----

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**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 **June                30, 2006**               |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                    |
| o      |  TRANSITION REPORT PURSUANT TO SECTION                13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                FOR THE TRANSITION PERIOD FROM _________________ TO                _________________  |

**A**

**LTAIR        **

**N**

**ANOTECHNOLOGIES        **

**I**

**NC.**

| **Canada**                                      | **1-12497**                              | **33-1084375**                         |
|-------------------------------------------------|------------------------------------------|----------------------------------------|
| **______________________**                      | _____________________                    | ________________                       |
| (State                    or other jurisdiction | (Commission                    File No.) | (IRS                    Employer       |
| of                    incorporation)            |                                     | Identification                    No.) |

**204        Edison Way**

**Reno,        Nevada 89502**

| Large                  accelerated filer     o | Accelerated                  filer     x | Non-accelerated                  filer     o |
|-------------------------------------------------------------------------|-------------------------------------------------------------------|-----------------------------------------------------------------------|

**As        of August 1, 2006 the registrant had 59,588,061 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)**                                                                                                                                                                                                                                                              |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |
|                                                                                                                                                                                                                                                                         |   | **June                  30,** |   | **December                  31,** |   |
|                                                                                                                                                                                                                                                                         |   | **2006** |   | **2005** |   |
| **ASSETS**                                                                                                                                                                                                                                                                   |   |   |   |   |   |
| **Current                  Assets**                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Cash                  and cash equivalents                                                                                                                                                                                                                                   |   | $ | 1,678,372 |   | $ | 2,264,418 |   |
| Investment                  in available for sale securities                                                                                                                                                                                                                 |   |   | 12,764,844 |   |   | 20,789,656 |   |
| Accounts                  receivable                                                                                                                                                                                                                                         |   |   | 474,446 |   |   | 602,168 |   |
| Prepaid                  expenses and other current assets                                                                                                                                                                                                                   |   |   | 392,076 |   |   | 254,067 |   |
| Total                  current assets                                                                                                                                                                                                                                        |   |   | 15,309,738 |   |   | 23,910,309 |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Investment                  in Available for Sale Securities**                                                                                                                                                                                                             |   |   | 906,124 |   |   | 423,000 |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Property,                  Plant and Equipment, net**                                                                                                                                                                                                                      |   |   | 9,902,278 |   |   | 8,169,445 |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Patents,                  net**                                                                                                                                                                                                                                            |   |   | 847,655 |   |   | 890,062 |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Other                  Assets**                                                                                                                                                                                                                                            |   |   | 21,261 |   |   | 71,200 |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Total                  Assets**                                                                                                                                                                                                                                            |   | $ | 26,987,056 |   | $ | 33,464,016 |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **Current                  Liabilities**                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Trade                  accounts payable                                                                                                                                                                                                                                      |   | $ | 1,792,032 |   | $ | 808,905 |   |
| Accrued                  salaries and benefits                                                                                                                                                                                                                               |   |   | 920,844 |   |   | 709,349 |   |
| Accrued                  liabilities                                                                                                                                                                                                                                         |   |   | 467,969 |   |   | 309,289 |   |
| Note                  payable, current portion                                                                                                                                                                                                                               |   |   | 600,000 |   |   | 600,000 |   |
| Total                  current liabilities                                                                                                                                                                                                                                   |   |   | 3,780,845 |   |   | 2,427,543 |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Note                  Payable, Long-Term Portion**                                                                                                                                                                                                                         |   |   | 1,800,000 |   |   | 2,400,000 |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Stockholders'                  Equity**                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
|        Common                    stock, no par value, unlimited shares authorized;59,461,393 and                    59,316,519 shares issued and outstanding                    at June                    30, 2006 and December 31, 2005 |   |   | 92,232,886 |   |   | 92,126,714 |   |
| Additional                  paid in capital                                                                                                                                                                                                                                  |   |   | 877,512 |   |   | - |   |
| Accumulated                  deficit                                                                                                                                                                                                                                         |   |   | (71,501,987 | ) |   | (63,152,905 | ) |
| Deferred                  compensation expense                                                                                                                                                                                                                               |   |   | - |   |   | (165,336 | ) |
| Accumulated                  other comprehensive loss                                                                                                                                                                                                                        |   |   | (202,200 | ) |   | (172,000 | ) |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Total                  Stockholders' Equity**                                                                                                                                                                                                                              |   |   | 21,406,211 |   |   | 28,636,473 |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Total                  Liabilities and Stockholders' Equity**                                                                                                                                                                                                              |   | $ | 26,987,056 |   | $ | 33,464,016 |   |
|                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| See                  notes to the unaudited condensed consolidated financial                  statements.                                                                                                                                                                    |

