8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported):

November 29, 2005

NaturalNano, Inc.

(Exact name of registrant as specified in its charter)

Nevada	000-49901	87-0646435
(State or other jurisdiction	(Commission File No.)	(I.R.S. Employer
of incorporation)		Identification No.)

150 Lucius Gordon Drive, Suite 115

West Henrietta, New York 14586

(Address of principal executive offices)

Cementitious Materials, Inc.

19 East 200 South, Suite #1080

Salt Lake City, Utah 84111

(Former name, or former address, if changed since last report)

(585) 214-8005

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Page Numbers
Item 2.01 Completion of Acquisition of Assets	3
Part I	4
Part II	24
Part III	29
Item 3.02 Unregistered Sale of Equity Securities	29
Item 4.01 Changes in Registrant’s Certifying Accountant	30
Item 5.01 Changes in Control of Registrant	30
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers	30
Item 5.03 Amendments to Articles of Incorporation or Bylaws	30
Item 5.06 Change in Shell Company Status	30
Item 9.01 Financial Statements and Exhibits	31
Signatures	32
Exhibits	33

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As used in this Current Report on Form 8-K, unless the context otherwise requires, the terms “we,”“us,”“NaturalNano,” and “the Company,” refer to NaturalNano, Inc., a Nevada corporation formerly known as Cementitious Materials, Inc., together with its subsidiaries.

       This Information Statement and other reports that we file with the SEC contain certain forward-looking statements that involve risks and uncertainties relating to, among other things, the closing of the Merger transaction and our future financial performance or future events. Forward-looking statements give management’s current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than statements of current or historical fact contained in this Information Statement, including statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,”“estimate,”“plans,”“potential,”“projects,”“ongoing,”“expects,”“management believes,”“we believe,”“we intend,” and similar expressions. These statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from the results set forth in the information statement. You should not place undue reliance on these forward-looking statements. You should be aware that our actual results could differ materially from those contained in the forward-looking statements due to a number of factors such as:

·    continued development of our technology;

·    dependence on key personnel;

·    competitive factors;

·    the operation of our business; and

·    general economic conditions.

These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Item 2.01 Completion of Acquisition of Assets.

On November 29, 2005, pursuant to an Agreement and Plan of Merger, dated as of September 26, 2005 (the “Merger Agreement”) by and among Cementitious Materials, Inc., a Nevada corporation, (the “Company”), Cementitious Acquisitions, Inc., a Nevada corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and NaturalNano, Inc., a Delaware corporation now known as NaturalNano Research, Inc. (“NN Research”), Merger Sub was merged with and into NN Research, with NN Research surviving as a wholly-owned subsidiary of the Company (the “Merger”). Immediately following the Merger, the Company changed its name to “NaturalNano, Inc.” Pursuant to the Merger Agreement, we issued 44,919,378 shares of our authorized but previously unissued common stock to the stockholders of NN Research in exchange for all of the issued and outstanding common stock of NN Research and an additional 10,469,600 shares of our authorized but previously unissued common stock in consideration for the conversion of certain outstanding NN Research convertible debt. We also issued options and warrants for the purchase of an aggregate of 7,200,000 shares of our common stock to the holders of outstanding NN Research options and warrants, in consideration of the cancellation of such options and warrants.

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Because the shares issued to NN Research’s stockholders and note holders in the Merger represent a controlling interest in the Company, the transaction was accounted for as a recapitalization, and NN Research is considered the acquirer for accounting purposes. All of the historical financial statements which are attached to this report through the date of the recapitalization are those of NN Research.

Immediately following the effective time of the Merger, all of our directors prior to the completion of the Merger resigned, and the Company’s board of directors was reconstituted to consist of the following five directors: Steven Katz, Ross B. Kenzie, John F. Lanzafame, Michael Riedlinger and Michael L. Weiner, all of whom (other than Mr. Riedlinger) were formerly directors of NN Research. More complete biographical information concerning each of these directors is set forth below in the section entitled “Executive Officers and Directors” in this Report.

Approximately but no earlier than 60 days after the filing date of this Report, we intend to register with the SEC on Form S-8 the shares of the Company’s common stock issuable upon exercise of options under the NaturalNano, Inc. 2005 Incentive Stock Plan issued pursuant to the Merger Agreement. Under obligations assumed by the Company in connection with the Merger, we also intend to register with the SEC on Form SB-2 certain of the shares of the Company’s common stock issued to former stockholders and note holders of NN Research, and certain shares issuable upon exercise of warrants issued pursuant to the Merger Agreement to the holder of NN Research warrants outstanding at the time of the Merger.

We were a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (17 CFR 240.12b-2)) immediately before the change in control effected by the Merger. Accordingly, we set forth below the information that would be required if we were filing a general form for registration of securities on Form 10-SB (17 CFR 249.210b) under the Exchange Act, reflecting our common stock, which is the only class of our securities subject to the reporting requirements of Section 13 (15 U.S.C. 78m) or Section 15(d) (15 U.S.C. 78o(d)) of the Exchange Act upon consummation of the change in control, with such information reflecting the Company and our securities upon consummation of the Merger.

Part I

BUSINESS

Overview

The Company is a development stage entity whose primary business is processing, developing and commercializing naturally occurring nanoscale materials. The business is currently directed toward research, development, production and marketing of material and proprietary technologies in the following fields:

(1.) Developing a state-of-the-art, proprietary process for extracting and separating halloysite nanotubes from halloysite clay;

(2.) Developing commercial applications for halloysite nanotubes, specifically for the following application areas;

(i) material additives for polymers, plastics, and composites;

(ii) cosmetics and other personal care products;

(iii) absorbent materials; and

(iv) pharmaceuticals and medical device additives;

 

(3.) Engaging in business alliances with other organizations to bring our nanoscale materials to market.

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Products and Technology

The Company provides halloysite nanotubes along with technologies and services for functionalizing these aluminosilicate nanotubes for use in a wide range of applications. Functionalization of the halloysite nanotubes is done by applying proprietary processes to fill or “load” the tubules with differing materials and compounds; or to enable diffusion of the tubules in a given chemical mixture; for specific purposes—such as an extended release of fragrances.

The resulting materials produced using these proprietary processes is either a fine powder or a “slurry,” which is a powder suspended in a liquid. The use of powders or slurries depends on specific customer requirements and use in their manufacturing processes.

Proprietary technologies include processing methods, formulations, and specific surface treatments that enable the halloysite nanotubes to be functionalized and used in a wide range of applications. The Company has rights to patented technologies as well as patents pending for processing methods, formulations and other surface treatment technologies. Some proprietary technologies are protected by trade secrets.

Projected Milestones for the Period through December 2006

During the 2006 operating cycle, the Company will continue to focus on the following operational objectives and milestones:

1. Continued Intellectual Property Asset Development

a. Continue patent applications for separation technologies and applications for naturally occurring nanomaterials

b. License-in complementary technologies from third-parties

2. Halloysite nanotube processing technology

a. Continue investigation of processing alternatives for commercial scale

b. Create designs for pilot processing system

3. Sample material availability

a. First sample availability of processed halloysite for shipment to a third party

b. Shipment of first samples to third parties for evaluation for research-use only

4. Engagement with research organizations to reduce patent-pending and licensed IP to practice in the following categories:

a. Separation and classification of halloysite nanotubes

b. Additives for composite plastics and polymers

c. Cosmeceutical applications

d. Electronics applications

5. Close strategic partners and initial orders for our processed halloysite and licenses for our technology.

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Product Sales and Distribution Approach

The Company intends to develop an internal direct sales and distribution network for delivery of products and licensed processes with prospective customers. At the present time, this approach is considered to be a key element of our overall strategy in the qualification of potential applications and opportunities with customers. As individual market segments are developed through this direct sales approach, the Company may consider the use of alternate sales and distribution methods.

Competition

In addition to a wide range of material additives that are currently being used in the industries targeted by the Company, the current nanomaterials market consists of approximately 200 companies globally, providing a wide variety of metal oxides and inorganic compounds. The Company expects that its future product offerings will provide new capabilities and anticipated superior performance compared to existing materials. Benefits from the use of novel nanomaterials may permit us to differentiate our product offerings from potential competitors. However, many of our current and prospective competitors are larger and have greater financial resources, which could create significant competitive advantages for those companies

Within each of the targeted markets and product applications, the Company faces current and potential competition from many advanced material, encapsulation and chemical companies, suppliers of traditional materials and the in-house capabilities of several of its potential customers. With respect to larger producers of nanomaterials, while some of these producers do not currently offer competitive products, these companies have greater financial and technical resources, larger research and development staffs and greater manufacturing and marketing capabilities and could soon begin to compete directly against the Company.

Raw Materials

The Company has purchased from Atlas Mining Company a supply of halloysite clay, which the Company believes will be sufficient to meet the Company’s research and development needs for at least one year. Atlas Mining Company operates what is generally considered to be the largest commercial halloysite mine in the United States. The Company has identified other halloysite sources that it believes are suitable as alternate suppliers of raw materials, and the Company does not believe that it will be dependent upon Atlas Mining Company for the sole supply of raw materials.

Patents, Trademarks and Licenses

The Company has applied for patents on its processes and technologies and expects to continue filing more patent applications related to processes, new compositions of matter, and specific applications for use of the functionalized materials. The Company utilizes trademark protection for its current and anticipated products. Some technologies used by the Company have been licensed in from third-parties. These third parties include the majority stockholder of the Company, Technology Innovations, LLC, as well as an independent research laboratory. The Company expects to continue licensing-in processes and technologies that contribute to the further commercialization of naturally occurring nanomaterials.

Government Regulation

We are subject to governmental regulation much like many other companies. There are still relatively few laws or regulations specifically addressing nanotechnology. As a result, the manner in which existing laws and regulations should be applied to nanotechnology in general, and how they relate to our business in particular, is unclear in many cases. We expect new laws and regulations to be adopted that may be directly applicable to our activities. Any existing or new legislation applicable to us could expose us to substantial liability, including significant expenses necessary to comply with such laws and regulations and could dampen the growth in the use of nanotechnology in general.

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Estimate of Research and Development Expenses

We estimate that spending for the twelve month period ending December 31, 2006 for research and development related projects, including related capital investments, will be approximately $ 1,250,000.

Number of Total Employees and Full-Time Employees

As of November 29, 2005 the Company had seven full-time employees and one part time employee.

SUMMARY SELECTED HISTORICAL FINANCIAL DATA

The following table sets forth selected historical financial data for NN Research, the accounting acquiror in the Merger. The statement of operations data for the year ended December 31, 2004 and the balance sheet data as of December 31, 2004 are derived from our audited financial statements. The statement of operations data for the nine months ended September 30, 2005, and the balance sheet data as of September 30, 2005 are derived from our unaudited financial statements which include all adjustments, consisting only of normal recurring adjustments and accruals, that the Company considers necessary for a fair presentation of its financial position and results of operations for these periods. We commenced business operations in December 2004 and there are no financial data for any periods prior to December 22, 2004. Interim operating results for the nine months ended September 30, 2005 are not necessarily indicative of the results that may be expected for the entire fiscal year ended December 31, 2005 or any future period. The following selected financial data should be read in conjunction with the financial statements and the notes thereto included herewith.

Statement of Operations Data for NaturalNano, Inc. (now known as NaturalNano Research, Inc.):

	Nine Months Ended September 30, 2005			Period from Inception December 22, 2004 through December 31, 2004
Revenues	$	—		$	—
Expenses:
Research and development		293,492			5,000
General and administrative		1,597,065			2,336
Loss from operations		1,890,557			7,336
Other (income) expense:
Interest expense net		1,511
Investment income		(120,000	)
Total other (income) expense		(118,489	)
Net loss	$	(1,772,068	)	$	(7,336	)
Loss per share	$	(0.18	)	$	(.000	)
Weighted average number of shares outstanding		10,000,000			10,000,000

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Balance Sheet Data:

	September 30, 2005			December 31, 2004
	(unaudited)
Current assets	$	2,972,368		$	125,000
Working capital (deficiency)	$	(1,590,667	)	$	92,664
Total assets	$	3,301,714		$	125,000
Total liabilities	$	4,598,035		$	32,336
Total stockholders’ equity (deficiency)	$	(1,296,321	)	$	92,664

PLAN OF OPERATIONS

General

The following information should be read in conjunction with the September 30, 2005 financial statements and notes thereto appearing elsewhere in this Report on Form 8K.

The Company is a development stage company and is expected to remain so for at least the next twelve months. Our primary mission is to develop and exploit technologies in the area of nanotechnology, specifically focusing on naturally occurring nanoscale materials. Our strategy is to patent these processes and application technologies and subsequently license the associated patents to relevant industries including: polymers, plastics and composites, cosmetics and personal care products and medical and pharmaceutical device additives and coatings.

We believe that the commercial applications that will result from our research are patentable and will result in significant licensing potential across a wide range of industries. Our researchers have identified more than 200 applications within these industries as potential development opportunities which are subject to pending patents and issued patents under licensing agreements.

The Company’s near term goal is focused on core technology development and application processes utilizing halloysite nanotubes. We expect to identify and develop other naturally occurring nanoscale materials in future research programs.

Processing and Manufacturing

NaturalNano has defined the anticipated end product as either a dry powder or colloidal suspension of nanotubes which may be sold in different configurations - metallized or not, unloaded or loaded with any one of a number of different active agents for different applications. Different applications and marketing partners would require different product configurations, and will need to be assessed individually.

Our future manufacturing operations would begin with raw or minimally processed material we have received from the halloysite mine, sourced in the United States from Atlas Mining’s Dragon Mine in Utah. We would further process this material to extract nanotubes from the surrounding minerals present in halloysite clay and then further classify the nanotubes by size. This refined and classified material would then be shipped to customers in the form of a dry powder or a slurry mixture. The customer’s specific requirements will determine the final form of delivery.

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NaturalNano can add further value to the refined and classified nanotubes by either adding material to the surface of the nanotubes or loading within the hollow openings of the nanotubes. The resulting intermediary materials can then be shipped to customers for use in their manufacturing processes.

These powders or suspensions will be designed as an intermediate component of a finished consumer product. Typically, these materials would be incorporated with other components to produce the finished product that our marketing partner would sell, for instance providing a controlled release agent or a strengthening agent to be added to the partners existing materials / products. The Company will evaluate and select suitable manufacturing partners in each of the targeted industry segments. We will work with each manufacturing partner to build the expertise to provide the materials, in the various required configurations.

Patents and Intellectual Property

The Company’s intellectual property portfolio currently contains five patent applications with several additional patent applications in process. The Company has exclusive licenses, within certain fields of use, under four additional pending patent applications and licenses to eight additional patents. Over 200 applications for halloysite have been identified to date and are covered in our pending patents. As research and development continues, NaturalNano intends to aggressively seek patent protection for new developments and technologies in the United States and in strategic foreign markets, in addition to licensing-in patents to augment our development opportunities.

Research and Development

During the next twelve months the Company’s research and development focus will be in the following areas:

· Collaboration with potential customers in major market segments to demonstrate proof of principle for specific industry applications.

· Establishment of a Research Lab to produce sample products for customers in the various industries identified above, at a competitive cost.

· Establishment of a pilot production program to extract, separate and categorize naturally occurring nanotubes found within halloysite clay, which will provide the basis for our future development of commercial scale production facilities.

During the twelve month period ending December 31, 2006, the Company expects to spend approximately $250,000 for capital investments relating to the setup of the Research Lab. The Company is currently in the process of evaluating leased space available in the Rochester, New York area to establish this combined research facility.

Research and Development related expenditures for the twelve month period ending December 31, 2006, which will include salaries for employees, fees for collaborative research agreements and lab testing materials, will approximate $1,000,000.

Strategic Relationships

Leveraging strategic relationships is vital to our mission. These relationships will help us to validate our technology, develop extraction and separation processes, offer insight into additional application opportunities, and develop future sales channels, among other things. The Company has entered into cooperative research and development agreements with three nationally recognized universities and an independent laboratory to jointly test and further develop core technologies and commercial applications for naturally occurring nanoscale materials. We will continue to seek partnering relationships with research facilities around the world as we focus on developing new nanotechnology solution applications.

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We have entered into numerous non-disclosure agreements with prospective business partners and have discussed with these entities the potential for strategic relationships that could result in joint development and licensing agreements. This partnering of ideas and the joint development of applications has proven to be successful in accelerating our development of new processes and product opportunities and will continue to be pursued by the Company.

On May 25, 2005 NN Research signed a joint research agreement with Nanolution, LLC (a wholly owned subsidiary of Biophan Technologies, Inc.) to pursue the development of a new drug delivery application utilizing naturally occurring halloysite nanotechnologies. In connection with this agreement, the Company and Nanolution have agreed that all medical uses and inventions arising from these efforts will be owned by Nanolution and all purification processes and non-medical applications will be owned by the Company.

Investor Relations

The Company intends to regularly communicate and re-enforce our brand awareness and corporate strategies in order to keep our shareholders, the investment community and our strategic partners informed regarding our progress in achieving our stated milestones and related discoveries. We believe our efforts to achieve widespread press exposure will help raise the scientific and investment community’s awareness of the science of nanotechnology  and increase the recognition of NaturalNano, Inc. as an innovative company. In this regard, the Company has engaged various professional firms to actively assist and advise in establishing public relations and investor relations strategies.

Employees

As of November 29, 2005 the Company employed seven full-time employees and one part-time employee. We anticipate the addition of another full-time employee within the next twelve months. Our evaluation of human resource needs has resulted in our use of experienced part-time consultants in the areas of product and business development in lieu of immediate full-time hiring for certain positions. The Company also has a number of consulting PhD and post doctoral level scientists and engineers available to assist in various extraction and classification of halloysite nanotubes and on other application related research projects. All of our employees have signed confidentiality agreements and we have non-complete agreements in place with our key employees.

Cash and Financing Activities

The Company’s source of cash since inception has been from inter-company advances from our principal stockholder, Technology Innovations, LLC, and from the issuance of $4,156,000 in Convertible Bridge Notes. The Convertible Bridge Notes included a mandatory conversion feature that resulted in the issuance of 10,469,600 shares of the Company’s common stock coincident with the consummation of the Merger on November 29, 2005.

On March 31, 2005 NN Research issued a warrant to SBI USA, LLC, granting SBI the right to purchase 2,250,000 shares of NN Research common stock at an exercise price of $.23 per share. On November 29, 2005, in connection with the Merger, that warrant was cancelled and the Company issued to SBI a warrant in identical form entitling SBI to purchase 2,250,000 shares of our common stock at an exercise price of $.23 per share. This warrant expires on March 31, 2006. Our cash forecast for the period ending December 31, 2006 assumes receipt of $517,500 in proceeds resulting from the exercise of this warrant during the first quarter of 2006. SBI has not indicated whether it intends to exercise the warrant in whole or in part or at all and there can be no assurance that we will receive any of such proceeds.

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The estimated cash available and projected cash outflows for the twelve month period ending December 31, 2006 are as follows:

Cash on hand at September 30, 2005	$	2,698,330
Cash proceeds assumed from exercise of stock warrants		517,500
LESS: Estimated cash projected to be used in operations during the fourth quarter of 2005		(775,000	)
Projected cash available for 2006 operations	$	2,440,830
Projected cash uses for 2006 operations:
Research and product development expenses	$	1,000,000
Investment in Research Lab		250,000
General and administrative expenses including:
administrative salaries and benefits, office expenses, rent expense, legal and accounting, marketing and investor relations		1,700,000
Total estimated cash outflows for next twelve months	$	2,950,000

As the Company continues to grow its intellectual property portfolio and to identify and invest in the commercial research and development of naturally occurring nanoscale materials, additional cash flow funding will be required.

The Company will continually evaluate all funding options including additional offerings of its securities to private and institutional investors and other credit facilities as they become available.

RISK FACTORS

You should carefully consider, among other potential risks, the following risk factors as well as all other information set forth or referred to in this Report before purchasing shares of our common stock. Investing in our common stock involves a high degree of risk. If any of the following events or outcomes actually occurs, our business operating results and financial condition would likely suffer. As a result, the trading price of our common stock could decline, and you may lose all or part of the money you paid to purchase our common stock.

Risks Related to our Business

Neither NN Research nor Cementitious Materials has recorded revenues or an operating profit since inception; continuing losses may exhaust our capital resources and force us to discontinue operations.

From its inception in December 2004 through September 30, 2005, NN Research has incurred cumulative losses of approximately $1,779,404. Cementitious Materials has incurred cumulative losses of approximately $416,039 since it’s inception at July 31, 1987. We cannot assure you that we will achieve profitability in the immediate future or at any time.

NN Research has had a significant working capital deficit, which makes it more difficult to obtain capital necessary for its business and which may have an adverse effect on our future business.

As of September 30, 2005, NN Research had a working capital deficit of approximately $1,590,667. As a result of the Merger, an aggregate of $4,256,000 of outstanding debt was converted on November 29, 2005 into 10,469,600 shares of our common stock. Giving effect to such conversion and to the other Merger transactions, we had, on a pro forma basis, a working capital surplus of $2,471,759 as of September 30, 2005.

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If the Company cannot achieve commercial application of our nanoscale materials, we may not achieve profitability.

The Company must develop commercial applications for halloysite nanotubes, which it intends to do primarily by collaborating with market leaders in each potential field of use. If we fail to establish such collaborative relationships or if we are unable to develop sufficiently attractive commercial uses for our nanoscale materials or if we are unable to produce these materials at a competitive cost, we may not achieve profitability.

The industry in which we operate is highly competitive and has relatively low barriers to entry. Increased competition could result in margin erosion, which would make profitability even more difficult to achieve and sustain.

In addition to the wide range of material additives that are currently being used in the industries being targeted by the Company, the current nanomaterials market includes at least 200 companies globally, offering a wide variety of metal oxides and inorganic compounds. Many existing and potential competitors have greater financial resources and are likely to command a larger market share, which may enable them to establish a stronger competitive position than we have, in part through greater marketing opportunities. If we fail to address competitive developments quickly and effectively, we may not be able to remain a viable entity.

Our business could be negatively affected by any adverse economic developments in the advanced materials industry and/or the economy in general.

The Company depends on the demand for the application of our technology and nanoscale materials and our business is susceptible to downturns in the advanced materials industry and the economy in general. Any significant downturn in the market or in general economic conditions would likely hurt our business.

If the Company fails to keep up with changes affecting its technology and the markets that we will ultimately service, we will become less competitive, adversely affecting future financial performance.

In order to remain competitive and serve its customers effectively, NaturalNano must respond on a timely and cost-efficient basis to changes in technology, industry standards and procedures and customer preferences. The Company needs to continuously develop new technology and products and services to address new developments. In some cases these changes may be significant and the cost to comply with these changes may be substantial. We cannot assure you that we will be able to adapt to any changes in the future or that we will have the financial resources to keep up with changes in the marketplace. Also, the cost of adapting our technology, products and services may have a material and adverse effect on our operating results.

Our future success depends on retaining our existing key employees and hiring and assimilating new key employees. The loss of key employees or the inability to attract new key employees could limit our ability to execute our growth strategy, resulting in lost sales and a slower rate of growth.

Our success depends in part on our ability to retain key employees including our executive officers. Although following the Merger we expect to have employment agreements with our executives, each executive can terminate his or her agreement at any time. Also, we do not currently carry "key man" insurance on our executives but intend to obtain it in the near future. It would be difficult for us to replace any one of these individuals. In addition, as we grow we may need to hire additional key personnel. We may not be able to identify and attract high quality employees or successfully assimilate new employees into our existing management structure.

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Our growth strategy assumes that we may possibly make future targeted strategic acquisitions. A future acquisition may disrupt our business, dilute stockholder value or distract management’s attention from operations.

Unless the Company can develop our present technology or newly acquired technology into marketable products, our ability to generate revenue may be hindered and our ability to achieve profitability will be slow and difficult. A possible strategy is to acquire new technology or products through targeted strategic acquisitions. If we attempt and fail to execute on this strategy, our revenues may not increase and our ability to achieve significant profitability will be delayed. Prior to this time, our ability to make strategic acquisitions has been hampered by our limited capital resources and the lack of a public market for its stock.

We may not be able to identify any appropriate targets or acquire them on reasonable terms. Even if we make strategic acquisitions, we may not be able to integrate these technologies, products and/or businesses into our existing operations in a cost-effective and efficient manner.

We may be unable to protect our intellectual property adequately or cost effectively, which may cause us to lose market share or reduce prices.

Our future success depends significantly on our ability to protect and preserve our proprietary rights related to our technology and resulting products. We cannot assure you that we will be able to prevent third parties from using our intellectual property rights and technology without our authorization. Although the Company has filed for several patents and intends to pursue aggressively efforts to obtain patent protection for its technology, we will also rely on trade secrets, common law trademark rights and trademark registrations, as well as confidentiality and work for hire, development, assignment and license agreements with employees, consultants, third party developers, licensees and customers. However, these measures afford only limited protection and may be flawed or inadequate. Also, enforcing intellectual property rights could be costly and time-consuming and could distract management’s attention from operating business matters.

The Company’s intellectual property may infringe on the rights of others, resulting in costly litigation.

In recent years, there has been significant litigation in the United States involving patents and other intellectual property rights. In particular, there has been an increase in the filing of suits alleging infringement of intellectual property rights, which pressure defendants into entering settlement arrangements quickly to dispose of such suits, regardless of their merits. Other companies or individuals may allege that we infringe on their intellectual property rights. Litigation, particularly in the area of intellectual property rights, is costly and the outcome is inherently uncertain. In the event of an adverse result, we could be liable for substantial damages and we may be forced to discontinue our use of the subject matter in question or obtain a license to use those rights or develop non-infringing alternatives. Any of these results would increase our cash expenditures, adversely affecting our financial condition.

We may not be able to manage our growth effectively, which could adversely affect our operations and financial performance.

The ability to manage and operate our business as we execute our development and growth strategy will require effective planning. Significant rapid growth could strain our internal resources, and other problems that could adversely affect our financial performance. We expect that our efforts to grow will place a significant strain on our personnel, management systems, infrastructure and other resources. Our ability to manage future growth effectively will also require us to successfully attract, train, motivate, retain and manage new employees and continue to update and improve our operational, financial and management controls and procedures. If we do not manage our growth effectively, our operations could be adversely affected, resulting in slower growth and a failure to achieve or sustain profitability.

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Risks Related to Our Common Stock

Shares of our common stock may be subject to price volatility and illiquidity because our shares may continue to be thinly traded and may never become eligible for trading on Nasdaq or a national securities exchange.

Although a trading market for our common stock exists, the trading volume has historically been insignificant, and an active trading market for our common stock may never develop. There currently is no analyst coverage of our business. Very few shares of our common stock are currently freely tradable, and the amount of shares in our public “float” will continue to be limited, due to the applicability of resale restrictions under applicable securities laws on shares issued to the former shareholders of NN Research and the fact that significant portions of our outstanding shares are held by our officers, directors or major shareholders. As a result of the thin trading market for our common stock, and the lack of analyst coverage, the market price for our shares may continue to fluctuate significantly, and will likely be more volatile than the stock market as a whole. There may be a limited demand for shares of our common stock due to the reluctance or inability of certain investors to buy stocks quoted for trading on the OTC Bulletin Board (OTCBB), lack of analyst coverage of our common stock, and a negative perception by investors of stocks traded on the OTCBB; as a result, even if prices appear favorable, there may not be sufficient demand in order to complete a shareholder’s sell order. Without an active public trading market or broader public ownership, shares of our common stock are likely to be less liquid than the stock of most public companies, and any of our shareholders who attempt to sell their shares in any significant volumes may not be able to do so at all, or without depressing the publicly quoted bid prices for our shares.

