1. Nano Delivery of Cancer Therapeutics & siRNA A smart delivery system – small, safe, simple, and versatile.  Improved Efficacy  Lower Dosing  Fewer Side Effects

2. The Opportunity Employ NanoJackets to create more effective cancer and potentially gene therapeutics at lower dosing with fewer side-effects 2

3. NanoJackets Are Distinct Small & do not agglomerate (20 – 50nm) Protect Active Pharmaceutical Ingredient Calcium Phosphate based Increased time in circulation Dissolve in the cell Scalable and low-cost manufacturing 3

4. NanoJacket Structure Active Pharmaceutical Ingredient Calcium Phosphate NanoJacket Surface Treatment (Carboxylic Acid, Amine, or PEG) 4

5. Keystone Nano Overview Licensed and internally developed IP In-Vivo Data and Characterization of nanoparticles Focused and expedited path to Market Effective Partnerships with Nalco driving toward product revenues Ability to “package” compounds and siRNA in nano scale Calcium Phosphate 5

6. 6 KN Lead Compound Doxorubicin Application Area Breast, Bladder, Stomach, Ovaries, Thyroid Label Objective Similar efficacy with decreased nausea, vomiting, decrease in white blood cells, hair loss, congestive heart failure, cardiomyopathy Comparative Drugs Doxorubicin KN Additional Compounds Docetaxel, siRNA, Etc. Keystone Nano Summary

7. NanoJackets are Molecular Smart Bombs; Encapsulated components are released as a function of pH NanoJackets NJs 7

8. 1.This is the 1 st trial of NanoJacketed Doxorubicin in a Doxorubicin Resistant breast cancer model and dose level or schedule has not yet been optimized. 2.NanoJacketed Doxorubicin is at 10% of concentration of free doxorubicin. 3.Dosing was 3 times weekly, which has not been optimized. 8 Doxorubicin NanoJackets Treating Dox Resistant Cancer

9. 9 Near-Infrared Emitting Fluorophore-Doped Calcium Phosphate Nanoparticles for In Vivo Imaging of Human Breast Cancer ACS NANO Erhan I˙. Altınog ̌ lu, Timothy J. Russin, James M. Kaiser, Brian M. Barth, Peter C. Eklund, Mark Kester, and James H. Adair

10. PEG Coated NJs 10

11. Intellectual Property A.Patent Application – Kester / Adair use of NanoJackets in cancer product applications B.Patent Application – Adair / Kester on process to make and “NanoJacket” drugs C.Patent Applications (KN and Nalco) on methods and applications relating to industrial uses D.Patent Application (KN) on alternative methods of manufacturing E.Know-how in creating NanoJackets 11

12. Development Path Testing NanoJackets in Animal Models Testing NanoJackets in Animal Models Co-Development Agreements Co-Development Agreements New Drug Application New Drug Application Studies as Advised by Regulatory Team & FDA Studies as Advised by Regulatory Team & FDA 505 (b) (2) Trial 505 (b) (2) Trial Partnering Discussions 12

13. Keystone Nano Network Research Group Zetachron (4) Nalco (10) PSU COM Kester RG (5) PSU MRI Adair RG (5) Strategic Advisors Sage Axiom Capital Management Ben Franklin Kruse Consulting Investor Groups I-Networks White Door Inc. Axiom Led Individuals Ben Franklin Corporate Partners Silence Therapeutics Genentech Nalco

14. Partnership with Nalco Joint venture is - NanoSpecialties LLC Focus on industrial applications - non- pharmaceutical, non-biotechnology, and non- imaging applications Nalco provides up front research investment, milestone payments, and profit sharing First Industrial Product Launch 2009 14

15. 15 Investment Opportunity KN is finalizing a multi-million investment in development with Nalco around our joint venture KN is seeking to complete a $7 million pre-A convertible debt round for the Cancer / siRNA applications of the technology KN will test its first product in a comparison trial within 18 months of financing KN will file an NDA within 24 months of financing

16. Thank You! For More Information Contact: Jeff Davidson Keystone Nano, Inc. 1981 Pine Hall Road State College, PA 16801 jdavidson@keystonenano.com (814) 466-5080 16

17. 505 (b) (2) Shorter, less expensive regulatory path Testing CHANGE from approved therapeutic, no need to repeat Phase 1, 2, 3 trials More than 100 therapeutics approved Often used for alternative delivery systems Examples – Abraxane, Doxil, ANX-514 17

18. siRNA is Captured and Protected by NanoJackets 18 Free siRNA Boundsi RNA No Ca Ca binding siRNA control RNA-NJs RNA-NJs + EDTA

19. NanoJacket payloads are delivered intracellularly 5 Cy3-NanoJackets Free cy3 + cytochalasin D Cy3 is a fluorescent, organic molecule which has been encapsulated in NanoJackets Similar staining pattern in endothelial cells treated with free Cy3 and Cy3-NJs suggests NJs have dissolved Punctuate staining seen when Cy3-NJs are treated with cytochalasin D suggests that late endocytosis is involved in NJ dissolution