----

| **ALTAIR                  NANOTECHNOLOGIES INC. AND SUBSIDIARIES**                                        |   |
|-----------------------------------------------------------------------------------------------------------|--------|
| **CONDENSED                  CONSOLIDATED STATEMENTS OF OPERATIONS**                                      |   |
| **(Expressed                  in United States Dollars)**                                                 |   |
| **(Unaudited)**                                                                                           |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   | **Three                  Months Ended** |   | **Six                  Months Ended** |   |
|                                                                                                      |   | **June                  30,** |   | **June                  30,** |   |
|                                                                                                      |   | **2006** |   | **2005** |   | **2006** |   | **2005** |   |
| **Revenues**                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| License                  fees                                                                             |   | $ | 364,720 |   | $ | - |   | $ | 364,720 |   | $ | 695,000 |   |
| Product                  sales                                                                            |   |   | 2,640 |   |   | 42,485 |   |   | 10,658 |   |   | 65,593 |   |
| Commercial                  collaborations                                                                |   |   | 389,236 |   |   | 160,775 |   |   | 719,506 |   |   | 257,041 |   |
| Contracts                  and grants                                                                     |   |   | 300,232 |   |   | 299,621 |   |   | 507,240 |   |   | 512,827 |   |
| Total                  revenues                                                                           |   |   | 1,056,828 |   |   | 502,881 |   |   | 1,602,124 |   |   | 1,530,461 |   |
| **Operating                  Expenses**                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost                  of product sales                                                                    |   |   | 1,450 |   |   | 12,461 |   |   | 2,716 |   |   | 16,007 |   |
| Research                  and development                                                                 |   |   | 2,205,265 |   |   | 744,142 |   |   | 4,153,652 |   |   | 1,525,677 |   |
| Sales                  and marketing                                                                      |   |   | 618,422 |   |   | 190,670 |   |   | 1,011,583 |   |   | 921,108 |   |
| General                  and administrative                                                               |   |   | 1,796,853 |   |   | 1,355,698 |   |   | 4,408,157 |   |   | 2,921,133 |   |
| Depreciation                  and amortization                                                            |   |   | 363,247 |   |   | 251,455 |   |   | 680,118 |   |   | 496,085 |   |
| Total                  operating expenses                                                                 |   |   | 4,985,237 |   |   | 2,554,426 |   |   | 10,256,226 |   |   | 5,880,010 |   |
| **Loss                  from Operations**                                                                 |   |   | (3,928,409 | ) |   | (2,051,545 | ) |   | (8,654,102 | ) |   | (4,349,549 | ) |
| **Other                  Income (Expense)**                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  expense                                                                         |   |   | (42,000 | ) |   | (51,592 | ) |   | (87,500 | ) |   | (102,292 | ) |
| Interest                  income                                                                          |   |   | 181,522 |   |   | 184,383 |   |   | 392,825 |   |   | 287,659 |   |
| Loss                  on foreign exchange                                                                 |   |   | (131 | ) |   | (324 | ) |   | (305 | ) |   | (855 | ) |
| Total                  other income, net                                                                  |   |   | 139,391 |   |   | 132,467 |   |   | 305,020 |   |   | 184,512 |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  Loss**                                                                             |   | $ | (3,789,018 | ) | $ | (1,919,078 | ) | $ | (8,349,082 | ) | $ | (4,165,037 | ) |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Loss                  per common share - Basic and diluted**                                            |   | $ | (0.06 | ) | $ | (0.03 | ) | $ | (0.14 | ) | $ | (0.07 | ) |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Weighted                  average shares - Basic and diluted**                                          |   |   | 59,290,242 |   |   | 58,814,970 |   |   | 59,256,485 |   |   | 56,524,538 |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                  notes to the unaudited condensed consolidated financial                  statements. |

----

| **ALTAIR                  NANOTECHNOLOGIES INC. AND SUBSIDIARIES**                                                         |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|
| **CONDENSED****CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**                                                           |   |
| **(Expressed                  in United States Dollars)**                                                                  |   |
| **(Unaudited)**                                                                                                            |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   | **Accumulated** |   |   |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   | **Deferred** |   | **Other** |   |   |   |
|                                                                                                                       |   |   |   |   |   | **Additional** |   |   |   | **Compen-** |   | **Compre-** |   |   |   |
|                                                                                                                       |   | **Common                  Stock** |   | **Paid                  In** |   | **Accumulated** |   | **sation** |   | **hensive** |   |   |   |
|                                                                                                                       |   | **Shares** |   | **Amount** |   | **Capital** |   | **Deficit** |   | **Expense** |   | **Loss** |   | **Total** |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE,                  JANUARY 1, 2006                                                                                  |   |   | 59,316,519 |   | $ | 92,126,714 |   | $ | - |   | $ | (63,152,905 | ) | $ | (165,336 | ) | $ | (172,000 | ) | $ | 28,636,473 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                  loss:                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                                                  |   |   | - |   |   | - |   |   | - |   |   | (8,349,082 | ) |   | - |   |   | - |   |   | (8,349,082 | ) |
|                          Other                  comprehensive loss net of taxes of $0   |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (30,200 | ) |   | (30,200 | ) |
| Comprehensive                  loss:                                                                                       |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (8,379,282 | ) |
| Share-based                  compensation                                                                                  |   |   | - |   |   | 129,835 |   |   | 877,512 |   |   | - |   |   | - |   |   | - |   |   | 1,007,347 |   |
| Exercise                  of stock options                                                                                 |   |   | 66,999 |   |   | 141,673 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 141,673 |   |
| Issuance                  of restricted stock                                                                              |   |   | 77,875 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Elimination                  of deferred compensation expense                                                              |   |   | - |   |   | (165,336 | ) |   | - |   |   | - |   |   | 165,336 |   |   | - |   |   | - |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE,                  JUNE 30, 2006                                                                                    |   |   | 59,461,393 |   | $ | 92,232,886 |   | $ | 877,512 |   | $ | (71,501,987 | ) | $ | - |   | $ | (202,200 | ) | $ | 21,406,211 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                  notes to the unaudited                  condensed consolidated                  financial statements. |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| **ALTAIR                  NANOTECHNOLOGIES INC. AND SUBSIDIARIES**                                                                               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONDENSED                  CONSOLIDATED STATEMENTS OF CASH FLOWS**                                                                             |   |
| **(Expressed                  in United States Dollars)**                                                                                        |   |
| **(Unaudited)**                                                                                                                                  |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |
|                                                                                                                                             |   | **Three                  Months Ended** |   | **Six                  Months Ended** |   |
|                                                                                                                                             |   | **June                  30,** |   | **June                  30,** |   |
|                                                                                                                                             |   | **2006** |   | **2005** |   | **2006** |   | **2005** |   |
| **Cash                  flows from operating activities:**                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                                                                        |   | $ | (3,789,018 | ) | $ | (1,919,078 | ) | $ | (8,349,082 | ) | $ | (4,165,037 | ) |
|                      Adjustments                  to reconcile net loss to net cash used inoperating                  activities: |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                  and amortization                                                                                                   |   |   | 363,247 |   |   | 251,455 |   |   | 680,118 |   |   | 496,085 |   |
| Variable                  accounting on stock options                                                                                            |   |   | - |   |   | (170,975 | ) |   | - |   |   | 477,364 |   |
| Securities                  received in payment of license fees                                                                                  |   |   | (513,324 | ) |   | - |   |   | (513,324 | ) |   | (595,000 | ) |
| Amortization                  of discount on note payable                                                                                        |   |   | - |   |   | 51,592 |   |   | - |   |   | 102,292 |   |
| Share-based                  compensation                                                                                                        |   |   | 158,504 |   |   | 4,071 |   |   | 1,007,347 |   |   | 4,071 |   |
| Loss                  on disposal of fixed assets                                                                                                |   |   | - |   |   | - |   |   | 21,101 |   |   | - |   |
| Changes                  in operating assets and liabilities:                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts                  receivable, net                                                                                                        |   |   | 218,218 |   |   | (87,276 | ) |   | 127,722 |   |   | 119,222 |   |
| Prepaid                  expenses and other current assets                                                                                       |   |   | (45,208 | ) |   | (9,217 | ) |   | (138,009 | ) |   | 88,057 |   |
| Other                  assets                                                                                                                    |   |   | - |   |   | (5,000 | ) |   | 49,939 |   |   | (5,000 | ) |
| Trade                  accounts payable                                                                                                          |   |   | 492,835 |   |   | 482,960 |   |   | 479,882 |   |   | 676,058 |   |
| Accrued                  salaries and benefits                                                                                                   |   |   | 21,248 |   |   | (12,062 | ) |   | 211,495 |   |   | (150,862 | ) |
| Accrued                  liabilities                                                                                                             |   |   | 31,451 |   |   | (401,299 | ) |   | 158,680 |   |   | 471,012 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  cash used in operating activities**                                                                                       |   |   | (3,062,047 | ) |   | (1,814,829 | ) |   | (6,264,131 | ) |   | (2,481,738 | ) |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Cash                  flows from investing activities:**                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale                  of available for sale securities                                                                                           |   |   | 7,039,020 |   |   | - |   |   | 10,800,000 |   |   | - |   |
| Purchase                  of available for sale securities                                                                                       |   |   | (2,775,186 | ) |   | - |   |   | (2,775,187 | ) |   | - |   |
| Purchase                  of property and equipment                                                                                              |   |   | (744,791 | ) |   | (254,928 | ) |   | (1,888,400 | ) |   | (519,638 | ) |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  cash provided (used) by investing activities**                                                                            |   |   | 3,519,043 |   |   | (254,928 | ) |   | 6,136,413 |   |   | (519,638 | ) |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   | *(continued)* |   |

