**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-Q**





x
                QUARTERLY
                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                    ACT OF
                    1934
                    FOR THE QUARTERLY PERIOD ENDED**MARCH
                    31,
                    2007**




o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF1934
                FOR THE TRANSITION PERIOD FROM _________________ TO
                _________________








**A****LTAIR****N****ANOTECHNOLOGIES****I****NC.**


(Exact
      name of registrant as specified in its charter)





**Canada**
              **1-12497**
              **33-1084375**(State
                  or other jurisdiction
              (Commission
                  File No.)
              (IRS
                  Employerof
                  incorporation)
              
              Identification
                  No.)





**204
      Edison Way**


**Reno,
      Nevada 89502**


(Address
      of principal executive offices, including zip code)





Registrant’s
      telephone number, including area code: (775) 856-2500








Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. YES x NO o .




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check
      one):





Large
                accelerated filer [  ]
            Accelerated
                filer [X ]
            Non-accelerated
                filer [  ]




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Act): YES [  ] NO [X]





**As
      of May 4, 2007 the registrant had 70,020,626 Common Shares
      outstanding.**













**PART
                I - FINANCIAL INFORMATION****Item
                1. Financial Statements****ALTAIR
                NANOTECHNOLOGIES INC. AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED BALANCE SHEETS****(Expressed
                in United States Dollars)****(Unaudited)**




**March
                31,**
            
            **December
                31,****2007**
            
            **2006****ASSETS****Current
                Assets**Cash
                and cash equivalents
            
            $
            2,322,348
            
            $
            12,679,254Investment
                in available for sale securities
            
            
            22,436,829
            
            
            14,541,103Accounts
                receivable, net
            
            
            929,769
            
            
            1,624,825Product
                inventories
            
            
            1,019,599
            
            
            169,666Prepaid
                expenses and other current assets
            
            
            292,718
            
            
            413,390Total
                current assets
            
            
            27,001,263
            
            
            29,428,238**Investment
                in Available for Sale Securities**
            
            
            1,499,368
            
            
            1,306,420**Property,
                Plant and Equipment, net**
            
            
            11,800,801
            
            
            11,229,406**Patents,
                net**
            
            
            784,044
            
            
            805,248**Notes
                Receivable**
            
            
            338,654
            
            
            330,000**Other
                Assets**
            
            
            127,779
            
            
            21,261**Total
                Assets**
            
            $
            41,551,909
            
            $
            43,120,573**LIABILITIES
                AND STOCKHOLDERS' EQUITY****Current
                Liabilities**Trade
                accounts payable
            
            $
            1,645,205
            
            $
            1,533,047Accrued
                salaries and benefits
            
            
            747,488
            
            
            840,219Accrued
                liabilities
            
            
            461,706
            
            
            526,596Note
                payable, current portion
            
            
            600,000
            
            
            600,000Total
                current liabilities
            
            
            3,454,399
            
            
            3,499,862**Note
                Payable, Long-Term Portion**
            
            
            1,200,000
            
            
            1,800,000**Stockholders'
                Equity**Common
                stock, no par value, unlimited shares authorized;70,020,626
                and 69,079,270 shares issued andoutstanding
                at March 31, 2007 and December 31, 2006
            
            
            119,116,995
            
            
            115,989,879Additional
                paid in capital
            
            
            2,948,569
            
            
            2,002,220Accumulated
                deficit
            
            
            (85,534,654
            )
            
            (80,353,188
            )Accumulated
                other comprehensive loss
            
            
            366,600
            
            
            181,800**Total
                Stockholders' Equity**
            
            
            36,897,510
            
            
            37,820,711**Total
                Liabilities and Stockholders' Equity**
            
            $
            41,551,909
            
            $
            43,120,573




See
                notes to the unaudited condensed consolidated financial
                statements.




2


**ALTAIR
                NANOTECHNOLOGIES INC. AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS****(Expressed
                in United States Dollars)****(Unaudited)**




**Three
                Months Ended****March
                31,****2007**
            
            **2006****Revenues**Product
                sales
            
            $
            177,390
            
            $
            8,018Commercial
                collaborations
            
            
            347,288
            
            
            330,270Contracts
                and grants
            
            
            616,254
            
            
            207,008Total
                revenues
            
            
            1,140,932
            
            
            545,296**Operating
                Expenses**Cost
                of product sales
            
            
            210,262
            
            
            1,266Research
                and development
            
            
            2,997,327
            
            
            1,948,387Sales
                and marketing
            
            
            380,536
            
            
            393,161General
                and administrative
            
            
            2,611,215
            
            
            2,611,304Depreciation
                and amortization
            
            
            431,058
            
            
            316,871Total
                operating expenses
            
            
            6,630,398
            
            
            5,270,989**Loss
                from Operations**
            
            
            (5,489,466
            )
            
            (4,725,693
            )**Other
                Income (Expense)**Interest
                expense
            
            
            (35,000
            )
            
            (45,500
            )Interest
                income
            
            
            343,368
            
            
            211,303Loss
                on foreign exchange
            
            
            (369
            )
            
            (174
            )Total
                other income, net
            
            
            307,999
            
            
            165,629**Net
                Loss**
            
            $
            (5,181,467
            )
            $
            (4,560,064
            )**Loss
                per common share - Basic and diluted**
            
            $
            (0.07
            )
            $
            (0.08
            )**Weighted
                average shares - Basic and diluted**
            
            
            69,264,018
            
            
            59,222,352




See
                notes to the unaudited condensed consolidated financial
                statements.





3




**ALTAIR
                NANOTECHNOLOGIES INC. AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE
                LOSS****(Expressed
                in United States Dollars)****(Unaudited)**




**Accumulated****Other****Additional**
            
            
            
            **Compre-****Common
                Stock**
            
            **Paid
                In**
            
            **Accumulated**
            
            **hensive****Shares**
            
            **Amount**
            
            **Capital**
            
            **Deficit**
            
            **Income**
            
            **Total**BALANCE,
                JANUARY 1, 2007
            
            
            69,079,270
            
            $
            115,989,879
            
            $
            2,002,220
            
            $
            (80,353,188
            )
            $
            181,800
            
            $
            37,820,711Comprehensive
                loss:Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (5,181,467
            )
            
            -
            
            
            (5,181,467
            )Other
                comprehensive income,net
                of taxes of $0
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            184,800
            
            
            184,800Comprehensive
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (4,996,667
            )Share-based
                compensation
            
            
            -
            
            
            46,725
            
            
            964,349
            
            
            -
            
            
            -
            
            
            993,074Exercise
                of stock options
            
            
            45,833
            
            
            80,391
            
            
            -
            
            
            -
            
            
            -
            
            
            80,391Common
                stock issued
            
            
            895,523
            
            
            3,000,000
            
            
            -
            
            
            -
            
            
            -
            
            
            3,000,000BALANCE,
                MARCH 31, 2007
            
            
            70,020,626
            
            $
            119,116,995
            
            $
            2,948,569
            
            $
            (85,534,654
            )
            $
            366,600
            
            $
            36,897,510




See
                notes to the unaudited condensed consolidated financial
                statements.




4





**ALTAIR
                NANOTECHNOLOGIES INC. AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED STATEMENTS OF CASH FLOWS****(Expressed
                in United States Dollars)****(Unaudited)**




**Three
                Months Ended****March
                31,****2007**
            
            **2006****Cash
                flows from operating activities:**Net
                loss
            
            $
            (5,181,467
            )
            $
            (4,560,064
            )Adjustments
                to reconcile net loss to net cashused
                in operating activities:Depreciation
                and amortization
            
            
            431,058
            
            
            316,871Securities
                received in payment of license fees
            
            
            (8,148
            )
            
            -Securities
                received for exclusivity contract
            
            
            (106,518
            )
            
            -Share-based
                compensation
            
            
            993,074
            
            
            848,843Loss
                on disposal of fixed assets
            
            
            -
            
            
            21,100Accrued
                interest on notes receivable
            
            
            (8,654
            )
            
            -Changes
                in operating assets and liabilities:Accounts
                receivable, net
            
            
            695,056
            
            
            (90,496
            )Product
                inventories
            
            
            (834,647
            )
            
            -Prepaid
                expenses and other current assets
            
            
            120,672
            
            
            (92,801
            )Other
                assets
            
            
            -
            
            
            49,939Trade
                accounts payable
            
            
            (180,074
            )
            
            (12,953
            )Accrued
                salaries and benefits
            
            
            (92,731
            )
            
            190,247Accrued
                liabilities
            
            
            (64,890
            )
            
            127,229**Net
                cash used in operating activities**
            
            
            (4,237,269
            )
            
            (3,202,085
            )**Cash
                flows from investing activities:**Sale
                of available for sale securities
            
            
            2,325,000
            
            
            3,760,980Purchase
                of available for sale securities
            
            
            (10,220,726
            )
            
            -Purchase
                of property and equipment
            
            
            (704,302
            )
            
            (1,143,610
            )**Net
                cash provided (used) by investing activities**
            
            
            (8,600,028
            )
            
            2,617,370




*(continued)*





5


**ALTAIR
                NANOTECHNOLOGIES INC. AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED STATEMENTS OF CASH FLOWS****(Expressed
                in United States Dollars)****(Unaudited)**




**Three
                Months Ended****March
                31,****2007**
            
            **2006****Cash
                flows from financing activities:**Issuance
                of common shares for cash
            
            
            3,000,000
            
            
            -Proceeds
                from exercise of stock options
            
            
            80,391
            
            
            53,975Payment
                of notes payable
            
            
            (600,000
            )
            
            (600,000
            )**Net
                cash provided by (used) financing activities**
            
            
            2,480,391
            
            
            (546,025
            )**Net
                decrease in cash and cash equivalents**
            
            
            (10,356,906
            )
            
            (1,130,740
            )**Cash
                and cash equivalents, beginning of period**
            
            
            12,679,254
            
            
            2,264,418**Cash
                and cash equivalents, end of period**
            
            $
            2,322,348
            
            $
            1,133,678**Supplemental
                disclosures:**Cash
                paid for interest
            
            $
            168,000
            
            $
            105,000Cash
                paid for income taxes
            
            
            None
            
            
            None**Supplemental
                schedule of non-cash investing and financing
                activities:****For
                the three months ended March 31, 2007:**-
                We made property and equipment purchases of $292,233, which are included
                in trade accounts payable at March 31, 2007.-
                We had an unrealized gain on available for sale securities of
                $184,800.**For
                the three months ended March 31, 2006:**-
                We issued 36,000 shares of restricted stock to employees having a
                fair
                value of approximately $122,400
                for which no cash will be received*.*-
                We made property and equipment purchases of $123,701, which are included
                in trade accounts payable at March 31, 2006.-
                We had an unrealized gain on available for sale securities of
                $46,000.




*(concluded)*See
                notes to the unaudited condensed consolidated financial
                statements.




6


**ALTAIR
      NANOTECHNOLOGIES INC. AND SUBSIDIARIES**


**NOTES
      TO CONDESNED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**





**Note
      1. Basis of Preparation of Consolidated Financial
      Statements**





These
      unaudited interim condensed consolidated financial statements of Altair
      Nanotechnologies Inc. and its subsidiaries (collectively, “Altair”, “we” or the
“Company”) have been prepared in accordance with the rules and regulations of
      the United States Securities and Exchange Commission (the “Commission”). Such
      rules and regulations allow the omission of certain information and footnote
      disclosures normally included in financial statements prepared in accordance
      with accounting principles generally accepted in the United States of America,
      so long as the statements are not misleading. In the opinion of Company
      management, these consolidated financial statements and accompanying notes
      contain all adjustments (consisting of only normal recurring items) necessary
      to
      present fairly the financial position and results of operations for the periods
      shown. These unaudited interim condensed consolidated financial statements
      should be read in conjunction with the audited consolidated financial statements
      and notes thereto contained in our  Annual
      Report on Form 10-K for the year ended December 31, 2006, as filed with the
      Commission on March 13, 2007.




