2016, according to Clean Edge Inc. (Portland, Ore.).

QuantumSphere was founded in 2002 with just $100,000 of private funding and still has not taken in any venture capital, although it did have a public funding round last year. The company's founding goal was to create a thimble full of the nanoparticles it invented. But now, just over five years later, it claims to have surpassed its original goal with a manufacturing plant capable of producing tons of nanoparticles per year.

QuantumSphere claims its current manufacturing capacity is enough for both the battery and electrolysis markets. With an eye on future growth, however, the company has partnered with the OM Group Inc. (Cleveland) for mass-producing nanoparticles when QuantumSphere can no longer meet demand.

After perfecting the original invention, for which QuantumSphere was awarded a patent last year, the company hired an engineering team to adapt the nanoparticles for particular applications. Leading that team was director of fuel cell research Kimberly McGrath, a protg of George Olah, the 1994 Nobel Prize winner in chemistry. Olah, inventor of the direct liquid-methanol fuel cell, serves as a scientific adviser to QuantumSphere.

"We have formulated a nanoparticle coating that has a very high surface area, enabling inexpensive coated stainless-steel electrodes to exceed the performance of the expensive platinum electrodes used today," said McGrath. "We start with raw material that covers about the size of a sheet of paper, but after converting into nanoparticles, it covers a soccer field."

The nanoparticles are perfect spheres, consisting of a couple hundred atoms measuring from 16 to 25 nanometers in diameter. They are formed by means of a vacuum-deposition process that uses vapor condensation to produce highly reactive catalytic nanoparticles, for which the engineering team has formulated several end-use applications.

"Our biggest engineering challenge was finding a way to get the nanoparticles to stick to metal electrodes," McGrath said. The company has solved that problem, she said, "enabling existing electrolysis equipment to realize a 30 percent increase in hydrogen output just by retrofitting our coated electrodes."

QuantumSphere projects that the efficiency of electrolysis using its nanoparticle-coated electrodes, now at 85 percent, can be increased to 96 percent by the time hydrogen fuel cell automobiles are in wide use. Adjusting for rising gasoline prices, QuantumSphere projects that performing electrolysis at home to power hydrogen fuel cells will then be less expensive than burning fossil fuels.

The company has also made progress in its quest to eliminate the need for expensive platinum electrodes inside the fuel cell itself, claiming that today it can replace half a fuel cell's platinum with nanoparticle-coated stainless steel. QuantumSphere hopes to demonstrate fuel cells with no platinum at all in the coming years.

http://www.eetimes.com/news/semi/showArticle.jhtml?articleID=206801669

Some day....somebody....some company....is going to do the impossible....run your car on water. Oil stinks, gas stinks, and both are expensive as hell. Water is cheap, no stink, available everywhere - except deserts, where oil comes from - and if you are thirsty, much better than oil or gasoline.