----

| **ALTAIR                  NANOTECHNOLOGIES INC. AND SUBSIDIARIES**                                                                                                                              |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONDENSED                  CONSOLIDATED STATEMENTS OF CASH FLOWS**                                                                                                                            |   |
| **(Expressed                  in United States Dollars)**                                                                                                                                       |   |
| **(Unaudited)**                                                                                                                                                                                 |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                            |   | **Three                  Months Ended** |   | **Six                  Months Ended** |   |
|                                                                                                                                                                                            |   | **June                  30,** |   | **June                  30,** |   |
|                                                                                                                                                                                            |   | **2006** |   | **2005** |   | **2006** |   | **2005** |   |
| **Cash                  flows from financing activities:**                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          Issuance                  of common shares for cash, net of issuance costs                                                          |   | $ | - |   | $ | 9,400 |   | $ | - |   | $ | 19,329,800 |   |
| Proceeds                  from exercise of stock options                                                                                                                                        |   |   | 87,698 |   |   | 114,200 |   |   | 141,673 |   |   | 1,740,190 |   |
| Proceeds                  from exercise of warrants                                                                                                                                             |   |   | - |   |   | - |   |   | - |   |   | 4,259,672 |   |
| Payment                  of notes payable                                                                                                                                                       |   |   | - |   |   | - |   |   | (600,000 | ) |   | - |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  cash (used) provided by financing activities**                                                                                                                           |   |   | 87,698 |   |   | 123,600 |   |   | (458,327 | ) |   | 25,329,662 |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  (decrease) increase in cash and cash                  equivalents**                                                                                                 |   |   | 544,694 |   |   | (1,946,157 | ) |   | (586,046 | ) |   | 22,328,286 |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Cash                  and cash equivalents, beginning of period**                                                                                                                             |   |   | 1,133,678 |   |   | 31,632,286 |   |   | 2,264,418 |   |   | 7,357,843 |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Cash                  and cash equivalents, end of period**                                                                                                                                   |   | $ | 1,678,372 |   | $ | 29,686,129 |   | $ | 1,678,372 |   | $ | 29,686,129 |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Supplemental                  disclosures:**                                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  paid for interest                                                                                                                                                         |   |   | None |   |   | None |   | $ | 105,000 |   |   | None |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  paid for income taxes                                                                                                                                                     |   |   | None |   |   | None |   |   | None |   |   | None |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Supplemental                  schedule of non-cash investing and financing                  activities:**                                                                                     |   |   |   |   |   |   |
| **For                  the three months ended June 30, 2006:**                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| -                  We issued 56,875 shares of restricted stock to employees having                  a fair                  value of approximately $180,000 for which no cash will be received. |
| -                  We made property and equipment purchases of $503,245 which are                  included in                  trade accounts payable at June 30, 2006.                        |
| -                  We had an unrealized gain on available for sale securities of                  $15,800.                                                                                      |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **For                  the three months ended June 30, 2005:**                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| -                  None                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **For                  the six months ended June 30, 2006:**                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| -                  We issued 56,875 shares of restricted stock to employees having                  a fair                  value of approximately $180,000 for which no cash will be received. |
| -                  We made property and equipment purchases of $503,245 which are                  included in                  trade accounts payable at June 30, 2006.                        |
| -                  We had an unrealized loss on available for sale securities of                  $30,200.                                                                                      |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **For                  the six months ended June 30, 2005:**                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| -                  None                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *(concluded)*                                                                                                                                                                                   |
|                                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                  notes to the unaudited condensed consolidated financial                  statements.                                                                                       |