The
      results of operations for the three-month period ended March 31, 2007 are not
      necessarily indicative of the results to be expected for the full year.








**Note
      2. Summary of Significant Accounting Policies**




**Cash,
      Cash Equivalents and Investment in Available for Sale Securities (short-term)
      -** Cash,
      cash equivalents and **** investment
      in available for sale securities (short-term) consist principally of bank
      deposits, institutional money market funds and corporate notes. Short-term
      investments that are highly liquid, have insignificant interest rate risk and
      maturities of 90 days or less are classified as cash and cash equivalents.
      Investments that do not meet the definition of cash equivalents are classified
      as held-to-maturity or available-for-sale.




Our
      cash
      balances are maintained in bank accounts that are insured by the Federal Deposit
      Insurance Corporation (“FDIC”) up to a maximum of $100,000. At March 31, 2007
      and December 31, 2006, we had cash deposits of approximately $2.1million and
      $3.0 million, respectively, in excess of FDIC insurance limits.





**Investment
      in Available for Sale Securities (long-term) -** Available
      for sale securities (long-term) **** includes
      publicly traded equity investments that are classified as available for sale
      and
      recorded at market using the specific identification method. Unrealized gains
      and losses (except for other than temporary impairments) are recorded in other
      comprehensive income (loss), which is reported as a component of stockholders’
equity. We evaluate our investments on a quarterly basis to determine if a
      potential other than temporary impairment exists. Our evaluation considers
      the
      investees’ specific business conditions as well as general industry and market
      conditions.





**Inventory
      -** The
      Company values its inventories at the lower of cost (first-in, first-out method)
      or market. We employ a full absorption procedure using standard cost techniques,
      which approximates actual cost. The standards are customarily reviewed and
      adjusted annually.





7


**Accumulated
      Other Comprehensive Loss -** Accumulated
      other comprehensive loss consists entirely of unrealized loss on the investment
      in available for sale securities. The components of comprehensive loss for
      the
      three-month periods ended March 31, 2007 and 2006 are as follows:





**Three
                Months Ended****March
                31, 2007****2007**
            
            **2006**Net
                loss
            
            $
            5,181,467
            
            $
            4,560,064Unrealized
                gain on investment in availablefor
                sale securities, net of taxes of $0
            
            
            (184,800
            )
            
            (46,000
            )Comprehensive
                loss
            
            $
            4,996,667
            
            $
            4,514,064




**Long-Lived
      Assets -** We
      evaluate the carrying value of long-term assets, including intangibles, when
      events or circumstance indicate the existence of a possible impairment, based
      on
      projected undiscounted cash flows, and recognize impairment when such cash
      flows
      will be less than the carrying values. Measurement of the amounts of
      impairments, if any, is based upon the difference between carrying value and
      fair value. Events or circumstances that could indicate the existence of a
      possible impairment include obsolescence of the technology, an absence of market
      demand for the product, and/or continuing technology rights protection.





**Deferred
      Income Taxes -** We
      use
      the asset and liability approach for financial accounting and reporting for
      income taxes. Deferred income taxes are provided for temporary differences
      in
      the bases of assets and liabilities as reported for financial statement purposes
      and income tax purposes. We have recorded a valuation allowance against all
      net
      deferred tax assets. The valuation allowance reduces deferred tax assets to
      an
      amount that represents management’s best estimate of the amount of such deferred
      tax assets that more likely than not will be realized.





**Revenue
      Recognition** - We
      recognize revenue when persuasive evidence of an arrangement exists, delivery
      has occurred or service has been performed, the fee is fixed and determinable,
      and collectibility is probable.  Our revenues were derived
      from product sales, commercial collaborations and contracts and
      grants.  Revenue for product sales is recognized upon delivery of the
      product, unless specific contractual terms dictate otherwise. Based on the
      specific terms and conditions of each contract/grant, revenues are recognized
      on
      a time and materials basis, a percentage of completion basis and/or a completed
      contract basis. Revenue under contracts based on time and materials is
      recognized at contractually billable rates as labor hours and expenses are
      incurred. Revenue under contracts based on a fixed fee arrangement is recognized
      based on various performance measures, such as stipulated milestones.  As
      these milestones are achieved, revenue is recognized.  From time to time,
      facts develop that may require us to revise our estimated total costs or
      revenues expected.  The cumulative effect of revised estimates is recorded
      in the period in which the facts requiring revisions become known.  The
      full amount of anticipated losses on any type of contract is recognized in
      the
      period in which it becomes known. Payments received in advance relating to
      the
      future performance of services or delivery of products are deferred until the
      performance of the service is complete or the product is shipped. Upfront
      payments received in connection with certain rights granted in contractual
      arrangements are deferred and amortized over the related time period over which
      the benefits are received.





**Overhead
      Allocation** -
      Facilities overhead, which is comprised primarily of occupancy and related
      expenses, is initially recorded in general and administrative expenses and
      then
      allocated to research and development and product inventories based on labor
      costs.





**Net
      Loss Per Common Share**  -
      Basic
      loss per share is computed using the weighted average number of common shares
      outstanding during the period.  Diluted loss per share is computed using
      the weighted average number of common and potentially dilutive shares
      outstanding during the period.  Potentially dilutive shares consist of the
      incremental common shares issuable upon the exercise of stock options and
      warrants.  Potentially dilutive shares are excluded from the computation if
      their effect is anti-dilutive.  We had a net loss for all periods presented
      herein; therefore, none of the stock options and warrants outstanding during
      each of the periods presented were included in the computation of diluted loss
      per share as they were anti-dilutive.





8


**Recent
      Accounting Pronouncements** - In
      April 2007, the Financial Accounting Standards Board ("FASB") issued Statement
      of Financial Accounting Standards No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* (“SFAS
      159”), which will become effective for the first fiscal year that begins after
      November 15, 2007. This statement permits entities to choose to measure many
      financial instruments and certain other items at fair value that are not
      currently required to be measured at fair value. Any unrealized gains and losses
      associated with the instruments or other balances for which the fair value
      option has been elected are reported in earnings at each subsequent reporting
      date. We
      do not
      believe the adoption of SFAS 159 will have a material impact on our financial
      position, results of operations or cash flows.




**Reclassifications
      -** ****** Certain
      reclassifications have been made to prior period amounts to conform to
      classifications adopted in the current period.





**Note
      3. Investment in Available for Sale Securities**





Investments
      in available for sale securities (short-term) consist of auction rate corporate
      notes. The notes are long-term instruments with expiration dates through 2041.
      Interest is settled and the rate is reset every 7 to 28 days.





Investment
      in available for sale securities (long-term) consists of 240,000 shares of
      Spectrum Pharmaceuticals, Inc. (“Spectrum”) common stock. Although the Spectrum
      shares are eligible for resale under Rule 144, the Company currently intends
      to
      hold them indefinitely. Additionally, 140,000 of the 240,000 shares are subject
      to a contractual provisions preventing sale prior to June 2007. The shares
      were
      received as partial payment of licensing fees when Spectrum entered into a
      license agreement for RenaZorb in January 2005 and in payment of the first
      milestone achieved in June 2006. On receipt, the shares were recorded at their
      market value of $1,138,200 as measured by their closing price on the Nasdaq
      Capital Market. At March 31, 2007, their fair value was approximately
      $1,504,800, representing an unrealized holding gain of approximately $366,600.





**Note
      4. Product Inventories**





Product
      inventories consist of the following:





**March
                31,**
              **2007**
            
            **December
                31,**
              **2006**Raw
                Materials
            
            $
            769,143
            
            $
            -Work
                in Process
            
            
            -
            
            
            112,500Finished
                Goods
            
            
            250,456
            
            
            -Demo
                Units
            
            
            -
            
            
            57,165Total
                Product Inventories
            
            $
            1
                ,019,599
            
            $
            169,666





As
      products reach the commercialization stage, the related inventory is recorded.
      The costs associated with products undergoing research and development are
      expensed as incurred. As of March 31, 2007, inventory consisted of the labor,
      materials, and overhead to produce the battery packs associated with the
      $1,040,000 Phoenix purchase order. As of December 31, 2006, work in process
      consisted primarily of battery cells and modules in various stages of the
      manufacturing process.




**Note
      5. Patents**





Our
      patents are associated with the nanomaterials and titanium dioxide pigment
      technology. We are amortizing these assets over their useful lives. The
      amortized patents balances as of March 31, 2007 and December 31, 2006
      were:





**March
                31,**
              **2007**
            
            **December
                31,**
              **2006**Patents
                and patent applications
            
            $
            1,517,736
            
            $
            1,517,736Less
                accumulated amortization
            
            
            (733,692
            )
            
            (712,488
            )Total
                patents and patent applications
            
            $
            784,044
            
            $
            805,248





The
      weighted average amortization period for patents is approximately 16.5 years.
      Amortization expense, which
      represents the amortization relating to the identified amortizable patents,
      was
      $21,204 for the three months ended March 31, 2007 and 2006. For each of the
      next
      five years, amortization expense relating to patents is expected to be
      approximately $85,000 per year. Management believes the net carrying amount
      of
      patents will be recovered by future cash flows generated by commercialization
      of
      the titanium processing technology.





9


**Note
      6.** **Notes
      Receivable**





On
      December 31, 2006, we received a $330,000 unsecured note receivable from Phoenix
      Motorcars, Inc. in connection with the sale of battery packs, which bears
      interest at 10.5%. The principal and interest are due by December 30, 2008
      with
      no pre-payment penalty. The balance of the note including accrued interest
      was
      $338,654 at March 31, 2007.





**Note
      7. Notes Payable**





The
      current and long term amount of the note payable are as follows:





**March
                31,**
              **2007**
            
            **December
                31,**
              **2006**Note
                payable to BHP MineralsInternational,
                Inc.
            
            $
            1,800,000
            
            $
            2,400,000Less
                current portion
            
            
            (600,000
            )
            
            (600,000
            )Long-term
                portion of notes payable
            
            $
            1,200,000
            
            $
            1,800,000





The
      note
      payable to BHP Minerals International, Inc., in the face amount of
      $3,000,000, was
      entered into on August 8, 2002 and is secured by the property we acquired The
      first two payments of $600,000 of principal plus accrued interest were due
      and
      paid on February 8, 2006 and February 8, 2007. Additional payments of $600,000
      plus accrued interest are due annually on February 8, 2008 through
      2010.





**Note
      8.** **Stock-Based
      Compensation**





We
      have a
      stock incentive plan, administered by the Board of Directors, which provides
      for
      the granting of options and restricted shares to employees, officers, directors
      and other service providers of the Company. Options granted under the plan
      generally are granted with an exercise price equal to the market value of a
      common share at the date of grant, have five- or ten-year terms and typically
      vest over periods ranging from immediately to three years from the date of
      grant. The estimated fair value of equity-based awards, less expected
      forfeitures, is amortized over the awards’ vesting period utilizing the graded
      vesting method. Under this method, unvested amounts begin amortizing at the
      beginning of the month in which the options are granted.





The
      total
      number of shares authorized to be granted under the 2005 stock plan is
      3,000,000. Prior stock option plans, which are now terminated, authorized a
      total of 6,600,000 shares, of which options for 5,745,500 were granted and
      options for 1,895,600 are outstanding unexercised at March 31, 2007. The total
      compensation cost charged in connection with these plans was $993,074 and
      $848,843 for the quarter ending March 31, 2007 and March 31, 2006, respectively.
      Of this amount, $149,777 and $116,304 were recognized in connection with
      restricted stock and options granted to non-employees for the quarter ending
      March 31, 2007 and March 31, 2006, respectively.