20. Competitive Approaches 20 Company (Product)TechnologyKey Difference J & J (Doxil)LiposomeNJ likely to provide improved delivery and fewer lipid associated side effects Abraxis Oncology (Abraxane) Albumin Coupled TaxolNJ should not cause pains in joints and muscles pSividiaSilicaNJs are soluble and less toxic Tempo Pharmaceuticals Combined Delivery of APIsNJ are simpler to produce and validate with clinical trials Insert TherapeuticsPolymeric particlesNJ offer pH dependent dissolution and have better biological compatibility Bind BiosciencesPolymeric particlesNJ pH dependent dissolution and have better biological compatibility

21. NanoJackets (NJs) 40 nm, non-toxic, stable, calcium phosphate Targetable, pH dependent dissolution Provides intracellular release of drugs Lessens systemic exposure and toxicity Shown to allow use of potent/insoluble drugs Simple surface chemistry for targeting moieties 21

22. Key Team Members Jeff Davidson, CEO, BS Chemical Engineering, MBA – Developed Partnerships with Nalco & Ben Franklin raising $1.5 million to support KN – Founded PA BIO, Co-Founder of KN Mark Kester, Chief Medical Officer, Ph.D. – G. Thomas Passananti Professor of Pharmacology Hershey Medical – Scientific Advisor to Several Companies Jim Adair, Chief Science Officer, Ph.D. – Developed NanoJacket Technology – Professor of Materials Science and Engineering – Robert Cornwall, VP Operations, MS – Mylisa Paretter, Technical Lead, Ph.D. Penn State University / Hershey Medical Nalco, Inc. Sage Advisors, Inc. Axiom Capital, Inc. Mostafa Analoui 22

23. 23 KN Lead CompoundDoxorubicin Application AreaBreast, Bladder, Stomach, Ovaries, Thyroid Label ObjectiveSimilar efficacy with decreased nausea, vomiting, decrease in white blood cells, hair loss, congestive heart failure, cardiomyopathy Comparative DrugsDoxorubicin (Likely Doxil after NDA) Nano - DifferentiationCalcium Phosphate 20 to 40 nm particle with good safety profile – small, simple, non-exotic Evidence of EfficacyCellular and animal experiments have demonstrated efficacy. Additional animal experiments are planned TargetingWe have early supporting evidence supporting longer circulatory residence time and Enhanced Permeability and Retention effects. Targeting MoietiesKN views additional targeting moieties on the surface as being opportunities for 2 nd generation nanoparticles rather than 1 st generation. Keystone Nano Summary

24. Summary of NanoJacket Experimentation Lack of calcium-induced toxicology for amine functionalized NanoJackets in vitro (normal calcium currents in imaged neural stellate ganglia) as well as in vivo (ApoE knock out model of atherosclerosis); In-vitro efficacy against drug sensitive and drug resistant breast cancer cells with Ceramide NanoJackets; In-vitro efficacy against melanoma cells with Ceramide NanoJackets; In-vivo (mice) biodistribution data shows effect of surface functionalization In-vivo (mice) safety / efficacy for delivery of NanoJacketed Doxorubicin 24

25. NanoJackets are non-toxic In-Vivo 1.NanoJackets do not affect weight gain of ApoE knockout mice, a model of atherosclerosis 1.Dose of 10 15 NanoJackets three times per week 25

26. NanoJacketed Ceramide (as API) kills drug sensitive and drug resistant breast cancer cells 1.At 1/5 of the dosing NanoJackets are approximately 7 times as effective 2.NanoJackets are effective against drug resistant cells (Panel B) 26

27. Untreated Melanoma Cells Melanoma Imaged with NanoJackets NanoJacketed Ceramide Eliminates Melanoma Cells Ceramide NanoJackets Image & Treat Melanoma Cells Panel 1 – DAPI Stained Melanoma Cells Panel 2 – Demonstrating NanoJackets Image (Target) Melanoma Cells Panel 3 – When treated with NanoJacketed Ceramide the cells quickly die 27

28. Ceramide NanoJackets reduce melanoma growth In Vivo without toxicology 1.Mice treated with NanoJackets were not harmed. 2.Mice treated had a 40% smaller tumor at the conclusion of the study with suboptimal dose of Ceramide 28

29. PEG Coated NanoJackets Image of Mouse with NJ at right showing recirculation of NJs for extended circulation NJs provide sustained distribution as shown in the photo of the NJs at right Free ICG entirely susceptible to hepatic clearance (Secretion in bile through gastrointestinal track) Localization in tumors evident with PEGylated NJs after 24 hours Stomach Duodenum Pancreas Small Intestine Excised GI Track after 4-hour ICG-doped NJ injection 29

30. 30 Work Underway  DEVELOPMENT EXPERIMENTS PLANNED Dose Response versus free Dox (7 groups of 6 animals) Surface Treatment Effects (4 groups of 6 animals with dosing) CRO Toxicology and biodistribution / PK Study (designs being planned)  REGULATORY INITIATIVES Prepare for Pre-IND discussions with FDA (planning underway)

31.  Small, simple, safe, versatile delivery technology  Large cancer therapy opportunities  Expedited / Advantaged Pathway to Market  Protected IP  Strong in-vivo data 31 Summary