----

**ALTAIR        NANOTECHNOLOGIES INC. AND SUBSIDIARIES**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED)**

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

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

**Cash,        Cash Equivalents and Investment in Available for Sale Securities (short-term)        -**
** **
*Accounting        for Certain Investments in Debt and Equity Securities*

**Investment        in Available for Sale Securities (long-term) - **
** **

**Accumulated        Other Comprehensive Loss - **

----

|                                                                                                                            |   | **Three                  Months Ended** |      | **Six                  Months Ended** |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|---------------------------------------|--------|
|                                                                                                                            |   | **June                  30, 2006**      |      | **June                  30, 2006**    |   |
|                                                                                                                            |   | **2006**                                |      | **2005**                              |   | **2006** |   | **2005** |   |
| Net                  loss                                                                                                       |   | $                                       | 3,789,018 |                                  | $      | 1,919,078 |   | $ | 8,349,082 |   | $ | 4,165,037 |   |
| Unrealized                    (gain) loss on investment in available for                    sale securities, net of taxes of $0 |   |                                    | (15,800   | )                                     |   | - |   |   | 30,200 |   |   | - |   |
|                                                                                                                            |   |                                    |      |                                  |   |   |   |   |   |   |   |   |   |
| Comprehensive                  loss                                                                                             |   | $                                       | 3,773,218 |                                  | $      | 1,919,078 |   | $ | 8,379,282 |   | $ | 4,165,037 |   |

**Long-Lived        Assets - **

**Deferred        Income Taxes - **

**Revenue        Recognition**

**Overhead        Allocation**

**Net        Loss Per Common Share**

----

**Recent        Accounting Pronouncements**
*Transition        Election Related to Accounting for Tax Effects of Share-Based Payment        Awards*
*Share        Based Payment, *

**Reclassifications        -**
*** ***

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

**Note        4.  Note Payable**

|                                                |   | June                  30, 2006 |      | December                  31, 2005 |   |
|-----------------------------------------------------|--------|--------------------------------|-----------|------------------------------------|--------|
| Note                  payable to BHP Minerals       |   |                           |      |                               |   |   |   |
| International,                  Inc.                |   | $                              | 2,400,000 |                               | $      | 3,000,000 |   |
| Less                  current portion               |   |                           | (600,000  | )                                  |   | (600,000 | ) |
| Long-term                  portion of notes payable |   | $                              | 1,800,000 |                               | $      | 2,400,000 |   |

----

**Note        5. Patents**

|                                           |   | **June                  30,** |      |
|------------------------------------------------|--------|-------------------------------|-----------|
|                                           |   | **2006**                      |      | **2005** |   |
| Patents                                        |   | $                             | 1,517,736 |   | $ | 1,517,736 |   |
| Less                  accumulated amortization |   |                          | (670,081  | ) |   | (585,266 | ) |
| Total                  patents                 |   | $                             | 847,655   |   | $ | 932,470 |   |

**Note        6. **
**Share-Based        Compensation**

*Accounting        for Stock Issued to Employees *

----

**Stock        Options**

|                                     |   | **Three                  Months**  |   | **Six                  Months**    |   |
|------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
|                                     |   | **Ended**                          |   | **Ended**                          |   |
|                                     |   | **June                  30, 2006** |   | **June                  30, 2006** |   |
| Dividend                  yield          |   |                               | None   |                               |   | None |   |
| Expected                  volatility     |   |                               | 93%    |                               |   | 93% |   |
| Risk-free                  interest rate |   |                               | 5.0%   |                               |   | 4.7% |   |
| Expected                  term (years)   |   |                               | 4.19   |                               |   | 4.63 |   |

|                                            |   |       |      |         |   | **Weighted**                      |   |          |   |
|-------------------------------------------------|--------|------------|-----------|--------------|--------|-----------------------------------|--------|---------------|--------|
|                                            |   |       |      | **Weighted** |   | **Average**                       |   |          |   |
|                                            |   |       |      | **Average**  |   | **Remaining**                     |   | **Aggregate** |   |
|                                            |   |       |      | **Exercise** |   | **Contractual**                   |   | **Intrinsic** |   |
|                                            |   | **Shares** |      | **Price**    |   | **Term                  (Years)** |   | **Value**     |   |
| Outstanding                  at January 1, 2006 |   |       | 2,533,200 |         | $      | 2.69                              |   |          | 4.8    |   | $ | 810,650 |   |
| Granted                                         |   |       | 1,155,131 |         |   | 3.36                              |   |          |   |   |   |   |   |
| Exercised                                       |   |       | (66,999   | )            |   | 1.82                              |   |          |   |   |   |   |   |
| Forfeited/Expired                               |   |       | (42,363   | )            |   | 2.39                              |   |          | -      |   |   | - |   |
|                                            |   |       |      |         |   |                              |   |          |   |   |   |   |   |
| Outstanding                  at June 30, 2006   |   |       | 3,578,969 |         | $      | 3.03                              |   |          | 6.1    |   | $ | 2,199,455 |   |
|                                            |   |       |      |         |   |                              |   |          |   |   |   |   |   |
| Exercisable                  at June 30, 2006   |   |       | 2,466,094 |         | $      | 3.09                              |   |          | 5.0    |   | $ | 1,753,215 |   |

|                                                  |   |       |      | **Weighted**                    |   |
|-------------------------------------------------------|--------|------------|-----------|---------------------------------|--------|
|                                                  |   |       |      | **Average**                     |   |
|                                                  |   |       |      | **Grant                  Date** |   |
|                                                  |   | **Shares** |      | **Fair                  Value** |   |
| Non-vested                  shares at January 1, 2006 |   |       | 793,875   |                            | $      | 1.87 |   |
| Granted                                               |   |       | 1,155,131 |                            |   | 2.32 |   |
| Vested                                                |   |       | (824,131  | )                               |   | 3.55 |   |
| Forfeited/Expired                                     |   |       | (12,000   | )                               |   | 3.11 |   |
|                                                  |   |       |      |                            |   |   |   |
| Non-vested                  shares at June 30, 2006   |   |       | 1,112,875 |                            | $      | 1.94 |   |