**Stock
      Options**





In
      calculating compensation related to stock option grants, the fair value of
      each
      stock option is estimated on the date of grant using the Black-Scholes
      option-pricing model and the following weighted average
      assumptions:





**Three
                Months Ended**
            
            **Three
                Months Ended****March
                31, 2007**
            
            **March
                31, 2006**Dividend
                yield
            
            
            None
            
            
            NoneExpected
                volatility
            
            
            87%
            
            
            93%Risk-free
                interest rate
            
            
            4.6%
            
            
            4.7%Expected
                life (years)
            
            
            4.84
            
            
            4.67





10


A
      summary
      of the changes in stock options outstanding under our equity-based compensation
      plans during the quarter ended March 31, 2007 is presented below:





**Weighted****Weighted**
            
            **Average****Average**
            
            **Remaining**
            
            **Aggregate****Exercise**
            
            **Contractual**
            
            **Intrinsic****Shares**
            
            **Price**
            
            **Term
                (Years)**
            
            **Value**Outstanding
                at January 1, 2007
            
            
            3,278,222
            
            $
            3.06
            
            
            5.9
            
            $
            1,366,105Granted
            
            
            1,302,882
            
            
            2.10Exercised
            
            
            (45,833
            )
            
            1.23Forfeited/Expired
            
            
            (23,147
            )
            
            1.09Outstanding
                at March 31, 2007
            
            
            4,512,124
            
            $
            2.96
            
            
            6.9
            
            $
            2,435,882Exercisable
                at March 31, 2007
            
            
            3,053,611
            
            $
            3.05
            
            
            5.7
            
            $
            1,850,664





Shares
      issued to non-employees reflected in the table above include 605,000 shares
      outstanding at January 1, 2007, and 92,000 shares granted resulting in 697,000
      shares outstanding and 560,667 exercisable at March 31, 2007.





The
      weighted average grant date fair value of options granted was $1.86 and $2.33
      during the quarter ended March 31, 2007 and March 31, 2006, respectively. The
      total intrinsic value of options exercised was $65,008 and $63,325 during the
      quarter ended March 31, 2007 and March 31, 2006, respectively.





A
      summary
      of the status of non-vested shares at March 31, 2007 and changes during the
      quarter ended March 31, 2007 is presented below:




**Weighted****Average****Grant
                Date****Shares**
            
            **Fair
                Value**Non-vested
                shares at January 1, 2007
            
            
            877,542
            
            $
            1.98Granted
            
            
            1,302,882
            
            
            2.10Vested
            
            
            (716,494
            )
            
            1.00Forfeited/Expired
            
            
            (5,417
            )
            
            3.26Non-vested
                shares at March 31, 2007
            
            
            1,458,513
            
            $
            2.78




As
      of
      March 31, 2007, there was $1,532,515 of total unrecognized compensation cost
      related to non-vested options granted under the plans. That cost is expected
      to
      be recognized over a weighted average period of .7 years as of March 31, 2007.
      The total fair value of shares vested was $1,014,603 and $1,582,880 during
      the
      quarter ended March 31, 2007 and March 31, 2006, respectively. Cash received
      from stock option exercises was $80,391 and $53,975 during the quarter ended
      March 31, 2007 and March 31, 2006, respectively.





**Restricted
      Stock**





Our
      stock
      incentive plan provides for the granting of other incentive awards in addition
      to stock options. During the quarter ended March 31, 2007, the Board of
      Directors did not grant any shares of restricted stock under the plan. During
      the quarter ended March 31, 2006, the Board of Directors granted 36,000 shares
      of restricted stock under the plan with a weighted average fair value of $3.39
      per share. Restricted shares have the same voting and dividend rights as the
      Company’s unrestricted common shares, vest over a two-year period and are
      subject to the employee’s continued service to the Company. Compensation cost
      for restricted stock is recognized in the financial statements on a pro rata
      basis over the vesting period.





11





A
      summary
      of the changes in restricted stock outstanding during the quarter ended March
      31, 2007 is presented below:





**Weighted****Average****Grant
                Date****Shares**
            
            **Fair
                Value**Non-vested
                shares at January 1, 2007
            
            
            120,207
            
            $
            2.96Granted
            
            
            -
            
            
            -Vested
            
            
            -
            
            
            -Forfeited/Expired
            
            
            (4,000
            )
            
            2.81Non-vested
                shares at March 31, 2007
            
            
            116,207
            
            $
            2.97





Non-vested
      shares relating to non-employees reflected in the table above include 81,875
      shares outstanding at January 1, 2007 and at March 31, 2007.





As
      of
      March 31, 2007 we had $344,777 of total unrecognized compensation expense,
      net
      of estimated forfeitures, related to restricted stock which will be recognized
      over the weighted average period of 1.9 years.




**Note
      9. Other Transactions**





In
      March
      2007, The AES Corporation (“AES”), one of the world’s largest global power
      companies, privately purchased 895,523 unregistered common shares of the Company
      at a price of $3.35 per share. Total proceeds received relating to the purchase
      were $3,000,000. No underwriting commission was paid in connection with this
      transaction. The Company agreed to prepare and file a registration statement
      to
      register the shares within 30 days of the closing date of the transaction,
      which
      was effective on March 5, 2007. Due to additional time required by AES to review
      the registration statement and prepare related documents, the registration
      statement was not filed until April 10, 2007.





**Note
      10.** **Income
      Taxes**




In
      June
      2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
      (FIN) No. 48 “Accounting for Uncertainty in Income Taxes- an interpretation of
      FASB Statement 109”. FIN 48 establishes a single model to address accounting for
      uncertain tax positions. FIN 48 clarifies the accounting for income taxes by
      prescribing a minimum recognition threshold a tax position is required to meet
      before being recognized in the financial statements. FIN 48 also provides
      guidance on de-recognition, measurement classification, interest and penalties,
      accounting in interim periods, disclosure and transition. Upon adoption as
      of
      January 1, 2007, we had no uncertain tax positions.  However, in reviewing
      the U.S. and Canadian income tax treatment of certain expenses we concluded
      that
      errors had been made in the allocation of those expenses between the U.S. and
      Canadian entities.




Based
      on
      our review, we determined that the gross amount of the Canadian deferred tax
      asset is overstated by approximately $1 million. This deferred tax asset has
      been fully reserved and, therefore, there will be no net income tax affect
      on
      the financial statements relating to this correction. The Canadian net operating
      loss will be reduced by approximately $2.8 million as a result of filing amended
      returns.




For
      U.S.
      tax purposes, the gross deferred tax asset has been understated for expense
      items that should be recorded on the U.S. books. Although the gross amount
      of
      the deferred tax asset will be increased as a result of the expenses to be
      recorded on the U.S. books, the additional amount of the deferred tax
      asset will also be fully reserved. The additional expenses to be recorded
      on the U.S. books during 2007 will increase the U.S. net operating loss by
      approximately $1.6 million.





**Note
      11. Related Party Transactions**





In
      January 2007, we entered into a multi-year purchase and supply agreement with
      Phoenix Motorcars, Inc. (“Phoenix”) for up to 500 battery pack systems. The
      initial order of battery pack systems, valued at $1,040,000, has been received
      and was expected to ship in March and April 2007. Due to a delay in receipt
      of
      the pre-payment amounts due from Phoenix pending their receipt of additional
      funding, no shipments were made in March or April. This order is now expected
      to
      ship by the end of the second quarter. Total accounts receivable and long term
      notes receivable including accrued interest (see Note 7) due from Phoenix at
      March 31, 2007 totaled $96,276 and $338,654, respectively.





12


Additionally,
      Phoenix issued 1,000,000 shares of its common stock in consideration for the
      three-year exclusivity agreement within the United States of America included
      in
      the contract. Phoenix must meet minimum battery pack purchases, annually, to
      maintain the limited exclusivity agreement through its expiration in December
      2009. The common stock shares received represent a 16.6% ownership interest
      in
      Phoenix. The investment was recorded at $106,518 (see Note 3) with the offset
      to
      deferred revenue, which will be recognized on a straight-line basis over the
      three year term of the exclusivity period. Total revenue of $8,876 was
      recognized during the three month period ended March 31, 2007 and the ending
      balance of deferred revenue was $97,642.





**Note
      12. Business Segment Information**





Management
      views the Company as operating in four business segments: Performance Materials,
      Life Sciences, Advanced Materials and Power Systems (“ AMPS”)
      and an Altair Hydrochloride Pigment Process Division (“AHP”). Two of these
      divisions were formed in the fourth quarter of 2006, AMPS and AHP. The activity
      relating to these business units was previously included in Performance
      Materials. For all quarters presented, this activity has been reclassified
      out
      of Performance Materials and reported in the new business units.





The
      Performance Materials segment produces advanced materials for coatings, sensors,
      alternative energy devices and materials for improving process technologies.
      Beginning in the first quarter of 2007, sales of nano-structured lithium
      titanate spinel ("LTO") were moved to Performance Materials out of the AMPS
      segment. All previous activity has been reclassed accordingly. The Life Sciences
      segment produces pharmaceutical products, drug delivery products and dental
      materials. The AMPS segment develops,
      produces, and sells nanoTitanate, NanoSafe battery cells, and battery packs
      and
      provides related design and test services. The AHP segment markets and licenses
      our titanium dioxide pigment production technology.





The
      accounting policies of these business segments are the same as described in
      Note
      2 to the unaudited condensed consolidated financial statements. Reportable
      segment data reconciled to the consolidated financial statements as of and
      for
      the three-month period ended March 31, 2007 and March 31, 2006 is as
      follows:





**Depreciation****Loss
                From**
            
            **and****Three
                Months Ended**
            
            **Net
                Sales**
            
            **Operations**
            
            **Amortization**
            
            **Assets****March
                31, 2007:**Performance
                Materials
            
            $
            546,732
            
            $
            295,064
            
            $
            160,688
            
            $
            5,339,327AMPS
            
            
            263,006
            
            
            1,476,103
            
            
            111,500
            
            
            4,543,798AHP
            
            
            319,871
            
            
            277,287
            
            
            119,876
            
            
            2,471,124Life
                Sciences
            
            
            11,323
            
            
            123,875
            
            
            6,520
            
            
            1,693,734Corporate
                and other
            
            
            -
            
            
            3,317,137
            
            
            32,475
            
            
            27,503,926Consolidated
                Total
            
            $
            1,140,932
            
            $
            5,489,466
            
            $
            431,058
            
            $
            41,551,909**March
                31, 2006:**Performance
                Materials
            
            $
            154,740
            
            $
            792,991
            
            $
            254,048
            
            $
            5,315,626AMPS
            
            
            110,926
            
            
            887,838
            
            
            32,814
            
            
            2,436,236AHP
            
            
            279,630
            
            
            135,902
            
            
            -
            
            
            376,196Life
                Sciences
            
            
            -
            
            
            136,527
            
            
            2,353
            
            
            598,727Corporate
                and other
            
            
            -
            
            
            2,772,435
            
            
            27,656
            
            
            20,954,209Consolidated
                Total
            
            $
            545,296
            
            $
            4,725,693
            
            $
            316,871
            
            $
            29,680,994





13


In
      the
      table above, corporate and other expense in the Loss From Operations column
      includes such expenses as investor relations, business consulting, general
      legal
      expense, accounting and audit, general insurance expense, shareholder
      information expense and general office expense.