In addition, while we may at some point be able to meet the requirements necessary for our common stock to be listed on one of the Nasdaq stock markets or on a national securities exchange, we cannot assure you that we will ever achieve a listing of our common stock on Nasdaq or on a national securities exchange. Initial listing on one of the Nasdaq markets or one of the national securities exchanges is subject to a variety of requirements, including minimum trading price and minimum public “float” requirements, and could also be affected by the general skepticism of such markets concerning companies that are the result of mergers with inactive publicly-held companies. There are also continuing eligibility requirements for companies listed on public trading markets. If we are unable to satisfy the initial or continuing eligibility requirements of any such market, then our stock may not be listed or could be delisted. This could result in a lower trading price for our common stock and may limit your ability to sell your shares, any of which could result in you losing some or all of your investments.

Future sales of shares of our common stock may decrease the price for such shares.

On November 29, 2006, the one-year holding period requirement under Rule 144 expires on the common stock issued to former shareholders of NN Research in connection with the Merger, unless we achieve registration of part or all of those shares before this date. As a result, a large number of shares of our common stock will be eligible for resale on the open market, at that time many without any restrictions as to size or frequency of such sales. Actual sales, or the prospect of sales by our shareholders, may have a negative effect on the market price of the shares of our common stock.

We also intend to register certain shares of our common stock that are subject to outstanding warrants and stock options, or reserved for issuance under our stock option plan. Once such shares are registered, they can be freely sold in the public market upon exercise of the warrants or options. If any of our shareholders either individually or in the aggregate cause a large number of securities to be sold in the public market, or if the market perceives that these holders intend to sell a large number of securities, such sales or anticipated sales could result in a substantial reduction in the trading price of shares of our common stock and could also impede our ability to raise future capital. Sales of a substantial number of shares of our common stock in the public markets, or the perception that these sales may occur, could cause the market price of our common stock to decline and could materially impair our ability to raise capital through the sale of additional equity securities. In addition to the 60,380,020shares of our common stock actually issued and outstanding, there will be another 9,250,000 shares of common stock reserved for future issuance as follows:

(i) 4,950,000 shares issuable upon exercise of outstanding options under our 2005 Incentive Stock Plan;

(ii) 2,250,000 shares issuable upon exercise of outstanding stock purchase warrants; and

(iii) 2,050,000 shares reserved for issuance in the future under our 2005 Incentive Stock Plan.

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Our stock price may be volatile, and you may lose some or all of your investment.

The trading prices of the stock of companies listed on the OTCBB, have been highly volatile. Accordingly, the trading price of our common stock is likely to be subject to wide fluctuations. Factors affecting the trading price of our common stock may include, among other things:

• variations in our operating results;

• announcements of technological innovations, new services or service enhancements, or significant agreements, by us or by our competitors;

• recruitment or departure of key personnel;

• changes in estimates of our operating results, or changes in recommendations by any securities analysts that may follow us;

• sales of our common stock, particularly sales by officers, directors and significant shareholders; or

• conditions in our industry, the industries of our customers and the economy as a whole.

Our stock may be subject to regulation as a “penny stock”, which could severely limit the liquidity of your securities.

Our common stock may be subject to regulation as a “penny stock,” which generally includes stocks traded on the OTCBB that have a market price of less than $5.00 per share. If shares of our common stock continue to trade for less than $5.00 per share, they would be subject to Rule 15g-9 under the Exchange Act which, among other things, requires that broker/dealers satisfy special sales practice requirements, including making individualized written suitability determinations, providing disclosure explaining the nature and risks of the penny stock market, receiving a purchaser’s written consent prior to any transaction and waiting two days before effecting the transaction. Such requirements could severely limit the liquidity of your securities.

Mergers of the type we just completed are often heavily scrutinized by the SEC and we may encounter difficulties or delays in obtaining future regulatory approvals.

Historically, the SEC and NASD have not generally favored transactions in which a privately-held company merges into a largely inactive company with publicly traded stock, and there is a significant risk that we may encounter difficulties in obtaining the regulatory approvals necessary to conduct future financing or acquisition transactions, or to eventually achieve a listing of shares on one of the Nasdaq stock markets or on national securities exchange. On June 29, 2005, the SEC adopted rules dealing with private company mergers into dormant or inactive public companies. As a result, it is likely that we will be scrutinized carefully by the SEC and possibly by the National Association of Securities Dealers or Nasdaq, which could result in difficulties or delays in achieving SEC clearance of any future registration statements or other SEC filings that we may pursue, in attracting NASD-member broker-dealers to serve as market-makers in our stock, or in achieving admission to one of the Nasdaq stock markets or any other national securities market. As a consequence, our financial condition and the value and liquidity of your shares may be negatively impacted.

Being a public company will increase administrative costs, which could result in lower net income, and make it more difficult for us to attract and retain key personnel.

As a public company, we incur significant legal, accounting and other expenses that NN Research did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the SEC, have required changes in corporate governance practices of public companies. We expect that these new rules and regulations will increase our legal and financial compliance costs and make some activities more time consuming. These new rules and regulations could also make it more difficult for us to attract and retain qualified executive officers and qualified members of our Board of Directors, particularly to serve on our audit committee.

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We do not anticipate paying dividends in the foreseeable future. This could make our stock less attractive to potential investors.

We anticipate that we will retain all future earnings and other cash resources for the future operation and development of our business and we do not intend to declare or pay any cash dividends in the foreseeable future. Any future payment of cash dividends will be at the discretion of our Board of Directors after taking into account many factors, including our operating results, financial condition and capital requirements. Corporations that pay dividends may be viewed as a better investment than corporations that do not.

The authorization and issuance of preferred stock may prevent or discourage a change in our management.

Our amended Articles of Incorporation will authorize the Board of Directors to issue up to 10,000,000 shares of preferred stock without stockholder approval. Such shares will have terms, conditions, rights, preferences and designations as the Board may determine. The rights of the holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of discouraging a person from acquiring a majority of our outstanding common stock.

It may be difficult for a third party to acquire us, and this could depress our stock price.

Nevada corporate law includes provisions that could delay, defer or prevent a change in control of our company or our management. These provisions could discourage information contests and make it more difficult for you and other stockholders to elect directors and take other corporate actions. As a result, these provisions could limit the price that investors are willing to pay in the future for shares of our common stock. For example:

(i)    without prior stockholder approval, the Board of Directors has the authority to issue one or more classes of preferred stock with rights senior to those of common stock and to determine the rights, privileges and inference of that preferred stock;

(ii)    there is no cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; and

(iii)    stockholders cannot call a special meeting of stockholders.

DESCRIPTION OF PROPERTY

We currently conduct our primary business operations using office space rented from Lennox Tech Enterprise Center in West Henrietta, New York. We pay a monthly fee of $4,047 for the use of this office space under a lease expiring May 31, 2008 (subject to our right to terminate any time after May 31, 2006 upon 90 days’ notice). We are planning to lease laboratory facilities as needed to expand the capabilities and facilities of subcontractors and government laboratories, where we plan to conduct the bulk of our research under contracts and cooperative research and development agreements. We believe that suitable space is available in the greater Rochester, New York area at competitive rates. Our management believes that our properties are adequately covered by insurance.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of November 29, 2005 with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our directors and executive officers and by all of the directors and executive officers as a group. Unless otherwise indicated, the address of each of the persons listed below is ^c/_o NaturalNano, Inc., 150 Lucius Gordon Drive, Suite 115, West Henrietta, NY 14586. Unless otherwise indicated in the footnotes, shares are owned of record and beneficially by the named person. For purposes of the following table, a person is deemed to be the beneficial owner of any shares of common stock (a) over which the person has or shares, directly or indirectly, voting or investment power, or (b) of which the person has a right to acquire beneficial ownership at any time within 60 days after November 29, 2005. “Voting power” is the power to vote or direct the voting of shares and “investment power” includes the power to dispose or direct the disposition of shares.

Name and Address of Beneficial Owner	Number of Shares Beneficially Owned (1)			Percent of Class(2)
Directors and Executive Officers:
Steven Katz		100,000			*
Ross B. Kenzie		32,962,624	(3)		54.4	%
John F. Lanzafame		116,667			*
Michael L. Weiner		33,029,430	(3)		53.6	%
Michael Riedlinger		500,000			*
Kathleen Browne		150,000			*
Sarah Cooper		100,000			*
All Directors and Executive Officers as a group (7 persons)		33,996,097	(3)		55.1	%
Other 5% Beneficial Owners:
Technology Innovations, LLC 150 Lucius Gordon Drive, Suite 215 West Henrietta, NY 14586		32,962,763	(4)		54.4	%

* Less than 1%

1) Except as may be set forth below, the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them.

2) Applicable percentage of ownership is based on 60,380,020 shares outstanding immediately following the Merger, together with applicable options for such stockholder. Shares subject to options currently exercisable or exercisable within 60 days after the effective time of the Merger are included in the number of shares beneficially owned and are deemed outstanding for purposes of computing the percentage ownership of the person holding such options, but are not deemed outstanding for computing the percentage of any other stockholder.

3) Includes 32,962,763 shares held by or issuable to, Technology Innovations, LLC, of which Messrs. Kenzie and Weiner are members and managers. Each of Mr. Kenzie and Mr. Weiner disclaims beneficial ownership of the shares held by Technology Innovations, LLC except to the extent of his beneficial ownership of a membership interest in Technology Innovations, LLC.

4) Includes 250,000 shares issuable pursuant to currently exercisable options.

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EXECUTIVE OFFICERS AND DIRECTORS

The following table shows information about our executive officers and directors as of November 29, 2005:

Name	Age	Position
Steven Katz	56	Director
Ross B. Kenzie	73	Director
John F. Lanzafame	37	Director
Michael L. Weiner	57	Director
Michael Riedlinger	47	President and Director
Kathleen Browne	50	Chief Financial Officer, Treasurer and Secretary
Sarah Cooper	28	Chief Technology Officer

The business experience of each of the persons listed above during the past five years is as follows:

Steven Katz is President of Steven Katz & Associates, Inc., a technology-based management consulting firm specializing in strategic planning, corporate development, new product planning, technology licensing, and structuring and securing various forms of financing since 1982. From January 2000 until October 2001, Mr. Katz was President and Chief Operating Officer of Senesco Technologies, Inc., a public company engaged in the development of proprietary genes with application to agro-biotechnology. From 1983 to 1984 he was the co-founder and Executive Vice President of S.K.Y. Polymers, Inc., a biomaterials company. Prior to S.K.Y. Polymers, Inc., Mr. Katz was Vice President and General Manager of a non-banking division of Citicorp. From 1976 to 1980 he held various senior management positions at National Patent Development Corporation, including President of three subsidiaries. Prior positions were with Revlon, Inc. (1975) and Price Waterhouse & Co. (1969 to 1974). Mr. Katz received a Bachelor of Business Administration degree in Accounting from the City College of New York in 1969. He is a member of the Boards of Directors of two publicly held corporations, USA Technologies, Inc. and Biophan Technologies, Inc. and of several private companies.

Ross B. Kenzie currently serves on the boards of several companies including the publicly heldRand Capital Corporation and Biophan Technologies Inc. as well as many entrepreneurial ventures that are privately held, including Biomed Solutions LLC and Technology Innovations, LLC. Mr. Kenzie is a former Chairman and Chief Executive Officer of Goldome Bank, from which he retired in June 1989. He was previously Executive Vice President of Merrill Lynch & Co., in the New York worldwide headquarters, and is a former member of the Merrill Lynch & Co. Board of Directors. He is a former Director of the Federal Home Loan Bank of New York ( from 1984 to 1988) and served on the boards of the National Council of Savings Institutions (from 1982 to 1986), the Federal Reserve Bank of New York, Buffalo Branch (from 1985 to 1987), and the Savings Banks Association of New York State (from 1984 to 1987). Mr. Kenzie was a Director of Millard Fillmore Hospitals (from 1982 to 1995) and is currently Past Chairman Emeritus. He served on the Board of the Kaleida Health, Education and Research Foundation (from 1998 to 2000) and is currently on its Investment Committee. He was Director of the Health Systems Agency of Western New York (from 1988 to 1991), and was a member of the College Council of the State University College at Buffalo (from 1981 to 1998) and served as Chairman. He was a Director of the College’s Foundation and a member of its Finance Committee (from 1984 to 1998) and is currently on its Investment Committee. He served on the Council of the Burchfield-Penney Art Center (from 1990 to 2001) and the Albright Knox Art Gallery (from 1983 to 1985). He is also a member of the Board, and the Chairman of the Investment Committee of the State University at Buffalo Foundation.

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John Lanzafame is Vice President for Business Development of Biophan Technologies, Inc. He has fifteen years experience in the medical device industry, with a background that includes a bachelors degree in chemical engineering and a masters degree in industrial engineering.  Until early 2004, Mr. Lanzafame was employed by STS Biopolymers, Inc., a privately held medical device company that marketed high performance polymer-based coatings for the medical device industry, including drug eluting surfaces for devices such as coronary stents and indwelling catheters.  Mr. Lanzafame held a variety of positions with STS Biopolymers, including positions in research, product development, and sales and marketing, ultimately leading to his assuming the position of President of STS Biopolymers beginning in 2003.  In 2004, Mr. Lanzafame left STS Biopolymers following sale of the company to Angiotech Pharmaceuticals, and is currently Vice President, Business Development for Biophan, and President of Nanolution, Biophan’s drug delivery division.  This newly formed division was created to leverage new discoveries in the field of nanotechnology for the purposes of targeted drug delivery and highly controlled drug elution from medical devices.

Michael L. Weiner is President, Chief Executive Officer and co-founder of Biophan Technologies, Inc. He began his career at Xerox Corporation in 1975, where he served in a variety of capacities in sales and marketing, including manager of software market expansion and manager of sales compensation planning. In 1982, he received the President’s award, the top honor at Xerox for an invention benefiting a major product line. In 1985, Mr. Weiner founded Microlytics, a Xerox spin-off company which developed technology from the Xerox Palo Alto Research Center into a suite of products, including the award winning Word Finder Thesaurus, with licenses out to over 150 companies, including Apple, Microsoft, and Sony. Microlytics was acquired by a merger with a public company in 1990, which Mr. Weiner then headed up through 1993. In February 1999, Mr. Weiner founded Technology Innovations, LLC, to develop intellectual property assets. In August 2000, Technology Innovations, LLC created a subsidiary, Biomed Solutions, LLC, to pursue certain biomedical and nanotechnology opportunities, investing in embryonic-to-seed stage innovations which generate new ventures and/or licenses. Mr. Weiner is the CEO and a director of Biophan Technologies, Inc., a medical research and development company located in West Henrietta, New York engaged in providing technology to enable implantable medical devices and interventional devices to be used safely and effectively in conjunction with Magnetic Resonance Imaging (MRI), since December 2000. Mr. Weiner serves on the Boards of Biophan Technologies, Inc., Biomed Solutions, LLC, Technology Innovations, LLC, Stem Capture, Inc., OncoVista, Inc., Myotech, LLC, TE Bio, LLC, and Nanoset, LLC,. Mr. Weiner holds seventeen U.S. patents.

Michael Riedlinger became President of NaturalNano in December 2004. Prior to joining NaturalNano, he was, from 2002 to 2005, President of Technology Sales and Licensing Services, a firm specializing in business development for organizations that seek new sources of revenue from licensing or selling their technical innovations to others. Mr. Riedlinger continues to provide limited consulting services to Biophan Technologies, Inc. relative to licensing and technical development projects in connection with this former role. From 2000 to 2002, Mr. Riedlinger was Chief Executive Officer of Vitalwork, Inc., an organizational development company focused on training and corporate culture change for the telecommunications industry. From 1995 to 2000, Mr. Riedlinger was Director of Sales and Marketing at Metamor Software Solutions, a computer programming services division of Metamor Worldwide with offices in over 20 countries. From 1993 to 1995 he was Vice President of QSoft Solutions, a provider of quality management software and information to major corporations in North America. From 1986 to 1993, Mr. Riedlinger held several positions, including OEM Products Director and Director of Strategic Planning at Microlytics, Inc. Mr. Riedlinger has a MBA from the University of Rochester and a BFA from the Rochester Institute of Technology.

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Kathleen Browne became Chief Financial Officer of NaturalNano in July 2005. For the four years prior to joining NaturalNano, Ms. Browne was the Corporate Controller and Chief Accountant of Paychex, Inc., a payroll service provider in Rochester, New York. During the period 1996-2000, she served as the Vice President and Corporate Controller of W.R. Grace, a worldwide specialty chemicals manufacturer located in Boca Raton, Florida. From 1992-1996, Ms. Browne served in various financial positions for Bausch & Lomb in Rochester, New York. From 1977 to 1992, Ms. Browne was with the Rochester, New York office of Price Waterhouse. Ms. Browne holds a Bachelor of Science degree from St. John Fisher College.  She is a member of the American Institute of Certified Accountants and the New York State Society of CPAs.

Sarah Cooper has been Chief Technology Officer of NaturalNano since December 2004. Ms. Cooper has an extensive background in nanotechnology and material science. Trained as a chemical engineer, she was, prior to joining NaturalNano, a research fellow at NASA Ames Center for Nanotechnology, studying the fundamental properties of carbon nanotubes and other nanomaterials. Ms. Cooper is also a consultant to Biophan Technologies, Inc. for that company’s bio-thermal battery project. While on sabbatical from NASA in 2003, Ms. Cooper attended NJIT’s BioMEMS Summer Institute to study the potential of BioMEMS as an integration platform to scale nano-sized components into practical devices. Before going to NASA, she conducted research at Los Alamos National Lab and IDEXX Laboratories. Ms. Cooper received her BS in chemical engineering from Brown University in 2000, and is currently finishing a PhD in Materials Physics at the University of Sydney, expanding on her work at NASA on nanoengineered thermoelectric materials. Ms. Cooper has authored numerous scientific and professional journal articles.

Potential Conflict of Interests

Two members of our Board of Directors, Michael L. Weiner and Ross B. Kenzie, are managers and significant equity holders of Technology Innovations, LLC, which owns approximately 54.4% of our outstanding common stock. Messrs. Weiner and Kenzie and Technology Innovations are also significant equity holders of Biomed Systems LLC, a company engaged in the business of identifying and acquiring for exploitation technologies in the biomedical field. Further, Mr. Weiner is on the board of Nanoset, LLC, an entity owned in part by Biomed Solutions, which is engaged in the development of nanomagnetic particle coatings. Messrs. Weiner and Kenzie and a third member of our Board, Steven Katz, are also on the Board of, and Mr. Weiner and a fourth member of our Board, John Lanzafame, are executive officers of, Biophan Technologies, Inc., a company with whose wholly-owned subsidiary, Nanolution, LLC, we have a joint research and development agreement for the development of drug delivery and medical applications utilizing nanotechnology discoveries.

Prior to joining NN Research, our President, Michael Riedlinger, advised Biophan Technologies on licensing and technological development projects as an independent consultant. He has continued to provide such services to Biophan Technologies, and the cost of 20% of his base compensation is borne by Biophan Technologies. Our Chief Technology Officer, Sarah Cooper, also provides services to Biophan Technologies, and 50% of the cost of her base salary is borne by Biophan Technologies.

Because of the nature of our business and the business of these other entities, the relationships of all of the members of our Board of Directors with these other entities may give rise to conflicts of interest with respect to certain matters affecting us. Potential conflicts may not be resolved in a manner that is favorable to us. We believe it is not possible to predict the precise circumstances under which future potential conflicts may arise and therefore intend to address potential conflicts on a case-by-case basis. Under Nevada law, directors have a fiduciary duty to act in good faith and with a view to the best interests of the corporation.

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The Board and Committees of the Board

The standing committees of the Board are the Audit Committee and the Compensation Committee. The Board does not currently have a nominating committee and has not established any specific procedure for selecting candidates for director. However, directors are currently nominated by a majority vote of the Board. There is also no established procedure for shareholder communications with members of the Board or the Board as a whole. However, shareholders may communicate with the investor relations department of the Company, and such communications are either responded to immediately or are referred to the president or chief financial officer of the Company for a response. The Board intends to form a nominating and corporate governance committee during the 2006 fiscal year.

Audit Committee. The Audit Committee is currently composed of Messrs. Katz (Chairman) , and Kenzie. The responsibilities of the Audit Committee will be more fully set forth in the Audit Committee Charter which the Board intends to adopt prior to the 2006 Annual Meeting. When adopted, the Audit Committee Charter will be posted on our website at www.naturalnano.com, and shall include provisions governing the appointment, retention, compensation and oversight of, the work of the independent accountants, who report to, and are directly accountable to, the Committee. The Audit Committee reviews with the independent accountants the results of the audit engagement, approves professional services provided by the accountants including the scope of non-audit services, if any, and reviews the adequacy of our internal accounting controls. The Board has determined that Messrs. Katz and Kenzie meet the qualifications as “audit committee financial experts”.

Compensation Committee. The Compensation Committee is composed of Messrs Kenzie (Chairman), Weiner and Katz. The responsibilities of the Compensation Committee will be more fully set forth in the Compensation Committee Charter which the Board intends to adopt prior to the 2006 Annual Meeting. When adopted, the Compensation Committee Charter will be posted on our website at www.naturalnano.com, and shall include provisions governing the review of the Company’s compensation policies and the establishment of executive officer compensation, and the administration of the Company’s Stock Option Plan.

Compensation of the Board

Directors who are employees of the Company do not receive additional compensation for serving on the Board or its committees. Non-employee directors, for their services as directors, are paid an annual cash fee of $8,000. In addition, non-employee directors are also eligible to receive an option grant for up to 50,000 shares of our common stock at each annual stockholders meeting. All directors are reimbursed for their reasonable expenses incurred in attending Board meetings. Steven Katz receives an additional $3,000 per year for serving as Chairman of the Audit Committee. Otherwise, no additional compensation is paid to directors for serving as members of committees of the Board.

The Company maintains directors and officers liability insurance.

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EXECUTIVE COMPENSATION

NN Research was incorporated on December 22, 2004 and did not have any employees for the fiscal year ended December 31, 2004. Set forth below is information relating to the current compensation of the Company’s executive officers, stated on an annualized basis. The date on which each officer’s employment commenced is set forth opposite his or her name.

SUMMARY COMPENSATION TABLE

		Annual Compensation		Awards
Name / Position	Payroll Start Date	Gross Salary	Eligible Bonus	Restricted Awards	Securities Options / SAR
Michael Riedlinger/President	1/1/05	$135,000	$30,000	None	1,500,000
Kathleen Browne/CFO	7/1/05	$135,000	$20,000	None	400,000
Sarah Cooper/CTO	10/1/05	$110,000	$7,000	None	300,000

Employment Contracts and Termination of Employment and Change-in-Control Arrangements

Each of the Company’s executive officers was offered employment in a letter which set forth his or her compensation and provides that employment may be terminated at any time by either the Company or the executive officer upon 90 days’ notice or by the Company immediately for cause or upon the executive officer’s death or disability. There are no arrangements between the Company and any of its executive officers for severance pay or for any payments or other compensation upon a change in control of the Company. All of our executives have signed confidentiality agreements and we have non-complete agreements in place with the Company's President and CTO. 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Registration Rights Agreementand Other Registration Obligations

NN Research entered into a certain Registration Rights Agreement on December 22, 2004 with Technology Innovations LLC, our principal stockholder which holds 32,962,763 shares of our common stock,. We assumed NN Research’s obligations under the Registration Rights Agreement in connection with the Merger. Under the Registration Rights Agreement, we are required to use our reasonable best efforts to prepare and file with the SEC, and to cause to be declared effective, a registration statement on an appropriate form pursuant to the Securities Act of 1933 to permit the offer and resale by Technology Innovations, LLC of the shares held by it. We are obligated to keep such registration statement effective for a period of one year after it first becomes effective. All expenses incident to the performance of our obligations under the Registration Rights Agreement, including all registration fees and expenses, will be borne by the Company. The Registration Rights Agreement is filed herewith as Exhibit 4.3 and the foregoing description is qualified in its entirety by reference to such Exhibit.

In connection with the Merger, on November 29, 2005, we issued to SBI USA, LLC a warrant for the purchase of 2,250,000 shares of our common stock, in exchange for a warrant which had been issued to SBI by NN Research and which were cancelled pursuant to the Merger Agreement. Under the warrant, if we determine to register any shares of our common stock under the Securities Act of 1933 in connection with a public offering of our common stock (other than under an employee benefit plan or in connection with a merger or similar transaction), we are required to include in such registration any shares of our common stock issuable to SBI under the warrant (or in certain other specified transactions). We have agreed to bear all expenses incurred by us or by SBI in connection with such registration. The warrant is filed herewith as Exhibit 4.5 and the foregoing description is qualified in its entirety by reference to such Exhibit.

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In the Subscription Agreement pursuant to which NN Research issued the Convertible Notes that were converted, at the effective time of the Merger, into an aggregate of 10,469,600 shares of our common stock, NN Research agreed to use its best efforts to include the securities issued upon conversion of such Convertible Notes in any registration statement filed by NN Research under the Securities Act of 1933 in connection with a public offering of its common stock (other than under an employee benefit plan or in connection with a merger or similar transaction) for its own account or for the account of others. In the Merger Agreement, we assumed the obligations of NN Research with respect to such registration rights. All expenses incident to the performance of our obligations, including all registration fees and expenses, will be borne by the Company. The form of Subscription Agreement is filed herewith as Exhibit 4.4 and the foregoing description is qualified in its entirety by reference to such Exhibit.

Joint Research Agreement

On May 25, 2005, NN Research entered into a joint research agreement with Nanolution, LLC to pursue the development of a new drug delivery application utilizing naturally occurring halloysite nanotechnologies. One of our directors, John Lanzafame, is President of Nanolution. Nanolution is a wholly-owned subsidiary of Biophan Technologies, Inc. and three of our directors (Messrs. Katz, Kenzie and Weiner) are directors of Biophan Technologies; Messrs. Lanzafame and Weiner are executive officers of Biophan Technologies. Under the joint research agreement, all medical uses and inventions arising from these efforts will be owned by Nanolution and all purification processes and non-medical applications will be owned by the Company. The joint research agreement is filed herewith as Exhibit 10.2 and the foregoing description is qualified in its entirety by reference to such Exhibit.

License Agreement

On April 27, 2005, Technology Innovations, LLC granted NN Research an exclusive, world-wide license, with right to sublicense, to use certain specified patent rights of Technology Innovations (the “Patent Rights”) as well as Technology Innovation’ research and development information, unpatented inventions, know-how, trade secrets, and technical data in thedevelopment, manufacture, use and sale of non-medical products employing halloysite microtubule processes, structures, compositions and applications. NN Research is required to make royalty payments to Technology Innovations based on the net sales of products utilizing the licensed technology and on the receipt of fees for the sublicensing of such technology. The license will expire upon the expiration or abandonment of the Patent Rights, but may be terminated earlier by Technology Innovations for (i) non-payment of royalties or other breach by NN Research of its obligations under the License Agreement or (ii) the failure of NN Research or any sublicense to make any sale of a product utilizing the licensed technology within five years after the effective date of the License Agreement. Technology Innovations is our principal stockholder and the holder of approximately 54% of our outstanding common stock. Two of our directors (Messrs. Kenzie and Weiner) are members and managers of Technology Innovations.

DESCRIPTION OF SECURITIES

The following description of our capital stock is only a summary. It is subject in all respects to applicable Nevada law and to the provisions of our articles of incorporation and bylaws, as amended from time to time, copies of which have been or will be filed with the SEC. Please refer to these documents for more complete information.