----

**Restricted        Stock**

|                                                  |   |       |    | **Weighted**                    |   |
|-------------------------------------------------------|--------|------------|---------|---------------------------------|--------|
|                                                  |   |       |    | **Average**                     |   |
|                                                  |   |       |    | **Grant                  Date** |   |
|                                                  |   | **Shares** |    | **Fair                  Value** |   |
| Non-vested                  shares at January 1, 2006 |   |       | 132,500 |                            | $      | 2.82 |   |
| Granted                                               |   |       | 56,875  |                            |   | 3.17 |   |
| Vested                                                |   |       | (47,000 | )                               |   | 2.87 |   |
| Forfeited/Expired                                     |   |       | (15,000 | )                               |   | 2.88 |   |
|                                                  |   |       |    |                            |   |   |   |
| Non-vested                  shares at June 30, 2006   |   |       | 127,375 |                            | $      | 2.95 |   |

**Pro        Forma Information for Periods Prior to 2006**

*Accounting        for Stock-Based Compensation*

|                                                                                                                                                                                             |   | **Three                  Months**  |      | **Six                  Months**    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|-----------|------------------------------------|--------|
|                                                                                                                                                                                             |   | **Ended**                          |      | **Ended**                          |   |
|                                                                                                                                                                                             |   | **June                  30, 2005** |      | **June                  30, 2005** |   |
| Net                  loss as reported                                                                                                                                                            |   | $                                  | 1,919,078 |                               | $      | 4,165,037 |   |
|                                                                                                                                                                                             |   |                               |      |                               |   |   |   |
| Add                    (Deduct): stock-based employee compensation expense included                    in reported                    net loss, net                    of income taxes of $0     |   |                               | 170,975   |                               |   | (477,364 | ) |
| Add:                    total stock-based employee compensation expense determined under                    fair value based method                    for all awards, net of income taxes of $0 |   |                               | 196,029   |                               |   | 614,454 |   |
| Pro                  forma net loss                                                                                                                                                              |   | $                                  | 2,286,082 |                               | $      | 4,302,127 |   |
|                                                                                                                                                                                             |   |                               |      |                               |   |   |   |
| Loss                  per common share (basic and diluted):                                                                                                                                      |   |                               |      |                               |   |   |   |
| As                  reported                                                                                                                                                                     |   | $                                  | 0.03      |                               | $      | 0.07 |   |
| Pro                  forma                                                                                                                                                                       |   | $                                  | 0.04      |                               | $      | 0.08 |   |

----

|                                     |   | **Three                  Months**  |   | **Six                  Months**    |   |
|------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
|                                     |   | **Ended**                          |   | **Ended**                          |   |
|                                     |   | **June                  30, 2005** |   | **June                  30, 2005** |   |
| Dividend                  yield          |   |                               | None   |                               |   | None |   |
| Expected                  volatility     |   |                               | 103%   |                               |   | 106% |   |
| Risk-free                  interest rate |   |                               | 3.70%  |                               |   | 3.84% |   |
| Expected                  term (years)   |   |                               | 2.83   |                               |   | 3.06 |   |

**Note        7. Related Party Transactions**

**Note        8. Business Segment Information**

|                                    |   |         |      | **(Income)**                   |   | **Depreciation** |   |       |    |
|-----------------------------------------|--------|--------------|-----------|--------------------------------|--------|------------------|--------|------------|---------|
|                                    |   |         |      | **Loss                  From** |   | **and**          |   |       |    |
| **Three                  Months Ended** |   | **Revenues** |      | **Operations**                 |   | **Amortization** |   | **Assets** |    |
| **June                  30, 2006:**     |   |         |      |                           |   |             |   |       |    |   |   |   |   |
| Performance                  Materials  |   | $            | 467,422   |                           | $      | 945,752          |   | $          | 259,910 |   | $ | 6,280,763 |   |
| AMPS                                    |   |         | 78,799    |                           |   | 1,393,748        |   |       | 71,581  |   |   | 2,462,564 |   |
| Life                  Sciences          |   |         | 510,607   |                           |   | (447,556         | )      |       | 2,353   |   |   | 1,041,927 |   |
| Corporate                  and Other    |   |         | -         |                           |   | 2,036,465        |   |       | 29,403  |   |   | 17,201,802 |   |
|                                    |   |         |      |                           |   |             |   |       |    |   |   |   |   |
| Consolidated                  Total     |   | $            | 1,056,828 |                           | $      | 3,928,409        |   | $          | 363,247 |   | $ | 26,987,056 |   |
|                                    |   |         |      |                           |   |             |   |       |    |   |   |   |   |
|                                    |   |         |      |                           |   |             |   |       |    |   |   |   |   |
| **June                  30, 2005:**     |   |         |      |                           |   |             |   |       |    |   |   |   |   |
| Performance                  Materials  |   | $            | 476,999   |                           | $      | 155,266          |   | $          | 228,133 |   | $ | 5,493,323 |   |
| AMPS                                    |   |         | -         |                           |   | 103,920          |   |       | -       |   |   | - |   |
| Life                  Sciences          |   |         | 25,882    |                           |   | 89,008           |   |       | 303     |   |   | 457,294 |   |
| Corporate                  and Other    |   |         | -         |                           |   | 1,703,351        |   |       | 23,019  |   |   | 32,165,964 |   |
|                                    |   |         |      |                           |   |             |   |       |    |   |   |   |   |
| Consolidated                  Total     |   | $            | 502,881   |                           | $      | 2,051,545        |   | $          | 251,455 |   | $ | 38,116,581 |   |