For
      the
      three months ended March 31, 2007, we had sales to three major customers, each
      of which accounted for 10% or more of revenues. Total sales to these customers
      for the three months ended March 31, 2007 and the balance of their accounts
      receivable at March 31, 2007 were as follows:





**Sales
                - 3 Months Ended**
            
            **Accounts
                Receivable at****Customer**
            
            **March
                31, 2007**
            
            **March
                31, 2007****Performance
                Materials Division:**University
                of Las Vegas Research Foundation
            
            $
            216,537
            
            $
            211,237Department
                of Energy
            
            $
            188,953
            
            $
            76,451**AMPS
                Division:**Department
                of Energy
            
            $
            178,415
            
            $
            25,201**AHP
                Division:**Western
                Oil Sands
            
            $
            319,872
            
            $
            200,430





For
      the
      three months ended March 31, 2006, we had sales to three major customers, each
      of which accounted for 10% or more of revenues. Total sales to these customers
      for the three months ended March 31, 2006 and the balance of their accounts
      receivable at March 31, 2006 were as follows:





**Sales
                - 3 Months Ended**
            
            **Accounts
                Receivable at****Customer**
            
            **March
                31, 2006**
            
            **March
                31, 2006****Performance
                Materials Division:**University
                of Las Vegas Research Foundation
            
            $
            80,806
            
            $
            53,850**AMPS
                Division:**National
                Science Foundation
            
            $
            81,406
            
            $
            85,489**AHP
                Division:**Western
                Oil Sands
            
            $
            279,630
            
            $
            253,111




Revenues
      for the three-month periods ended March 31, 2007 and 2006 by geographic area
      were as follows:





**Revenues
                -**
            
            **Revenues
                -****3
                Months Ended**
            
            **3
                Months Ended****Geographic
                information (a):**
            
            **March
                31, 2007**
            
            **March
                31, 2006**United
                States
            
            $
            742,237
            
            $
            212,614Canada
            
            
            321,872
            
            
            282,802Other
                foreign countries
            
            
            76,823
            
            
            49,880Total
            
            $
            1,140,932
            
            $
            545,296




(a)
                Revenues are attributed to countries based on location of
                customer.





14


**Note
      13. Subsequent Events**





On
      April
      24, 2007, the Company and The Sherwin-Williams Company (“Sherwin”) entered into
      agreements related to the formation of AlSher Titania LLC, a Delaware limited
      liability company (“AlSher”). AlSher is a joint venture combining certain
      technologies of the Company and Sherwin in order to develop and produce titanium
      dioxide pigment for use in paint and coatings and nano titanium dioxide
      materials for use in a variety of applications, including those related to
      removing contaminants from air and water.





The
      agreements include a Contribution Agreement dated April 24, 2007 (the
“Contribution Agreement”) among Altairnano, Inc., an indirect wholly-owned
      subsidiary of the Company (“Altairnano”), Sherwin and AlSher. Pursuant to the
      Contribution Agreement, Altairnano contributed to AlSher Titania the rights
      set
      forth in the Altair License described below and certain pilot plants assets
      with
      a book value net of depreciation of $3,110,000, and Sherwin agreed to contribute
      to AlSher cash and a license agreement related to a technology for the
      manufacture of titanium dioxide using the digestion of ilmenite in hydrochloric
      acid.





Pursuant
      to a License Agreement dated April 24, 2007 (the “Altair License”) between
      Altairnano and AlSher, Altairnano granted AlSher an exclusive license to use
      Altairnano’s technology (including its hydrochloride pigment process) for the
      production of titanium dioxide pigment and other titanium containing materials
      (other than battery or nanoelectrode materials). Altairnano receives no
      consideration for the license granted to AlSher other than its ownership
      interest in AlSher. Improvements in the technology are licensed back to
      Atlairnano subject to a royalty equal to the greater of 5% of the net sales
      price of derivative products or 10% of the gross margin on such products. Absent
      early termination, the terms of the Altair License with respect to each licensed
      patent extends through the expiration of such patent. The Altair License also
      addresses ownership of existing and developed intellectual property, rights
      with
      respect to maintenance and protection of underlying patents and intellectual
      property, early termination, confidentiality and other standard items.





As
      part
      of the transaction, the Company agreed to guarantee the obligations of its
      subsidiary, Altairnano Inc., under the various agreements. The parties entered
      into an operating agreement, supply agreements, additional license agreement,
      a
      services agreement and other documents. As a condition to enter into the second
      phase of the joint venture, the Company agreed to complete its pigment pilot
      processing plant and related development activities by January 2008. The costs
      associated with this effort are expected to be partially reimbursed by
      AlSher.








15




**Item** **2.** **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION** **AND RESULTS OF OPERATIONS**




**Forward-Looking
      Statements**




This
      Quarterly Report on Form 10-Q (this “Report”) contains various forward-looking
      statements. Such statements can be identified by the use of the forward-looking
      words "anticipate," "estimate," "project," "likely," "believe," "intend,"
      "expect," or similar words. These statements discuss future expectations,
      contain projections regarding future developments, operations, or financial
      conditions, or state other forward-looking information. When considering such
      forward-looking statements, you should keep in mind the risk factors noted
      in
“Item 1A. Risk Factors” and other cautionary statements throughout this Report
      and our other filings with the Securities and Exchange Commission. You should
      also keep in mind that all forward-looking statements are based on management’s
      existing beliefs about present and future events outside of management’s control
      and on assumptions that may prove to be incorrect. If one or more risks
      identified in this Report or any other applicable filings materializes, or
      any
      other underlying assumptions prove incorrect, our actual results may vary
      materially from those anticipated, estimated, projected, or
      intended.




**Overview**





The
      following discussion summarizes the material changes in our financial condition
      between December 31, 2006 and March 31, 2007 and the material changes in our
      results of operations between the three-month periods ended March 31, 2007
      and
      March 31, 2006. This discussion should be read in conjunction with Management’s
      Discussion and Analysis of Financial Condition and Results of Operations
      included in the Company’s Annual Report on Form 10-K for the year ended December
      31, 2006.





We
      are a
      Canadian corporation, with principal assets and operations in the United States,
      whose primary business is developing and commercializing nanomaterial and
      titanium dioxide pigment technologies. We are organized into four divisions,
      an
      Advanced Materials and Power Systems Division, or AMPS, a Life Sciences
      Division, an Altair Hydrochloride Pigment Process Division, or AHP, and a
      Performance Materials Division. Our research, development, production and
      marketing efforts are currently directed toward four primary market applications
      that utilize our proprietary technologies:





·
            AMPS:
                The design, development, and production of our NanoSafe brand nanoTitanate
                battery cells, batteries, and battery packs as well as related design
                and
                test services.





·
            Life
                Sciences


o
            The
                co-development of RenaZorb, a test-stage active pharmaceutical ingredient,
                which is designed to be useful in the treatment of elevated serum
                phosphate levels in patients undergoing kidney
                dialysis.


o
            The
                co-development of Renalan, a test-stage active pharmaceutical ingredient,
                which is designed to be useful in the treatment of elevated serum
                phosphate levels in animals suffering from chronic renal
                disease.





·
            AHP:
                The marketing and licensing of titanium dioxide pigment production
                technology. In April 2007, the AlSher Titania joint venture was formed
                for
                the purpose of developing and producing titanium dioxide pigment.
                Initial
                pilot plant trials are scheduled to be completed in early 2008 (See
                Subsequent Events Note 13).





·
            Advanced
                Materials





o
            The
                testing, development, marketing and/or licensing of nano-structured
                ceramic powders for use in various application, such as advanced
                performance coatings, air and water purification systems, and nano-sensor
                applications. As part of the AlSher Titania joint venture, an exclusive
                license was granted to AlSher Titania to produce nano titanium dioxide
                materials that will be purchased by the Company for internal development
                and commercial sales (See Subsequent Events Note 13).


o
            The
                development, production and sale for testing purposes of electrode
                materials for use in a new class of high performance lithium ion
                batteries
                called lithium nanoTitanate batteries.





16




We
      also
      provide contract research services on select projects where we can utilize
      our
      resources to develop intellectual property and/or new products and technology.





Our
      revenues have been, and we expect them to continue to be, generated by license
      fees, product sales, commercial collaborations and contracts and grants. We
      currently have agreements in place to (1) provide research involving a
      technology used in the detection of chemical, biological and radiological
      agents, (2) provide laboratory space and services in connection with testing
      and
      development related to the use of our AHP to produce
      titanium dioxide  pigment
      and pigment-related products from titanium-bearing oil sands, (3)
      supply nano-sized anode and cathode materials for design and development of
      high
      capacity lithium ion battery and super capacitor applications, (4) provide
      research utilizing nanotechnology processes for the production and
      commercialization of solar-based hydrogen technologies, (5)
      produce battery packs, and (6) provide research to further develop battery
      electrode materials, nanosensors, and nanomaterials
      characterization. In
      addition, we have entered into a licensing agreement for RenaZorb, our
      pharmaceutical candidate for treatment of chronic renal failure in humans;
      we
      have licensed all potential pharmaceutical products for animal applications;
      have entered into a joint venture to develop and produce titanium dioxide
      pigment for use in paint and coatings and nano titamium dioxide materials for
      use in a variety of advanced materials applications; and we have made product
      sales consisting principally of battery packs and lithium titanate. Future
      revenues will depend on the success of our contracted projects, the results
      of
      our other research and development work, the success of the RenaZorb and animal
      application  licensees
      in obtaining regulatory approval for the drugs, or other products, the
      successful completion of pilot plant operations in connection with AlSher
      Titania, and the success of our marketing efforts with respect to both product
      sales and technology licenses.





**General
      Outlook**





We
      have
      generated net losses in each fiscal year since incorporation. In fiscal 2006,
      revenues from product sales, commercial collaborations and contracts and grants
      increased significantly, but operating expenses also increased as we added
      employees and committed additional funds to our customer contracts, battery
      initiative, pigment process technology and sales and marketing efforts. Our
      gross
      profit margins on customer contracts for research and development work are
      very
      low, and in order that we may be profitable in the long run, our business plan
      focuses on the development of products and technologies that we expect will
      eventually bring a substantial amount of higher-margin revenues from licensing,
      manufacturing, product sales and other sources. We expect our NanoSafe
      nanoTitanate battery materials to be a source of such higher-margin revenues.
      Consequently, during 2006, we continued to expand the scope of our AMPS Division
      by (1) hiring additional staff and increasing temporary personnel to handle
      production demand (2) leasing additional laboratory and production space in
      Indiana, and (3) acquiring test and production equipment. In
      2007,
      we intend to increase spending for the battery initiative, manufacturing of
      the
      potential drug candidates, and pigment process development.





As
      we
      attempt to significantly expand our revenues from licensing, manufacturing,
      sales and other sources, some of the key near-term events that will affect
      our
      long-term success prospects include the following:





·
            We
                must continue the development work on our nano-structured LTO electrode
                materials, produce sufficient quantities of batteries and battery
                cells
                for test purposes, obtain satisfactory test results and successfully
                market the materials. Toward that end, we have hired additional employees,
                have constructed test and production facilities and are purchasing
                equipment. Our intent is to initially market our nano-structured
                lithium
                titanate spinel (“LTO”) electrode materials to the automotive industry
                where we must be able to demonstrate to prospective customers that
                our
                nano-structured LTO electrode materials offer significant advantages
                over
                existing technologies.





·
            On
                January 9, 2007, we entered into a multi-year purchase and supply
                agreement with Phoenix Motorcars, Inc. for NanoSafe nanoTitanate
                battery
                packs to be used in electric vehicles produced by Phoenix.
                Contemporaneously, Phoenix placed a firm purchase order for $1,040,000
                in
                NanoSafe nanoTitanate battery packs and projected orders for 2007
                of
                between $16 and $42 million for the remainder of 2007. Shipments
                of
                battery packs relating to the firm order will not be made until the
                second
                quarter of 2007. The agreement provides Phoenix with limited exclusivity
                in the all-electric vehicle market during a three-year period. In
                order to
                maintain exclusivity, Phoenix must purchase at least $16 million
                in
                battery packs during 2007. Phoenix must be successful in their business
                strategy and we must build and deliver battery packs on a scale we
                have
                never before achieved, in order to fully benefit from this purchase
                agreement.






17


·
            Spectrumand
                Elancomust
                begin the testing and application processes necessary to receive
                FDAapproval
                of our RenaZorband
                Renalan products, respectively. Toward that end, we must manufacture
                RenaZorb and Renalan under pharmaceutical industry guidelines to
                support
                such testing.




·
            We
                have formed a joint venture with The Sherwin-Williams Company to
                develop
                and produce titanium dioxide pigment for use in paint and coatings.
                The
                success of this joint venture and initial pilot plant trials is integral
                to continuing development and the ultimate commercialization of
                AHP.