Authorized Capital Stock

Common Stock

We are authorized to issue up to 100,000,000 shares of common stock with a par value of $0.001 per share. As of November 29, 2005, there were 60,380,020 shares of our common stock issued and outstanding. All shares of common stock have equal rights and privileges with respect to voting, liquidation and dividend rights. Each share of common stock entitles the holder thereof to (a) one non-cumulative vote for each share held of record on all matters submitted to a vote of the stockholders; (b) to participate equally and to receive any and all such dividends as may be declared by the Board of Directors; and (c) to participate pro rata in any distribution of assets available for distribution upon liquidation. Holders of our common stock have no preemptive rights to acquire additional shares of common stock or any other securities. The common stock is not subject to redemption and carries no subscription or conversion rights.

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Preferred Stock

We are authorized to issue up to 10,000,000 shares of common stock with a par value of $0.001 per share. There are currently no shares of our preferred stock issued or outstanding. The Board of Directors has the flexibility to set new classes, series, and other terms and conditions of the preferred shares. Preferred shares may be issued from time to time in one or more series at the discretion of our Board of Directors. The Board has the authority to establish the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof.

Preferred shares may be issued in the future by the Board without further stockholder approval, for such purposes as the board deems in the best interest of our company, including future stock splits and split-ups, stock dividends, equity financings and issuances for acquisitions and business combinations. In addition, such authorized but unissued common and preferred shares could be used by the Board of Directors for defensive purposes against a hostile takeover attempt, including (by way of example) the private placement of shares or the granting of options to purchase shares to persons or entities sympathetic to, or contractually bound to support, management. We have no such present arrangement or understanding with any person. Further, the common and preferred shares may be reserved for issuance upon exercise of stock purchase rights designed to deter hostile takeovers, commonly known as a "poison pill".

The flexibility granted to the board in specifying the rights and preferences of various series of preferred stock could similarly be used in designing classes of preferred stock which could act as an effective deterrent or defensive tool in a takeover situation including the creation of voting and other impediments which might frustrate persons attempting to gain control of our company. Such uses of authorized and unissued stock might make any takeover attempt more difficult and could deprive stockholders of the ability to realize above present market premiums, which often accompany such takeover attempts. There are currently no shares of preferred stock outstanding and we do not have any present intention of issuing any such shares in the immediate future.

PART II

STOCK PRICE AND DIVIDEND INFORMATION; RELATED STOCKHOLDER MATTERS

Stock Price

Our common stock is currently traded on the OTCBB as NaturalNano, Inc. under the symbol “NNAN.” Prior to December 1, 2005, our stock traded as Cementitious Materials, Inc. under the symbol “CTTM.” Because our shares have traded only on a limited and sporadic basis, there is no meaningful history of reported trades in the public market and we therefore do not include a price history of our shares. The market price of our common stock fluctuates. We encourage you to obtain current market price information for our common stock.

Holders

The number of record holders of our common stock as of November 29, 2005, was 176; this number does not include an indeterminate number of shareholders whose shares are held by brokers in street name.

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Dividends

We have never declared or paid any cash dividends on any class of our common stock. We currently intend to retain any future earnings to fund the development and growth of our business and currently do not anticipate paying cash dividends in the foreseeable future.

EQUITY COMPENSATION PLAN INFORMATION

The following table shows information about securities authorized for issuance under our equity compensation plans as of November 29, 2005:

					Number of Securities
	Number of				remaining for future
	Securities to		Weighted-		issuance under equity
	be issued upon		average exercise		compensation plans
	exercise of		price of		(excluding securities
	outstanding options,		outstanding		reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders		4,950,000	$	.10		2,050,000
Equity compensation plans not approved by security holders		none	$	–		none
Total		4,950,000	$	.10		2,050,000

NATURALNANO, INC. 2005 INCENTIVE STOCK PLAN

The following is a brief summary of the NaturalNano, Inc. 2005 Incentive Stock Plan, a copy of which is filed herewith as Exhibit 4.1. The following summary is qualified in its entirety by reference to such Exhibit.

Types of Awards

The incentive stock plan provides for the grant of non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) and other stock-based awards. No more than 50% of the total number of shares of common stock covered by the incentive stock plan may be issued pursuant to awards that are not options or stock appreciation rights.

Incentive Stock Options and Non-statutory Stock Options. Optionees receive the right to purchase a specified number of shares of common stock at a specified option price and subject to such other terms and conditions as are specified in connection with the option grant. Options may not be granted at an exercise price less than the fair market value of the common stock on the date of grant. Options may not be granted for a term in excess of ten years. Outstanding options may not be amended to provide an exercise price per share which is lower than the then current exercise price per share of such outstanding options. The Board of Directors may not cancel any outstanding options and grant in substitution for such options new options under the incentive stock plan covering the same or a different number of shares of common stock and having an exercise price per share lower than the then current exercise price per share of the cancelled options. The Board of Directors will, however, have the power to amend stock options to convert them into stock appreciation rights and make other amendments to options, provided that the optionee must consent to such action unless the board determines that the action would not materially and adversely affect the optionee.

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Restricted Stock and Restricted Stock Unit Awards. Restricted stock awards entitle recipients to acquire shares of common stock, subject to our right to repurchase all or part of such shares from the recipient in the event that the conditions specified in the applicable award are not satisfied prior to the end of the applicable restriction period established for such award. Restricted stock unit awards entitle the recipient to receive shares of common stock to be delivered in the future subject to such terms and conditions on the delivery of the shares as the Board of Directors may determine.

Restricted stock and restricted stock unit awards granted under the incentive stock plan may vest (a) solely on the basis of passage of time, (b) solely based on achievement of specified performance criteria or (c) upon the passage of time, subject to accelerated vesting if specified performance criteria are met. The Board of Directors may determine, at the time of grant, that restricted stock or restricted stock unit award being made to an officer will vest solely upon achievement of specified performance criteria designed to qualify for deduction under Section 162(m) of the Code. The performance criteria for each restricted stock or restricted stock unit award intended to so qualify for purposes of Section 162(m) of the Code will be based on one or more of the following measures: sales, earnings per share, return on net assets, return on equity, and customer service levels.

Except as noted below, (a) restricted stock and restricted stock units that vest solely on the basis of passage of time may vest no faster than ratably over three years; and (b) restricted stock and restricted stock units that vest based on achievement of specified performance criteria, or provide for accelerated vesting based upon achievement of specified performance criteria, may not vest earlier than the first anniversary of the date of grant. These vesting restrictions do not apply to restricted stock and restricted stock unit awards collectively with respect to up to 5% of the total number of shares of common stock covered by the incentive stock plan. In addition, the Board of Directors may make exceptions to the vesting limitations described above in the event of the recipient’s death, a change in control or other extraordinary circumstances specified in the incentive stock plan.

Stock Appreciation Rights. A stock appreciation right, or SAR, is an award entitling the holder on exercise to receive, at the election of the Board of Directors, an amount in cash or common stock or a combination thereof determined in whole or in part by reference to appreciation, from and after the date of grant, in the fair market value of a share of common stock. SARs may be based solely on appreciation in the fair market value of common stock or on a comparison of such appreciation with some other measure of market growth such as (but not limited to) appreciation in a recognized market index.

Other Stock-Based Awards. Under the incentive stock plan, the Board of Directors has the right to grant other awards of common stock or awards otherwise based upon common stock or other property, including without limitation rights to purchase shares of common stock, having such terms and conditions as the board may determine.

Eligibility to Receive Awards

Employees, officers, directors, consultants, advisors and other service providers are eligible to be granted awards under the incentive stock plan. The maximum number of shares with respect to which awards may be granted to any participant under the incentive stock plan may not exceed 5 million shares per calendar year.

Administration

The incentive stock plan is administered by the Board of Directors. The board has the authority to adopt, amend and repeal the administrative rules, guidelines and practices relating to the incentive stock plan and to interpret the plan’s provisions. The board may also delegate authority under the incentive stock plan to a committee of the Board of Directors. The board may also delegate authority under the incentive stock plan to one or more officers, except that the board will fix the terms of the awards to be granted by such officers and the maximum number of shares subject to awards that the officers may grant. No officer will be authorized to grant awards to himself or herself.

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Subject to any applicable delegation by the Board of Directors and any applicable limitations contained in the incentive stock plan, the Board of Directors selects the recipients of awards and determines:

(i) the number of shares of common stock covered by options and the dates upon which such options become exercisable;

(ii) the exercise price of options, which may not be less than 100% of the fair market value of common stock;

(iii) the duration of options, which may not exceed 10 years;

(iv) the terms of stock appreciation rights and the dates or conditions upon which such stock appreciation rights become exercisable;

(v) the number of shares of common stock subject to any restricted stock, restricted stock unit or other stock-based awards and the terms and conditions of such awards, including, if applicable, conditions for repurchase, issue price and repurchase price.

We are required to make appropriate adjustments or substitutions in connection with the incentive stock plan and any outstanding awards to reflect stock splits, stock dividends, recapitalizations, spin-offs and other similar changes in capitalization to the extent the Board of Directors deems such adjustment or substitution to be necessary and appropriate. The incentive stock plan also contains provisions addressing the consequences of any “reorganization event,” which is defined as:

(i) any Merger or consolidation of with or into another entity as a result of which all of the common stock is converted into or exchanged for the right to receive cash, securities or other property; or

(ii) any exchange of all of common stock for cash, securities or other property pursuant to a share exchange transaction.

If any award expires or is terminated, surrendered or canceled without having being fully exercised, is forfeited in whole or in part, or results in any common stock not being issued because (a) the award is settled for cash, or (b) shares are used to satisfy the exercise price or tax withholding obligation, the unused shares of common stock covered by such award will again be available for grant under the incentive stock plan, subject, however, in the case of incentive stock options, to any limitations under the Code.

Termination or Amendment

No award may be made under the incentive stock plan after the completion of ten years from the date on which the plan is approved by our stockholders, but awards previously granted may extend beyond that date. The Board of Directors may at any time amend, suspend or terminate the incentive stock plan, except that no award designated as subject to Section 162(m) of the Code by the Board of Directors after the date of such amendment shall become exercisable, realizable or vested, to the extent such amendment was required to grant such award, unless and until such amendment shall have been approved by our stockholders. In addition, without the approval of our stockholders, no amendment may:

(i) increase the number of shares authorized under the incentive stock plan;

(ii) materially increase the benefits provided under the incentive stock plan;

(iii) materially expand the class of participants eligible to participate in the incentive stock plan;

(iv) expand the types of awards provided under the incentive stock plan; or

(v) make any other changes which require stockholder approval under the rules of the national securities market on which the shares of common stock are quoted.

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No award may be made that is conditioned on the approval of our stockholders of any amendment to the incentive stock plan.

Federal Income Tax Consequences

The following generally summarizes the United States federal income tax consequences that generally will arise with respect to awards granted under the incentive stock plan. This summary is based on the tax laws in effect as of the date of this Information Statement. Changes to these laws could alter the tax consequences described below.

Incentive Stock Options. A participant will not have income upon the grant of an incentive stock option. Also, except as described below, a participant will not have income upon exercise of an incentive stock option if the participant has been employed by our company, NaturalNano, or any other 50% or more-owned corporate subsidiary at all times beginning with the option grant date and ending three months before the date the participant exercises the option. If the participant has not been so employed during that time, then the participant will be taxed as described below under “Nonstatutory Stock Options.” The exercise of an incentive stock option may subject the participant to the alternative minimum tax.

A participant will have income upon the sale of the stock acquired under an incentive stock option at a profit if sales proceeds exceed the exercise price. The type of income will depend on when the participant sells the stock. If a participant sells the stock more than two years after the option was granted and more than one year after the option was exercised, then all of the profit will be long-term capital gain. If a participant sells the stock prior to satisfying these waiting periods, then the participant will have engaged in a disqualifying disposition and a portion of the profit will be ordinary income and a portion may be capital gain. This capital gain will be long-term if the participant has held the stock for more than one year and otherwise will be short-term. If a participant sells the stock at a loss (sales proceeds are less than the exercise price), then the loss will be a capital loss. This capital loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.

Nonstatutory Stock Options. A participant will not have income upon the grant of a nonstatutory stock option. A participant will have compensation income upon the exercise of a nonstatutory stock option equal to the value of the stock on the day the participant exercised the option less the exercise price. Upon sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the option was exercised. This capital gain or loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.

Restricted Stock. A participant will not have income upon the grant of restricted stock unless an election under Section 83(b) of the Code is made within 30 days of the date of grant. If a timely 83(b) election is made, then a participant will have compensation income equal to the value of the stock less the purchase price. When the stock is sold, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the date of grant. If the participant does not make an 83(b) election, then when the stock vests the participant will have compensation income equal to the value of the stock on the vesting date less the purchase price. When the stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock on the vesting date. Any capital gain or loss will be long-term if the participant held the stock for more than one year from the vesting date and otherwise will be short-term.

Restricted Stock Units. A participant will have income from a restricted stock unit equal to the difference of the fair market value of the stock on the date of delivery of the stock less the purchase price. A participant is not permitted to make a Section 83(b) election for a restricted stock unit.

Stock Appreciation Rights and Other Stock-Based Awards. The tax consequences associated with stock appreciation rights and any other stock-based awards granted under the incentive stock plan will vary depending on the specific terms of such award. Among the relevant factors are whether or not the award has a readily ascertainable fair market value, whether or not the award is subject to forfeiture provisions or restrictions on transfer, the nature of the property to be received by the participant under the award and the participant’s holding period and tax basis for the award or underlying common stock.

Tax Consequences to Us. There will be no tax consequences to us except that we will be entitled to a deduction when a participant has compensation income. Any such deduction will be subject to the limitations of Section 162(m) of the Code.

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LEGAL PROCEEDINGS

There are no material pending legal proceedings to which we are a party or to which any of our property is subject and, to the best of our knowledge, no such actions against us are contemplated or threatened.

RECENT SALES OF UNREGISTERED SECURITIES

On November 29, 2005, we issued an aggregate of 55,388,978 shares of our common stock in the Merger. The shares were issued in a private transaction to 59 persons that were the former stockholders and note holders of NN Research. We also issued, pursuant to the Merger Agreement, a warrant for the purchase of 2,250,000 shares of our common stock to one investor, in exchange for a warrant for the purchase of an identical number of shares of NN Research common stock that was cancelled in the Merger. The issuances were made in reliance on an exemption from registration under the Securities Act of 1933 pursuant to Section 4(2) of that Act

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our articles of incorporation provide that no director or officer shall have any liability to the company if the person acted in good faith and with the same degree of care and skill as prudent person in similar circumstances.

Our articles of incorporation and bylaws provide that we will indemnify our directors and officers and may indemnify our employees or agents to the fullest extent permitted by law against liabilities and expenses incurred in connection with litigation in which they may be involved because of their offices. However, nothing in our articles of incorporation or bylaws protects or indemnifies a director, officer, employee or agent against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office. To the extent that a director has been successful in defense of any proceeding, the Nevada Revised Business Corporations Act provides that he or she shall be indemnified against reasonable expenses incurred in connection with the proceeding.

PART F/S

See Item 9.01: Financial Statements and Exhibits below.

PART III

See Item 9.01: Financial Statements and Exhibits below.

Item 3.02 Unregistered Sale of Equity Securities.

On November 29, 2005, effective upon the closing of the Merger, we issued 55,388,978 shares of our common stock to the former stockholders and note holders of NN Research. In connection with the Merger, we also issued a warrant to SBI USA, LLC, the holder of an outstanding warrant for the purchase of NN Research common stock. Reference is made to the disclosure set forth under Item 2.01 of this Current Report on Form 8-K which is incorporated herein by reference.

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Item 4.01 Changes in Registrant’s Certifying Accountant.

(a) On November 29, 2005, after the closing of the Merger, HJ & Associates, LLC, Certified Public Accountants (“HJ”), resigned as our independent certifying accountants, effective November 29, 2005. The termination of our relationship with HJ was unanimously accepted by the Audit Committee of our Board of Directors on November 29, 2005.

HJ’s audit report to our financial statements for the years ended December 31, 2004 and 2003, includes a modification expressing substantial doubt as to the Company's ability to continue as a going concern because we had not established an ongoing source of revenues sufficient to cover our operating costs. Our ability to continue as a going concern is dependent on obtaining adequate capital to fund future operating losses until we become profitable. The audit report contains no other adverse opinion, disclaimer of opinion or modification as to uncertainty, audit scope or accounting principle.

In connection with its audit for the last two fiscal years and the interim periods until the date of termination, there have been no disagreements with HJ on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures which, if not resolved to the satisfaction of HJ, would have caused it to make reference to the subject matter of the disagreement in connection in its report on the financial statements.

During our two most recent fiscal years and through November 29, 2005 there have been no reportable events as set forth in Regulation S-B, Item 304(a)(1)(iv). We have provided HJ with a copy of this Form 8-K and requested that it furnish us with a letter addressed to the Securities and Exchange Commission stating whether or not HJ agrees with the above statements. A copy of the letter provided to us by HJ in response to this request is filed as Exhibit 16.1 to this Form 8-K.

(b) Also on November 29, 2005, the Audit Committee unanimously approved a resolution to engage Goldstein Golub Kessler LLP, Certified Public Accountants (“GGK”), to become our new independent certifying accountants. Prior to the Merger, GGK had served as the independent certifying accountants of NN Research from its inception. From the date of inception of NN Research and through November 29, 2005, we have not consulted with GGK regarding:

(i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and no written report or oral advice was provided to us by concluding there was an important factor to be considered by us in reaching a decision as to an accounting, auditing or financial reporting issue; or

(ii) any matter that was the subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-B and the related instructions thereto, or a reportable event, as set forth in Item 304(a)(1)(iv) of Regulation S-B.

Item 5.01 Changes in Control of Registrant.

Reference is made to the disclosure set forth under Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

In connection with the closing of the Merger, all of the Company’s incumbent officers and directors resigned as of November 29, 2005, the effective date of the Merger. On November 29, 2005, the following persons were elected to our Board of Directors: Steven Katz, Ross B. Kenzie, John F. Lanzafame, Michael Riedlinger and Michael L. Weiner. Also, on November 29, 2005, the following persons were elected to the offices indicated after their names: Michael Riedlinger (President), Kathleen A. Browne (Chief Financial Officer, Treasurer and Secretary), and Sarah Cooper (Chief Technology Officer). Reference is made to the disclosure set forth under Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws

On November 29, 2005, we amended our articles of incorporation, (i) to change of our name from Cementitious Materials, Inc. to NaturalNano, Inc. and (ii) to increase our authorized capitalization to 100,000,000 shares of common stock and 10,000,000 shares of preferred stock. A copy of the Certificate of Amendment to our Articles of Incorporation is filed as Exhibit 3.2 to this Report and the foregoing description of the amendment is qualified in its entirety by reference to such Exhibit.

On December 5, 2005, we filed Restated Articles of Incorporation. The Restated Articles restated our corporate charter to reflect all prior amendments, but did not effect any further amendment. A copy of our Restated Articles of Incorporation is filed as Exhibit 3.1 to this Report on Form 8-K.

Item 5.06 Change in Shell Company Status

Reference is made to the disclosure set forth under Item 2.01 and Item 5.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

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Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

See Financial Statements beginning at Page F-1

(b) Pro forma financial information.

See Unaudited Pro Forma Condensed Financial Statements of NaturalNano, Inc. filed herewith as Exhibit 99.1.

(d) Exhibits.

Exhibit Number	Description
2.1	Agreement and Plan of Merger among NaturalNano, Inc., Cementitious Materials, Inc. and Cementitious Acquisitions, Inc. 1
3.1	Restated Articles of Incorporation*
3.2	Certificate of Amendment of Articles of Incorporation*
3.3	By-laws 2
4.1 #	NaturalNano, Inc. 2005 Incentive Stock Plan 3
4.2 #	Form of Non-Qualified Stock Option Agreement *
4.3	Registration Rights Agreement dated as of December 22, 2004 between NaturalNano, Inc. and Technology Innovations, LLC *
4.4	Form of Subscription Agreement for the Purchase of Convertible Notes of NaturalNano, Inc. *
4.5	Warrant issued to SBI USA, LLC *
10.1	License Agreement between Technology Innovations, LLC and NaturalNano, Inc. dated as of April 27, 2005 (filed in redacted form pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission) *
10.2	Joint Research Agreement between Nanolution, LLC and NaturalNano Inc. dated as of May 25, 2005 *
10.3 #	Employment Letter of Michael Riedlinger and Amendment No. 1 thereto *
10.4 #	Employment Letter of Kathleen A. Browne and Amendment No. 1 thereto *
10.5 #	Employment Letter of Sarah Cooper *
16.1	Letter on Change in Certifying Accountant *
21.1	Subsidiaries *
23.1	Consent of Goldstein Golub Kessler LLP, Certified Public Accountants*
99.1	Unaudited Pro Forma Condensed Financial Statements of NaturalNano, Inc.*

* Filed herewith

# May be deemed a compensatory plan or arrangement

1. Incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K dated September 26, 2005

2. Incorporated by reference to Exhibit 3.2 to Form 10-SB filed July 3, 2002

3. Incorporated by reference to Appendix C to Information Statement on Schedule 14C filed November 8, 2005

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NATURALNANO, INC.
Dated:  December 5, 2005	By:	/s/ Michael Riedlinger
		Michael Riedlinger President

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

NaturalNano Inc.

We have audited the accompanying balance sheet of NaturalNano Inc. (a development stage company) (an entity controlled by Technology Innovations, LLC) as of December 31, 2004, and the related statements of operations, stockholder’s equity and cash flows for the period from December 22, 2004 (inception) to December 31, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NaturalNano Inc. as of December 31, 2004 and the results of its operations and its cash flows for the period from December 22, 2004 to December 31, 2004 in conformity with United States generally accepted accounting principles.

/s/ GOLDSTEIN GOLUB KESSLER LLP

New York, New York

August 15, 2005, except for Note 12,

as to which the date is November 29, 2005

F-1

NaturalNano, Inc.

(A Development Stage Company)

BALANCE SHEET

	September 30,			December 31,
	2005			2004
	(UNAUDITED)
Assets
Current assets:
Cash and cash equivalents	$	2,698,330
Prepaid assets		250,000		$	125,000
Other current assets		24,038
Total current assets		2,972,368			125,000
Property and equipment, net		29,346
Investments		300,000
Total assets	$	3,301,714		$	125,000
Liabilities and Stockholder's Equity (Deficiency)
Liabilities
Current liabilities:
Accounts Payable	$	119,338
Accrued Payroll		112,604
Accrued Expenses		175,093
Due to Related Parties				$	32,336
Convertible Bridge Notes		4,156,000
Total current liabilities		4,563,035			32,336
Other Liability		35,000
Total Liabilties		4,598,035			32,336
Stockholder's Equity (Deficiency)
Common stock - $.01 par value:
Authorized 30,000,000 shares
Issued and outstanding 10,000,000 shares		100,000			100,000
Additional Paid In Capital		383,083
Deficit accumulated in the development stage		(1,779,404	)		(7,336	)
Total stockholder's equity (deficiency)		(1,296,321	)		92,664
Total liabilities and stockholder's equity (deficiency)	$	3,301,714		$	125,000

See notes to financial statements

F-2

NaturalNano, Inc.

(A Development Stage Company)

STATEMENT OF OPERATIONS

							From inception
	For the nine months			From inception			December 22, 2004
	ending			December 22, 2004			through
	September 30, 2005			through			September 30, 2005
	UNAUDITED			December 31, 2004			UNAUDITED
Operating expenses:
Research and development (see note "a")	$	293,492		$	5,000		$	298,492
General and administrative (see note "b")		1,597,065			2,336			1,599,401
		1,890,557			7,336			1,897,893
Other (income) expense:
Interest expense,net		1,511						1,511
Investment income		(120,000	)					(120,000	)
		(118,489	)					(118,489	)
Net loss		($1,772,068	)		($7,336	)		($1,779,404	)
Loss per common share - basic and diluted		($0.18	)		($0.00	)
Weighted average shares outstanding		10,000,000			10,000,000

(a) Research and development expenses include stock based compensation of $17,500.

(b) General and administrative expense includes stock based compensation of $140,583.

See notes to financial statements

F-3

NaturalNano, Inc.

(A Development Stage Company)

STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIENCY)

Period from December 22, 2004 (inception) to September 30, 2005

							Deficit Accumulated
					Additional		during the			Stockholder's
	Common Stock				Paid-in		Development			Equity
	Shares		Amount		Capital		Stage			(Deficiency)
December 22, 2004
10,000,000 shares issued for cash $.01 per share		10,000,000	$	100,000						$	100,000
Net loss from inception through December 31, 2004								($7,336	)		(7,336	)
Balance at December 31, 2004		10,000,000		100,000				(7,336	)		92,664
Unaudited:
Warrant issued for 2,250,000 shares of common stock for services received					$	225,000					225,000
Grant of 1,580,830 stock options for services						158,083					158,083
Net loss for nine months ending September 30, 2005								(1,772,068	)		(1,772,068	)
Balance at September 30, 2005		10,000,000	$	100,000	$	383,083		($1,779,404	)		($1,296,321	)

See notes to financial statements

F-4

NaturalNano, Inc.

(A Development Stage Company)

STATEMENT OF CASH FLOWS

 UNAUDITED

							From inception
	For the nine months			From inception			December 22, 2004
	ending			December 22, 2004			through
	September 30, 2005			through			September 30, 2005
	UNAUDITED			December 31, 2004			UNAUDITED
Cash flows from operating activities:
Net loss		($1,772,068	)		($7,336	)		($1,779,404	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,574						2,574
Issuance of warrant for services		225,000						225,000
Grant of stock options for services		158,083						158,083
Change in market value of Atlas warrant		(120,000	)					(120,000	)
Receipt of Atlas Mining warrant		(180,000	)					(180,000	)
Changes in operating assets and liabilities:
(Increase ) in Prepaid assets		(125,000	)		(125,000	)		(250,000	)
(Increase) in Other current assets		(24,038	)					(24,038	)
Increase in Accounts Payable, Accrued
Payroll and Accrued Expenses		407,035						407,035
Increase in Other Liabilities		35,000						35,000
Net cash used in operating activities		(1,393,414	)		(132,336	)		(1,525,750	)
Net cash used in investing activity -
Purchase of property and equipment		(31,920	)					(31,920	)
Cash flows from financing activities:
Advances from Related Parties		395,301			32,336			427,637
Repayment of Advances from Related Parties		(427,637	)					(427,637	)
Issuance of Convertible Notes		4,156,000						4,156,000
Issuance of Common Stock					100,000			100,000
Net cash provided by financing activities		4,123,664			132,336			4,256,000
Change in cash and cash equivalents and balance at end of period	$	2,698,330		$	0		$	2,698,330
Non-cash investing activity:
Receipt of Atlas Mining warrant	$	180,000					$	180,000

See notes to financial statements

F-5

NaturalNano, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Information related to the nine month period ending September 30, 2005 is unaudited

1.    PRINCIPAL BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES:

Financial Statements

The balance sheet as of September 30, 2005 and the statement of operations, stockholders’ equity (deficiency) and cash flows for the nine month period ended September 30, 2005 and the period from December 22, 2004 (inception) to September 30, 2005 have been prepared by NaturalNano, Inc. (“the Company”) and are unaudited. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position at September 30, 2005 and the results of operations and cash flows for the periods ended September 30, 2005 have been included. The results of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the entire fiscal year.

Description of the Business

The Company was incorporated under the laws of the State of Delaware on December 22, 2004 and as a result of the merger with Cementitious Materials, Inc. (described in Note 12 below) changed its domicile to Nevada on November 29, 2005.

The Company, located in West Henrietta, New York, is a development stage company engaged in the discovery, refinement and commercialization of naturally occurring nanoscale materials. The Company’s current activities are directed toward research, development, production and marketing of its proprietary technologies relating to the extraction and separation of nanotubes from halloysite clay and the development of related commercial applications for:

· material additives for polymers, plastics and composites

· cosmetics and other personal care products

· absorbent materials and

· pharmaceutical and medical device additives.