----

|                                   |   |         |      | **(Income)**                   |   | **Depreciation** |   |       |    |
|----------------------------------------|--------|--------------|-----------|--------------------------------|--------|------------------|--------|------------|---------|
|                                   |   |         |      | **Loss                  From** |   | **and**          |   |       |    |
| **Six                  Months Ended**  |   | **Revenues** |      | **Operations**                 |   | **Amortization** |   | **Assets** |    |
| **June                  30, 2006:**    |   |         |      |                           |   |             |   |       |    |   |   |   |   |
| Performance                  Materials |   | $            | 901,791   |                           | $      | 1,874,647        |   | $          | 513,958 |   | $ | 6,280,763 |   |
| AMPS                                   |   |         | 189,725   |                           |   | 2,281,586        |   |       | 104,396 |   |   | 2,462,564 |   |
| Life                  Sciences         |   |         | 510,608   |                           |   | (311,030         | )      |       | 4,705   |   |   | 1,041,927 |   |
| Corporate                  and Other   |   |         | -         |                           |   | 4,808,899        |   |       | 57,059  |   |   | 17,201,802 |   |
|                                   |   |         |      |                           |   |             |   |       |    |   |   |   |   |
| Consolidated                  Total    |   | $            | 1,602,124 |                           | $      | 8,654,102        |   | $          | 680,118 |   | $ | 26,987,056 |   |
|                                   |   |         |      |                           |   |             |   |       |    |   |   |   |   |
|                                   |   |         |      |                           |   |             |   |       |    |   |   |   |   |
| **June                  30, 2005:**    |   |         |      |                           |   |             |   |       |    |   |   |   |   |
| Performance                  Materials |   | $            | 776,246   |                           | $      | 1,149,444        |   | $          | 449,030 |   | $ | 5,493,323 |   |
| AMPS                                   |   |         | 33,333    |                           |   | 200,471          |   |       | -       |   |   |   |   |
| Life                  Sciences         |   |         | 720,882   |                           |   | (440,583         | )      |       | 2,993   |   |   | 457,294 |   |
| Corporate                  and Other   |   |         | -         |                           |   | 3,440,217        |   |       | 44,062  |   |   | 32,165,964 |   |
|                                   |   |         |      |                           |   |             |   |       |    |   |   |   |   |
| Consolidated                  Total    |   | $            | 1,530,461 |                           | $      | 4,349,549        |   | $          | 496,085 |   | $ | 38,116,581 |   |

|                                                 |   | **Revenues                  -****3                  Months Ended** |    | **Accounts****Receivable                  at** |   |
|------------------------------------------------------|--------|--------------------------------------------------------------------|---------|------------------------------------------------|--------|
| **Customer**                                         |   | **June                  30, 2006**                                 |    | **June                  30, 2006**             |   |
| **Performance                  Materials Division:** |   |                                                               |    |                                           |   |
| Western                  Oil Sands                   |   | $                                                                  | 240,758 |                                           | $      | 170,236 |   |
| UNLV                  Research Foundation            |   | $                                                                  | 222,448 |                                           | $      | 156,022 |   |
|                                                 |   |                                                               |    |                                           |   |   |   |
| **Life                  Sciences Division:**         |   |                                                               |    |                                           |   |   |   |
| Spectrum                  Pharmaceuticals, Inc.      |   | $                                                                  | 510,608 |                                           | $      | - |   |

|                                                 |   | **Revenues                  -****3                  Months Ended** |    | **Accounts****Receivable                  at** |   |
|------------------------------------------------------|--------|--------------------------------------------------------------------|---------|------------------------------------------------|--------|
| **Customer**                                         |   | **June                  30, 2005**                                 |    | **June                  30, 2005**             |   |
| **Performance                  Materials Division:** |   |                                                               |    |                                           |   |
| Western                  Michigan University         |   | $                                                                  | 138,730 |                                           | $      | 98,930 |   |
| Western                  Oil Sands                   |   | $                                                                  | 69,854  |                                           | $      | 56,674 |   |
| UNLV                  Research Foundation            |   | $                                                                  | 160,890 |                                           | $      | 104,702 |   |

----

|                                                 |   | **Revenues                  -****6                  Months Ended** |    | **Accounts****Receivable                  at** |   |
|------------------------------------------------------|--------|--------------------------------------------------------------------|---------|------------------------------------------------|--------|
| **Customer**                                         |   | **June                  30, 2006**                                 |    | **June                  30, 2006**             |   |
| **Performance                  Materials Division:** |   |                                                               |    |                                           |   |
| Western                  Oil Sands                   |   | $                                                                  | 520,388 |                                           | $      | 170,236 |   |
| UNLV                  Research Foundation            |   | $                                                                  | 303,254 |                                           | $      | 156,022 |   |
|                                                 |   |                                                               |    |                                           |   |   |   |
| **Life                  Sciences Division:**         |   |                                                               |    |                                           |   |   |   |
| Spectrum                  Pharmaceuticals, Inc.      |   | $                                                                  | 510,608 |                                           | $      | - |   |

|                                                 |   | **Revenues                  -****6                  Months Ended** |    | **Accounts****Receivable                  at** |   |
|------------------------------------------------------|--------|--------------------------------------------------------------------|---------|------------------------------------------------|--------|
| **Customer**                                         |   | **June                  30, 2005**                                 |    | **June                  30, 2005**             |   |
| **Performance                  Materials Division:** |   |                                                               |    |                                           |   |
| Western                  Michigan University         |   | $                                                                  | 248,439 |                                           | $      | 98,930 |   |
| Western                  Oil Sands                   |   | $                                                                  | 165,235 |                                           | $      | 56,674 |   |
| UNLV                  Research Foundation            |   | $                                                                  | 231,054 |                                           | $      | 104,702 |   |
|                                                 |   |                                                               |    |                                           |   |   |   |
| **Life                  Sciences Division:**         |   |                                                               |    |                                           |   |   |   |
| Spectrum                  Pharmaceuticals, Inc.      |   | $                                                                  | 720,881 |                                           | $      | 25,881 |   |