Although
      it is not essential that all of these projects be successful in order to permit
      substantial long-term revenue growth, we believe that full commercialization
      of
      several of our technologies will be necessary in order to expand our revenues
      enough to create a likelihood of our becoming profitable in the long term.
      We
      are optimistic with respect to our current key projects, as well as others
      we
      are pursuing, but recognize that, with respect to each, there are development,
      marketing, partnering and other risks to be overcome.





**Recent
      Business Developments**





**Advanced
      Materials and Power Systems Division**





In
      January 2007, we entered into a multi-year purchase and supply agreement with
      Phoenix for lithium nanoTitanate battery packs to be used in electric vehicles
      produced by Phoenix. Contemporaneously, Phoenix placed firm purchase orders
      for
      35 kilowatt hour (“KWh”) battery pack systems valued at $1,040,000 to be
      delivered in March and April of 2007 and placed an indicative blanket purchase
      order for up to 500 battery pack systems to be delivered during 2007 (projected
      value between $16 and $42 million). Due
      to a
      delay in receipt of the pre-payment amounts due from Phoenix pending their
      receipt of additional funding, no shipments were made in March or April. This
      order is now expected to ship by the end of the second quarter. The
      terms
      of the purchase and supply agreement include a three-year exclusivity agreement
      within the United States that provides Phoenix with limited, exclusive use
      of
      our NanoSafe battery packs in four wheeled, all-electric vehicles having a
      gross
      weight up to 6,000 pounds. Phoenix must meet minimum battery pack purchases
      annually to maintain the limited exclusivity agreement. The minimum commitment
      to maintain exclusivity for 2007 would provide $16 million in battery pack
      sales. Our NanoSafe battery packs manufactured for hybrid electric vehicles
      and
      plug-in hybrid electric vehicles are excluded from the exclusivity agreement. Phoenix
      issued 1,000,000 shares of its common stock to us in consideration for the
      three-year exclusivity agreement described above. The common stock shares
      received represented a 16.6% ownership interest in Phoenix at the time of
      purchase and were valued at $106,518 (Refer to Note 3 to the Consolidated
      Unaudited Financial Statements).





In
      February 2007, we formed a strategic alliance with UQM Technologies, Inc.,
      a
      developer and manufacturer of power dense, high efficiency electric motors,
      generators and power electronic controllers for the automotive, aerospace,
      medical, military and industrial markets. The alliance pairs UQM’s electric
      motor, power generator and power electronic products that are small,
      lightweight, highly efficient, and offer high torque and high speed in a single
      package, with Altairnano’s NanoSafe Ô battery
      packs that are safe, possess rapid charge and discharge rates, have exceptional
      performance at high and low temperature extremes and exhibit long cycle life.
      The transportation market is expected to experience rapid technological change
      resulting in further electrification of vehicles. As a result, a wide array
      of
      possible product opportunities are expected to develop in electric
      transportation and other related markets, including products for electric
      propulsion, power generation, power management and conversion and on-board
      energy storage. By collaborating on product development opportunities, both
      companies can potentially accelerate the commercialization of their proprietary
      technologies as well as develop optimized solutions that require motive power,
      on-board energy storage and power generation.





**AHP
      Division**





In
      April
      2007, a new company, called AlSher Titania LLC.(“AlSher”), was formed. 
AlSher represents a joint venture with The Sherwin-Williams Company, one of
      the
      world's leading manufacturers of paint and durable coatings. AlSher will combine
      the Altairnano Hydrochloride Pigment (AHP) process and the Sherwin-Williams
      Hychlor Pigment (SWHP) process and other technologies to develop and produce
      high quality titanium dioxide pigment for use in paint and coatings, and nano
      titanium dioxide materials for use in a variety of applications including those
      related to removing contaminants from air and water.




18


The
      new
      AlSher Titania pigment process is designed to produce titanium dioxide pigment
      at a significantly lower price point — both in terms of capital outlay and
      operating costs — as compared to sulfate and chloride-based technologies
      currently in use.  Equally important is the improved environmental
      acceptability of the new materials and their production processes, as compared
      to current technologies. White titanium dioxide pigment is mainly used in the
      production of paints, plastics, and paper and the total world market is valued
      at approximately $9 billion US, with a projected annual growth rate of
      approximately three percent.





**Performance
      Materials**





In
      January 2007, Sulzer Metco placed a $75,000 order for TiO 2 thermal
      spray grade powder to be delivered during the first and second quarters of
      2007.
      The thermal spray grade powder material will support a product roll-out by
      Sulzer Metco scheduled for May 2007.





During
      March 2007 we executed a $356,000 subcontract with the University of Nevada,
      Las
      Vegas for follow-on work related to the solar hydrogen project being funded
      by
      the U.S. Department of Energy. Work is scheduled through December 31, 2007.
      The
      development project will involve enhancement of the solar cell to be used at
      the
      proposed hydrogen filling station located in Las Vegas, Nevada. The solar device
      converts light and water directly into hydrogen fuel in a highly efficient,
      renewable and carbon free process using photo-catalytic nano-crystalline thin
      films to gather photons of incident light and convert them into electrons to
      directly split water into its constituent elements.





**Life
      Sciences**





In
      December 2006, Elanco Animal Health Division of Eli Lilly and Company completed
      a proof of concept study relating to our Renalan drug candidate product for
      the
      treatment of renal disease in companion animals. As a result, we earned a
      $100,000 milestone payment under our license agreement with Elanco. We continue
      to support Elanco and Spectrum in development of Renalan and RenaZorb,
      respectively, and seeking product approvals from the FDA.





**Liquidity
      and Capital Resources**




**Current
      and Expected Liquidity**





Historically,
      we have financed operations primarily through the issuance of equity securities
      (common shares, convertible debentures, stock options and warrants) and by
      the
      issuance of debt. We do not presently have any plans to pursue additional debt
      or equity financing during 2007 however, we may be required to raise additional
      capital in the near term and reserve the right to do so in connection with
      a
      business opportunity, transaction or other event not anticipated by our current
      budget. We
      do not
      have any commitments with respect to future financing and may, or may not,
      be
      able to obtain such financing on reasonable terms, or at all. We have a single
      note payable in the principal amount of $3,000,000 that does not contain any
      restrictive covenants with respect to the issuance of additional debt or equity
      securities by Altair. The first two payments of $600,000 of principal plus
      accrued interest were due and paid on February 8, 2006 and February 8, 2007.
      Future payments of principal and interest are due annually on February 8, 2008
      through 2010.





Our
      cash
      and short-term investments decreased by $2,461,180, from $27,220,357 at December
      31, 2006 to $24,759,177 at March 31, 2007, due primarily to the incurrence
      of
      operating expenses (approximately $4,200,000) purchases of property and
      equipment (approximately $704,000) and payment of notes payable ($600,000).
      This
      decrease was partially offset by the receipt of $3,000,000 in connection with
      the private placement of common shares purchased by The AES Corporation in
      March
      2007.





During
      the quarter ended March 31, 2007, our cash used in operations was $4,237,269.
      Unusual or infrequently occurring payments made during the first quarter of
      2007
      included annual employee bonus payments of $ 461,014 . The
      amount of cash we use in operations is dependent on the amount and mix of
      revenues we generate. In the first quarter of 2007, revenues were $1,140,932,
      which included $177,390 of product sales. Although we expect quarterly revenues
      to increase during the remainder of the year, and we expect product sales to
      become a larger percentage of the sales mix, we cannot be certain that this
      will
      occur.





Our
      objective is to manage cash expenditures in a manner consistent with rapid
      product development that leads to the generation of revenues in the shortest
      possible time. We believe we have adequate cash resources, and availability
      of
      additional capital if needed, to continue product development until
      higher-margin revenues and positive cash flow can be generated.





19


At
      May 4,
      2007, we had 70,020,626
      common shares issued and outstanding. As of that same date, there were
      outstanding warrants to purchase up to 3,256,525 common shares and options
      to
      purchase up to 4,637,124 common
      shares.





**Capital
      Commitments**





The
      following table discloses aggregate information about our contractual
      obligations and the periods in which payments are due as of March 31,
      2007:




**Less
                Than**
            
            
            
            
            
            **After****Contractual
                Obligations**
            
            **Total**
            
            **1
                Year**
            
            **1-3
                Years**
            
            **4-5
                Years**
            
            **5
                Years**Notes
                Payable
            
            $
            1,800,000
            
            $
            600,000
            
            $
            1,200,000
            
            $
            -
            
            $
            -Interest
                on notes payable
            
            
            252,000
            
            
            126,000
            
            
            126,000
            
            
            -
            
            
            -Contractual
                Service Agreements
            
            
            1,570,760
            
            
            1,488,529
            
            
            82,231
            
            
            -
            
            
            -Facilities
                and Property Leases
            
            
            352,754
            
            
            209,833
            
            
            142,921
            
            
            -
            
            
            -Unfulfilled
                Purchase Orders
            
            
            2,657,658
            
            
            2,657,658
            
            
            -
            
            
            -
            
            
            -Total
                Contractual Obligations
            
            $
            6,633,172
            
            $
            5,082,020
            
            $
            1,551,151
            
            $
            -
            
            $
            -





In
      connection with the formation of the AlSher Titania joint venture, the Company
      committed to completion of its pigment processing pilot plant and expects to
      commission the plant by late 2007. Total capital expenditures, labor and
      development costs associated with this effort are expected to total
      approximately $ 3.9
      million ,
      which
      will be partially reimbursed by AlSher. Through March 31, 2007, approximately
      $371,000 of costs associated
      with the pigment processing pilot plant have been incurred.





We
      also
      intend to purchase equipment for our Reno, Nevada facility for use in the
      development and expansion of our current advanced battery materials production
      capabilities. We expect to spend approximately $ 350,000 for this
      equipment and approximately $200,000 for down payments on equipment and building
      improvements relating to manufacture of our pharmaceutical products during
      the
      quarter ended June 30, 2007.





**Off-Balance
      Sheet Arrangements**





There
      were no off-balance sheet arrangements at March 31, 2007.





**Critical
      Accounting Policies and Estimates**




Management
      based the following discussion and analysis of our financial condition and
      results of operations on our unaudited condensed consolidated financial
      statements. The preparation of these financial statements requires us to make
      estimates and judgments that affect the reported amounts of assets, liabilities,
      revenue and expenses, and related disclosure of contingent assets and
      liabilities. On an on-going basis, we evaluate our critical accounting policies
      and estimates, including those related to inventory, long-lived assets,
      stock-based compensation, revenue recognition, overhead allocation, allowance
      for doubtful accounts and deferred income taxes. We base our estimates on
      historical experience and on various other assumptions that we believe to be
      reasonable under the circumstances, the results of which form the basis for
      making judgments about the carrying values of assets and liabilities that are
      not readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions.




We
      believe the following critical accounting policies affect the more significant
      judgments and estimates used in the preparation of our consolidated financial
      statements. These judgments and estimates affect the reported amounts of assets
      and liabilities and the reported amounts of revenues and expenses during the
      reporting periods. Changes to these judgments and estimates could adversely
      affect our future results of operations and cash flows.





·
            Product
                Inventories. The Company values its inventories at the lower of cost
                (first-in, first-out method) or market. We employ a full absorption
                procedure using standard cost techniques, which approximates actual
                cost.
                The standards are customarily reviewed and adjusted
                annually.