The Company is in the development stage and is expected to remain so for at least the next twelve months. The Company has not generated any revenues since its inception nor is it expected to do so in the near future. The Company’s ability to continue in business is dependent upon obtaining sufficient financing or attaining profitable operations.

F-6

NaturalNano, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Information related to the nine month period ending September 30, 2005 is unaudited

Cash Equivalents

Cash equivalents consist of money market securities with a maturity of three months or less when purchased. Cash equivalents are stated at cost plus accrued interest, which approximates market value.

Concentration of Credit Risk

The Company maintains cash in bank deposit accounts which, at times, exceed federally insured limits. The Company has not experienced any losses on these accounts.

Research & Development

Research and development costs are expensed in the period the expenditures are incurred. Capital assets acquired in support of research and development are capitalized and depreciated over their estimated useful life and related depreciation expense is included in research and development expense.

Property and Equipment

Property and equipment, at cost, consists of the following:

				Useful Life
Furniture & Office Equipment	$	16,655			5 years
Computers and Software		15,265			3 years
		31,920
Less: Accumulated Depreciation		(2,574	)
Property and equipment, net	$	29,346

Depreciation of property and equipment is provided on a straight-line basis over the estimated useful lives of the related assets.

Costs of internally developed intellectual property rights with indeterminate lives are expensed as incurred.

Deferred Taxes

Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply when the differences are expected to be realized. A valuation allowance is recognized if it is anticipated that some or all of the deferred tax asset may not be realized.

F-7

NaturalNano, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Information related to the nine month period ending September 30, 2005 is unaudited

Loss Per Share

Basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per common share gives effect to dilutive options and warrants outstanding during the period. Shares to be issued upon the exercise of the outstanding options and warrants are not included in the computation of diluted loss per share as their effect is anti-dilutive. There were 7,200,000 shares underlying outstanding options, warrants and 10,469,600 shares resulting from convertible debt which have been excluded from the calculation at September 30, 2005.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates by management. Actual results could differ from these estimates.

Stock Options

The Company has elected to apply Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock options issued to employees (intrinsic value) and has adopted the disclosure-only provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-Based Compensation. Had the Company elected to recognize compensation cost based on the fair value of the options granted at the grant date as prescribed by SFAS No. 123, the Company’s net loss and loss per common share for the nine month period ending September 30, 2005 would have been as follows:

Net loss- as reported	($ 1,772,068	)
Deduct: Total stock-based employee compensation expense determined under fair-value-based method for all awards, net of related tax effects	( 110,335	)
Pro Forma net loss	($ 1,882,403	)
Basic and diluted loss per share -as reported	($0.18	)
Basic and diluted loss per share - pro forma	($0.19	)

The Company’s Board of Directors estimated the fair market value of the stock options at $0.10 per share on the date of grant.

F-8

NaturalNano, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Information related to the nine month period ending September 30, 2005 is unaudited

Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123 (revised 2004),”Share-Based Payment”“SFAS No. 123R”), which replaces SFAS No. 123 and supersedes APB No. 25. SFAS No. 123R requires that compensation cost relating to share-based payment transactions be recognized in financial statements based on alternative fair value models. The pronouncement requires that the cost of share-based compensation be measured based on the fair value of the equity or liability instruments issued. Per APB No. 25, compensation expense was recognized only to the extent the fair value of common stock exceeded the stock option exercise price at the measurement date. The pro forma disclosures previously permitted under SFAS No. 123 will no longer be an alternative to financial statement recognition. SFAS No.123R requires the benefits of tax deductions in excess of recognized compensation cost be reported as a financing cash flow item.

The SEC delayed the effective date for implementation of SFAS No. 123R to the first fiscal year beginning after June 15, 2005. The Company will adopt SFAS No. 123R effective January 1, 2006. Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

2.    COOPERATIVE RESEARCH AGREEMENTS

The Company has cooperative research and development agreements with two universities and an independent laboratory to jointly test and further develop commercial applications for naturally occurring nanomaterials. These agreements generally cover shared research personnel and facilities for a period of twelve to twenty four months with termination provisions requiring 30 days advance written notice. These agreements are subject to confidentiality clauses and include provisions relating to the ownership and the right to use any jointly developed intellectual property. Minimum future payments required under these agreements are as follows:

For the quarter ending December 31, 2005	$	43,000
For the year ending December 31, 2006	$	43,000

F-9

NaturalNano, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Information related to the nine month period ending September 30, 2005 is unaudited

3.    RELATED PARTY RESEARCH AGREEMENT

On May 25, 2005, the Company entered into a joint research agreement with Nanolution, LLC, a wholly owned subsidiary of Biophan Technologies, Inc. Biophan Technologies, Inc. is related to the Company’s majority shareholder, Technology Innovations, LLC, through common ownership. This agreement covers the exchange of ideas in support of a new drug delivery capability. The Company has secured the mineral rights and is developing the separation capabilities needed to support this drug delivery application. The term of this agreement shall continue until the desired technology becomes commercially viable or until mutually terminated by both parties.All medical uses and inventions that arise as a result of this agreement will be owned by Nanolution, LLC and all purification processes for raw halloysite and non-medical applications will be owned by the Company.

4.    LICENSE AGREEMENT WITH TECHNOLOGY INNOVATIONS, LLC.

On April 27, 2005 the Company entered into an exclusive, field of use limited license agreement (“License Agreement”) with its majority shareholder, Technology Innovations, LLC. This agreement grants the Company an exclusive, world-wide license, to make, use and sell the products developed under these patents. The License Agreement covers several patent applications and provisional patents owned by Technology Innovations that will expire at various future dates. The Company also has the right to grant sublicenses to third parties under the agreement.

Future minimum royalty payments of $6,250 per quarter are required under the terms of this agreement, commencing in the calendar quarter that the first patent is issued.

5. TRANSACTIONS WITH ATLAS MINING COMPANY

On December 29, 2004 the Company contracted with Atlas Mining Company (OTC BB: ALMI) in Utah for the purchase of 500 tons of processed halloysite nanotubes. In connection with this agreement, the Company agreed to the following scheduled payments to Atlas Mining payable through their designated distributor:

$125,000 paid on December 29, 2004,

$125,000 paid on June 29, 2005, and

$100,000 payable upon commercial shipments made in excess of $250,000.

F-10

NaturalNano, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Information related to the nine month period ending September 30, 2005 is unaudited

As additional consideration, the Company will pay 10% of the resale cash proceeds received from unaffiliated third parties, in instances where the purchase price is in excess of $700 per ton up to a maximum of $2,000 per ton.

Payments made by the Company in accordance with this agreement are presented as prepaid expenses and will be recorded as inventory upon receipt and will be recognized as expense in the period the nanotubules are used in the development of proprietary applications and processes or as customer shipments are made.

On January 28, 2005 the Company was issued a two year warrant for the right to acquire 750,000 shares of Atlas Mining common stock at $.40 per share. This warrant expires two years from the original issue date which will be January 28, 2007. Neither the warrant nor the shares of common stock issuable upon exercise have been registered under the Securities Act of 1933 and as such, are not readily available for sale or transfer in the public markets. The fair value of this asset on January 28, 2005 and at September 30, 2005 was estimated at $180,000 and $300,000, respectively. The warrant has been recorded as a non-current asset at January 28, 2005 with an offsetting liability included in accrued expenses. The liability is being amortized over the two year period commencing January 28, 2005 and reflects the Company’s commitment to future research and development efforts which are expected to benefit both the Company and Atlas Mining. At September 30, 2005, the remaining liability, included in accrued expenses, is $112,500. The difference of $67,500 has been offset against research and development expenses in the accompanying statements of operations.

At September 30, 2005, the warrant was marked-to-market with changes in fair market value recorded as other investment income.

6. INCOME TAXES

As of September 30, 2005, the Company had a net operating loss carryforward, for federal income tax purposes, of approximately $1,779,000. The Company recorded a deferred income tax asset for the tax effect of the net operating loss carryforward of approximately $605,000. In recognition of the uncertainty regarding the ultimate amount of income tax benefits to be derived, the Company has recorded a full valuation allowance at September 30, 2005.

F-11

NaturalNano, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Information related to the nine month period ending September 30, 2005 is unaudited

7. STOCKHOLDER’S EQUITY

On November 29, 2005, in connection with the recapitalization and merger (see Note 12) with Cementitious Materials, Inc. (“Cementitious”), all outstanding options were canceled, and employees and consultants were granted options of NaturalNano, Inc. (formerly named Cementitious Materials, Inc.). The pro forma disclosure in Note 1 is presented for the options outstanding prior to the recapitalization. The original options were not modified to accelerate vesting or extend the term of the new options.

The Company received $225,000 in financial consulting services from SBI USA, LLC for which payment was satisfied through the issuance of 2,250,000 common stock warrants. These warrants have an exercise price of $0.23 per share, were fully vested as of the March 31, 2005 issuance date and have an expiration date of March 31, 2006. The consulting expenses relating to this warrant are included in general and administrative expenses in the accompanying statements of operations. None of these warrants had been exercised as September 30, 2005. Neither these warrants nor the common stock issuable upon exercise of the warrants, have been registered under the Securities Act of 1933 and therefore these warrants are considered “restricted assets” within the meaning of Rule 144 of the Securities Act of 1933.

8. STOCK-BASED COMPENSATION PLAN

The Company has a stock option plan (the “Plan”) which provides for the granting of nonqualified or incentive stock options (“ISO”) to officers, key employees, non-employee directors and consultants. The Plan authorizes the granting of options to acquire up to 7,000,000 common shares. ISO grants under the Plan are exercisable at the market value of the Company’s stock on the date of the grant. Nonqualified options under the Plan are exercisable at amounts determined by the Board. All options under the Plan are exercisable at times as determined by the Board, not to exceed 10 years from the date of grant. Additionally, the Plan provides for the granting of restricted stock to officers and key employees.

During the period ending September 30, 2005 the Company’s Board of Directors granted stock options at fair market value, which was estimated by the Board of Directors at $0.10 per share on the date of the grant, to purchase 4,950,000 shares of the Company’s common stock at $0.10 per share. Included in these actions were option grants to purchase 2,243,333 shares of the Company’s common stock issued to non-employees. The fair value of the stock options granted to non-employees has been recorded as expense of $158,083 in the accompanying statements of operations.

There were 2,408,332 outstanding option grants exercisable as of September 30, 2005.

F-12

NaturalNano, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Information related to the nine month period ending September 30, 2005 is unaudited

9. CONVERTIBLE BRIDGE NOTES

As of September 30, 2005, the Company had issued and outstanding $4,156,000 in secured Convertible Bridge Notes (the “Notes”) to be used for general working capital purposes. These notes included a mandatory conversion feature whereby $800,000 in debt would be converted into 2,079,600 shares of Cementitious common stock and $3,356,000 in debt would be converted into 8,390,000 shares of Cementitious common stock in connection with the Cementitious Materials, Inc. merger further described in note 12 below.

As a result of the merger on November 29, 2005, all of these Notes were converted into 10,469,600 shares of Cementitious common stock. The Notes included an accrued interest provision of 8% per annum, generally beginning six months after the date of issuance. No interest will be accrued or paid on this notes since all of this outstanding debt was satisfied with the conversion into common stock coincident with the planned merger with Cementitious.

10. LEASE OBLIGATION

On May 13, 2005, the Company entered into an operating lease agreement for office space expiring May 31, 2008. At any time after May 31, 2006, the Company may terminate the lease upon ninety days prior written notice to the landlord. Following are the minimum future payments under this lease:

For the quarter ending December 31, 2005	$	12,579
For each of the years ending December 31:
2006	$	53,807
2007	$	59,369
2008	$	35,938

11. LINE OF CREDIT AND PROMISSORY NOTE WITH TECHNOLOGY INNOVATIONS

On December 29, 2004 the Company entered into a Line of Credit Agreement and a Promissory Note with its former parent company, Technology Innovations, LLC. This Line of Credit allows for borrowings of up to $500,000 for working capital purposes and bears an interest rate of 8% per annum. This agreement extends through December 31, 2005 at which time the outstanding balance, including all interest accrued, shall be repaid in full. As of September 30, 2005 there were no outstanding borrowings under this agreement.

F-13

NaturalNano, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Information related to the nine month period ending September 30, 2005 is unaudited

12. SUBSEQUENT EVENTS

Merger with Cementitious Materials, Inc.

On November 29, 2005, the Company completed the previously announced merger with Cementitious Materials, Inc. Under the merger agreement, the Company merged into a newly formed subsidiary of Cementitious with NaturalNano, Inc. being the surviving entity.

In connection with the merger, Technology Innovations, LLC, the Company’s majority stockholder exchanged each of its outstanding shares for 4.4919378 shares of Cementitious stock for an aggregate of 44,919,378 shares of Cementitious. Each of the Company’s previously outstanding options and warrants were replaced with the same number of options and warrants of Cementitious with rights to acquire this common stock at economic and contractual terms consistent with the rights as defined in the original NaturalNano option and warrant agreements. The Convertible Bridge Notes outstanding on November 29, 2005 were converted into 10,469,600 shares of Cementitious common shares as prescribed in the original debt agreements (see note 9).

F-14

EXHIBIT INDEX
Exhibit Number	Description
2.1	Agreement and Plan of Merger among NaturalNano, Inc., Cementitious Materials, Inc. and Cementitious Acquisitions, Inc.
3.1	Articles of Incorporation and Amendments Thereto
3.2	Certificate of Amendment of Articles of Incorporation
3.3	By-laws
4.1	NaturalNano, Inc. 2005 Incentive Stock Plan
4.2	Form of Non-Qualified Stock Option Agreement
4.3	Registration Rights Agreement dated as of December 22, 2004 between NaturalNano, Inc. and Technology Innovations, LLC
4.4	Form of Subscription Agreement for the Purchase of Convertible Notes of NaturalNano, Inc.
4.5	Warrant issued to SBI USA, LLC
10.1	License Agreement between Technology Innovations, LLC and NaturalNano, Inc. dated as of April 27, 2005 (filed in redacted form pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission)
10.2	Joint Research Agreement between Nanolution, LLC and NaturalNano Inc. dated as of May 25, 2005
10.3	Employment Letter of Michael Riedlinger and Amendment No. 1 thereto
10.4	Employment Letter of Kathleen A. Browne and Amendment No. 1 thereto
10.5	Employment Letter of Sarah Cooper
16.1	Letter on Change in Certifying Accountant
21.1	Subsidiaries
23.1	Consent of Goldstein Golub Kessler LLP, Certified Public Accountants
99.1	Unaudited Pro Forma Condensed Financial Statements of NaturalNano, Inc.

33

EX-3.1

EXHIBIT 3.1

Restated Articles of Incorporation

of

NaturalNano, Inc.

Pursuant to the provisions of Section 78.403 of the Nevada Revised Statutes, the undersigned corporation adopts the following Restated Articles of Incorporation as of this 5^th day of December 2005:

FIRST: The name of the corporation is NaturalNano, Inc.

SECOND: The Articles of Incorporation of the corporation were filed by the Secretary of State on the 18^th day of February 2000.

THIRD: The Articles of Incorporation, as amended to the date of this certificate, are hereby restated (without further amendment) as follows:

1. Name of Corporation:	NaturalNano, Inc.
2. Resident Agent Name and Street Address:	Not Required
3. Shares:	The number of shares the corporation is authorized to issue is 100,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. Preferred shares may be issued from time to time in one or more series in the discretion of the board of directors. The board has the authority to establish the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof.
4. Governing Board:	Shall be styled as Directors.
Names, Addresses, Number of Board of Directors/Trustees:	Not Required
5. Purpose:	Any Legal
6. Other Matters:	See Articles 9, 10 and 11
7. Names, Addresses and Signatures of Incorporators:	Not Required
8. Certificate of Acceptance of Appointment of Resident Agent:	Not Required
9. Directors:	The corporation shall be governed by a Board of Directors consisting of no less than three (3) nor more than nine (9) directors. Directors need not be shareholders of the corporation
10. Exemption from Corporate Debt:	The private property of the shareholders of the corporation shall not be subject to the payment of any corporate debt to any extent whatsoever.
11. Indemnification:	As enumerated by the Nevada Code and as the Board of Directors may from time to time provide in the By-Laws or by resolution, the corporation shall indemnify its officers, directors, agents and other persons against personal liability for monetary damages for breach of fiduciary duty as a director to the full extent permitted by the laws of the State of Nevada.

The undersigned Kathleen A. Browne is the secretary of the corporation; she has been authorized to execute the foregoing certificate by resolution of the board of directors on the 2^nd day of December 2005, and the foregoing certificate sets forth the text of the Articles of Incorporation as amended to the date of this certificate.

Date December 5, 2005

NATURALNANO, INC.

By:   /s/ Kathleen A. Browne

Kathleen A. Browne, its Secretary

EX-3.2

Exhibit 3.2

DEAN HELLER

Secretary of State

202 North Carson St.

Carson City, NV 89701-4299

(775) 684-5708 Website: secretaryofstate.biz

Certificate of Amendment

(PURSUANT TO NRS 78.385 and 78.390)

Certificate of Amendment to Articles of Incorporation

For Nevada Profit Corporations

(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)

1. Name of Corporation: Cementitious Materials, Inc.

2. The articles have been amended as follows (provide article numbers, if available):

Article #1 - is amended to read:

"The name of the corporation is NaturalNano, Inc."

Article #3 - is amended to read:

"SHARES: The number of shares the corporation is authorized to issue is 100,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. Preferred shares may be issued from time to time in one or more series in the discretion of the board of directors. The board has the authority to establish the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof."

3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of the amendment is: 4,344,480 shares (87.0%) voting for (by written consent) and zero shares voting against.

4. Officer Signature (Required):

/s/ Geoff Williams

Geoff Williams, Secretary

* If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless of limitations or restrictions on the voting power thereof.

IMPORTANT: Failure to include any of the above information and remit the proper fees may cause this filing to be rejected.

EX-4.2

Exhibit 4.2

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

Pursuant to the

NaturalNano, Inc.

2005 Stock Option Plan

Name of Option Holder:

Date of Grant:

Number of Shares:

Exercise Price per Share:

Expiration Date:

This NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (the “Award Agreement”) is made as of ____________, 2005 between NaturalNano, Inc., a Delaware corporation (the “Company”), and the above-named individual, an employee of the Company or one of its Subsidiaries (the “Option Holder”), to record the granting of a non-qualified stock option pursuant to the Company’s 2005 Stock Option Plan (the “Plan”). Terms used herein that are defined in the Plan shall have the meanings ascribed to them in the Plan. If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan, the Plan’s terms shall supersede and replace the conflicting terms herein.

1. Grant of Option. The Company hereby grants to the Option Holder, subject to and pursuant to the terms and conditions of the Plan and this Award Agreement, the option to purchase from the Company an aggregate number of shares of common stock of the Company, no par value per share, (the “Shares”) set forth above at an exercise price per share set forth above. The parties intend this Option to be treated as a non-qualified stock option under the Code.

2. Expiration Date. This Option shall expire on the expiration date set forth above (the “Expiration Date”) unless this Option expires earlier as provided in Sections 5, 6 or 7 of this Award Agreement.

3. Exercisability. No Shares may be purchased under this Option and this Option shall not be exercisable until the Option has vested pursuant to the vesting schedule. Under the vesting schedule, a portion of this Option representing the right to purchase one half of the Shares that may be purchased under this Option shall vest on the first anniversary date after the Date of Grant and the right to purchase the remaining Shares that may be purchased under this Option shall vest on the second anniversary date after the Date of Grant, provided that the Option Holder remains in continuous employment with the Company or its Subsidiaries until such anniversary dates. If the Option Holder’s employment is terminated, Section 5 shall govern the Option Holder’s rights under this Option. Notwithstanding the foregoing or any other provision of the Plan or this Award Agreement, this Option may not be exercised after the Expiration Date.

4. Method of Exercising Options. The Option may be exercised from time to time by written or electronic notice (in the form prescribed by the Company) delivered to and received by the Company, which notice shall be signed or electronically confirmed by the Option Holder and shall state the election to exercise the Option and the number of whole Shares with respect to which the Option is being exercised. Such notice must be accompanied by a check payable to the Company or, subject to the Committee’s approval, such other consideration allowed pursuant to the Plan, in payment of the full Option Price for the number of Shares purchased. As soon as practicable after it receives such notice and payment, as applicable, and following receipt from the Option Holder of payment for any taxes which the Company is required by law to withhold by reason of such exercise, the Company will deliver to the Option Holder a certificate or certificates for the Shares so purchased. The Committee, in its sole discretion, may permit an Option Holder to exercise the Option pursuant to a “cashless exercise” procedure (subject to securities law restrictions), or by any other means the Committee determines is consistent with the Plan’s purpose and applicable law.

1. Upon the exercise of the Option Holder’s right to purchase Shares under this Option, the number of Shares subject to the Option shall be reduced on a one-for-one basis.

5. Cancellation of Options.

(a) Expiration of Term. On the Expiration Date, the unexercised Options shall be cancelled automatically.

(b) Termination of Employment. Except as provided in Sections 6 and 7 below, any unvested portion of the Option shall automatically be cancelled upon termination of the Option Holder’s employment with the Company or any of its Subsidiaries for any reason. Any portion of the Option vested at the time of termination may only be exercised by the Option Holder at any time on or prior to the earlier of the Expiration Date or the expiration of three (3) months after the date of termination. Any vested portion of the Option that is not exercised within such time period shall be automatically cancelled. A “termination” includes any event which causes the Option Holder to lose his or her eligibility to participate in the Plan (e.g., an individual is employed by a company that ceases to be a Subsidiary of the Company).

- 2 -

6. Death of Option Holder. Upon the death of the Option Holder while the Option Holder is an employee of the Company or a Subsidiary, any unvested portion of the Option shall fully vest. The Option may be exercised by the Option Holder’s estate, or by a person who acquires the right to exercise the Option by bequest or inheritance or by reason of the death of the Option Holder, provided that such exercise occurs both before the Expiration Date and within 6 months after the Option Holder’s death. Any portion of the Option not exercised within such time period will be cancelled.

7. Disability. Upon termination of the Option Holder’s employment by reason of the Option Holder’s Disability, any unvested portion of the Option shall fully vest. The Option may be exercised by the Option Holder, provided that such exercise occurs both before the Expiration Date and within 6 months after the Option Holder’s termination due to a Disability. Any portion of the Option not exercised within such time period will be cancelled. “Disability” shall mean a condition whereby the Option Holder is unable to engage in any substantial gainful activity by reason of any medically determinable physical impairment which can be expected to result in death or which is or can be expected to last for a continuous period of not less than thirty-six months, all as verified by a physician acceptable to, or selected by, the Company.

8. Non-Assignability. The Option shall not be assignable or transferable by the Option Holder, except by will or by the laws of descent and distribution. During the life of the Option Holder, the Option shall be exercisable only by the Option Holder.

9. Rights as a Shareholder. The Option Holder shall have no rights as a shareholder by reason of the Option unless and until certificates for shares of Common Stock are issued to him or her.

10. Discretionary Plan; Employment. The Plan is discretionary in nature and may be suspended or terminated by the Company at any time. With respect to the Plan, (a) each grant of an Option is a one-time benefit which does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options; (b) all determinations with respect to any such future grants, including, but not limited to, the times when the Option shall be granted, the number of Shares subject to each Option, the Option Price, and the times when each Option shall be exercisable, will be at the sole discretion of the Company; (c) if the Option Holder is an Employee, the Option Holder’s participation in the Plan shall not create a right to further or continued employment with the Option Holder’s employer and shall not interfere with the ability of the Option Holder’s employer to terminate the Option Holder’s employment relationship at any time with or without cause; (d) the Option Holder’s participation in the Plan is voluntary; (e) the Option is not part of normal and expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payment, bonuses, long-service awards, pension or retirement benefits, or similar payments; (f) the future value of the Shares underlying the Options is unknown and cannot be predicted with certainty; (g) if the underlying Shares do not increase in value, the Option will have no value; and (h) the ability of the Option Holder to sell Shares acquired pursuant to this Option may be limited by applicable securities laws.

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11. Effect of Plan. The Plan is hereby incorporated by reference into this Award Agreement, and this Award Agreement is subject in all respects to the provisions of the Plan, including without limitation the authority of the Committee to adjust awards and to make interpretations and other determinations with respect to all matters relating to this Award Agreement and the Plan.

12. CMI Merger. Notwithstanding the language of Section 11 of this Agreement, or the provisions of Section 4.2 of the Plan, each holder of an option (a “Company Option”) to purchase Company Common Stock granted prior to the Effective Time of the Merger pursuant to the Plan or otherwise will receive at the Closing, in exchange for a written instrument executed by such holder canceling by its terms all of the Company Options, a duly executed Option Agreement (a “CMI Option Agreement”) evidencing the grant to said holder, pursuant to the CMI Stock Incentive Plan (as defined herein), of an option (each, a “CMI Option”) to acquire one (1) share of CMI Common Stock for every one (1) share of Company Common Stock for which the Company Option is exercisable, on economic and contractual terms substantially and materially similar to the terms and conditions of said Company Option prior to such conversion.

13. Notice. Notices hereunder shall be in writing and if to the Company shall be addressed to the Secretary of the Company at NaturalNano, Inc., 150 Lucius Gordon Drive, Suite 115, West Henrietta, New York 14586 and if to the Option Holder shall be addressed to the Option Holder at his or her address as it appears on the Company’s records.

14. Successors and Assigns. This Award Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company and, to the extent provided in Section 6 hereof, to the heirs or legatees of the Option Holder.

15. Grant/Exercise Subject to Applicable Regulatory Approvals. Any grant of Options under the Plan is specifically conditioned on, and subject to, any required regulatory approvals. If necessary approvals for the grant or exercise are not obtained, the Options may be cancelled or rescinded, or they may expire, as determined by the Company in its sole and absolute discretion. The Company may restrict the exercise of any Option if the Shares issuable pursuant to the Option have not yet been registered pursuant to the Securities Act of 1933, as amended; provided, however, this limitation shall not apply during the six (6) months immediately prior to the Expiration Date or if the Option Holder agrees in writing that the Shares issuable upon the exercise will be restricted securities and bear a restrictive legend.

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16. Applicable Laws and Consent to Jurisdiction. The validity, construction, interpretation and enforceability of this Award Agreement shall be determined and governed by the laws of the New York without giving effect to the principles of conflicts of law. For the purpose of litigating any dispute that arises under this Award Agreement, the parties hereby consent to exclusive jurisdiction in New York and agree that such litigation shall be conducted in the federal or state courts located in Rochester, New York.

IN WITNESS WHEREOF, the Company and the Option Holder have caused this Award Agreement to be executed on the date set forth opposite their respective signatures, it being further understood that the date of grant may differ from the date of signature.

Dated:	___________________	NaturalNano, Inc.
		By:  ____________________________
		Chief Executive Officer
Dated:	___________________	Option Holder
		_____________________________

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EX-4.3

Exhibit 4.3

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement is entered into as of the 22^nd day of December 2004 (the “Agreement”), by and between NaturalNano, Inc., a Delaware corporation (the “Company”), and Technology Innovations, LLC, a limited liability company (the “Purchaser“).

W I T N E S S E T H :

WHEREAS, the Company has offered and sold to Purchaser (the “Offering”) an aggregate of 10,000,000 shares of the Company’s common stock, par value $.001 per share (the “Common Stock”); and

WHEREAS, in connection with the Offering and as a condition thereto, the Company will provide to Purchaser certain limited “piggy-back” registration rights related to the Common Stock and as set forth in this Agreement.