|                                             |   | **Revenues                  -**     |      | **Revenues                  -**     |   |
|--------------------------------------------------|--------|-------------------------------------|-----------|-------------------------------------|--------|
|                                             |   | **3                  Months Ended** |      | **3                  Months Ended** |   |
| **Geographic                  information (a):** |   | **June                  30, 2006**  |      | **June                  30, 2005**  |   |
|                                             |   |                                |      |                                |   |
| United                  States                   |   | $                                   | 816,578   |                                | $      | 416,527 |   |
| Canada                                           |   |                                | 240,250   |                                |   | 82,354 |   |
| Other                  foreign countries         |   |                                | -         |                                |   | 4,000 |   |
| Total                                            |   | $                                   | 1,056,828 |                                | $      | 502,881 |   |
|                                             |   |                                |      |                                |   |   |   |

|                                                                                                      |   | **Revenues                  -**     |      | **Revenues                  -**     |   |
|-----------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-----------|-------------------------------------|--------|
|                                                                                                      |   | **6                  Months Ended** |      | **6                  Months Ended** |   |
| **Geographic                  information (a):**                                                          |   | **June                  30, 2006**  |      | **June                  30, 2005**  |   |
|                                                                                                      |   |                                |      |                                |   |
| United                  States                                                                            |   | $                                   | 1,029,192 |                                | $      | 1,363,404 |   |
| Canada                                                                                                    |   |                                | 523,052   |                                |   | 166,416 |   |
| Other                  foreign countries                                                                  |   |                                | 49,880    |                                |   | 641 |   |
| Total                                                                                                     |   | $                                   | 1,602,124 |                                | $      | 1,530,461 |   |
|                                                                                                      |   |                                |      |                                |   |   |   |
| (a)                  Revenues are attributed to countries based on location of                  customer. |

----

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

**Forward-Looking        Statements**

**Overview**

| · | Advanced                  Materials |
|--------|-------------------------------------|

| o | The                  marketing and licensing of titanium dioxide pigment production                  technology.                                   |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------|
| o | The                  marketing and production of nano-structured ceramic powders for                  thermal                  spray applications. |
| o | The                  development of nano-structured ceramic powders for nano-sensor                  applications.                                 |

| · | Air                  and Water Treatment |
|--------|------------------------------------------|

| o | The                  development, production and sale of photocatalytic materials for                  air and                  water cleansing.                                                                                |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| o | The                  marketing** **of                  Nanocheck products for phosphate binding to prevent or reduce algae                  growth                  in recreational and industrial                  water. |

| · | Alternative                  Energy |
|--------|-------------------------------------|

| o | The                  development, production and sale for testing purposes of nano-structured                  lithium titanate spinel, lithium cobaltate and lithium manganate                  spinel                  materials for high performance lithium ion batteries. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| o | The                  design and development of power lithium ion battery cells, batteries                  and                  battery packs as well as related design and test services.                                                                                     |
| o | The                  development of materials for photovoltaics and transparent electrodes                  for                  hydrogen generation and fuel cells.                                                                                                           |

| · | Lanthanum                  based Pharmaceutical Products |
|--------|----------------------------------------------------------|

----

| 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                  testing of Renalan, a development-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.                           |

| · | Chemical                  Delivery Products |
|--------|---------------------------------------------|

| o | The                  research and development of TiNano Spheres, which are rigid, hollow,                  porous, high surface area ceramic micro structures that are derived                  from                  Altair’s proprietary process technology for the delivery of chemicals,                  drugs and biocides. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Biocompatible                  Materials |
|--------|------------------------------------------|

| o | The                  research and development of nanomaterials for use in various products                  for                  dental implants, dental fillings and dental products, as well as                  biocompatible coatings on implants. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**General        Outlook**

----

| · | We                  must continue the development work on our advanced battery materials                  and                  battery systems, produce sufficient quantities of batteries and                  battery                  cells for test purposes, obtain satisfactory test results and successfully                  market the materials and systems. 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                  battery                  materials and battery systems to the automotive, stationary power                  and                  military specialty battery industries where we must be able to                  demonstrate                  to prospective customers that our battery materials and battery                  systems                  offer significant advantages over existing                  technologies.                                                                                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | Spectrum                  must successfully complete the testing and application processes                  necessary                  to receive FDA approval of our RenaZorb product. Animal testing                  of                  RenaZorb was completed in September 2005 with positive results.                  However,                  as a result of disagreements over certain contractual issues, Altair                  and                  Spectrum entered an arbitration dispute resolution process. A settlement                  was not reached until early June 2006, thereby delaying the product                  development process and receipt of the next milestone payment.                  On June 22,                  2006, Altair received the milestone payment of 100,000 shares of                  Spectrum                  common stock called for in the agreement and an additional 40,000                  shares                  of common stock in payment of product improvement fees. Following                  the                  settlement, Spectrum appears to have re-focused on the product                  development                  process. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | The                  initial phase of work for the Western Oil Sands license agreement                  has been                  expanded and will run through December 31, 2006. We must successfully                  complete the initial phase, and Western Oil Sands must decide to                  proceed                  with phase 2 work for this project to continue to move toward                  commercialization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

**Recent        Business Developments**

**Advanced        Materials and Power Systems Division**

**Performance          Materials Division**

** **

**Life        Sciences Division**

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**Liquidity        and Capital Resources**

**Current        and Expected Liquidity**

**Capital        Commitments**

|                                            |   |      |      | **Less                  Than** |   |                           |   |                           |      | **After**                    |   |
|-------------------------------------------------|--------|-----------|-----------|--------------------------------|--------|--------------------------------|--------|--------------------------------|-----------|------------------------------|--------|
| **Contractual                  Obligations**    |   | **Total** |      | **1                  Year**    |   | **1-3                  Years** |   | **4-5                  Years** |      | **5                  Years** |   |
| Notes                  Payable                  |   | $         | 2,400,000 |                           | $      | 600,000                        |   | $                              | 1,200,000 |                         | $      | 600,000 |   | $ | - |   |
| Interest                  on Notes Payable      |   |      | 420,000   |                           |   | 168,000                        |   |                           | 210,000   |                         |   | 42,000 |   |   | - |   |
| Contractual                  Service Agreements |   |      | 1,245,883 |                           |   | 1,245,883                      |   |                           | 0         |                         |   | - |   |   | - |   |
| Facilities                  and Property Leases |   |      | 277,054   |                           |   | 129,316                        |   |                           | 147,738   |                         |   | - |   |   | - |   |
| Unfulfilled                  Purchase Orders    |   |      | 843,315   |                           |   | 843,315                        |   |                           | -         |                         |   | - |   |   | - |   |
| Total                  Contractual Obligations  |   | $         | 5,186,252 |                           | $      | 2,986,514                      |   | $                              | 1,557,738 |                         | $      | 642,000 |   | $ | - |   |