20


·
            Long-Lived
                Assets. Our long-lived assets consist principally of the nanomaterials
                and
                titanium dioxide pigment assets, the intellectual property (patents
                and
                patent applications) associated with them, and a building.Included
                in these long-lived assets are those that relate to our research
                and
                development process.  These assets are initially evaluated for
                capitalization based on Statement of Financial Accounting Standards
                No. 2,*Accounting
                for Research and Development Costs*. 
                If the assets have alternative future uses (in research and development
                projects or otherwise), they are capitalized when acquired or constructed;
                if they do not have alternative future uses, they are expensed as
                incurred.At
                March 31, 2007, the carrying value of these assets was $12,209,137,
                or 29%
                of total assets. We evaluate the carrying value of long-lived assets
                when
                events or circumstances indicate that impairment may exist. In our
                evaluation, we estimate the net undiscounted cash flows expected
                to be
                generated by the assets, and recognize impairment when such cash
                flows
                will be less than the carrying values. Events or circumstances that
                could
                indicate the existence of a possible impairment include obsolescence
                of
                the technology, an absence of market demand for the product, and/or
                the
                partial or complete lapse of technology rights protection.





·
            Share-Based
                Compensation. We have a stock incentive plan that provides for the
                issuance of common stock options to employees and service providers.
                We
                calculate compensation expense under SFAS 123R using a Black-Scholes
                option pricing model. In so doing, we estimate certain key assumptions
                used in the model. We believe the estimates we use, which are presented
                in
                Note 8 of Notes to Consolidated Financial Statements, are appropriate
                and
                reasonable.





·
            Revenue
                Recognition.We
                recognize revenue when persuasive evidence of an arrangement exists,
                delivery has occurred or service has been performed, the fee is fixed
                and
                determinable, and collectibility is probable, in accordance with
                the
                Securities and Exchange Commission*“Staff
                Accounting Bulletin No. 104 - Revenue Recognition in Financial
                Statements”*. 
                Historically, our revenues have been derived from four sources: license
                fees, commercial collaborations, contract research and development
                and
                product sales.  License fees are recognized when the agreement is
                signed, we have performed all material obligations related to the
                particular milestone payment or other revenue component and the earnings
                process is complete. Revenue for product sales is recognized upon
                delivery
                of the product, unless specific contractual terms dictate otherwise.
                Based
                on the specific terms and conditions of each contract/grant, revenues
                are
                recognized on a time and materials basis, a percentage of completion
                basis
                and/or a completed contract basis. Revenue under contracts based
                on time
                and materials is recognized at contractually billable rates as labor
                hours
                and expenses are incurred. Revenue under contracts based on a fixed
                fee
                arrangement is recognized based on various performance measures,
                such as
                stipulated milestones.  As these milestones are achieved, revenue is
                recognized.  From time to time, facts develop that may require us to
                revise our estimated total costs or revenues expected.  The
                cumulative effect of revised estimates is recorded in the period
                in which
                the facts requiring revisions become known.  The full amount of
                anticipated losses on any type of contract is recognized in the period
                in
                which it becomes known.





·
            Overhead
                Allocation. Facilities overhead, which is comprised primarily of
                occupancy
                and related expenses, is initially recorded in general and administrative
                expenses and then allocated monthly to research and development expense
                and product inventories based on labor costs. Facilities overhead
                allocated to research and development projects may be chargeable
                when
                invoicing customers under certain research and development
                contracts.





·
            Allowance
                for Doubtful Accounts. The allowance for doubtful accounts is based
                on our
                assessment of the collectibility of specific customer accounts and
                the
                aging of accounts receivable.  We analyze historical bad debts, the
                aging of customer accounts, customer concentrations, customer
                credit-worthiness, current economic trends and changes in our customer
                payment patterns when evaluating the adequacy of the allowance for
                doubtful accounts.  From period to period, differences in judgments
                or estimates utilized may result in material differences in the amount
                and
                timing of our bad debt expenses.





·
            Deferred
                Income Taxes. Income taxes are accounted for using the asset and
                liability
                method.  Deferred income tax assets and liabilities are recognized
                for the future tax consequences attributable to differences between
                the
                financial statement carrying amounts of existing assets and liabilities
                and their respective tax bases and operating loss and tax credit
                carry-forwards.  Deferred income tax assets and liabilities are
                measured using enacted tax rates expected to apply to taxable income
                in
                the years in which those temporary differences are expected to be
                recovered or settled.  The effect on deferred income tax assets and
                liabilities of a change in tax rates is recognized in income in the
                period
                that includes the enactment date.  Future tax benefits are subject to
                a valuation allowance when management is unable to conclude that
                its
                deferred income tax assets will more likely than not be realized
                from the
                results of operations.  The Company has recorded a valuation
                allowance to reflect the estimated amount of deferred income tax
                assets
                that may not be realized. The ultimate realization of deferred income
                tax
                assets is dependent upon generation of future taxable income during
                the
                periods in which those temporary differences become deductible. Management
                considers projected future taxable income and tax planning strategies
                in
                making this assessment. Based on the historical taxable income and
                projections for future taxable income over the periods in which the
                deferred income tax assets become deductible, management believes
                there is
                insufficient basis for projecting that the Company will realize the
                benefits of these deductible differences as of March 31, 2007. 
                Management has, therefore, established a full valuation allowance
                against
                its net deferred income tax assets as of March 31,
                2007.





21


**Results
      of Operations**





*Three
      Months Ended March 31, 2007 Compared to Three Months Ended March 31,
      2006*





The
      net
      loss for the quarter ended March 31, 2007, which was the first quarter of our
      2007 fiscal year, totaled $5,181,467 ($.07 per share) compared to a net loss
      of
      $4,560,064 ($.08 per share) in the first quarter of 2006.





Total
      revenues for the quarter ended March 31, 2007 were $1,140,932 compared to
      $545,296 for the same period of 2006. Product
      revenues increased by $169,372, from $8,018 in the first quarter of 2006 to
      $177,390 in the first quarter of 2007. During the first quarter of 2007, we
      recorded approximately $165,400 of product revenues associated with NanoSafe
      nanoTitanate battery materials, alumina and prototype cells. There were no
      comparable product revenues in the first quarter of 2006. Additionally, sales
      of
      other TiO2 related products increased by approximately $4,000 for the quarter
      ending March 31, 2007 over the prior year quarter.





Revenues
      from contracts and grants increased by $409,246, from $207,008 in the first
      quarter of 2006, to $616,254 in the first quarter of 2007. Revenues associated
      with the subcontract with the University of Nevada, Las Vegas increased by
      $135,700 primarily due to equipment billed in the first quarter of 2007.
      Revenues of $367,400 were recorded in connection with the $2.5 million
      Department of Energy earmark in the first quarter of 2007. In the prior year,
      revenues associated with this grant were not recorded until September 2006.
      These increases were offset by $15,300 due to the completion of the Western
      Michigan University grant and by $79,100 due to the completion of a subcontract
      with Rutgers University to provide testing services associated with the National
      Science Foundation grant in 2006.





Cost
      of
      product sales increased by $208,995, from $1,266 in the first quarter of 2006
      to
      $210,262 in the same quarter of 2007. This increase is driven by the changes
      in
      product sales discussed in the paragraph above.





Research
      and development (“R&D”) expenses increased by $1,048,940, from $1,948,387 in
      the first quarter of 2006 to $2,997,327 in the same quarter of 2007. Labor
      and
      overhead costs increased by approximately $492,000 due to the addition of 24
      new
      employees. Expenditures for materials, supplies and other operating costs
      (exclusive of labor) for the battery initiative increased by approximately
      $393,000 and other R&D operations increased by approximately $164,000
      primarily due to costs incurred in connection with the $2.5 million Department
      of Energy earmark that was not effective in the first quarter of
      2006.





Depreciation
      and amortization increased by $114,187, from $316,871 in first quarter of 2006
      to $431,058 in the first quarter of 2007. The increase in depreciation reflects
      the addition of approximately $3,000,000 in lab and production equipment since
      March 2006, primarily relating to expansion of production capabilities at the
      Indiana and Reno facilities.





Interest
      income increased by $132,065, from $211,303 in the first quarter of 2006 to
      $343,368 in the first quarter of 2007 due to an increase in cash available
      for
      investment of approximately $5.4 million that was generated through the sale
      of
      common shares in December 2006 and the private sale of stock to The AES
      Corporation in March 2007.




22


**Item
      3.**  **Quantitative
      and Qualitative Disclosures about Market Risk**





We
      do not
      have any derivative instruments, commodity instruments, or other financial
      instruments for trading or speculative purposes, nor are we presently at
      material risk for changes in interest rates on foreign currency exchange rates.





**Item
      4.**  **Controls
      and Procedures**





(a)  Based
      on
      the evaluation of our "disclosure controls and procedures" (as defined in the
      Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) required by
      paragraph (b) of Rules 13a-15 or 15d-15, our chief executive officer and our
      chief financial officer have concluded that, as of March 31, 2007, our
      disclosure controls and procedures were effective in ensuring that information
      required to be disclosed by the Company in reports that it files under the
      Exchange Act is recorded, processed, summarized and reported within the time
      periods required by governing rules and forms.




(b)  There
      have been no changes in our internal control over financial reporting identified
      in connection with the evaluation required by paragraph (d) of Exchange Act
      Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have
      materially affected, or are reasonably likely to materially affect, our internal
      control over financial reporting.







23




**PART
      II - OTHER INFORMATION**





***Item
      1A. Risk Factors***





**Material
      Changes in Risk Factors**




*The
      Risk Factors set forth below do not reflect any material changes from the “Risk
      Factors” identified in our Annual Report on Form 10-K for the fiscal year ended
      December 31, 2006 (the “Form 10-K”)* *.*





Immaterial
      edits and the financial and other data referenced in the risk factors have
      been
      updated as of a recent practicable date.





**Risk
      Factors**





An
      investment in our common shares and warrants involves significant risks. You
      should carefully consider *the
      risks described in this Report before making an investment decision. Any of
      these risks could materially and adversely affect our business, financial
      condition or results of operations. In such case, you may lose all or part
      of
      your investment. Some factors in this section are forward-looking
      statements.*





***We
      may continue to experience significant losses from
      operations*** .





We
      have
      experienced a loss in every fiscal year since our inception. Our losses from
      operations were $17,681,415 in 2006 and $5,181,467 in the quarter ended March
      31, 2007. Even
      if
      we do generate operating income in one or more quarters in the future,
      subsequent developments in our industry, customer base, business or cost
      structure, or an event such as significant litigation or a significant
      transaction, may cause us to again experience operating losses. We may never
      become profitable for the long-term, or even for any quarter.




***Our
      quarterly operating results have fluctuated significantly in the past and will
      continue to fluctuate in the future, which could cause our stock price to
      decline.***




Our
      quarterly operating results have fluctuated significantly in the past, and
      we
      believe that they will continue to fluctuate in the future, due to a number
      of
      factors, many of which are beyond our control. If in future periods our
      operating results do not meet the expectations of investors or analysts who
      choose to follow our company, our stock price may fall. Factors that may affect
      our quarterly operating results include the following:




•
            fluctuations
                in the size and timing of customer orders from one quarter to the
                next;


•
            timing
                of delivery of our services and products;


•
            addition
                of new customers or loss of existing customers;


•
            our
                ability to commercialize and obtain orders for products we are
                developing;


•
            costs
                associated with developing our manufacturing capabilities;


•
            new
                product announcements or introductions by our competitors or potential
                competitors;


•
            the
                effect of variations in the market price of our common shares on
                our
                equity-based compensation expenses;


•
            acquisitions
                of businesses or customers;


•
            technology
                and intellectual property issues associated with our products; and


•
            general
                economic trends, including changes in energy prices, or geopolitical
                events such as war or incidents of terrorism.




***Our
      revenues have historically been generated from low-margin contract research
      services; if we cannot expand revenues from other products and services, our
      business will fail.***




Historically,
      a significant portion of our revenues has come from contract research services
      for businesses and government agencies. During the years ended December 31,
      2006, 2005 and 2004, contract services revenues comprised 67%, 70%, and 99%,
      respectively, of our operating revenues. Contract services revenue is low margin
      and unlikely to grow at a rapid pace. Our business plan anticipates revenues
      from product sales and licensing, both of which are higher margin than contract
      services and have potential for rapid growth, increasing in coming years. If
      we
      are not successful in significantly expanding our revenues from higher margin
      products and services, our revenue growth will be slow, and it is unlikely
      that
      we will achieve profitability.