NOW,THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound, the parties hereto hereby agree as follows:

1. Registration Rights. The Company, currently a privately owned corporation, intends to use its reasonable best efforts to effect a transaction whereby the Company will become a publicly owned corporation, either by facilitating an initial public offering, merging with or being acquired by an existing public company, or by other similar and satisfactory means. At such time as the Company becomes a public company, it will use its reasonable best efforts to cause to be prepared and filed with the Securities and Exchange Commission (“SEC”), a registration statement on an appropriate form (the “Registration Statement”) that is available pursuant to the Securities Act of 1933, as amended (the Securities Act”), that will register the Common Stock and permit the offer and re-sale from time to time of such Common Stock in accordance with the applicable laws, rules and regulations promulgated under the Securities Act. The Company will also use its reasonable best efforts to cause the Registration Statement to become effective as promptly as reasonably practicable thereafter, and to keep the Registration Statement continuously effective for a period of one year after the Registration Statement first becomes effective.

(a) No Firm Commitment. The rights granted hereunder to Purchaser are not intended to be guaranteed and nothing herein is to be construed as the Company making a firm commitment to file, or cause to be filed with the SEC, a Registration Statement related to the Common Stock at any time in the future.

(b) Limitations. The registration rights granted hereunder are limited in that the Company will use its reasonable best efforts to file a Registration Statement for the Common Stock, or in the event the Company or a successor files a registration statement under the Securities Act for the public sale of its securities, Purchasers will have the limited right to include, or “piggyback” the shares, or a portion thereof, of the Common Stock in the Registration Statement. However, any investment banker and/or underwriter of any such public offering may severely restrict or completely negate the ability of Purchasers to include their shares in any such Registration Statement and public offering. Thus, the right to piggyback shares into a Registration Statement will be subject to and contingent upon approval by such investment banker and/or underwriter.

(c) Reasonable Efforts. The Company will use all reasonable best efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit the Common Stock, or a portion thereof, to be included in a piggy-back Registration Statement, which will be included on the same terms and conditions as any similar securities of the Company or its successor or any other security holder included therein, and to permit the sale or other disposition of such Common Stock in accordance with the intended method of distribution thereof.

(d) Priority in Registrations. If a piggy-back Registration Statement is an underwritten primary registration on behalf of the Company or a successor, and the managing underwriters advise the Company or the successor in writing that in their opinion the number of shares of Common Stock requested to be included on a secondary basis in such registration exceeds the number which can be sold in such offering without materially and adversely affecting the marketability of such primary or secondary offering, then the Company or successor will have the right to limit the number of shares of Common Stock to be included in the Registration Statement.

2. Registration Expenses. All expenses incident to the Company’s performance of or compliance with this Agreement including, without limitation, all registration and filing fees, costs and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, and fees and disbursements of counsel for the Company and all independent certified public accountants, underwriters (excluding discounts and commissions, which will be paid by the sellers of the Common Stock) and other persons retained in connection with the Registration Statement, will be borne by the Company or its successor, and the Company or its successor will pay its internal expenses (including, without limitation, all salaries and expenses of its employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which similar securities issued by the Company are then listed or on the OTC Bulletin Board or other trading system.

3. Transfer of Registration Rights. The rights granted to the Purchaser under this Agreement may be transferred and/or assigned to another party or entity, provided that nothing contained herein shall be deemed to permit an assignment, transfer or disposition of the Common Stock in violation of this Agreement or any applicable law. Any transferee to whom rights under this Agreement are transferred will, as a condition to such transfer, deliver to the Company a written instrument by which such transferee agrees to be bound by the obligations imposed upon the Purchaser under this Agreement to the same extent as if such transferee were a Purchaser hereunder.

4. Change of Control. In the event the Company enters into a transaction that results in a change of control of the Company, or whereby the Company is acquired by or merges with another entity that is deemed a public company, then the Company will transfer all of its obligations, rights and duties set forth herein to such other controlling party or entity.

5. Recapitalizations, Exchanges, etc. The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all securities into which the Common Stock may be converted, exchanged or substituted in any recapitalization or other capital reorganization by the Company or any successor, and any and all equity securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in conversion of, in exchange for or in substitution of, the Common Stock and will be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. The Company shall cause any successor or assign (whether by merger, consolidation, sale of assets or otherwise) to enter into a new registration rights agreement with the Purchaser on terms substantially the same as this Agreement as a condition of any such transaction.

6. No Inconsistent Agreements. The Company has not and shall not enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Purchaser in this Agreement or grant any additional registration rights to any person or with respect to any securities that are prior in right to or inconsistent with the rights granted in this Agreement.

7. Amendments and Waivers. The provisions of this Agreement may be amended and the Company may take action herein prohibited, or omit to perform any act herein required to be performed by it, if, but only if, the Company has obtained the written consent of Purchaser

8. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

9. Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

10.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of laws rules or provisions.

11.Successors and Assigns; Third Party Beneficiaries. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto, each subsequent holder of the Common Stock and their respective successors and assigns and executors , administrators and heirs. Holders of the Common Stock are intended third party beneficiaries of this Agreement and this Agreement may be enforced by such holders.

12.Entire Agreement. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed as of the date and year first written above.

NATURAL NANO, INC.
By:
	Name:
	Title

TECHNOLOGY INNOVATIONS, LLC.
By:
	Name:
	Title

EX-4.4

Exhibit 4.4

SUBSCRIPTION AGREEMENT

Print Name of Subscriber:_____________

Amount Subscribed For: $____________

SUBSCRIPTION AGREEMENT

For the Purchase of Convertible Note

of

NaturalNano, Inc.

This SUBSCRIPTION AGREEMENT (the “Subscription Agreement”) sets forth the terms by which the undersigned (sometimes also referred to as the “subscriber”) hereby subscribes for a Convertible Promissory (“Note” or “Securities”) of NaturalNano, Inc., a Delaware corporation (the “Company”). The Company is offering for purchase Notes in the aggregate amount of $1,000,000 (subject to increase, at the Company’s sole discretion)(the “Offering”).

The Notes will be offered by the Company on a best efforts basis but may utilize the services of selected registered broker-dealers. The Notes shall be offered only to “Accredited Investors,” as such term is defined under Rule 501(a) of the Securities Act of 1933, as amended (the “Act”), including, without limitation, entities within such definition, without registration, pursuant to the exemption from registration created by Regulation D under the Act. The Offering will commence on June 6, 2005, and shall terminate on July 31, 2005, unless extended by the Company in its sole discretion and without notice to any subscriber (the “Offering Period”).

The subscriber agrees to pay the purchase price listed on the signature page as a subscription for the Note being purchased hereunder. The entire purchase price is due and payable upon the execution of this Subscription Agreement, and shall be paid by check, subject to collection, or by wire transfer. The Company shall have the right to reject this subscription in whole or in part.

The Company, at its discretion, will hold a closing on, and issue, the Notes upon the receipt and acceptance by the Company of Subscription Agreements (“First Closing”). As additional subscriptions are received and accepted by the Company, the Company will hold additional closings as the Company deems necessary until (i) it has received and accepted subscriptions for the entire offering or (ii) the Termination Date, whichever occurs first.

PROSPECTIVE INVESTORS SHOULD RETAIN THEIR OWN PROFESSIONAL

ADVISORS TO REVIEW AND EVALUATE THE ECONOMIC, TAX AND OTHER

CONSEQUENCES OF AN INVESTMENT IN THE COMPANY.

THE SECURITIES ARE OFFERED PURSUANT TO THIS SUBSCRIPTION AGREEMENT AND THE OTHER DOCUMENTS ANNEXED HERETO (COLLECTIVELY, THE “OFFERING MATERIALS”), WHICH OFFERING MATERIALS HAVE NOT BEEN FILED OR REGISTERED WITH OR APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION”), NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS. NO STATE SECURITIES LAW ADMINISTRATOR HAS PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR THE ADEQUACY OF THE OFFERING MATERIALS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

IT IS INTENDED THAT THE SECURITIES OFFERED HEREBY WILL BE MADE AVAILABLE ONLY TO “ACCREDITED INVESTORS,” AS DEFINED IN RULE 501 OF REGULATION I PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). THE SECURITIES OFFERED HEREBY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND APPLICABLE STATE SECURITIES LAWS FOR NONPUBLIC OFFERINGS. SUCH EXEMPTIONS LIMIT THE NUMBER AND TYPES OF INVESTORS TO WHICH THE OFFERING WILL BE MADE AND RESTRICT SUBSEQUENT TRANSFERS OF THE INTERESTS.

THE SECURITIES OFFERED HEREBY SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD TO SUSTAIN A LOSS OF THEIR ENTIRE INVESTMENT. INVESTORS WILL BE REQUIRED TO REPRESENT THAT THEY ARE FAMILIAR WITH AND UNDERSTAND THE TERMS OF THIS OFFERING.

NO SECURITIES MAY BE RESOLD OR OTHERWISE DISPOSED OF BY AN INVESTOR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, REGISTRATION UNDER THE APPLICABLE FEDERAL OR STATE SECURITIES LAWS IS NOT REQUIRED OR COMPLIANCE IS MADE WITH SUCH REGISTRATION REQUIREMENTS.

WE DRAW YOUR ATTENTION TO THE ANTIFRAUD PROVISIONS OF THE FEDERAL AND STATE SECURITIES LAWS, PARTICULARLY RULE 10b5 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, WHICH PROHIBITS THE PURCHASE OR SALE OF SECURITIES ON THE BASIS OF MATERIAL NONPUBLIC INFORMATION. IN LIGHT OF THESE PROVISIONS, INCLUDING RULE l0b5, WE ADVISE YOU THAT, IF YOU ARE IN POSSESSION OF MATERIAL INFORMATION RELATING TO THE COMPANY WHICH YOU KNOW OR HAVE REASON TO KNOW IS NONPUBLIC, YOU SHOULD NOT PURCHASE OR SELL OR CAUSE TO BE PURCHASED OR SOLD ANY OF THE COMPANY’S SECURITIES. IN ADDITION, YOU SHOULD NOT DISCLOSE ANY OF SUCH INFORMATION UNLESS AND UNTIL SUCH INFORMATION HAS BEEN PUBLICLY DISCLOSED.

THE OFFERING MATERIALS ARE SUBMITTED IN CONNECTION WITH THE PRIVATE PLACEMENT OF THE SECURITIES AND DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED. IN ADDITION, THE OFFERING MATERIALS CONSTITUTE AN OFFER ONLY IF A NAME AND IDENTIFICATION NUMBER APPEAR IN THE APPROPRIATE SPACES PROVIDED ON THE COVER PAGE AND CONSTITUTE AN OFFER ONLY TO THE PERSON WHOSE NAME APPEARS THEREON. ANY REPRODUCTION OR DISTRIBUTION OF THE OFFERING MATERIALS IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF THEIR CONTENTS, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY, IS PROHIBITED. ANY PERSON ACTING CONTRARY TO THE FOREGOING RESTRICTIONS MAY PLACE HIMSELF AND THE COMPANYIN VIOLATION OF FEDERAL OR STATE SECURITIES LAWS.

THE COMPANY RESERVES THE RIGHT TO ACCEPT OR REJECT ANY SUBSCRIPTION FOR SECURITIES, IN WHOLE OR IN PART, OR TO ALLOT TO ANY PROSPECTIVE INVESTOR FEWER THAN THE NUMBER OF SECURITIES SUCH INVESTOR DESIRES TO PURCHASE.

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IN DECIDING WHETHER TO PURCHASE SECURITIES, EACH INVESTOR MUST CONDUCT AND RELY ON ITS OWN EVALUATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SECURITIES. PROSPECTIVE INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THE OFFERING MATERIALS OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE COMPANY, OR ANY PROFESSIONAL ASSOCIATED WITH THE OFFERING, AS LEGAL OR TAX ADVICE. THE OFFEREE AUTHORIZED TO RECEIVE THE OFFERING MATERIALS SHOULD CONSULT ITS OWN TAX COUNSEL, ACCOUNTANT OR BUSINESS ADVISOR, RESPECTIVELY, AS TO LEGAL, TAX AND RELATED MATTERS CONCERNING ITS PURCHASE OF THE SECURITIES.

THE INFORMATION PRESENTED HEREIN WAS PREPARED BY THE COMPANY AND IS BEING FURNISHED SOLELY FOR USE BY PROSPECTIVE INVESTORS IN CONNECTION WITH THE OFFERING. THE INFORMATION CONTAINED IN THE OFFERING MATERIALS HAS BEEN SUPPLIED BY THE COMPANY AND HAS BEEN INCLUDED HEREIN IN RELIANCE ON THE COMPANY.

EXCEPT AS OTHERWISE INDICATED, THE OFFERING MATERIALS SPEAK AS OF THE DATE HEREOF. NEITHER THE DELIVERY OF THE OFFERING MATERIALS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATEANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AFTER THE DATE HEREOF.

NO GENERAL SOLICITATION WILL BE CONDUCTED AND NO OFFERING LITERATURE OR ADVERTISING IN ANYFORM WILL OR MAY BE EMPLOYED IN THE OFFERING OF THE SECURITIES, EXCEPT FOR THE OFFERING MATERIALS (INCLUDING AMENDMENTS OR SUPPLEMENTS HERETO). NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THE OFFERING MATERIALS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON.

BY ACCEPTING DELIVERY OF ANY OFFERING MATERIAL, THE OFFEREE AGREES (I) TO KEEP CONFIDENTIAL THE CONTENTS THEREOF, AND NOT TO DISCLOSE THE SAME TO ANY THIRD PARTY OR OTHERWISE USE THE SAME FOR ANY PURPOSE OTHER THAN EVALUATION BY SUCH OFFEREE OF A POTENTIAL PRIVATE INVESTMENT IN THE COMPANY AND (II) TO RETURN THE SAME TO THE COMPANY IF (A) THE OFFEREE DOES NOT SUBSCRIBE TO PURCHASE ANY SECURITIES, (B) THE OFFEREE’S SUBSCRIPTION IS NOT ACCEPTED, OR (C) THE OFFERING IS TERMINATED OR WITHDRAWN.

THE COMPANY WILL MAKE AVAILABLE TO ANY PROSPECTIVE INVESTOR, PRIOR TO THE CLOSING, THE OPPORTUNITY TO ASK QUESTIONS OF AND TO RECEIVE ANSWERS FROM REPRESENTATIVES OF THE COMPANY CONCERNING THE COMPANY OR THE TERMS AND CONDITIONS OF THE OFFERING AND TO OBTAIN ANY ADDITIONAL RELEVANT INFORMATION TO THE EXTENT THE COMPANY POSSESSES SUCH INFORMATION OR CAN OBTAIN IT WITHOUT UNREASONABLE EFFORT OR EXPENSE. INVESTORS AGREE TO ADVISE THE COMPANY IN WRITING IF THEY ARE RELYING UPON ANY SUCH INFORMATION.

FOR RESIDENTS OF ALL STATES

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT.

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THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE 1933 ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

FOR FLORIDA RESIDENTS

THE SECURITIES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER IN A TRANSACTION EXEMPT UNDER §517.061 OF THE FLORIDA SECURITIES ACT. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BYSUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER OR ANESCROW AGENT OR WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH INVESTOR, WHICHEVER OCCURS LATER.

FOR NEW JERSEY RESIDENTS

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE BUREAU OF SECURITIES OF THE STATE OF NEW JERSEY NOR HAS THE BUREAU PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING DOES NOT CONSTITUTE APPROVAL OF THE ISSUE OR SALE THEREOF BY THE BUREAU OF SECURITIES. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

FOR NEW YORK RESIDENTS

THE OFFERING MATERIALS HAVE NOT BEEN REVIEWED BY THE ATTORNEY GENERAL OF THE STATE OF NEW YORK PRIOR TO THEIR ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

THE OFFERING MATERIALS DO NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE NOT MISLEADING. THEY CONTAIN A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE SUMMARIZED HEREIN, TO THE EXTENT ANY SUCH SUMMARIES ARE SO INCLUDED.

FOR TEXAS RESIDENTS

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR THE TEXAS ACT AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION CONTAINED IN SECTION 5(1)(a) AND RULE 109.13 OF SUCH ACT. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE 1933 ACT AND/OR THE TEXAS ACT OR EXEMPTION THEREFROM.

The subscriber acknowledges that the Note being purchased hereunder will not be registered under the 1933 Act, or the securities laws of any State, that absent an exemption from registration contained in those laws, the issuance and sale of the Note, or the shares into which the Note is converted, would require registration, and that the Company’s reliance upon such exemption is based upon the subscriber’s representations, warranties, and agreements contained in the Offering Materials.

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REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF SUBSCRIBER

1. The subscriber represents, warrants, and agrees as follows:

(a) The subscriber agrees that this Subscription Agreement is and shall be irrevocable.

(b) The subscriber has carefully read the Offering Materials, all of which the subscriber acknowledges have been provided to the subscriber. The subscriber has been given the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of this Offering and the Offering Materials and to obtain such additional written information, to the extent the Company possesses such information or can acquire it without unreasonable effort or expense, necessary to verify the accuracy of same as the subscriber desires in order to evaluate the investment. The subscriber further acknowledges that he or she fully understands the Offering Materials, and the subscriber has had the opportunity to discuss any questions regarding any of the Offering Materials with his or her counsel or other advisor. Notwithstanding the foregoing, the only information upon which the subscriber has relied is that set forth in the Offering Materials and his or her own independent investigation. The subscriber acknowledges that the subscriber has received no representations or warranties from the Company, or its respective officers, directors, stockholders, employees or agents in making this investment decision other than as specifically set forth in the Offering Materials.

(c) The subscriber is aware that the purchase of the Note is a speculative investment involving a high degree of risk and that there is no guarantee that the subscriber will realize any gain from this investment, and that the subscriber could lose the total amount of the subscriber’s investment. The subscriber acknowledges that the subscriber has satisfied itself as to its awareness of all of the risk factors related to the purchase of the Note.

(d) The subscriber understands that no federal or state agency or authority has made any finding or determination regarding the fairness of this Offering of the Note for investment, or any recommendation or endorsement of this Offering of the Note.

(e) The subscriber is purchasing the Note for the subscriber’s own account, with the intention of holding the Note, with no present intention of dividing or allowing others to participate in this investment or of reselling or otherwise participating, directly or indirectly, in a distribution of the Note, and shall not make any sale, transfer, or pledge thereof without registration under the 1933 Act and any applicable securities laws of any state or other jurisdiction or unless an exemption from registration is available under those laws to the satisfaction of the Company and its counsel.

(f) The subscriber represents that the subscriber, if an individual, has adequate means of providing for his or her current needs and personal and family contingencies and has no need for liquidity in this investment in the Note. The subscriber represents that the subscriber is an “Accredited Investor” as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act, as evidenced by meeting at least one of the following standards:

(i) the Investor is a natural person and had individual income (i.e., not including, if applicable, income of the Investor’s spouse) in excess of $200,000 in the two previous years and reasonably expects to have income in excess of $200,000 in the present year, or he, she and his or her spouse had joint income in excess of $300,000 in the two previous years and reasonably expect to have joint income of $300,000 in the present year;

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(ii) the Investor is a natural person and his or her net worth at the time of his or her purchase of the Note (i.e., excess of total assets over total liabilities), inclusive of home, home furnishings and automobiles, either individually or jointly with his or her spouse, exceeds $1,000,000;

(iii) the Investor is an organization defined in Section 501(c)(3) of the Internal Revenue Code, business trust, partnership, or corporation with total assets in excess of $5,000,000, which was not formed for the specific purpose of acquiring the Note;

(iv) any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Note, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii);

(v) the Investor is an employee benefit plan within the meaning of ERISA and (i) the Investor’s investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, that is either a bank, savings and loan association, insurance company, or registered investment advisor, (ii) the investor’s total assets are in excess of $5,000,000 or (iii), if a self-directed plan, the Investor’s investment decisions are made solely by persons who are Accredited Investors;

(vi) the Investor is a bank as defined in Section 3(a)(2) of the Securities Act; any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 5 of the Securities Exchange Act of 1934; an insurance company as defined in Section 2(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940, as amended; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; or a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940; or

(vii) the Investor is an entity in which all of the equity owners would qualify as “Accredited Investors.”

The subscriber has no reason to anticipate any material change in his or her personal financial condition for the foreseeable future.

(g) The subscriber is financially able to bear the economic risk of this investment, including the ability to hold the Note indefinitely or to afford a complete loss of his or her investment in the Note.

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(h) The subscriber represents that the subscriber’s overall commitment to investments which are not readily marketable is not disproportionate to the subscriber’s net worth, and the subscriber’s investment in the Note will not cause such overall commitment to become excessive. The subscriber understands that the statutory basis on which the Notes are being sold to the subscriber and others would not be available if the subscriber’s present intention were to hold the Note for a fixed period or until the occurrence of a certain event. The subscriber realizes that, in the view of the Securities and Exchange Commission, a purchase now with a present intent to resell by reason of a foreseeable specific contingency or any anticipated change in the market value, or in the condition of the Company, or that of the industry in which the business of the Company is engaged or in connection with a contemplated liquidation, or settlement of any loan obtained by the subscriber for the acquisition of the Note, and for which such Note may be pledged as security or as donations to religious or charitable institutions for the purpose of securing a deduction on an income tax return, would, in fact, represent a purchase with an intent inconsistent with the subscriber’s representations to the Company and the Securities and Exchange Commission would then regard such sale as a sale for which the exemption from registration is not available. The subscriber will not pledge, transfer or assign this Subscription Agreement, or any interest herein or any obligation or right hereunder, without first obtaining the written consent of the Company.

(i) The subscriber represents that the funds provided for this investment are either separate property of the subscriber, community property over which the subscriber has the right of control, or are otherwise funds as to which the subscriber has the sole right of management.

(j) FOR PARTNERSHIPS, CORPORATIONS, TRUSTS, OR OTHER ENTITIES ONLY: If the subscriber is a partnership, corporation, trust or other entity, (i) the subscriber has enclosed with this Subscription Agreement appropriate evidence of the authority of the individual executing this Subscription Agreement to act on its behalf (e.g., if a trust, a certified copy of the trust agreement; if a corporation, a certified corporate resolution authorizing the signature and a certified copy of the articles of incorporation; or, if a partnership, a certified copy of the partnership agreement); (ii) the subscriber represents and warrants that it was not organized or reorganized for the specific purpose of acquiring the Note; (iii) the subscriber has the full power and authority to execute this Subscription Agreement on behalf of such entity and to make the representations and warranties made herein on its behalf; and (iv) this investment in the Company has been affirmatively authorized, if required, by the governing board of such entity and is not prohibited by the governing documents of the entity.

(k) The address shown under the subscriber’s signature at the end of this Subscription Agreement is the subscriber’s principal residence if he or she is an individual or its principal business address if a corporation or other entity.

(l) The subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Note.

(m) The subscriber acknowledges that the certificates for the Note and the shares into which the Note may be converted which the subscriber will receive will contain a legend substantially as follows:

THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS IS AVAILABLE.

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The subscriber further acknowledges that stop transfer orders will be placed upon the certificates for the Securities which the Note maybe converted into in accordance with the 1933 Act.

2. Registration of Securities.

(a)The subscriber acknowledges that the Company has agreed to use its best efforts to include a portion of the shares which the Note may be converted into, or Securities with which the shares are exchanged into (also referred to as the “Registrable Securities”) in any registration statement to be filed with the Securities and Exchange Commission (the “Commission”) for its own account or the accounts of others under the Securities Act (the “Act”) any of its equity securities, other than on Form S-4 or Form S-8 or their equivalents relating to shares of Common Stock to be issued solely in connection with any acquisition of any entity or business or shares of Common Stock issuable in connection with stock option or other employee benefit plans. The piggy back registration rights shall be subject to underwriter’s approval and other such restrictions (the “Registration Statement”). The Company shall use its good faith efforts to keep such Registration Statement continuously effective as long as the delivery of a prospectus thereunder is required under the Act and its regulations, including, but not limited to, Rule 144 thereunder or its successor regulations (“Rule 144”), in connection with the disposition of the Securities; provided, that it is agreed and acknowledged that such obligation of the Company to maintain the effectiveness of the Registration Statement shall cease upon the ability of the subscribers to sell or otherwise dispose of all of the Registrable Securities covered by the Registration Statement under Rule 144; provided further, that, notwithstanding the Company’s obligation to maintain the effectiveness of the Registration Statement pursuant to the immediately preceding proviso, and notwithstanding the duration of any Blackout Period, such obligation to maintain the effectiveness of the Registration Statement shall cease under all circumstances no later than the second anniversary of the date of the final Closing of the Offering (the “Final Date”).

(b) The Company agrees to pay all Registration Expenses in connection with the Registration Statement. All Selling Expenses relating to Registrable Securities registered on behalf of the subscriber pursuant to the Registration Statement shall be borne by the subscriber. For purposes of this Subscription Agreement, “Registration Expenses” shall mean (i) all registration, listing, qualification and filing fees (including NASD filing fees), (ii) fees and disbursements of counsel for the Company, (iii) accounting fees incident to any such registration, (iv) blue sky fees and expenses (including counsel fees in connection with the preparation of a Blue Sky Memorandum and legal investment survey and NASD filings), (v) all expenses of any persons in preparing or assisting in preparing, printing, distributing, mailing and delivering the Registration Statement, any prospectus, any underwriting agreements, transmittal letters, securities sales agreements, securities certificates and other documents relating to the performance of and compliance with this Subscription Agreement, and (vi) all internal expenses of the Company (including all salaries and expenses of officers and employees performing legal or accounting duties); provided, however, that Registration Expenses shall not include any Selling Expenses. For purposes of this Subscription Agreement, “Selling Expenses” shall mean underwriting discounts, selling commissions and stock transfer taxes applicable to the Registrable Securities registered on behalf of the subscriber for Note hereunder.

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(c) The Registration Statement will not be deemed to have become effective (and the related registration will not be deemed to have been effected) unless it has been declared effective by the Commission prior to a request by the subscriber that such Registration Statement be withdrawn; provided, however, that if, after it has been declared effective, the offering of any Registrable Securities pursuant to such Registration Statement is interfered with by any stop order, injunction or other order or requirement of the Commission or any other governmental agency or court.

(d) At any time or from time to time, the subscriber may elect to have its Registrable Securities sold in an underwritten offering and may select the investment banker or investment bankers and manager or managers that will serve as lead and co-managing underwriters with respect to the offering of its Registrable Securities, subject to the consent of the Company which shall not be unreasonably withheld.

(e) The subscriber agrees, as a condition to the registration obligations with respect to the subscriber provided herein, to furnish to the Company such information regarding the subscriber required to be included in the Registration Statement, the ownership of Registrable Securities by the subscriber and the proposed distribution by the subscriber of such Registrable Securities as the Company may from time to time reasonably request in writing.

(f) The subscriber agrees that, upon receipt of any notice from the Company of the happening of any event of the kind which the Company reasonably regards as requiring the subscriber to discontinue sale of the Registrable Securities pursuant to the Registration Statement, the subscriber will forthwith discontinue disposition of the Registrable Securities pursuant to the affected Registration Statement until the subscriber’s receipt of the copies of any supplemented or amended prospectus as shall be required in the reasonable opinion of the Company, and, if so directed by the Company, the subscriber will deliver to the Company (at the expense of the Company) all copies in its possession, other than permanent file copies then in the subscriber’s possession, of any prospectus covering such Registrable Securities which was current at the time of receipt of such notice.