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**Off-Balance        Sheet Arrangements**

**Critical        Accounting Policies and Estimates**

| · | 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.   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                  June 30, 2006, the carrying value of these assets was $10,424,000, or 39%                  of total assets. We evaluate the carrying value of long-lived assets                  when                  events or circumstances indicate that an 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| · | Share-Based                  Compensation. We have a stock incentive plan which provides for                  the                  issuance of stock options, restricted stock and other awards 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 6 of Notes to Condensed Consolidated                  Financial Statements, are appropriate and reasonable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| · | 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.  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 at the time the purchaser                  has                  accepted delivery of the product. 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. |

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| · | 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                  based on labor costs. Facilities overhead allocated to research                  and                  development projects may be chargeable when invoicing customers                  under                  certain research and development contracts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| · | 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                  carryforwards.  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 as of June 30, 2006 for projecting that the                  Company                  will realize the benefits of these deductible differences as of                  June 30,                  2006.  Management has, therefore, established a full valuation                  allowance against its net deferred income tax assets as of June                  30,                  2006. |

**Results        of Operations**

*Three        Months Ended June 30, 2006 Compared to Three Months Ended June 30,        2005*

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*Six        Months Ended June 30, 2006 Compared to Six Months Ended June 30,        2005*

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

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

**PART        II - OTHER INFORMATION**

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

| · | ***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                  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.***                                                                                                                                            |
| · | ***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.*** |
| · | ***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.***             |

| · | ***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.*** |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | ***We                  have a substantial number of warrants and options outstanding and                  may                  issue a significant number of additional shares upon the exercise                  thereof.*** |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*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 below and other cautionary        statements throughout this Report and our other filings with the SEC. 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.*

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

***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.***

| · | fluctuations                  in the size and timing of customer service 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.***

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

| · | 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; |

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| · | 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        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.***

***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                  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; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | 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 (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.                                                                                                                                                                                                                                                                                           |

***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.***

| •       | 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.         |

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***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.***

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

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

| · | 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;                                                       |
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|   |                                                                                                                                                                                                                                                                                                                                                             |
| · | The                  licensee 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. |

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

| · | 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;                                                                                                                                                                                           |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| · | 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. |

***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.***

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

| · | 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; |

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|   |                                                                                                                                                                                   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | the                  amount of our capital needs;                                                                                                                                      |
|   |                                                                                                                                                                                   |
| · | the                  market’s perception of nanotechnology and/or chemical                  stocks;                                                                              |
|   |                                                                                                                                                                                   |
| · | 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; |

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

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

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

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

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

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| · | 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        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.***

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**Item        4. Submission of Matters to a Vote of Security Holders**

| 1. | The                  shareholders considered whether to elect the                  following persons as directors, each to serve until the next annual                  meeting of shareholders and until his respective successor shall                  have been                  duly elected and shall                  qualify:  |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Name                  of Nominee**  |   |  **Votes                  For**  |       |  **Votes                  Withheld/Abstentions**  |   |  **Broker                  Non-Votes**  |   |
|--------------------------------------------|--------|--------------------------------------------|------------|-------------------------------------------------------------|--------|---------------------------------------------------|--------|
| Michel                  Bazinet       |   |                                       | 48,351,710 |                                                        |   | 704,351                                           |   |   | -0- |   |
| Jon                  Bengtson         |   |                                       | 48,325,865 |                                                        |   | 730,196                                           |   |   | -0- |   |
| James                  Golla          |   |                                       | 48,257,938 |                                                        |   | 798,123                                           |   |   | -0- |   |
| Alan                  J. Gotcher      |   |                                       | 48,349,282 |                                                        |   | 706,779                                           |   |   | -0- |   |
| George                  Hartman       |   |                                       | 48,172,060 |                                                        |   | 884,001                                           |   |   | -0- |   |
| Christopher                  Jones    |   |                                       | 48,351,876 |                                                        |   | 704,185                                           |   |   | -0- |   |

|   | 2. | The                  shareholders considered whether to appoint Perry-Smith, LLP as                  independent                  auditors and authorize the Audit Committee of the Board of Directors                  to                  fix their remuneration. There were 48,398,224 votes cast in favor,                  no                  votes cast against, 657,837 votes withheld, and no broker non-votes,                  which                  vote was sufficient for approval. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item        6. Exhibits **

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**SIGNATURES**

|   |                            |   | Altair                  Nanotechnologies Inc.                                  |
|--------|---------------------------------|--------|--------------------------------------------------------------------------------|
|   |                            |   |                                                                           |
|   |                            |   |                                                                           |
|   | August                  7, 2006 |   | By:                  /s/ Alan J. Gotcher                                       |
|   | Date                            |   | Alan                  J. Gotcher, Chief Executive Officer                      |
|   |                            |   |                                                                           |
|   |                            |   |                                                                           |
|   | August                  7, 2006 |   | By:                  /s/ Edward H. Dickinson                                   |
|   | Date                            |   | Edward                  H. Dickinson, Chief Financial                  Officer |

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| **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, File No. 001-12497 |
| 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, 2005,                  File No. 001-12497 |
| 31.1                               |   | Section                  302 Certification of Chief Executive Officer |   | Filed                  herewith |
| 31.2                               |   | Section                  302 Certification of Chief Financial Officer |   | Filed                  herewith |
| 32.1                               |   | Section                  906 Certification of Chief Executive Officer |   | Filed                  herewith |
| 32.2                               |   | Section                  906 Certification of Chief Financial Officer |   | Filed                  herewith |

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