24


***Our
      patents and other protective measures may not adequately protect our proprietary
      intellectual property, and we may be infringing on the rights of others.***




We
      regard
      our intellectual property, particularly our proprietary rights in our
      nanomaterials and titanium dioxide pigment technology, as critical to our
      success. We have received various patents, and filed other patent applications,
      for various applications and aspects of our nanomaterials and titanium dioxide
      pigment technology and other intellectual property. In addition, we generally
      enter into confidentiality and invention agreements with our employees and
      consultants. Such patents and agreements and various other measures we take
      to
      protect our intellectual property from use by others may not be effective for
      various reasons, including the following:




·
            Our
              pending patent applications may not be granted for various reasons,
              including the existence of conflicting patents or defects in our
              applications;·
            The
                patents we have been granted may be challenged, invalidated or
                circumvented because of the pre-existence of similar patented or
                unpatented intellectual property rights or for other
                reasons;·
            Parties
                to the confidentiality and invention agreements may have such agreements
                declared unenforceable or, even if the agreements are enforceable,
                may
                breach such agreements;·
            The
                costs associated with enforcing patents, confidentiality and invention
                agreements or other intellectual property rights may make aggressive
                enforcement cost prohibitive;·
            Even
                if we enforce our rights aggressively, injunctions, fines and other
                penalties may be insufficient to deter violations of our intellectual
                property rights; and·
            Other
                persons may independently develop proprietary information and techniques
                that, although functionally equivalent or superior to our intellectual
                proprietary information and techniques, do not breach our patented
                or
                unpatented proprietary rights.




Because
      the value of our company and common shares is rooted primarily in our
      proprietary intellectual property rights, our inability to protect our
      proprietary intellectual property rights or gain a competitive advantage from
      such rights could harm our ability to generate revenues and, as a result, our
      business and operations.




In
      addition, we may inadvertently be infringing on the proprietary rights of other
      persons and may be required to obtain licenses to certain intellectual property
      or other proprietary rights from third parties. Such licenses or proprietary
      rights may not be made available under acceptable terms, if at all. If we do
      not
      obtain required licenses or proprietary rights, we could encounter delays in
      product development or find that the development or sale of products requiring
      such licenses is foreclosed.




***Because
      our products are generally components of end products, the viability of many
      or
      our products is tied to the success of third parties' existing and potential
      end
      products.***




Few
      of
      the existing or potential products being developed with our nanomaterials and
      titanium dioxide pigment technology are designed for direct use by the ultimate
      end user. Phrased differently, most of our products are components of other
      products. For example, our nano-structured LTO battery materials and NanoSafe
      batteries are designed for use in end-user products such as electric vehicles,
      hybrid electric vehicles and other potential products. Other potential products
      and processes we and our partners are developing using our technology, such
      as
      titanium dioxide pigments, life science materials, air and water treatment
      products, and coatings, are similarly expected to be components of third-party
      products. As a result, the market for our products is dependent upon third
      parties creating or expanding markets for their end-user products that utilize
      our products. If such end-user products are not developed, or the market for
      such end-user products contracts or fails to develop, the market for our
      component products would be expected to similarly contract or collapse. This
      would limit our ability to generate revenues and would harm our business and
      operations.




25


***The
      commercialization of many of our technologies is dependent upon the efforts
      of
      commercial partners and other third parties over which we have no or little
      control.***




We
      do not
      have the expertise or resources to commercialize all potential applications
      of
      our nanomaterials and titanium dioxide pigment technology. For example, we
      do
      not have the resources necessary to complete the testing of, and obtain FDA
      approval for, RenaZorb and other potential life sciences products or to
      construct a commercial facility to use our titanium dioxide pigment production
      technology. Other potential applications of our technology, such as those
      related to our nano-structure LTO electrode materials, coating materials and
      dental materials, are likely to be developed in collaboration with third
      parties, if at all. With respect to these and substantially all other
      applications of our technology, the commercialization of a potential application
      of our technology is dependent, in part, upon the expertise, resources and
      efforts of our commercial partners. This presents certain risks, including
      the
      following:




•
            we
                may not be able to enter into development, licensing, supply and
                other
                agreements with commercial partners with appropriate resources, technology
                and expertise on reasonable terms or at all;•
            our
                commercial partners may not place the same priority on a project
                as we do,
                may fail to honor contractual commitments, may not have the level
                of
                resources, expertise, market strength or other characteristic necessary
                for the success of the project, may dedicate only limited resources
                and/or
                may abandon a development project for reasons, including reasons,
                such as
                a shift in corporate focus, unrelated to its
                merits;




•
            our
                commercial partners may terminate joint testing, development or marketing
                projects on the merits of the projects for various reasons, including
                determinations that a project is not feasible, cost-effective or
                likely to
                lead to a marketable end product;




•
            at
                various stages in the testing, development, marketing or production
                process, we may have disputes with our commercial partners, which
                may
                inhibit development, lead to an abandonment of the project or have
                other
                negative consequences; and




•
            even
                if the commercialization and marketing of jointly developed products
                is
                successful, our revenue share may be limited and may not exceed our
                associated development and operating
                costs.




As
      a
      result of the actions or omissions of our commercial partners, or our inability
      to identify and enter into suitable arrangements with qualified commercial
      partners, we may be unable to commercialize apparently viable products on a
      timely and cost-effective basis, or at all. Our business is not dependent upon
      a
      single application of our technology; however, we
      will
      not become profitable and be able to sustain operations in the long run if
      we
      fail to
      commercialize several of our potential products.





***If
      we acquire or invest in other companies, assets or technologies and we are
      not
      able to integrate them with our business, or we do not realize the anticipated
      financial and strategic goals for any of these transactions, our financial
      performance may be impaired.***




As
      part
      of our growth strategy, we routinely consider acquiring or making investments
      in
      companies, assets or technologies that we believe are strategic to our business.
      We do not have extensive experience in integrating new businesses or
      technologies, and if we do succeed in acquiring or investing in a company or
      technology, we will be exposed to a number of risks, including:




•
            we
                may find that the acquired company or technology does not further
                our
                business strategy, that we overpaid for the company or technology
                or that
                the economic conditions underlying our acquisition decision have
                changed;




•
            we
                may have difficulty integrating the assets, technologies, operations
                or
                personnel of an acquired company, or retaining the key personnel
                of the
                acquired company;




•
            our
                ongoing business and management's attention may be disrupted or diverted
                by transition or integration issues and the complexity of managing
                geographically or culturally diverse
                enterprises;




•
            we
                may encounter difficulty entering and competing in new product or
                geographic markets or increased competition, including price competition
                or intellectual property litigation;
                and




•
            we
                may experience significant problems or liabilities associated with
                product
                quality, technology and legal contingencies relating to the acquired
                business or technology, such as intellectual property or employment
                matters.




26


In
      addition, from time to time we may enter into negotiations for acquisitions
      or
      investments that are not ultimately consummated. These negotiations could result
      in significant diversion of management time, as well as substantial
      out-of-pocket costs. If we were to proceed with one or more significant
      acquisitions or investments in which the consideration included cash, we could
      be required to use a substantial portion of our available cash. If we issue
      shares of capital stock or other rights to purchase capital stock, including
      options and warrants, existing stockholders would be diluted. In addition,
      acquisitions and investments may result in the incurrence of debt, large
      one-time write-offs, such as acquired in-process research and development costs,
      and restructuring charges.




***We
      intend to expand our operations and increase our expenditures in an effort
      to
      grow our business. If we are unable to achieve or manage significant growth
      and
      expansion, or if our business does not grow as we expect, our operating results
      may suffer.***




During
      the past year, we have significantly increased our research and development
      expenditures in an attempt to accelerate the commercialization of certain
      products, particularly our nano-structured LTO electrode materials and NanoSafe
      battery systems. Our business plan anticipates continued additional expenditure
      on development, manufacturing and other growth initiatives. We may not achieve
      significant growth. If achieved, significant growth would place increased
      demands on our management, accounting systems, network infrastructure and
      systems of financial and internal controls. We may be unable to expand
      associated resources and refine associated systems fast enough to keep pace
      with
      expansion, especially as we expand into multiple facilities at distant
      locations. If we fail to ensure that our management, control and other systems
      keep pace with growth, we may experience a decline in the effectiveness and
      focus of our management team, problems with timely or accurate reporting, issues
      with costs and quality controls and other problems associated with a failure
      to
      manage rapid growth, all of which would harm our results of
      operations.





***Our
      competitors have more resources than we do, which may give them a competitive
      advantage.***




We
      have
      limited financial personnel and other resources and, because of our early stage
      of development, have limited access to capital. We compete or may compete
      against entities that are much larger than we are, have more extensive resources
      than we do and have an established reputation and operating history. Because
      of
      their size, resources, reputation, history and other factors, certain of our
      competitors may be able to exploit acquisition, development and joint venture
      opportunities more rapidly, easily or thoroughly than we can. In addition,
      potential customers may choose to do business with our more established
      competitors, without regard to the comparative quality of our products, because
      of their perception that our competitors are more stable, are more likely to
      complete various projects, are more likely to continue as a going concern and
      lend greater credibility to any joint venture.





***We
      will not generate substantial*** ***revenues
      from our life science products unless proposed products receive FDA approval
      and
      achieve substantial market penetration.***





We
      have
      entered into development and license agreements with respect to RenaZorb, a
      potential drug candidate for humans with kidney disease, and other life science
      products, and expect to enter into additional licensing and/or supply agreements
      in the future. Most of the potential life sciences applications of our
      technologies are subject to regulation by the FDA and similar regulatory bodies.
      In general, license agreements in the life sciences area call for milestone
      payments as certain milestones related to the development of the products and
      the obtaining of regulatory approval are met; however, the receipt by the
      licensor of substantial recurring revenues is generally tied to the receipt
      of
      marketing approval from the FDA and the amount of revenue generated from the
      sale of end products. There are substantial risks associated with licensing
      arrangements, including the following:





•
            Further
                testing of potential life science products using our technology may
                indicate that such products are less effective than existing products,
                unsafe, have significant side effects or are otherwise not
                viable;




•
            The
                licensees may be unable to obtain FDA or other regulatory approval
                for
                technical, political or other reasons or, even if it obtains such
                approval, may not obtain such approval on a timely basis;
                and




•
            End
                products for which FDA approval is obtained, if any, may fail to
                obtain
                significant market share for various reasons, including questions
                about
                efficacy, need, safety and side effects or because of poor marketing
                by
                the licensee.




27


If
      any of
      the foregoing risks, or other risks associated with our life science products
      were to occur, we would not receive substantial, recurring revenue from our
      life
      science division, which would adversely affect our overall business, operations
      and financial condition .




***As
      manufacturing becomes a larger part of our operations, we will become exposed
      to
      accompanying risks and liabilities.***





We
      have
      not produced any pigments, nanoparticles or other products using our
      nanomaterials and titanium dioxide pigment technology and equipment on a
      sustained commercial basis In-house or outsourced manufacturing is becoming
      an
      increasingly significant part of our business. If and as manufacturing becomes
      a
      larger part of our business, we will become increasingly subject to various
      risks associated with the manufacturing and supply of products, including the
      following:





•
            If
                we fail to supply products in accordance with contractual terms,
                including
                terms related to time of delivery and performance specifications,
                we may
                become liable for direct, special, consequential and other damages,
                even
                if manufacturing or delivery was
                outsourced;




•
            Raw
                materials used in the manufacturing process, labor and other key
                inputs
                may become scarce and expensive, causing our costs to exceed cost
                projections and associated
                revenues;




•
            Manufacturing
                processes typically involve large machinery, fuels and chemicals,
                any or
                all of which may lead to accidents involving bodily harm, destruction
                of
                facilities and environmental contamination and associated liabilities;
                and




•
            We
                may have, and may be required to, make representations as to our
                right to
                supply and/or license intellectual property and to our compliance
                with
                laws. Such representations are usually supported by indemnification
                provisions requiring us to defend our customers and otherwise make
                them
                whole if we license or supply products that infringe on third-party
                technologies or violate government
                regulations.