3. Indemnification; Contribution.

(a) Indemnification by the Company. The Company agrees to indemnify and hold harmless each person who participates as an underwriter of the Securities pursuant to the Registration Statement, the subscriber and its respective partners, directors, officers and employees and each person, if any, who controls any subscriber or underwriter within the meaning of Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as follows:

(i) against any and all losses, liabilities, claims, damages, judgments and reasonable expenses whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement pursuant to which Securities were registered under the Act, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any prospectus, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;

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(ii) against any and all losses, liabilities, claims, damages, judgments and reasonable expenses whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, investigation or proceeding by any governmental agency or body, commenced or threatened, or of any other claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and

(iii) against any and all reasonable expense whatsoever, as incurred (including fees and disbursements of counsel) in investigating, preparing or defending against any litigation, investigation or proceeding by any governmental agency or body, commenced or threatened, in each case whether or not such person is a party, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided, however, that this indemnity agreement does not apply to the subscriber or underwriter with respect to any loss, liability, claim, damage, judgment or expense to the extent arising out of any untrue statement or alleged untrue statement of a material fact contained in any prospectus, or the omission or alleged omission therefrom of a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in any such case made in reliance upon and in conformity with written information furnished to the Company by the subscriber or underwriter expressly for use in a Registration Statement (or any amendment thereto) or any prospectus (or any amendment or supplement thereto); and provided further, in the case of an offering that is not an underwritten offering, the Company will not be liable to the subscriber under the indemnity agreement in this Section 3(a) for any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense that arises out of the subscriber’s failure to send or give a copy of the final prospectus (as its may then be amended or supplemented) to the person asserting an untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of the Securities to such person if such statement or omission was corrected in such final prospectus (as it may then be amended or supplemented) and the Company has previously furnished copies thereof in accordance with this Subscription Agreement.

(b) Indemnification by the Subscriber. The subscriber agrees to indemnify and hold harmless the Company, and each underwriter and each of their respective partners, directors, officers and employees (including each officer of the Company who signed the Registration Statement), and each person, if any, who controls the Company or any underwriter within the meaning of Section 15 of the Act, against any and all losses, liabilities, claims, damages, judgments and expenses described in the indemnity contained in paragraph (a) of this Section (provided that any settlement of the type described therein is effected with the written consent of the subscriber), as incurred, but only with respect to untrue statements or alleged untrue statements of a material fact contained in any prospectus or the omissions or alleged omissions therefrom of a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in any such case made in reliance upon and in conformity with written information furnished to the Company by the subscriber expressly for use in such Registration Statement (or any amendment thereto) or such prospectus (or any amendment or supplement thereto).

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(c) Conduct of Indemnification Proceedings. Each indemnified party or parties shall give reasonably prompt notice to each indemnifying party or parties of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but which it or they may have under this indemnity agreement, except to the extent that the indemnifying party is materially prejudiced by such failure to give notice. If the indemnifying party or parties so elects within a reasonable time after receipt of such notice, the indemnifying party or parties may assume the defense of such action or proceeding at such indemnifying party’s or parties’ expense with counsel chosen by the indemnifying party or parties and approved by the indemnified party defendant in such action or proceeding, which approval shall not be unreasonably withheld; provided, however, that, if such indemnified party or parties determines in good faith that a conflict of interest exists and that therefore it is advisable for such indemnified party or parties to be represented by separate counsel or that, upon advice of counsel, there may be legal defenses available to it or them which are different from or in addition to those available to the indemnifying party, then the indemnifying party or parties shall not be entitled to assume such defense and the indemnified party or parties shall be entitled to separate counsel (limited in each jurisdiction to one counsel for all underwriters and another counsel for all other indemnified parties under this Subscription Agreement) at the indemnifying party’s or parties’ expense. If an indemnifying party or parties is not so entitled to assume the defense of such action or does not assume such defense, after having received the notice referred to in the first sentence of this paragraph, the indemnifying party or parties will pay the reasonable fees and expenses of counsel for the indemnified party or parties (limited in each jurisdiction to one counsel for all underwriters and another counsel for all other indemnified parties under this Subscription Agreement). No indemnifying party or parties will be liable for any settlement effected without the written consent of such indemnifying party or parties, which consent shall not be unreasonably withheld. If an indemnifying party is entitled to assume, and assumes, the defense of such action or proceeding in accordance with this paragraph, such indemnifying party or parties shall not, except as otherwise provided in this subsection (c), be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action or proceeding.

(d)Contribution.

(i) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms in respect of any losses, liabilities, claims, damages, judgments and expenses suffered by an indemnified party referred to therein, each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, liabilities, claims, damages, judgments and expenses in such proportion as is appropriate to reflect the relative fault of the Company, on the one hand, and of the subscriber (including, in each case, that of their respective officers, directors, employees and agents), on the other, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages, judgments or expenses, as well as any other relevant equitable considerations. The relative fault of the Company, on the one hand, and of the subscriber (including, in each case, that of their respective officers, directors, employees and agents), on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or by or on behalf of the Holder, on the other, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, liabilities, claims, damages, judgments and expenses referred to above shall be deemed to include, subject to the limitations set forth in paragraph (c) of this Section, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

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(ii) The Company and the subscriber agree that it would not be just and equitable if contribution pursuant to this paragraph (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in sub-paragraph (i) above. Notwithstanding the provisions of this paragraph (d), in the case of distributions to the public, the subscriber shall not be required to contribute any amount in excess of the amount by which (A) the total price at which the Securities sold by the subscriber and distributed to the public were offered to the public exceeds (B) the amount of any damages which the subscriber has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(iii) For purposes of this Section, each person, if any, who controls the subscriber or an underwriter within the meaning of Section 15 of the Act (and their respective partners, directors, officers and employees) shall have the same rights to contribution as the subscriber or underwriter; and each director of the Company, each officer of the Company who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act shall have the same rights to contribution as the Company.

4. The subscriber expressly acknowledges and agrees that the Company is relying upon the subscriber’s representations herein.

5. The subscriber does not have any direct or indirect affiliation with any member of the National Association of Registrable Securities Dealers, Inc.

6. The subscriber acknowledges that the subscriber understands the meaning and legal consequences of the representations and warranties which are contained herein and hereby agrees to indemnify, save and hold harmless the Company, and its respective officers, directors, partners, employees, agents, and attorneys, from and against any and all claims or actions arising out of a breach of any representation, warrant or acknowledgment of the subscriber contained herein. Such indemnification shall be deemed to survive any purchase of the Note and to include not only the specific liabilities, losses, damages or obligations with respect to which such indemnity is provided, but also all reasonable costs, expenses, counsel fees and expenses of settlement relating thereto, whether or not any such liabilities, losses, damages or obligations shall have been reduced to judgment.

7. The Company has been duly and validly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Delaware. The Company has all requisite power and authority, and all necessary authorizations, approvals and orders required as of the date hereof to own its properties and conduct its business and to enter into this Subscription Agreement and to be bound by the provisions and conditions hereof or therein.

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8. If the Company utilizes the services of registered broker-dealers, it may pay reasonable and customary fees in connection with the sales by the broker.

9. Except as otherwise specifically provided for hereunder, no party shall be deemed to have waived any of his or her or its rights hereunder or under any other agreement, instrument or papers signed by any of them with respect to the subject matter hereof unless such waiver is in writing and signed by the party waiving said right. Except as otherwise specifically provided for hereunder, no delay or omission by any party in exercising any right with respect to the subject matter hereof shall operate as a waiver of such right or of any such other right. A waiver on any one occasion with respect to the subject matter hereof shall not be construed as a bar to, or waiver of, any right or remedy on any future occasion. All rights and remedies with respect to the subject matter hereof, whether evidenced hereby or by any other agreement, instrument, or paper, will be cumulative, and may be exercised separately or concurrently.

10. The parties have not made any representations or warranties with respect to the subject matter hereof not set forth herein, and this Subscription Agreement, together with any instruments executed simultaneously herewith, constitutes the entire agreement between them with respect to the subject matter hereof. All understandings and agreements heretofore entered into between the parties with respect to the subject matter hereof are merged in this Subscription Agreement and any such instrument, which alone fully and completely expresses their agreement.

11. This Subscription Agreement may not be changed, modified, extended, terminated or discharged orally, but only by an agreement in writing, which is signed by all of the parties to this Subscription Agreement.

12. The parties agree to execute any and all such other and further instruments and documents, and to take any and all such further actions reasonably required to effectuate this Subscription Agreement and the intent and purposes hereof.

13. If any provision or any portion of any provision of this Subscription Agreement or the application of any such provision or any portion thereof to any person or circumstance shall be held invalid or unenforceable, the remaining portion of such provision not held invalid or unenforceable to any person or circumstance shall not be affected thereby.

14. This Subscription Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Subscription Agreement may be by actual or facsimile signature.

15. This Subscription Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to conflicts of law principles and the subscriber hereby consents to the jurisdiction of the courts of the State of New York and/or the United States District Court located in the State of New York.

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AMOUNT OF NOTE PURCHASED: $   

Manner in Which Title is to be Held: (check one)

1. _____Individual

2. _____Joint Tenants with Right of Survivorship (both parties must sign)

3. _____Married with Separate Property

4. _____Community Property

5. _____Tenants in Common

6. _____Corporation

7. _____Partnership

8. _____IRA of ___________________________________________

9. _____   Trust, dated opened _____________

10.  _____Keogh of __________________________________________

11.  _____   As a Custodian for __________________________________________________
  under the Uniform Gift to Minors Act of the State of _______________________

12.  _____Other (please indicate)

INDIVIDUAL INVESTORS	ENTITY INVESTORS
___________________________________	____________________________________
Signature (Individual)	Name of Entity, if any
	____________________________________
	Signature
___________________________________	Its _________________________________
Signature (all record holders should sign)	Title
___________________________________	____________________________________
Name(s) Typed or Printed	Name Typed or Printed
Address to Which Correspondence	Address to Which Correspondence
Should be Directed	Should be Directed
___________________________________	____________________________________
___________________________________	____________________________________
___________________________________	____________________________________
City, State and Zip Code	City, State and Zip Code
___________________________________	____________________________________
Social Security Number	Tax Identification Number

The foregoing subscription is accepted this ______ day of _______________, 2005, on behalf of NaturalNano, Inc.

___________________________________

By: _______________________________

Name: Michael Riedlinger

Title: President

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EX-4.5

Exhibit 4.5

NEITHER THESE WARRANTS NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THESE WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

2,250,000 Warrants November 29, 2005

NATURALNANO INC.

WARRANTS

NaturalNano Inc., a Nevada corporation (“NaturalNano”), certifies that, for value received, SBI USA, LLC (“SBI”), or registered assigns (the “Holder”), is the owner of Two Million Two Hundred Fifty Thousand (2,250,000) Warrants of NaturalNano (the “Warrants”). Each Warrant entitles the Holder to purchase from NaturalNano at any time prior to the Expiration Date (as defined below) one share of the common stock of NaturalNano (the “Common Stock”) for $0.23 per share (the “Exercise Price”), on the terms and conditions hereinafter provided. The Exercise Price and the number of shares of Common Stock purchasable upon exercise of each Warrant are subject to adjustment as provided in this Certificate.

1.Vesting; Expiration Date; Exercise

1.1Vesting. The Warrants shall vest and become exercisable as of the date of this Certificate.

1.2Expiration Date. The Warrants shall expire on March 31, 2006 (the “Expiration Date”).

1.3Manner of Exercise. The Warrants are exercisable by delivery to NaturalNano of the following (the “Exercise Documents”): (a) this Certificate (b) a written notice of election to exercise the Warrants; and (c) payment of the Exercise Price in cash or by check. Within three business days following receipt of the foregoing, NaturalNano shall execute and deliver to the Holder: (a) a certificate or certificates representing the aggregate number of shares of Common Stock purchased by the Holder, and (b) if less than all of the Warrants evidenced by this Certificate are exercised, a new certificate evidencing the Warrants not so exercised.

1.4Warrant Exercise Limitation. Notwithstanding any other provision of this Agreement, if as of the date of exercise NaturalNano has a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, Holder may not exercise Warrants under this Section 1 to the extent that immediately following such exercise Holder would beneficially own 5% or more of the outstanding Common Stock of NaturalNano. For this purpose, a representation of the Holder that following such exercise it would not beneficially own 5% or more of the outstanding Common Stock of NaturalNano shall be conclusive and binding upon NaturalNano unless the number of shares of Common Stock for which the Holder seeks to exercise Warrants would themselves represent 5% or more of the outstanding Common Stock of NaturalNano following such exercise.

2.Adjustments of Exercise Price and Number and Kind of Conversion Shares

2.1In the event that NaturalNano shall at any time hereafter (a) pay a dividend in Common Stock or securities convertible into Common Stock; (b) subdivide or split its outstanding Common Stock; (c) combine its outstanding Common Stock into a smaller number of shares; then the number of shares to be issued immediately after the occurrence of any such event shall be adjusted so that the Holder thereafter may receive the number of shares of Common Stock it would have owned immediately following such action if it had exercised the Warrants immediately prior to such action and the Exercise Price shall be adjusted to reflect such proportionate increases or decreases in the number of shares.

2.2In case of any reclassification, capital reorganization, consolidation, merger, sale of all or substantially all of NaturalNano’s assets or any other change in the Common Stock of NaturalNano, other than as a result of a subdivision, combination, or stock dividend provided for in Section 2.1 (any of which, a “Change Event”), then, as a condition of such Change Event, lawful provision shall be made, and duly executed documents evidencing the same from NaturalNano or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of the Warrants to purchase, at a total price equal to that payable upon the exercise of the Warrants, the kind and amount of shares of stock and other securities and property receivable in connection with such Change Event by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such Change Event. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the Exercise Price per share payable hereunder, provided the Exercise Price for all the Warrants shall remain the same. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, capital reorganizations, mergers, consolidations, sales or other transfers. Notwithstanding the foregoing, in the event NaturalNano enters into a reverse merger (the “Reverse Merger”) with a corporation that is obligated to file reports under Section 13 of the Securities Exchange Act of 1934, as amended (the “Public Company”), or a subsidiary of such corporation, pursuant to which NaturalNano’s shareholders will acquire control of the Public Company, each Warrant shall thereafter entitle the Holder to purchase one share of the Common Stock of the Public Company at the Exercise Price in effect immediately prior to the Reverse Merger, notwithstanding that in the Reverse Merger outstanding shares of Common Stock of NaturalNano may be exchanged for more than one share of the Public Company’s Common Stock.

3.Reservation of Shares. NaturalNano shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, such number of shares of Common Stock as shall from time to time be issuable upon exercise of the Warrants. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to permit the exercise of the Warrants, NaturalNano shall promptly seek such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

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4.Certificate as to Adjustments. In each case of any adjustment in the Exercise Price, or number or type of shares issuable upon exercise of these Warrants, the Chief Financial Officer of NaturalNano shall compute such adjustment in accordance with the terms of these Warrants and prepare a certificate setting forth such adjustment and showing in detail the facts upon which such adjustment is based, including a statement of the adjusted Exercise Price. NaturalNano shall promptly send (by facsimile and by either first class mail, postage prepaid or overnight delivery) a copy of each such certificate to the Holder.

5.Loss or Mutilation. Upon receipt of evidence reasonably satisfactory to NaturalNano of the ownership of and the loss, theft, destruction or mutilation of this Certificate, and of indemnity reasonably satisfactory to it, and (in the case of mutilation) upon surrender and cancellation of these Warrants, NaturalNano will execute and deliver in lieu thereof a new Certificate of like tenor as the lost, stolen, destroyed or mutilated Certificate.

6.Representations and Warranties of NaturalNano. NaturalNano hereby represents and warrants to Holder that:

6.1Due Authorization. All corporate action on the part of NaturalNano, its officers, directors and shareholders necessary for (a) the authorization, execution and delivery of, and the performance of all obligations of NaturalNano under, these Warrants, and (b) the authorization, issuance, reservation for issuance and delivery of all of the Common Stock issuable upon exercise of these Warrants, has been duly taken. These Warrants constitute a valid and binding obligation of NaturalNano enforceable in accordance with their terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally and to general equitable principles.

6.2Organization. NaturalNano is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power to own, lease and operate its property and to carry on its business as now being conducted and as currently proposed to be conducted.

6.3Valid Issuance of Stock. Any shares of Common Stock issued upon exercise of the Warrants in accordance with their terms will be duly and validly issued, fully paid and non-assessable.

6.4Governmental Consents. All consents, approvals, orders, authorizations or registrations, qualifications, declarations or filings with any federal or state governmental authority on the part of NaturalNano required in connection with the issuance of the Warrants have been obtained.

7.Representations and Warranties of SBI. SBI, and any subsequent holder of Warrants, by its acceptance hereof, represents and warrants to NaturalNano that:

7.1It is acquiring the Warrants for its own account, for investment purposes only.

7.2It understands that an investment in the Warrants and in the shares of Common Stock issuable upon exercise of the Warrants involves a high degree of risk, and it has the financial ability to bear the economic risk of this investment in the Warrants and such shares, including a complete loss of such investment. It has adequate means for providing for its current financial needs and has no need for liquidity with respect to this investment.

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7.3It has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Warrants and in the shares of Common Stock issuable upon exercise of the Warrants and in protecting its own interest in connection with such transactions.

7.4It understands that neither the Warrants nor the shares of Common Stock issuable upon exercise of the Warrants have been registered under the Securities Act of 1933, as amended (the “Securities Act”) or under any state securities laws. It is familiar with the provisions of the Securities Act and Rule 144 thereunder and understands that the restrictions on transfer on the Warrants and on the shares of Common Stock issuable upon exercise of the Warrants may result in it being required to hold the Warrants or such shares for an indefinite period of time.

7.5It agrees not to sell, transfer, assign, gift, create a security interest in, or otherwise dispose of, with or without consideration (collectively, “Transfer”) any of the Warrants or any of the shares of Common Stock issuable upon exercise of the Warrants except pursuant to an effective registration statement under the Securities Act or an exemption from registration. As a further condition to any such Transfer, except in the event that such Transfer is made pursuant to an effective registration statement under the Securities Act, if in the reasonable opinion of counsel to NaturalNano any such Transfer would not be exempt from the registration and prospectus delivery requirements of the Securities Act, NaturalNano may require the Holder and the contemplated transferee to furnish NaturalNano with letters setting forth such information and agreements as may be reasonably requested by NaturalNano to ensure compliance with the Securities Act.

8.Notices of Record Date

In the event:

8.1NaturalNano shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of these Warrants), for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities or to receive any other right; or

8.2of any consolidation or merger of NaturalNano with or into another corporation, any capital reorganization of NaturalNano, any reclassification of the capital stock of NaturalNano, or any conveyance of all or substantially all of the assets of NaturalNano to another corporation in which holders of NaturalNano’s stock are to receive stock, securities or property of another corporation; or

8.3of any voluntary dissolution, liquidation or winding-up of NaturalNano; or

8.4of any redemption or conversion of all outstanding Common Stock;

then, and in each such case, NaturalNano will mail or cause to be mailed to the Holder a notice specifying, as the case may be, (a) the date on which a record is to be taken for the purpose of such dividend, distribution or right, or (b) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation, winding-up, redemption or conversion is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such stock or securities as at the time are receivable upon the exercise of these Warrants), shall be entitled to exchange their shares of Common Stock (or such other stock or securities), for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up. NaturalNano shall use all reasonable efforts to ensure such notice shall be delivered at least five days prior to the date therein specified.

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9. Registration Rights.

9.1Definitions. For purposes of this Section 9, the following terms shall have the meanings set forth below:

9.1.1A “Blackout Event” means any of the following: (a) the possession by NaturalNano of material information that is not ripe for disclosure in a registration statement or prospectus, as determined reasonably and in good faith by the Chief Executive Officer or the Board of Directors of NaturalNano or that disclosure of such information in the Registration Statement or the prospectus constituting a part thereof would be materially detrimental to the business and affairs of NaturalNano; or (b) any material engagement or activity by NaturalNano which would, in the reasonable and good faith determination of the Chief Executive Officer or the Board of Directors of NaturalNano, be materially adversely affected by disclosure in a registration statement or prospectus at such time.

9.1.2“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

9.1.3“Included Shares” shall mean any Registrable Shares included in a Registration.

9.1.4“Registrable Shares” shall mean the shares of Common Stock (or such stock or securities as at the time are receivable upon the exercise of these Warrants) issuable upon exercise of the Warrants and any other warrants and or other securities issued to SBI in connection with performing investor relations services for NaturalNano, and shares or securities issued as a result of stock split, stock dividend or reclassification of such shares.

9.1.5“Registration” shall mean a registration of securities under the Securities Act.

9.1.6“Registration Period” with respect to any Registration Statement shall mean the period commencing the effective date of the Registration Statement and ending upon withdrawal or termination of the Registration Statement.

9.1.7“Registration Statement” shall mean a registration statement, as amended from time to time, filed with the SEC in connection with a Registration.

9.1.8“SEC” shall mean the Securities and Exchange Commission.

9.2Piggyback Registration. Unless the Registrable Shares are then included in a Registration Statement or can be sold under the provisions of Rule 144 without limitation as to volume, whether pursuant to Rule 144(k) or otherwise, if NaturalNano shall determine to register any Common Stock under the Securities Act for sale in connection with a public offering of Common Stock (other than pursuant to an employee benefit plan or in connection with a merger, acquisition or similar transaction), NaturalNano will give written notice thereof to Holder and will include in such Registration Statement any of the Registrable Shares which Holder may request be included by a writing delivered to NaturalNano within 15 days after the notice given by NaturalNano to Holder; provided, however, that if the offering is to be firmly underwritten, and the representative of the underwriters of the offering refuse in writing to include in the offering all of the shares of Common Stock requested by NaturalNano and others, the shares to be included shall be allocated first to NaturalNano and any shareholder who initiated such Registration and then among the others (including Holder) based on the respective number of shares of Common Stock held by such persons. If NaturalNano decides not to, and does not, file a Registration Statement with respect to such Registration, or after filing determines to withdraw the same before the effective date thereof, NaturalNano will promptly so inform Holder, and NaturalNano will not be obligated to complete the registration of the Included Shares included therein.

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9.3Certain Covenants. In connection with any Registration:

9.3.1NaturalNano shall take all lawful action such that the Registration Statement, any amendment thereto and the prospectus forming a part thereof do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. Upon becoming aware of the occurrence of any event or the discovery of any facts during the Registration Period that make any statement of a material fact made in the Registration Statement or the related prospectus untrue in any material respect or which material fact is omitted from the Registration Statement or related prospectus that requires the making of any changes in the Registration Statement or related prospectus so that it will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they are made, not misleading (taking into account any prior amendments or supplements), NaturalNano shall promptly notify Holder, and, subject to the provisions of Section 9.4, as soon as reasonably practicable prepare (but, subject to Section 9.4, in no event more than five business days in the case of a supplement or seven business days in the case of a post-effective amendment) and file with the SEC a supplement or post-effective amendment to the Registration Statement or the related prospectus or file any other required document so that, as thereafter delivered to a purchaser of Shares from Holder, such prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

9.3.2At least three business days prior to the filing with the SEC of the Registration Statement (or any amendment thereto) or the prospectus forming a part thereof (or any supplement thereto), NaturalNano shall provide draft copies thereof to Holder and shall consider incorporating into such documents such comments as Holder (and its counsel) may propose to be incorporated therein. Notwithstanding the foregoing, no prospectus supplement need be delivered in draft form to Holder.

9.3.3NaturalNano shall promptly notify Holder upon the occurrence of any of the following events in respect of the Registration Statement or the prospectus forming a part thereof: (a) the receipt of any request for additional information from the SEC or any other federal or state governmental authority, the response to which would require any amendments or supplements to the Registration Statement or related prospectus; (b) the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; or (c) the receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.

9.3.4NaturalNano shall furnish to Holder with respect to the Included Shares registered under the Registration Statement (and to each underwriter, if any, of such Included Shares) such number of copies of prospectuses and such other documents as Holder may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Included Shares by Holder pursuant to the Registration Statement.

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9.3.5In connection with any registration pursuant to Section 9.2, NaturalNano shall file or cause to be filed such documents as are required to be filed by NaturalNano for normal Blue Sky clearance in states specified in writing by Holder; provided, however, that NaturalNano shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented.

9.3.6NaturalNano shall bear and pay all expenses incurred by it and Holder (other than underwriting discounts, brokerage fees and commissions and fees and expenses of more than one law firm) in connection with the Registration of the Registrable Shares pursuant to the Registration Statement; provided, however, that NaturalNano shall not be obligated to pay the fees and expenses of more than one legal counsel who shall serve as counsel to all selling shareholders in such Registration.

9.3.7NaturalNano shall require each legal opinion and accountant’s “cold comfort” letter in connection with the Registration, if any, to be rendered to Holder as well as NaturalNano and/or its Board of Directors.

9.3.8As a condition to including Registrable Shares in a Registration Statement, Holder must provide to NaturalNano such information regarding itself, the Registrable Shares held by it and the intended method of distribution of such Included Shares as shall be required to effect the registration of the Included Shares and, if the offering is being underwritten, Holder must provide such powers of attorney, indemnities and other documents as may be reasonably requested by the managing underwriter.

9.3.9Following the effectiveness of a Registration Statement, upon receipt from NaturalNano of a notice that such Registration Statement contains an untrue statement of material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made, Holder will immediately discontinue disposition of Included Shares pursuant to the Registration Statement until NaturalNano notifies Holder that it may resume sales of Included Shares and, if necessary, provides to Holder copies of the supplemental or amended prospectus.

9.4Blackout Event. NaturalNano shall not be obligated to file a post-effective amendment or supplement to the Registration Statement or the prospectus constituting a part thereof during the continuance of a Blackout Event; provided, however, that no Blackout Event may be deemed to exist for more than 60 days. Without the express written consent of Holder, if required to permit the continued sale of Shares by Holder, a post-effective amendment or supplement to Registration Statement or the prospectus constituting a part thereof must be filed no later than the 61^st day following commencement of a Blackout Event.

9.5Rule 144. With a view to making available to Holder the benefits of Rule 144, NaturalNano agrees, until such time as Holder can sell all remaining Registrable Shares under the provisions Rule 144(k), to:

9.5.1.1comply with the provisions of paragraph (c)(1) of Rule 144; and

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9.5.1.2file with the SEC in a timely manner all reports and other documents required to be filed by NaturalNano pursuant to Section 13 or 15(d) under the Exchange Act; and, if at any time it is not required to file such reports but in the past had been required to or did file such reports, it will, upon the request of a Purchaser, make available other information as required by, and so long as necessary to permit sales of its Shares pursuant to, Rule 144.

9.6  NaturalNano Indemnification. In connection with any Registration covering Included Shares, NaturalNano agrees to indemnify and hold harmless Holder, and its officers, directors and agents (including broker or underwriter selling Included Shares for Holder), and each person, if any, who controls Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities caused by (a) any violation or alleged violation by NaturalNano of the Securities Act, Exchange Act, any state securities laws or any rule or regulation promulgated under the Securities Act, Exchange Act or any state securities laws, (b) any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to the Included Shares (as amended or supplemented if NaturalNano shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or (c) caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to NaturalNano by Holder or on Holder’s behalf expressly for use therein.

9.7Holder Indemnification. Holder, by requesting that Registrable Shares be included in a Registration, agrees to indemnify and hold harmless NaturalNano, its officers, directors and agents and each person, if any, who controls NaturalNano within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity from NaturalNano to Holder set forth in Section 9.6, but only with respect to information furnished or required to be furnished in writing by Holder or on Holder’s behalf expressly for use in any registration statement or prospectus relating to the Registrable Shares, or any amendment or supplement thereto, or any preliminary prospectus.

