Houston Technology Center Announces Three New Gulf Coast Region ETF Grant Recipients.

HOUSTON -- The Houston Technology Center (HTC) and Gulf Coast Regional Center of Innovation and Commercialization (Gulf Coast RCIC) for the Texas Emerging Technology Fund (ETF) announced today that Carbon Nanotube Acceleration Project (CNAP), NanoComposites, Inc. (NCI) and Nanospectra Biosciences, Inc. have been awarded ETF grants and have also joined HTC as Client companies.

Awards for the three Gulf Coast region companies were officially announced by Lt. Governor David Dewhurst at the Houston Technology Showcase event held September 27, 2006 in Houston.

Carbon Nanotube Acceleration Project (CNAP), an operating division of Carbon Nanotechnologies, Inc. (CNI), was awarded $975,000 to help bring to the market a new fuel cell technology that is expected to power the next generation of portable and wireless electronic devices. The technology was developed by the late Nobel Prize Laureate in Chemistry, Professor Rick Smalley, at Rice University. The Houston-based company will use the grant as matching funds for a $975,000 grant from the U.S. Department of Commerce's National Institute of Standards and Technology. More than $2.7 million in private and public sector investments have already been made in the technology to help bring it to market by early 2007. According to T.J. Wainerdi, Director of CNAP, "Single-wall carbon nanotubes have the potential to double the power of micro-fuel cells, making them a preferred solution for powering next-generation portable electronics and ushering in a new age of personal super computing." The ETF grant is expected to help leverage an additional $10 million in strategic investments. CNI has been collaborating with Rice University and assisted by the Economic Development Alliance for Brazoria County.

"Rick Smalley was a visionary. He knew that Texas should lead the world in nanotechnology and energy. Helping make molecular electronics happen was one of his top priorities. At the end of his life, he was thrilled about this emerging technology grant, and the governor's show of support for leading Texas in a direction that will prove to be profitable in many ways - locally and globally," said Deborah Smalley, the widow of the late scientist. "He would have been proud of the team effort lead by T.J. Wainerdi, the Economic Development Alliance for Brazoria County and the Gulf Coast RCIC, to make this grant a reality." For more information visit www.cnanotech.com.

NanoComposites, Inc. (NCI) was awarded $1.5 million to commercialize its proprietary process for the functionalization of carbon nanotubes. In 2007, NanoComposites will be producing uniquely enhanced elastomers for use in mission critical seals used in upstream oil and gas drilling operations. NanoComposites, Inc. has been working in collaboration with Rice University and assisted by the Greater Houston Partnership.

"NCI is delighted to receive this ETF Award which further strengthens the company's ties to Texas and the oil and gas industry in Houston," said Barry Drayson, CEO of NCI. "The award will fuel NCI's further growth and provide a solid validation for the company's upcoming Series C Financing," he added.

Nanospectra Biosciences, Inc. was awarded $1,250,000 to fund the clinical development of its AuroLase[TM] Cancer Therapy. Nanospectra's primary focus is the development and commercialization of AuroLase(TM) which is broadly applicable to virtually all solid tumors. Other potential applications of AuroShell(TM) microparticles in development include the detection of disease and bio-warfare agents through Raman-based substrates and immunodiagnostic assays and the development of laser eye protection for military use. Nanospectra Biosciences, Inc.'s collaboration partners are Rice University, UT MD Anderson Cancer Center, UTMB at Galveston and the Greater Houston Partnership.

"We are very pleased that the ETF has selected Nanospectra's AuroLase[TM] Cancer Therapy for funding," stated J. Donald Payne, President and CEO of Nanospectra Biosciences, Inc. "This was an extremely competitive selection process, and we believe the award underscores the potential medical significance of our therapy to cancer patients as well as our potential impact on economic development in the State of Texas. We will use this award to commence a clinical trial in head and neck cancer later in 2006." For more information visit www.nanospectra.com.

The three companies announced last week join three other HTC Clients, all based in the Gulf Coast region, already funded by the ETF:

CorInnova Incorporated - an early stage medical device company, developing and commercializing heart assist technologies that lead to heart recovery rather than replacement, was awarded $500,000, collaborating with the Research Valley Partnership. Funding for CorInnova has come through Texas A&M sponsored research as well as a NIH STTR Fast-Track Award ($850K).

Endothelix, Inc. - a company dedicated to bringing endothelial function measurement from research laboratories to the mainstream practice of medicine in a low-cost and operator-independent manner to assist with early detection of cardiovascular disease and monitoring response to therapy. Endothelix, Inc. was awarded $1 million, collaborating with Rice University. Endothelix's first technology was licensed from the Texas Heart Institute and the University of Texas Health Science Center in Houston. Researchers from the University of Houston, Baylor College of Medicine, and Texas A&M University are also actively involved with Endothelix. For more information visit www.endothelix.com.

itRobotics, Inc., a pioneering technology company operating to provide state of the art non-destructive inspection service for small diameter energy pipes using the latest robotic technology, was awarded $750,000. itRobotics, Inc. collaboration partners are Rice University and Greater Fort Bend Economic Development Council. For more information visit www.itrobotics.com.

The $200 million Texas Emerging Technology Fund created in June 2005 by Texas Governor Rick Perry assists small to mid-size technology companies launch sooner, expedite the commercialization of new life-changing inventions out of the lab and into the hands of consumers and improve research at Texas universities.

HTC has been selected to serve as the Gulf Coast RCIC for the ETF, collaborating with the Greater Houston Partnership (GHP), Economic Development Organizations (EDO) within its 32-county region, area universities, and community volunteers. The Gulf Coast RCIC and the other seven centers are responsible for processing all funding applications and supporting emerging technology companies in their regions.

"Houston Technology Center congratulates the three newest recipients of ETF funding. We are very pleased to see numerous companies from the Gulf Coast region receiving awards that will help realize their plans to accelerate the commercialization of their technologies, thereby contributing to the region's economy and benefiting the community locally and globally," said Paul Frison, President and CEO of the Houston Technology Center.

The Gulf Coast RCIC is currently reviewing applications submitted for the fifth round of funding. Applications for the sixth round of funding may be submitted to the Gulf Coast RCIC in December, 2006. For detailed information about the Emerging Technology Fund, visit the Gulf Coast RCIC web site at www.gulfcoastrcic.org.

About the Houston Technology Center: Houston Technology Center (HTC) is Greater Houston's business accelerator and the largest technology business incubator in Texas. A 501(C)(3) corporation and the center of entrepreneurship in Houston, HTC accelerates the commercialization of emerging technology companies within several key sectors: Energy, Technology, Life Sciences, Nanotechnology and NASA-originated technologies. For more information visit www.houstontech.org.