Any
      failure to adequately manage risks associated with the manufacture and supply
      of
      materials and products could lead to losses (or small gross profits) from that
      segment of our business and/or significant liabilities, which would adversely
      affect our business, operations and financial condition.





***We
      have issued a $3,000,000 note to secure the purchase of the land and the
      building where our nanomaterials and titanium dioxide pigment assets are
      located.***





In
      August
      2002, we entered into a purchase and sale agreement with BHP Minerals
      International Inc. to purchase the land, building and fixtures in Reno, Nevada
      where our nanomaterials and titanium dioxide pigment assets are located. In
      connection with this transaction, we issued to BHP a note in the amount of
      $3,000,000, at an interest rate of 7%, secured by the property we acquired. The
      first
      two payments of $600,000 of principal plus accrued interest were due and paid
      on
      February 8, 2006 and February 8, 2007. Additional payments of $600,000 plus
      accrued interest are due annually on February 8, 2008 through 2010. If we fail
      to make the required payments on the note, BHP has the right to foreclose and
      take the property. If this should occur, we would be required to relocate our
      primary operating assets and offices, causing a significant disruption in our
      business.





***We
      may not be able to raise sufficient capital to meet future obligations.***




As
      of March
      31, 2007, we
      had approximately $24.8 million
      in cash, cash equivalents and short-term investments . As we
      take additional steps to enhance our commercialization and marketing efforts,
      or
      respond to acquisition opportunities or potential adverse events, our use of
      working capital may increase significantly. In any such event, absent a
      comparatively significant increase in revenue, we will need to raise additional
      capital in order to sustain our ongoing operations, continue unfinished testing
      and additional development work and, if certain of our products are
      commercialized, construct
      and operate facilities for the production of those products.




28





We
      may
      not be able to obtain the amount of additional capital needed or may be forced
      to pay an extremely high price for capital. Factors affecting the availability
      and price of capital may include the following:





•
            market
                factors affecting the availability and cost of capital
                generally;




•
            the
                price, volatility and trading volume of our common
                shares;




•
            our
                financial results, particularly the amount of revenue we are generating
                from operations;•
            the
                amount of our capital needs;




•
            the
                market's perception of companies in one or more of our lines of
                business;




•
            the
                economics of projects being pursued;
                and




•
            the
                market's perception of our ability to execute our business plan and
                any
                specific projects identified as uses of
                proceeds.




If
      we are
      unable to obtain sufficient capital or are forced to pay a high price for
      capital, we may be unable to meet future obligations or adequately exploit
      existing or future opportunities.





***Our
      past and future operations may lead to substantial environmental
      liability.***




Virtually
      any prior or future use of our nanomaterials and titanium dioxide pigment
      technology is subject to federal, state and local environmental laws. In
      addition, we are in the process of reclaiming mineral property that we leased
      in
      Tennessee. Under applicable environmental laws, we may be jointly and severally
      liable with prior property owners for the treatment, cleanup, remediation and/or
      removal of any hazardous substances discovered at any property we use. In
      addition, courts or government agencies may impose liability for, among other
      things, the improper release, discharge, storage, use, disposal or
      transportation of hazardous substances. If
      we
      incur any significant environmental liabilities, our ability to execute our
      business plan and our financial condition would be harmed.




***Certain
      of our experts and directors reside in Canada and may be able to avoid civil
      liability.***




We
      are a
      Canadian corporation, and three of our directors and our Canadian legal counsel
      are residents of Canada. As a result, investors may be unable to effect service
      of process upon such persons within the United States and may be unable to
      enforce court judgments against such persons predicated upon civil liability
      provisions of the U.S. securities laws. It is uncertain whether Canadian courts
      would enforce judgments of U.S. courts obtained against us or such directors,
      officers or experts predicated upon the civil liability provisions of U.S.
      securities laws or impose liability in original actions against us or our
      directors, officers or experts predicated upon U.S. securities
      laws.





***We
      are dependent on key personnel.***





Our
      continued success will depend to a significant extent on the services of Dr.
      Alan J. Gotcher, our Chief Executive Officer and President, Edward
      Dickinson, our
      Chief Financial Officer, and
      Dr.
      Bruce Sabacky, Chief
      Technology Officer.  We
      have
      key man insurance on the lives of Dr. Gotcher and Dr. Sabacky. We
      do not
      have agreements requiring any of our key personnel to remain with our company. The
      loss
      or unavailability of any or all of these individuals would
      harm our ability to execute our business plan, maintain important business
      relationships and complete certain product development initiatives, which would
      harm our business.





***We
      may issue substantial amounts of additional shares without stockholder approval.***





Our
      articles of incorporation authorize the issuance of an unlimited number of
      common shares that may be issued without any action or approval by our
      stockholders. In addition, we have various stock option plans that have
      potential for diluting the ownership interests of our stockholders. The issuance
      of any additional common shares would further dilute the percentage ownership
      of
      our company held by existing stockholders.





29


***The
      market price of our common shares is highly volatile and may increase or
      decrease dramatically at any time.***




The
      market price of our common shares may be highly volatile. Our stock price may
      change dramatically as the result of announcements of product developments,
      new
      products or innovations by us or our competitors, u ncertainty
      regarding the viability of the nanomaterials and titanium dioxide pigment
      technology or any of our product initiatives, significant customer contracts, significant litigation or other factors or
      events that would be expected to affect our business, financial condition,
      results of operations and future prospects. In addition, the market price for
      our common shares may be affected by various factors not directly related to
      our
      business or future prospects, including the following:





•
            Intentional
                manipulation of our stock price by existing or future shareholders
                or a
                reaction by investors to trends in our stock rather than the fundamentals
                of our business;•
            A
                single acquisition or disposition, or several related acquisitions
                or
                dispositions, of a large number of our shares, including by short
                sellers
                covering their position;•
            The
                interest of the market in our business sector, without regard to
                our
                financial condition, results of operations or business
                prospects;•
            Positive
                or negative statements or projections about our company or our industry,
                by analysts, stock gurus and other persons;•
            The
                adoption of governmental regulations or government grant programs
                and
                similar developments in the United States or abroad that may enhance
                or
                detract from our ability to offer our products and services or affect
                our
                cost structure; and•
            Economic
                and other external market factors, such as a general decline in market
                prices due to poor economic indicators or investor
                distrust.





***We
      have never declared a cash dividend and do not intend to declare a cash dividend
      in the foreseeable future.***




We
      have
      never declared or paid cash dividends on our common s hares.
      We
      currently intend to retain any future earnings, if any, for use in our business
      and, therefore, do not anticipate paying dividends on our common shares in
      the
      foreseeable future.





***We
      are subject to various regulatory regimes, and may be adversely affected by
      inquiries, investigations and allegations that we have not complied with
      governing rules and laws.***





In
      light
      of our status as a public company and our lines of business, we are subject
      to a
      variety of laws and regulatory regimes in addition to those applicable to all
      businesses generally.  For example, we are subject to the reporting
      requirements applicable to Canadian and United States reporting issuers, such
      as
      the Sarbanes-Oxley Act of 2002, the rules of the NASDAQ Capital Market and
      certain state and provincial securities laws. We are also subject to state
      and
      federal environmental, health and safety laws, and rules governing department
      of
      defense contracts. Such laws and rules change frequently and are often
      complex.  In connection with such laws, we are subject to periodic audits,
      inquiries and investigations.  Any such audits, inquiries and
      investigations may divert considerable financial and human resources and
      adversely affect the execution of our business plan.   In addition,
      through such audits, inquiries and investigations, we or a regulator have from
      time to time determined, and may in the future determine, that we are out of
      compliance with one or more governing rules or laws.  Remedying such
      non-compliance may divert additional financial and human resources.  In
      addition, in the future, we may be subject to a formal charge or determination
      that we have materially violated a governing law, rule or regulation.  Any
      charge, and particularly any determination,
      that we had materially violated a governing law would likely have a material
      adverse effect on the market price of our stock, our ability to execute our
      business plan.





For
      example, on March 30, 2005, we received a letter of inquiry from the SEC
      requesting information relating to a press release we issued on February 10,
      2005, in which we announced developments in a rechargeable battery technology
      that incorporates our lithium titanate battery materials. After providing the
      requested information, we received a follow up letter of inquiry dated August
      2,
      2005 requesting additional information related to our battery programs, emails
      of certain affiliates, certain transactions and recent earnings calls. We
      provided the information to the SEC in a series of letters sent during September
      and October 2005. We have not been contacted by the SEC since providing all
      requested information in October 2005 or been notified of any ongoing activity
      or pending proceeding. The absence of any additional letters of inquiry related
      to the matter for  an
      approximately 18-month period suggests to us that the inquiry may be completed;
      however, we have received no notice from the SEC with respect to the status
      of
      the inquiry and are uncertain as to its status. Based upon advice of counsel
      that the SEC frequently does not apprise a company whether an inquiry has been
      terminated or is ongoing, we expect to remain uncertain in the foreseeable
      future. Our response to the SEC inquiry diverted considerable financial and
      human resources, which harmed our ability to execute our business plan for
      a
      time, and leaves a level of uncertainty going forward, which may harm our
      ability to enter into business relationships, recruit qualified officers and
      employees and raise capital.




30




Through
      such audits, inquiries and investigations, we or a regulator may determine
      that
      we are out of compliance with one or more governing rules or laws. 
Remedying such non-compliance diverts additional financial and human
      resources.  In addition, in the future, we may be subject to a formal
      charge or determination that we have materially violated a governing law, rule
      or regulation.  Any charge, and particularly any determination, that we had
      materially violated a governing law would harm our ability to enter into
      business relationships, recruit qualified officers and employees and raise
      capital.




**Item
      5. Other Information**




On
      March
      6, 2007, we entered into a Subcontract with the University of Las Vegas (“UNLV”)
      with respect to the Department of Energy project entitled “High Efficiency
      Generation of Hydrogen Fuels Using Solar Thermo Chemical Splitting of Water”.
      Under this agreement, we are required to perform work related to the project
      with an aggregate labor and other costs of $356,500 for which UNLV is required
      to give us reimbursement, and we are required to cost share the remaining
      $98,950 of project costs.





**Item
      6. Exhibits**





a)  See
      Exhibit Index attached hereto following the signature page.








31


**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 thereunto
      duly authorized.





Altair
                Nanotechnologies Inc.May
                10, 2007
            
            By:
                /s/ Alan J. GotcherDate
            
            Alan
                J. Gotcher, Chief Executive OfficerMay
                10, 2007
            
            By:
                /s/ Edward H. DickinsonDate
            
            Edward
                H. Dickinson, Chief Financial Officer











32


**EXHIBIT
                INDEX****Exhibit
                No.**
            
            **Exhibit**
            
            **Incorporated
                by Reference/ Filed Herewith**3.1
            
            Articles
                of Continuance
            
            Incorporated
                by reference to the Current Report on Form 8-K filed with the SEC
                on July
                18, 2002.3.2
            
            Bylaws
            
            Incorporated
                by reference to the Annual Report on Form 10-K for the year ended
                December
                31, 2004 filed with the SEC on March 9, 200510.1
            
            Subcontract
                dated March 6, 2007 with U.N.L.V.
            
            Filed
                herewith31.1
            
            Section
                302 Certification of Chief Executive Officer
            
            Filed
                herewith31.2
            
            Section
                302 Certification of Chief Financial Officer
            
            Filed
                herewith32.1
            
            Section
                906 Certification of Chief Executive Officer
            
            Filed
                herewith32.2
            
            Section
                906 Certification of Chief Financial Officer
            
            Filed
                herewith












33