9.8Indemnification Procedures. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to this Section 9, such person (an “Indemnified Party”) shall promptly notify the person against whom such indemnity may be sought (the “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses; provided that the failure of any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder except to the extent (and only to the extent that) that the Indemnifying Party is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (a) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (b) in the reasonable judgment of such Indemnified Party representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties (including in the case of Holder, all of its officers, directors and controlling persons) and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, the Indemnified Parties shall designate such firm in writing to the Indemnifying Party. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent (which consent shall not be unreasonably withheld or delayed), but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.

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9.9Contribution. To the extent any indemnification by an Indemnifying Party is prohibited or limited by law, the Indemnifying Party agrees to make the maximum contribution with respect to any amounts for which, he, she or it would otherwise be liable under this Section 9 to the fullest extent permitted by law; provided, however, that (a) no contribution shall be made under circumstances where a party would not have been liable for indemnification under this Section 9 and (b) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning used in the Securities Act) shall be entitled to contribution from any party who was not guilty of such fraudulent misrepresentation.

10. Nontransferability. SBI may not sell or transfer any Warrants to any person other than a director, officer, employee, manager or affiliate of SBI (or a person controlled by one or more directors, officers, employees, managers or affiliates of SBI) or to a person or entity that assists SBI in providing services to NaturalNano without the consent of NaturalNano.

11.Severability. If any term, provision, covenant or restriction of these Warrants is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of these Warrants shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

12.Notices. All notices, requests, consents and other communications required hereunder shall be in writing and shall be effective when delivered or, if delivered by registered or certified mail, postage prepaid, return receipt requested, shall be effective on the third day following deposit in United States mail: to the Holder, at SBI USA, LLC, 610 Newport Center Drive, Newport Beach, CA 92660; and if addressed to NaturalNano, at NaturalNano Inc., 150 Lucius Gordon Drive, West Henrietta, NY 14586, or such other address as Holder or NaturalNano may designate in writing.

13.No Rights as Shareholder. The Holder shall have no rights as a shareholder of NaturalNano with respect to the shares issuable upon exercise of the Warrants until the receipt by NaturalNano of all of the Exercise Documents.

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NaturalNano Inc.

By:  

Its:

Agreed to and accepted by:

SBI USA, LLC

By: _____________________________
Shelly Singhal, Manager

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EXHIBIT “A”

NOTICE OF EXERCISE

(To be signed only upon exercise of the Warrants)

To:NaturalNano Inc.

The undersigned hereby elects to purchase shares of Common Stock (the “Warrant Shares”) of NaturalNano Inc. (“NaturalNano”), pursuant to the terms of the enclosed warrant certificate (the “Certificate”). The undersigned tenders herewith payment of the exercise price pursuant to the terms of the Certificate.

The undersigned hereby represents and warrants to, and agrees with, NaturalNano as follows:

1. Holder is acquiring the Warrant Shares for its own account, for investment purposes only and not with a view to distribution in violation of the Securities Act of 1933, as amended (the “Securities Act”).

2. Holder understands that an investment in the Warrant Shares involves a high degree of risk, and Holder has the financial ability to bear the economic risk of this investment in the Warrant Shares, including a complete loss of such investment. Holder has adequate means for providing for its current financial needs and has no need for liquidity with respect to this investment.

3. Holder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Warrant Shares and in protecting its own interest in connection with this transaction.

4. Holder understands that the issuance of the Warrant Shares to Holder has not been registered under the Securities Act or under any state securities laws. Holder is familiar with the provisions of the Securities Act and Rule 144 thereunder and understands that the restrictions on transfer on the Warrant Shares may result in Holder being required to hold the Warrant Shares for an indefinite period of time unless the transfer by Holder is registered under the Securities Act.

5. Holder agrees not to sell, transfer, assign, gift, create a security interest in, or otherwise dispose of, with or without consideration (collectively, “Transfer”) any of the Warrant Shares except pursuant to an effective registration statement under the Securities Act or an exemption from registration. As a further condition to any such Transfer, except in the event that such Transfer is made pursuant to an effective registration statement under the Securities Act, if in the reasonable opinion of counsel to NaturalNano any Transfer of the Warrant Shares by the contemplated transferee thereof would not be exempt from the registration and prospectus delivery requirements of the Securities Act, NaturalNano may require the contemplated transferee to furnish NaturalNano with an investment letter setting forth such information and agreements as may be reasonably requested by NaturalNano to ensure compliance by such transferee with the Securities Act.

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Each certificate evidencing the Warrant Shares will bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE EXERCISED, SOLD, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

6. Immediately following this exercise of Warrants, if as of the date of exercise NaturalNano has a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, the undersigned will not beneficially own five percent (5%) or more of the then outstanding Common Stock of NaturalNano (based on the number of shares outstanding set forth in the most recent periodic report filed by NaturalNano with the Securities and Exchange Commission and any additional shares which have been issued since that date of which Holder is aware have been issued).

Number of Warrants Exercised: ______________

Dated: ____________________

____________________________________

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EX-10.1

Exhibit 10.1

[Redacted]

LICENSE AGREEMENT

BETWEEN

TECHNOLOGY INNOVATIONS, LLC

AND

NATURALNANO, INC.

EFFECTIVE AS OF APRIL 27, 2005

TABLE OF CONTENTS

	Page No.
RECITALS	1
ARTICLE 1 - DEFINITIONS	1
ARTICLE 2 - LICENSE GRANT	3
ARTICLE 3 - ROYALTIES	4
ARTICLE 4 - CONFIDENTIALITY	7
ARTICLE 5 - TERM AND TERMINATION	7
ARTICLE 6 - PATENT MAINTENANCE AND REIMBURSEMENT	9
ARTICLE 7 - INFRINGEMENT AND LITIGATION	9
ARTICLE 8 - DISCLAIMER OF WARRANTY; INDEMNIFICATION	9
ARTICLE 9 - USE OF NAME; INDEPENDENT CONTRACTOR	12
ARTICLE 10 - ADDITIONAL PROVISIONS	12

Attachment 1 Intellectual Property List

This License Agreement (“AGREEMENT”) is made by and between Technology Innovations, LLC (“LICENSOR”), having a place of business at 150 Lucius Gordon Drive, Suite 215, West Henrietta, New York 14586 and NaturalNano, Inc. (“LICENSEE”), having a place of business at 150 Lucius Gordon Drive, Suite 124, West Henrietta, New York 14586.

This AGREEMENT is effective as of April 27, 2005 (“EFFECTIVE DATE”).

RECITALS

WHEREAS, LICENSOR owns and is proprietor of certain intellectual property listed in Attachment 1 relating to applications of halloysite processes, structures and compositions; and

WHEREAS, LICENSEE desires to secure an exclusive, field of use limited license to make, use and sell the intellectual property described in Attachment 1 hereto.

NOW, THEREFORE, in consideration of the premises and of the promises and covenants contained herein and intending to be legally bound hereby, the parties agree as follows:

ARTICLE 1 - DEFINITIONS

1.1 AFFILIATE means, when used with reference to LICENSEE, any ENTITY directly or indirectly controlling, controlled by or under common control with LICENSEE. For purposes of this AGREEMENT, “control” means the direct or indirect ownership of over fifty percent (50%) of the outstanding voting securities of an ENTITY, or the right to receive over fifty percent (50%) of the profits or earnings of an ENTITY, or the right to control the policy decisions of an ENTITY.

1.2 BANKRUPTCY EVENT means the ENTITY in question becomes insolvent, or voluntary or involuntary proceedings by or against such ENTITY are instituted in bankruptcy or under any insolvency law, or a receiver or custodian is appointed for such ENTITY, or proceedings are instituted by or against such ENTITY for corporate reorganization or the dissolution of such ENTITY, which proceedings, if voluntary, shall not have been dismissed within sixty (60) days after the date of filing, or such ENTITY makes an assignment for the benefit of creditors, or substantially all of the assets of such ENTITY are seized or attached and not released within sixty (60) days thereafter.

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1.3 CALENDAR QUARTER means each three-month period, or any portion thereof, beginning on January 1, April 1, July 1 and October 1.

1.4 CALENDAR YEAR means a period of twelve (12) months beginning on January 1 and ending on December 31.

1.5 CONFIDENTIAL INFORMATION means and includes all technical information, inventions, trade secrets, developments, discoveries, software, know-how, methods, techniques, formulae, data, processes and other proprietary ideas, whether or not patentable or copyrightable, identified as confidential or proprietary at the time it is delivered or communicated to LICENSEE.

1.6 ENTITY means a corporation, an association, a joint venture, a partnership, a trust, a business, an individual, a government or political subdivision thereof, including an agency, or any other organization that can exercise independent legal standing.

1.7 FIELD OR FIELD OF USE means non-medical uses of halloysite microtubule processes, structures, compositions and applications; [ … ]

1.8 LICENSEE shall include LICENSEE and its AFFILIATES.

1.9 NET SALES means the cash consideration or FAIR MARKET VALUE attributable to the SALE of any LICENSED PRODUCT(S), less qualifying costs directly attributable to such SALE and actually identified on the invoice and borne by LICENSEE or its sublicensee.

1.9.1Such qualifying costs shall be limited to the following:

1.9.1.1 Discounts, in amounts customary in the trade, for quantity purchases, prompt payments and for wholesalers and distributors.

1.9.1.2 Credits or refunds, not exceeding the original invoice amount, for claims or returns.

1.9.1.3 Prepaid transportation insurance premiums.

1.9.1.4 Prepaid outbound transportation expenses.

1.9.1.5 Sales and use taxes imposed by a governmental agency.

1.10 LICENSED PRODUCT(S) means product(s) which in the absence of this AGREEMENT would infringe at least one claim of PATENT RIGHTS or product(s) made, at least in part, using LICENSOR’S TECHNICAL INFORMATION.

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1.11 PATENTED PRODUCT(S) means product(s) which are made, made for, used or sold, which manufacture, use or sale is covered by any claim of the LICENSOR’S PATENT RIGHTS in any country.

1.12 PATENT RIGHTS means those United States patent applications listed in Attachment 1 hereto, and foreign counterparts including continuation, continuation-in-part, divisional and re-issue applications thereof, together with any and all patents issuing thereupon.

1.13 TECHNICAL INFORMATION means research and development information, unpatented inventions, know-how, trade secrets, and technical data in the possession of LICENSOR on the EFFECTIVE DATE of this AGREEMENT which is needed to produce LICENSED PRODUCT(S).

1.14 SALE means any bona fide transaction for which consideration is received for the sale, use, lease, transfer or other disposition of LICENSED PRODUCT(S). A SALE of LICENSED PRODUCT(S) shall be deemed completed at the time LICENSEE or its sublicensee receives payment for such LICENSED PRODUCT(S).

ARTICLE 2 - LICENSE GRANT

2.1 LICENSOR grants to LICENSEE for the term of this AGREEMENT an exclusive, world-wide right and license, with the right to grant sublicenses, to make, have made, use and sell LICENSED PRODUCT(S) in the FIELD OF USE. No other rights or licenses are granted hereunder.

2.2 The right to sublicense conferred upon LICENSEE under this AGREEMENT is subject to the following conditions:

2.2.1 In each such sublicense, the sublicensee shall be prohibited from further sublicensing and shall be subject to the terms and conditions of the license granted to LICENSEE under this AGREEMENT.

2.2.2 LICENSEE shall forward to LICENSOR, within thirty (30) days of execution, a complete and accurate copy written in the English language of each sublicense granted hereunder. LICENSOR’S receipt of such sublicense shall not constitute an approval of such sublicense or a waiver of any of LICENSOR’S rights or LICENSEE’S obligations hereunder.

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2.2.3 If LICENSEE becomes subject to a BANKRUPTCY EVENT, all payments then or thereafter due and owing to LICENSEE from its sublicensees shall upon notice from LICENSOR to any such sublicensee become payable directly to LICENSOR for the account of LICENSEE; provided however, that LICENSOR shall remit to LICENSEE the amount by which such payments exceed the amounts owed by LICENSEE to LICENSOR.

2.2.4 Notwithstanding any such sublicense, LICENSEE shall remain primarily liable to LICENSOR for all of the LICENSEE’S duties and obligations contained in this AGREEMENT, and any act or omission of a sublicensee which would be a breach of this AGREEMENT if performed by LICENSEE shall be deemed to be a breach by LICENSEE of this AGREEMENT.

ARTICLE 3 - ROYALTIES

3.1 ROYALTIES

3.1.1 In consideration of the license granted herein, LICENSEE shall pay to LICENSOR a royalty of [ … ] percent ([ … ] %) of the NET SALES of LICENSED PRODUCT(S) made, made for, used or sold by LICENSEE and any sublicensees.

3.1.2 LICENSEE shall promptly pay to LICENSOR [ … ] percent ([ … ] %) of any sublicense initiation fee or other such consideration, including, but not limited to, license fees, royalties and minimum royalties paid by each sublicensee of this AGREEMENT.

3.1.3 In the event that more than one royalty or payment is applicable to LICENSED PRODUCT(S), the royalty rate provided for in 3.1.1. or sublicensing fee or consideration due under 3.1.2 shall be prorated. For example, in the event two royalties or fees/payments are applicable, the royalty rate and payment percentage shall be reduced by one half, i.e. [ … ] % and [ … ] %, respectively. In the event that three royalties or payments would be applicable, the royalty rate and payment percentage shall be reduced by two thirds, i.e. [ … ] % and [ … ] %, respectively.

3.2 MILESTONES AND MAINTENANCE FEES

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3.2.1 LICENSEE shall use its best efforts to develop for commercial use and to market LICENSED PRODUCT(S) as soon as practical, consistent with sound and reasonable business practices.

3.2.2 LICENSEE shall provide LICENSOR on each June 1 and December 1 with written reports, setting forth in such detail as LICENSOR may reasonably request, the progress of the development, evaluation, testing and commercialization of the LICENSED PRODUCT(S). LICENSEE shall also notify LICENSOR within thirty (30) days of the first commercial sale of any LICENSED PRODUCT(S).

3.2.3 LICENSEE shall pay to LICENSOR a nonrefundable minimum quarterly royalty fee of [ … ] dollars ($[ … ]) commencing in the CALENDAR QUARTER that the first patent under PATENT RIGHTS issues. A minimum royalty payment paid hereunder shall serve as an advanced payment against royalties due under Section 3.1 herein during the period for which such minimum royalty payment was paid.

3.3 REPORTS AND RECORDS

3.3.1 LICENSEE shall deliver to LICENSOR within forty-five (45) days after the end of each CALENDAR QUARTER a report, certified by the chief financial officer of LICENSEE setting forth in reasonable detail the calculation of the royalties due to LICENSOR for such CALENDAR QUARTER, including, without limitation:

3.3.1.1 Number of LICENSED PRODUCT(S) involved in SALES, listed by country.

3.3.1.2 Gross consideration for SALES of LICENSED PRODUCT(S), including all amounts invoiced, billed, or received.

3.3.1.3 Qualifying costs, as defined in Section 1.13, listed by category of cost.

3.3.1.4 NET SALES of LICENSED PRODUCT(S) listed by country.

3.3.1.5 Royalties owed to LICENSOR, listed by category, including without limitation earned, sublicense derived, and minimum royalty categories.

3.3.1.6 Earned royalty amounts credited against minimum royalty payments.

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3.3.2 Payments under Sections 3.1 and 3.2 hereof shall be paid within forty-five (45) days following the last day of the CALENDAR QUARTER in which the royalties or payments accrue and shall accompany the report of Section 3.3.1.

3.3.3 LICENSEE will maintain and cause its sublicensees to maintain, complete and accurate books and records which enable the royalties payable hereunder to be verified. The records for each CALENDAR QUARTER shall be maintained for three years after the submission of each report under Article 3 hereof. Upon reasonable prior notice to LICENSEE, LICENSOR and its accountants shall have access to all books and records relating to the SALES of LICENSED PRODUCT(S) by LICENSEE and its sublicensees to conduct a review or audit thereof. Such access shall be available not more than once each CALENDAR YEAR, during normal business hours, and for each of three years after the expiration or termination of this AGREEMENT. If LICENSOR determines that LICENSEE has underpaid royalties by 5% or more, LICENSEE will pay the costs and expenses of LICENSOR and its accountants in connection with their review or audit.

3.4 CURRENCY, PLACE OF PAYMENT, INTEREST

3.4.1 All dollar amounts referred to in this AGREEMENT are expressed in United States dollars. All payments to LICENSOR under this AGREEMENT shall be made in United States dollars by check payable to “Technology Innovations, LLC”.

3.4.2 If LICENSEE receives revenues from SALES of LICENSED PRODUCT(S) in currency other than United States dollars, revenues shall be converted into United States dollars at the conversion rate for the foreign currency as published in the eastern edition of The Wall Street Journal as of the last business day of the applicable CALENDAR QUARTER.

3.4.3 Amounts that are not paid when due shall accrue interest from the due date until paid, at a rate equal to one and one-half percent (1.5%) per month (or the maximum allowed by law, if less).

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ARTICLE 4 - CONFIDENTIALITY

4.1 LICENSEE agrees to maintain in confidence and not to disclose to any third party any CONFIDENTIAL INFORMATION of LICENSOR received pursuant to this AGREEMENT. LICENSEE agrees to ensure that its employees have access to CONFIDENTIAL INFORMATION only on a need-to-know basis and are obligated in writing to abide by LICENSEE’S obligations hereunder. The foregoing obligation shall not apply to:

4.1.1 information that is known to LICENSEE or independently developed by LICENSEE prior to the time of disclosure, in each case, to the extent evidenced by written records promptly disclosed to LICENSOR upon receipt of the CONFIDENTIAL INFORMATION;

4.1.2 information disclosed to LICENSEE by a third party that has a right to make such disclosure;

4.1.3 information that becomes patented, published or otherwise part of the public domain as a result of acts by LICENSOR or a third person obtaining such information as a matter of right; or

4.1.4 information that is required to be disclosed by order of United States governmental authority or a court of competent jurisdiction; provided that LICENSEE shall use its best efforts to obtain confidential treatment of such information by the agency or court.

ARTICLE 5 - TERM AND TERMINATION

5.1 This AGREEMENT, unless sooner terminated as provided herein, shall terminate upon the expiration of the last to expire or become abandoned of the PATENT RIGHTS.

5.2 LICENSEE may, at its option, terminate this AGREEMENT at any time by doing all of the following:

5.2.1 by ceasing to make, have made, use and sell all LICENSED PRODUCT(S); and

5.2.2 by terminating all sublicenses, and causing all sublicensees to cease making, having made, using and selling all LICENSED PRODUCT(S); and

5.2.3 by giving sixty (60) days’ notice to LICENSOR of such cessation and of LICENSEE’S intent to terminate; and

5.2.4 by tendering payment of all accrued royalties.

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5.3 LICENSOR may terminate this AGREEMENT if any of the following occur:

5.3.1 LICENSEE becomes more than sixty (60) days in arrears in payment of royalties or expenses due pursuant to this AGREEMENT and LICENSEE does not provide full payment immediately upon demand; or

5.3.2 LICENSEE becomes subject to a BANKRUPTCY EVENT; or

5.3.3 LICENSEE breaches this AGREEMENT and does not cure such breach within sixty (60) days written notice thereof.

5.4 LICENSOR may also terminate this AGREEMENT if:

5.4.1 five (5) years have elapsed from the EFFECTIVE DATE of this AGREEMENT; and

5.4.2 LICENSEE has not made a SALE of a LICENSED PRODUCT(S) or has no sublicensees doing so; and

5.4.3 LICENSOR has given LICENSEE sixty (60) days notice of intent to terminate.

5.5 If LICENSEE becomes subject to a BANKRUPTCY EVENT, all duties of LICENSOR and all rights (but not duties) of LICENSEE under this AGREEMENT shall immediately terminate without the necessity of any action being taken either by LICENSOR or by LICENSEE. To secure the complete and timely payment and satisfaction of all LICENSEE’S royalty obligations under this AGREEMENT, LICENSEE hereby grants to LICENSOR a security interest, effective immediately, in LICENSEE’S entire right, title and interest in and to this AGREEMENT and to all inventories of LICENSED PRODUCT(S) now or hereafter owned by LICENSEE. In addition to any rights or remedies provided for under this AGREEMENT, LICENSOR shall have all of the rights and remedies of a secured party under the Uniform Commercial Code. Upon the request and at the sole expense of LICENSOR, LICENSEE shall execute any and all instruments or documents as shall be reasonably necessary to evidence and perfect such security interest in any jurisdiction.

5.6 Upon termination of this AGREEMENT, LICENSEE shall, at LICENSOR’S request, return to LICENSOR all CONFIDENTIAL INFORMATION fixed in any tangible medium of expression as well as any data generated by LICENSEE during the term of this AGREEMENT which will facilitate the development of the technology licensed hereunder.

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5.7 LICENSEE’S obligation to pay royalties accrued under Article 3 hereof shall survive termination of this AGREEMENT. In addition, the provisions of Articles 4, 5, 8, 9 and 10 shall survive such termination.

ARTICLE 6 - PATENT MAINTENANCE

6.1 LICENSOR shall control and diligently prosecute and maintain PATENT RIGHTS. All costs associated with the prosecution and maintenance of the PATENT RIGHTS shall be paid by the LICENSEE.

6.2 LICENSEE and its sublicensees shall comply with all United States and foreign laws with respect to patent marking of LICENSED PRODUCT(S).

ARTICLE 7 - INFRINGEMENT AND LITIGATION

7.1 LICENSOR and LICENSEE are responsible for notifying each other promptly of any infringement of PATENT RIGHTS which may come to their attention. The parties shall consult one another in a timely manner concerning any appropriate response thereto.

7.2 In any action to enforce any of the PATENT RIGHTS, either party, at the request and expense of the other party, shall cooperate to the fullest extent reasonably possible. This provision shall not be construed to require either party to undertake any activities, including legal discovery, at the request of any third party except as may be required by lawful process of a court of competent jurisdiction.

ARTICLE 8 - DISCLAIMER OF WARRANTY; INDEMNIFICATION

8.1 THE PATENT RIGHTS, TECHNICAL INFORMATION, LICENSED PRODUCT(S) AND ALL OTHER TECHNOLOGY LICENSED UNDER THIS AGREEMENT ARE PROVIDED ON AN “AS IS” BASIS AND NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, ARE MADE WITH RESPECT THERETO. BY WAY OF EXAMPLE BUT NOT OF LIMITATION, NO REPRESENTATIONS OR WARRANTIES ARE MADE (i) OF COMMERCIAL UTILITY; (ii) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; OR (iii) THAT THE USE OF THE PATENT RIGHTS, TECHNICAL INFORMATION, LICENSED PRODUCT(S) AND ALL TECHNOLOGY LICENSED UNDER THIS AGREEMENT WILL NOT INFRINGE ANY PATENT, COPYRIGHT OR TRADEMARK OR OTHER PROPRIETARY OR PROPERTY RIGHTS OF OTHERS. LICENSOR SHALL NOT BE LIABLE TO LICENSEE, LICENSEE’S SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO: ANY CLAIM ARISING FROM THE USE OF THE PATENT RIGHTS, TECHNICAL INFORMATION, LICENSED PRODUCT(S) AND ALL TECHNOLOGY LICENSED UNDER THIS AGREEMENT OR FROM THE MANUFACTURE, USE OR SALE OF LICENSED PRODUCT(S); OR ANY CLAIM FOR LOSS OF PROFITS, LOSS OR INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND.

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8.2LICENSEE will defend, indemnify and hold harmless LICENSOR, its trustees, officers, agents and employees (individually, an “Indemnified Party”, and collectively, the “Indemnified Parties”), from and against any and all liability, loss, damage, action, claim or expense suffered or incurred by the Indemnified Parties (including attorney’s fees) (individually, a “Liability”, and collectively, the “Liabilities”) that results from or arises out of: (a) the development, use, manufacture, promotion, sale or other disposition, of any TECHNICAL INFORMATION, PATENT RIGHTS or LICENSED PRODUCT(S) by LICENSEE, its assignees, sublicensees, vendors or other third parties; (b) breach by LICENSEE of any covenant or agreement contained in this AGREEMENT; and (c) the enforcement by an Indemnified Party of its rights under this Section. Without limiting the foregoing, LICENSEE will defend, indemnify and hold harmless the Indemnified Parties from and against any Liabilities resulting from:

8.2.1 any product liability or other claim of any kind related to the use by a third party of a LICENSED PRODUCT(S) that was manufactured, sold or otherwise disposed by LICENSEE, its assignees, sublicensees, vendors or other third parties;

8.2.2 a claim by a third party that the TECHNICAL INFORMATION or PATENT RIGHTS or the design, composition, manufacture, use, sale or other disposition of any LICENSED PRODUCT(S) infringes or violates any patent, copyright, trademark or other intellectual property rights of such third party; and

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8.3 The Indemnified Party shall promptly notify LICENSEE of any claim or action giving rise to Liabilities subject to the provisions of the foregoing Section. LICENSEE shall have the right to defend any such claim or action, at its cost and expense. LICENSEE shall not settle or compromise any such claim or action in a manner that imposes any restrictions or obligations on LICENSOR or grants any rights to the TECHNICAL INFORMATION, PATENT RIGHTS or PATENTED PRODUCT(S) without LICENSOR’S prior written consent. If LICENSEE fails or declines to assume the defense of any such claim or action within thirty (30) days after notice thereof, LICENSOR may assume the defense of such claim or action for the account and at the risk of LICENSEE, and any Liabilities related thereto shall be conclusively deemed a liability of LICENSEE. LICENSEE shall pay promptly to the Indemnified Party any Liabilities to which the foregoing indemnity relates, as incurred. The indemnification rights of LICENSOR or other Indemnified Party contained herein are in addition to all other rights which such Indemnified Party may have at law or in equity or otherwise.

8.4 INSURANCE

8.4.1 LICENSEE shall procure and maintain a policy or policies of comprehensive general liability insurance, including broad form and contractual liability, in a minimum amount of [ … ] dollars ($[ … ]) combined single limit per occurrence and in the aggregate as respects personal injury, bodily injury and property damage arising out of LICENSEE’S performance of this AGREEMENT.

8.4.2 The policy or policies of insurance specified herein shall be issued by an insurance carrier with an A.M. Best rating of “A” or better and shall name LICENSOR as an additional insured with respect to LICENSEE’S performance of this AGREEMENT. LICENSEE shall provide LICENSOR with certificates evidencing the insurance coverage required herein and all subsequent renewals thereof. Such certificates shall provide that LICENSEE’S insurance carrier(s) notify LICENSOR in writing at least 30 days prior to cancellation or material change in coverage.

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8.4.3 LICENSOR shall periodically review the adequacy of the minimum limits of liability specified herein. Further, LICENSOR reserves the right to require LICENSEE to adjust such coverage limits accordingly. The specified minimum insurance amounts shall not constitute a limitation on LICENSEE’S obligation to indemnify LICENSOR under this AGREEMENT.

ARTICLE 9 - USE OF LICENSOR’S NAME; INDEPENDENT CONTRACTOR

9.1 LICENSEE and its employees and agents shall not use and LICENSEE shall not permit its sublicensees to use LICENSOR’S name, any adaptation thereof, any LICENSOR logotype, trademark, service mark or slogan or the name mark or logotype of any LICENSOR representative or organization in any way without the prior, written consent of LICENSOR.

9.2 Nothing herein shall be deemed to establish a relationship of principal and agent between LICENSOR and LICENSEE, nor any of their agents or employees for any purpose whatsoever. This AGREEMENT shall not be construed as constituting LICENSOR and LICENSEE as partners, or as creating any other form of legal association or arrangement which would impose liability upon one party for the act or failure to act of the other party.

ARTICLE 10 - ADDITIONAL PROVISIONS

10.1 LICENSEE shall comply with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture, marketing, sale, use, import or export of product(s). Without limiting the foregoing, it is understood that this AGREEMENT may be subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes and other commodities, articles and information, including the Arms Export Control Act as amended in the Export Administration Act of 1979, and that the parties obligations hereunder are contingent upon compliance with applicable United States export laws and regulations. The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by LICENSEE that LICENSEE shall not export data or commodities to certain foreign countries without prior approval of such agency. LICENSOR neither represents that a license is not required nor that, if required, it will issue.

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10.2 This AGREEMENT and the rights and duties appertaining thereto may not be assigned by LICENSEE without first obtaining the express written consent of LICENSOR. Any such purported assignment, without the written consent of LICENSOR, shall be null and of no effect.

10.3 Notices, payments, statements, reports and other communications under this AGREEMENT shall be in writing and shall be deemed to have been received as of the date dispatched if sent by public overnight courier (e.g., Federal Express) and addressed as follows:

If for LICENSOR:

Technology Innovations, LLC

150 Lucius Gordon Drive, Suite 215

West Henrietta, New York 14586

Attn:Michael L. Weiner, Chief Executive Officer

If for LICENSEE:

NaturalNano, Inc.

150 Lucius Gordon Drive, Suite 124

West Henrietta, New York 14586

Attn:Michael Riedlinger, President

Either party may change its official address upon written notice to the other party.

10.4 This AGREEMENT shall be construed and governed in accordance with the laws of the State of New York, without giving effect to conflict of law provisions.

10.5 Any modification of this AGREEMENT shall be in writing and signed by an authorized representative of each party.

10.6 In the event that a party to this AGREEMENT perceives the existence of a dispute with the other party concerning any right or duty provided for herein, the parties shall, as soon as practicable, confer in an attempt to resolve the dispute. If the parties are unable to resolve such dispute amicably, then the parties hereby submit to the exclusive jurisdiction of and venue in the courts located in the State of New York with respect to any and all disputes concerning the subject of this AGREEMENT.

10.7 A waiver by either party of a breach or violation of any provision of this AGREEMENT will not constitute or be construed as a waiver of any subsequent breach or violation of that provision or as a waiver of any breach or violation of any other provision of this AGREEMENT.

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10.8 Any of the provisions of this AGREEMENT which are determined to be invalid or unenforceable in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability in such jurisdiction, without rendering invalid or unenforceable the remaining provisions hereof or affecting the validity or unenforceability of any of the terms of this AGREEMENT in any other jurisdiction.

10.9 The headings and captions used in this AGREEMENT are for convenience of reference only and shall not affect its construction or interpretation.

10.10 Nothing in this AGREEMENT, express or implied, is intended to confer on any person, other than the parties hereto or their permitted assigns, any benefits, rights or remedies.

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IN WITNESS WHEREOF the parties, intending to be legally bound, have caused this AGREEMENT to be executed by their duly authorized representatives.

LICENSOR:

TECHNOLOGY INNOVATIONS, LLC

By:______________________________________________

Michael L. Weiner, CEO

LICENSEE:

NATURALNANO, INC.

By:______________________________________________

Michael Riedlinger, President

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ATTACHMENT 1

Intellectual Property List

Technology to be licensed to NaturalNano, Inc. from Technology Innovations, LLC

1. Provisional Patent application [ … ] and any subsequent patents including continuations-in-part, titled: “[ … ]” filing date: October 7, 2004.

2. Continuation-in-part of Provisional Patent application [ … ] known also as [ … ] and now referred to as [ … ] and titled: “[ … ]” with filing date of: April 4, 2005.

3. PCT known as [ … ] titled: “[ … ]” with filing date of April 5, 2005.

4. Patent application known as [ … ] with deposit date of January 25, 2005 titled: “[ … ]”

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EX-10.2

Exhibit 10.2

JOINT RESEARCH AGREEMENT ASSIGNMENT

AND NON-DISCLOSURE AGREEMENT

JOINT RESEARCH AGREEMENT

This Joint Research Agreement ("JRA") is effective as of May 25, 2005 by and between Nanolution, LLC ("Nanolution") and NaturalNano Inc. ("NaturalNano") (also referred to herein as "the Parties").

The parties have agreed to conduct and support joint research in the field of drug delivery utilizing naturally occurring halloysite nanotechnologies ("the Project"). This JRA covers the exchange of ideas and information as well as the performance of experimental, developmental, and/or research work ("the Work") performed under the Project, and the ownership of confidential or proprietary information, including any intellectual property.

The term of the Project shall be from May 25, 2005 and shall continue at least until the desired drug delivery technology has been proven commercially viable, or until mutually terminated by both parties.

The Work performed as a result of the Project shall be subject to this JRA regardless of where the Work is performed or by whom. In addition, all intellectual property, including but not limited to inventions, conceptions, ideas, know-how, discoveries, processes, machines, manufactures, compositions of matter, formulations, processes, biological material, biological methods, or any improvements thereof, whether or not patentable or suitable for other form of exclusive right or legal protection, conceived, made or derived during the course of Work within the Project under this JRA shall be owned by and assigned to the Parties as follows:

· All medical uses and inventions that arise out of this JRA shall be owned by Nanolution.

· All purification processes for raw halloysite and all non-medical applications that arise out of this JRA shall be owned by NaturalNano.

For: NANOLUTION, LLC	For: NATURALNANO INC.
Name: John Lanzafame Title: President	Name: Michael Riedlinger Title: President

NON-DISCLOSURE AGREEMENT

The Parties acknowledge that each owns certain CONFIDENTIAL INFORMATION, as defined herein, which might relate to the inventions, conceptions, ideas, know-how, discoveries, processes, machines, manufactures, compositions of matter, formulations, processes, biological material, biological methods, or any improvements thereof, whether or not patentable or suitable for other form of exclusive right or legal protection, conceived, made or derived during the course of Work within the Project under this JRA; and

The Parties are willing to disclose to each other such necessary CONFIDENTIAL INFORMATION provided each Party preserves the confidential nature of the other Party's INFORMATION and uses it solely for purposes of this Agreement.

The Parties agree as follows:

1. "CONFIDENTIAL INFORMATION" as used in this Agreement means all technical or business information disclosed by one of the Parties to another pursuant to the JRA that is identified at the time of disclosure or within thirty (30) days thereafter as being confidential and proprietary. No information will be regarded as CONFIDENTIAL INFORMATION if the Party to which it is disclosed can show by competent proof that such information

(a) was at the time of disclosure, or subsequently became, through no fault of the receiving Party, known to the general public through publication or otherwise; or

(b) was, subsequent to disclosure to a Party, lawfully and independently received by that Party from a third party who had the right to disclose it without restriction.

Specific aspects or details of CONFIDENTIAL INFORMATION shall not be deemed to be within the public domain or in the possession of a Party merely because the CONFIDENTIAL INFORMATION is embraced by general disclosures in the public domain or in the possession of a Party. In addition, any combination of CONFIDENTIAL INFORMATION shall not be considered in the public domain or in the possession of a Party merely because individual elements thereof are in the public domain or in the possession of that Party unless the combination and its principles are in the public domain or in the possession of that Party.

2. Any Party, at its discretion, may disclose to another Party any CONFIDENTIAL INFORMATION that the disclosing Party, in its reasonable judgment, believes is sufficient to enable the receiving Party to arrive at conceptions, ideas, innovations, discoveries, inventions, compositions, biological material, biological methods, whether or not patentable or susceptible to any other form of legal protection, during performance Under the IRA. Any Party may also cause such disclosures to be made to the other Party on behalf of the disclosing Party by third parties who are Under obligations of confidentiality to the disclosing Party; such disclosures from third parties shall be deemed to be disclosures by the disclosing Party.

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3. In consideration of each and every disclosure of CONFIDENTIAL INFORMATION, the Parties agree to:

(a) treat as confidential and to preserve the confidentiality of all CONFIDENTIAL INFORMATION;

(b) use any and all CONFIDENTIAL INFORMATION solely in connection with the performance of the IRA and for no other purpose;

(c) make no disclosures of any CONFIDENTIAL INFORMATION to any party other than officers and employees of a Party to this IRA;

(d) limit access to CONFIDENTIAL INFORMATION to those officers and employees having a reasonable need for such INFORMATION and being boUnd by a written obligation to maintain the confidentiality of such INFORMATION; and

(e) maintain in confidence any information regarding the nature or scope of any transaction between the Parties, except to the extent such information must be disclosed pursuant to law, and then only after notifying the other Party of such requirement.

Any obligation imposed by this paragraph 3 may be waived in writing by a Party as to particular CONFIDENTIAL INFORMATION and to a particular use or disclosure. Any such waiver will have a one-time effect and will not apply to any subsequent situation regardless of its similarity.

4. All CONFIDENTIAL INFORMATION will remain the property of the disclosing Party and, upon request of the disclosing Party, the receiving Party shall promptly return to the disclosing Party all CONFIDENTIAL INFORMATION, or any part or reproduction thereof.

5. The obligations of each and every Party, and each employee and officer of each Party Under this Agreement will expire five (5) years from the termination of the JRA.

6. This Agreement is subject to the laws (excluding conflicts rules) of the State of New York.

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7. The terms and provisions of this Agreement will inure to the benefit of the Parties, their respective successors and assigns and will be binding on said successors and assigns. This paragraph notwithstanding, neither Party may disclose any CONFIDENTIAL INFORMATION to any successor or assign absent prior written consent of the disclosing Party.

8. The Parties understand and agree that no right or license under any patent, patent application, or know-how is granted to any other Party or any other person by this Agreement or by any disclosure of any CONFIDENTIAL INFORMATION.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

For: NANOLUTION, LLC		For: NATURALNANO INC.
By:		By:
	Name: John Lanzafame Title: President		Name: Michael Riedlinger Title: President

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EX-10.3

Exhibit 10.3

       January 3, 2005

Michael Riedlinger

30 Alpine Drive

Rochester, New York 14618

Dear Michael,

We are pleased to extend to you an offer of employment as the President of NaturalNano, Inc. (“the company”) effective April 4, 2005. Your annual full time salary will be $100,000 which will be paid on a bi-weekly basis at the rate of $3846.15 in gross wages every two weeks. You will be entitled to four weeks vacation (20 days) annually, earned on a pro-rata basis of 1.67 days each month. You will be eligible for a review of this compensation package effective January 1, 2006.

In addition to the statutory benefits defined by federal and local laws, (FICA, FUTA, New York State Disability Insurance and Workers Compensation) you will be entitled to the benefits available to other NaturalNano officers and employees. Currently this includes employer paid health and dental insurance coverage. You will also be eligible for an initial grant of 1,500,000 stock options at grant price of $.10 per share. These shares will vest as follows: 500,000 on the date of grant, 500,000 on March 1, 2006 and the remaining 500,000 on March 1, 2007. Notwithstanding any provision herein to the contrary any unvested portion of the option shall immediately expire upon termination of employment for any reason. This option grant will be governed pursuant to the “NaturalNano, Inc. 2004 Stock Option Plan.”

Your job responsibilities will include all strategic, operational and financial matters of the company. You will report directly to the Board of Directors and be responsive as requested to the board members and related sub-committees of the board.

This agreement is terminable by you or the company upon ninety (90) days’ written notice or by us for cause or upon your death or disability. As a condition of your employment, you will be required to sign our standard non-disclosure agreement regarding confidential proprietary information obtained in the course of your employment. A copy of this agreement is attached to this letter for your reference.

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Please indicate your acceptance by signing below and returning a signed copy to my attention. I look forward to working with you at NaturalNano—WELCOME!!

Regards,

Michael Weiner

Chairman of the Board

NaturalNano, Inc.

Agreed to and accepted _________________________________ Date: _________

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September 20, 2005

Michael Riedlinger

30 Alpine Drive

Rochester, New York 14618

RE:Amendment No. 1 to Employment Letter

Dear Michael,

This letter hereby amends your employment letter dated January 3, 2005.

The first paragraph of the letter is hereby amended to read as follows:

“We are pleased to extend to you an offer of employment as the President of NaturalNano, Inc. (“the company”) effective January 1, 2005. Your annual full time salary will be $135,000 which will be paid on a bi-weekly basis at the rate of $5,192.30 in gross wages every two weeks. You will be entitled to four weeks vacation (20 days) annually, earned on a pro-rata basis of 1.67 days each month. You will be eligible for a review of this compensation package effective January 1, 2006.”

In addition, a new paragraph shall be added as follows:

“Upon completion of the company’s raising financing of not less than $3,000,000, you shall receive a cash bonus of $10,000. Additionally, you shall be eligible to receive a bonus of up to $20,000 upon completion of certain milestones which include the following: (i) the Company shall be listed and trading on the OTCBB; (ii) the Company’s stock shall have traded at an average price of $1.00 or greater for a period of not less than 30 days; and (iii) the Company shall demonstrate progress in achieving its milestones as more fully described in the Company’s business plan.”

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All other terms and conditions of your employment will remain the same. Please let me know if you have any questions and we are pleased with the progress the company is making and your contributions to its success.

Regards,

Michael Weiner

Director

NaturalNano, Inc.

Agreed to and accepted _________________________________ Date:_________

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EX-10.4

Exhibit 10.4

March 17, 2005

Kathleen A. Browne

80 Georgian Court

Rochester, New York 14610

Dear Kathleen,

We are pleased to extend to you an offer of employment as the Chief Financial Officer of NaturalNano, Inc. (“the company”) effective on a part time consulting basis beginning April 4, 2005 (at an hourly rate of $60/hour) with the expectation that you will be available as a full time employee in advance of the public filings and the anticipated merger agreement specifically discussed during your interview. Your annual full time salary will be $120,000 which will be paid on a bi-weekly basis at the rate of $4615.38 in gross wages every two weeks. You will be entitled to four weeks vacation (20 days) annually, earned on a pro-rata basis of 1.67 days each month. You will be eligible for a review of this compensation package effective January 1, 2006.

In addition to the statutory benefits defined by federal and local laws, (FICA, FUTA, New York State Disability Insurance and Workers Compensation) you will be entitled to the benefits available to other NaturalNano officers and employees. Currently this includes employer paid health and dental insurance coverage which you may elect at any time these benefits cease to be provided by your former employer. You will also be eligible for an initial grant of 200,000 stock options at grant price of $.10 per share. These shares will vest on a monthly basis (at the rate of 16,667 options per month) with the first vesting date of May 31, 2005 and continue each month thereafter until the entire grant has vested. Notwithstanding any provision herein to the contrary any unvested portion of the option shall immediately expire upon termination of employment for any reason. This option grant will be governed pursuant to the “NaturalNano, Inc. 2004 Stock Option Plan.”

Your job responsibilities will include all financial matters of the company, including but not limited to: the maintenance of accounting systems and controls, preparation of budgets, financial statements, special reports and related analysis for: shareholder reporting as required under SEC regulations as well as the company’s Board of Directors and Audit Committee. You will report directly to Michael Riedlinger, President of NaturalNano and will be responsive to all levels of management and the Board as needed.

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This agreement is terminable by you or the company upon ninety (90) days’ written notice or by us for cause or upon your death or disability. As a condition of your employment, you will be required to sign our standard non-disclosure agreement regarding confidential proprietary information obtained in the course of your employment. A copy of this agreement is attached to this letter for your reference.

Please indicate your acceptance by signing below and returning a signed copy to my attention. I look forward to working with you at NaturalNano—WELCOME!!

Regards,

Michael Riedlinger

President

NaturalNano, Inc.

Agreed to and accepted _________________________________ Date: _________

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September 20, 2005

Kathleen A. Browne

80 Georgian Court

Rochester, New York 14610

RE:Amendment No. 1 to Employment Letter

Dear Kathleen,

This letter hereby amends your employment letter dated March 17, 2005.

The first paragraph of the letter is hereby amendment to read as follows:

“We are pleased to extend to you an offer of employment as the Chief Financial Officer of NaturalNano, Inc. (“the Company”) effective on a part time consulting basis beginning April 4, 2005 (at an hourly rate of $60/hour) with the expectation that you will be available as a full time employee in advance of the public filings and the anticipated merger agreement specifically discussed during your interview. Your annual full time salary will be $135,000 which will be paid on a bi-weekly basis at the rate of $5,192.30 in gross wages every two weeks. You will be entitled to four weeks vacation (20 days) annually, earned on a pro-rata basis of 1.67 days each month. You will be eligible for a review of this compensation package effective January 1, 2006.”

In addition, two new paragraphs shall be added as follows:

“You shall be eligible to receive a bonus of up to $20,000 upon completion of certain milestones which include the following: (i) the Company shall be listed and trading on the OTCBB; (ii) satisfaction of performance criteria established by the Board of Directors; and (iii) the Company shall demonstrate progress in achieving its milestones as more fully described in the Company’s business plan.”

“In addition to the initial option grant of 200,000, you shall receive and additional incentive grant for 200,000 stock options at a grant price of $.10 per share (“Incentive Stock Grant”). This Incentive Stock Grant shall vest one half on December 31, 2006 and the remaining one half on December 31, 2007. Notwithstanding any provision herein to the contrary any unvested portion of the Incentive Stock Grant shall immediately expire upon termination of employment for any reason. This option grant will be governed pursuant to the “NaturalNano, Inc. 2004 Stock Option Plan.”

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September 20, 2005

Page Two

All other terms and conditions of your employment will remain the same. Please let me know if you have any other questions and I look forward to working with you to make NaturalNano a success.

Regards,

Michael Riedlinger

President

NaturalNano, Inc.

Agreed to and accepted _________________________________ Date: _________

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EX-10.5

Exhibit 10.5

September 23, 2005

Sarah Cooper

250 W. El Camino Real

Apt. 2410

Sunnyvale, California 94087-1378

Dear Sarah,

We are pleased to extend to you an offer of employment as the Chief Technology Officer of NaturalNano, Inc. (“the company”) effective October 1, 2005. Your annual full time salary will be $110,000 which will be paid on a bi-weekly basis at the rate of $4,230.76 in gross wages every two weeks. You will be entitled to four weeks vacation (20 days) annually, earned on a pro-rata basis of 1.67 days each month. You will be eligible for a review of this compensation package effective January 1, 2006. In addition to your base salary, upon acceptance of this offer you shall receive a signing bonus in the amount of $7,000.00

In addition to the statutory benefits defined by federal and local laws, (FICA, FUTA, applicable State Disability Insurance and Workers Compensation) you will be entitled to the benefits available to other NaturalNano officers and employees. Currently this includes employer paid health and dental insurance coverage. You will also be eligible for an initial grant of 300,000 stock options at grant price of $.10 per share. These shares will vest as follows: 100,000 on the date of grant; 100,000 on March 1, 2006 and the remaining 100,000 on March 1, 2007. Notwithstanding any provision herein to the contrary, any unvested portion of the option shall immediately expire upon termination of employment for any reason. This option grant will be governed pursuant to the “NaturalNano, Inc. 2004 Stock Option Plan.”

Your job responsibilities will include the development of technology applications for the use of naturally occurring nanomaterials in medical and non-medical fields and writing and submitting related patent applications in coordination with the strategic plans of the company. You will report directly to me as the President of the company and as an officer of the company, will be expected to be responsive to the Scientific Advisory Board, the Board of Directors and other members of the management team as necessary.

This agreement is terminable by you or the company upon ninety (90) days’ written notice or by us for cause or upon your death or disability. As a condition of your employment, you will be required to sign our standard non-disclosure agreement regarding confidential proprietary information obtained in the course of your employment. A copy of this agreement is attached to this letter for your reference.

September 23, 2005

Page Two

Please indicate your acceptance by signing below and returning a signed copy to my attention. I look forward to working with you at NaturalNano—WELCOME!!

Regards,

Michael Riedlinger

President

NaturalNano, Inc.

Agreed to and accepted _________________________________ Date: _________

EX-16.1

EXHIBIT 16.1

November 29, 2005

Office of the Chief Accountant

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Ladies and Gentlemen:

This letter will confirm that we reviewed Item 4.01 of the Form 8-K of NaturalNano, Inc. (formerly Cementitious Materials, Inc.), dated November 29, 2005, captioned “Changes in Registrant’s Certifying Accountant,” and that we agree with the statements made therein as they relate to HJ & Associates, LLC. We are not in a position to agree or disagree with the statements in Item 4.01 regarding the engagement of Goldstein Golub Kessler LLP or the approval of such engagement by the Board of Directors.

We hereby consent to the filing of this letter as an exhibit to the foregoing report on Form 8-K.

HJ & Associates, LLC

Salt Lake City, Utah

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

NaturalNano, Inc.

We hereby consent to the use in this Form 8-K of NaturalNano, Inc. of our report, dated August 15, 2005, except for Note 12 as to which the date is November 29, 2005, on the financial statements of NaturalNano, Inc. as of December 31, 2004 and for the period from December 22, 2004 (inception) to December 31, 2004, which appears in such Form 8-K.

/s/ GOLDSTEIN GOLUB KESSLER LLP

New York, New York

December 1, 2005

EX-99.1

Exhibit 99.1

NATURALNANO, INC.

(A Development Stage Company)

PRO FORMA BALANCE SHEET

September 30, 2005 PRO FORMA

(UNAUDITED)

												PRO FORMA								PRO FORMA
	NaturalNano, Inc.			Cementitious Materials, Inc.			Adjustments					Acquisition September 30, 2005			Other Capital Adjustments					September 30, 2005
Assets
Current assets:
Cash and cash equivalents	$	2,698,330										$	2,698,330							$	2,698,330
Prepaid assets		250,000											250,000								250,000
Other current assets		24,038											24,038								24,038
Total current assets		2,972,368											2,972,368								2,972,368
Property and equipment, net		29,346											29,346								29,346
Investments		300,000											300,000								300,000
Total assets	$	3,301,714		$	0							$	3,301,714							$	3,301,714
Liabilities and Stockholder's Equity (Accumulated Deficit)
Liabilities
Current liabilities:
Accounts Payable	$	119,338		$	12,018							$	131,356								131,356
Accrued Payroll		112,604											112,604								112,604
Accrued Expenses		175,093											175,093								175,093
Due to Related Parties					81,556								81,556								81,556
Convertible Bridge Notes		4,156,000											4,156,000			(4,156,000	)	(2	)		0
Total current liabilities		4,563,035			93,574			0					4,656,609			(4,156,000	)				500,609
Other Liability		35,000											35,000								35,000
Total Liabilities		4,598,035			93,574			0					4,691,609			(4,156,000	)				535,609
Stockholder's Equity (Accumulated Deficit)
Common stock		100,000			4,991			(100,000	)	(1	)
								44,919		(1	)		49,910			10,470		(2	)		60,380
Additional paid in capital		383,083			362,474			100,000		(1	)
								(44,919	)	(1	)
								(461,039	)	(3	)		339,599			4,145,530		(2	)		4,485,129
Deficit accumulated in the development stage		(1,779,404	)		(461,039	)		461,039		(3	)		(1,779,404	)							(1,779,404	)
Total stockholder's equity (accumulated deficit)		(1,296,321	)		(93,574	)		0					(1,389,895	)		4,156,000					2,766,105
Total liabilities and stockholder's equity (deficiency)	$	3,301,714		$	0		$	0				$	3,301,714		$	0				$	3,301,714

See notes to financial statements

NaturalNano, Inc.

(A Development Stage Company)

PRO FORMA STATEMENT OF OPERATIONS

For the nine months ending September 30, 2005

(UNAUDITED)

								PRO FORMA				PRO FORMA
	NaturalNano, Inc.			Cementitious Materials, Inc.			Adjustments	Acquisition September 30, 2005			Other Capital Adjustments	September 30, 2005
Operating expenses:
Research and development (see note "a")	$	293,492						$	293,492			$	293,492
General and administrative (see note "b")		1,597,065		$	25,745				1,622,810				1,622,810
		1,890,557			25,745				1,916,302				1,916,302
Other (income) expense:
Interest expense		1,511			3,982				5,493				5,493
Investment (income)		(120,000	)						(120,000	)			(120,000	)
		(118,489	)		3,982				(114,507	)			(114,507	)
Net loss		($1,772,068	)		($29,727	)			($1,801,795	)			($1,801,795	)
Loss per common share - basic and diluted		($0.18	)		($0.01	)			($0.04	)			($0.03	)
Weighted average shares outstanding		10,000,000			4,991,042				44,919,378				55,388,978		(1)(2	)

(a) Research and development expenses include stock based compensation of $17,500.

(b) General and administrative expense includes stock based compensation of $140,583.

See notes to financial statements

NaturalNano, Inc.

(A Development Stage Company)

PRO FORMA STATEMENT OF OPERATIONS

For the twelve months ending December 31, 2004

(UNAUDITED)

								PRO FORMA				PRO FORMA
	NaturalNano, Inc. (a)			Cementitious Materials, Inc.			Adjustments	Acquisition December 31, 2004			Other Capital Adjustments	December 31, 2004
Operating expenses:
Research and development	$	5,000						$	5,000			$	5,000
General and administrative		2,336		$	13,967				16,303				16,303
		7,336			13,967				21,303				21,303
Other (income) expense:
Interest expense					2,312				2,312				2,312
		0			2,312				2,312				2,312
Net loss		($7,336	)		($16,279	)			($23,615	)			($23,615	)
Loss per common share - basic and diluted		($0.00	)		($0.00	)			($0.00	)			($0.00	)
Weighted average shares outstanding		10,000,000			4,991,042				44,919,378				55,388,978		(1)(2	)

(a) Includes the period from December 22, 2004 (inception) to December 31, 2004.

See notes to financial statements

NOTES TO UNAUDITED PRO FORMA CONDENSED

FINANCIAL STATEMENTS

Basis of presentation

As of November 29, 2005, NaturalNano,Inc.,(“NaturalNano”) Cementitious Materials, Inc. (“Cementitious”) and a wholly-owned subsidiary of Cementitious (the “Merger sub”) completed the previously announced merger whereby the Merger Sub merged with and into NaturalNano with NaturalNano becoming the surviving entity from the transaction, as a wholly owned subsidiary of Cementitious (the “Merger”). The transaction has been deemed a capital transaction accompanied by a recapitalization. Therefore, no goodwill will be recorded in the Merger.

The unaudited pro forma condensed balance sheet and statement of operations of NaturalNano have been prepared to give effect to

· the merger of Cementitious with NaturalNano ;

· the conversion of all indebtedness of NaturalNano outstanding at September 30, 2005 in exchange for 10,469,600 shares of Cementitious common stock.

The condensed pro forma financial statements have been prepared as if such transactions had taken place on September 30, 2005 for purposes of the pro forma condensed balance sheet and as if the transactions had taken place on January 1, 2004 for purposes of the pro forma condensed statements of operations.

The columns captioned NaturalNano represent the balance sheet of NaturalNano as of September 30, 2005 and the related statements of operations for the periods from December 22, 2004 (inception) through December 31, 2004 and for the nine months ended September 30, 2005. The columns captioned Cementitious represent the balance sheet of Cementitious as of September 30, 2005 and the related statements of operations for the year ended December 31, 2004 and for the nine months ended September 30, 2005.

We are providing this information to aid you in your analysis of the financial aspects of the Merger. The unaudited pro forma condensed financial statements described above should be read in conjunction with the historical financial statements of NaturalNano and Cementitious and the related notes thereto. The unaudited pro forma information is not necessarily indicative of the financial position or results of operations that may have actually occurred had the Merger taken place on the dates noted, or the future financial position or operating results of the combined company.

PRO FORMA ENTRIES:

(1) To reflect the issuance of 44,919,378 shares of Cementitious common stock as merger consideration with respect to all outstanding shares of common stock of NaturalNano.

(2) To reflect the issuance of 10,469,600 shares of Cementitious common stock relating to the November 29, 2005 outstanding convertible notes of NaturalNano.

(3) To reflect the recapitalization adjustment for the Merger.