----

----

| x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED                                        |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | March 31, 2010                                                                                                                                                |
|   |                                                                                                                                                          |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM_________________ TO _________________ |

| ALTAIR NANOTECHNOLOGIES INC.                           |
|--------------------------------------------------------|
| (Exact name of registrant as specified in its charter) |

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

| 204 Edison WayReno, Nevada 89502                             |
|--------------------------------------------------------------|
| (Address of principal executive offices, including zip code) |

| Large accelerated filer | o | Accelerated filer         | x |
|-------------------------|---|---------------------------|---|
| Non-accelerated filer   | o | Smaller reporting company | o |

----

----

| PART I - FINANCIAL INFORMATION                                                         |   |
|----------------------------------------------------------------------------------------|--------|
|                                                                                   |   |   |   |   |   |   |
| Item 1. Financial Statements                                                           |   |   |   |   |   |   |
|                                                                                   |   |   |   |   |   |   |
| ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES                                          |   |
| CONDENSED CONSOLIDATED BALANCE SHEETS                                                  |   |
| (Expressed in thousands of United States Dollars, except shares and per share amounts) |   |
| (Unaudited)                                                                            |   |
|                                                                                   |   |   |   |   |   |   |
|                                                                                   |   | March 31, |   |   | December 31, |   |
|                                                                                   |   | 2010 |   |   | 2009 |   |
| ASSETS                                                                                 |   |   |   |   |   |   |
| Current assets                                                                         |   |   |   |   |   |   |
| Cash and cash equivalents                                                              |   | $ | 12,350 |   |   | $ | 18,122 |   |
| Investment in available for sale securities                                            |   |   | 525 |   |   |   | 505 |   |
| Accounts receivable, net                                                               |   |   | 840 |   |   |   | 683 |   |
| Product inventories                                                                    |   |   | 5,932 |   |   |   | 5,043 |   |
| Prepaid expenses and other current assets                                              |   |   | 1,640 |   |   |   | 1,820 |   |
| Total current assets                                                                   |   |   | 21,287 |   |   |   | 26,173 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| Investment in available for sale securities                                            |   |   | 2,448 |   |   |   | 2,587 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| Property, plant and equipment, net held and used                                       |   |   | 8,749 |   |   |   | 8,670 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| Property, plant and equipment, net held and not used                                   |   |   | 2,096 |   |   |   | 2,211 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| Patents, net                                                                           |   |   | 483 |   |   |   | 551 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| Other assets                                                                           |   |   | 125 |   |   |   | 125 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| Total Assets                                                                           |   | $ | 35,188 |   |   | $ | 40,317 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                   |   |   |   |   |   |   |   |   |
| Current liabilities                                                                    |   |   |   |   |   |   |   |   |
| Trade accounts payable                                                                 |   | $ | 2,387 |   |   | $ | 1,783 |   |
| Accrued salaries and benefits                                                          |   |   | 1,567 |   |   |   | 625 |   |
| Accrued warranty                                                                       |   |   | 82 |   |   |   | 79 |   |
| Accrued liabilities                                                                    |   |   | 539 |   |   |   | 758 |   |
| Current portion of long-term debt                                                      |   |   | 94 |   |   |   | 810 |   |
| Total current liabilities                                                              |   |   | 4,669 |   |   |   | 4,055 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| Long-term debt, less current portion                                                   |   |   | 33 |   |   |   | 37 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| Stockholders' equity                                                                   |   |   |   |   |   |   |   |   |
| Common stock, no par value, unlimited shares authorized;                               |   |   |   |   |   |   |   |   |
| 105,400,728 shares issued and                                                          |   |   |   |   |   |   |   |   |
| outstanding at March 31, 2010 and December 31, 2009                                    |   |   | 188,577 |   |   |   | 188,515 |   |
| Additional paid in capital                                                             |   |   | 11,325 |   |   |   | 10,933 |   |
| Accumulated deficit                                                                    |   |   | (168,271 | ) |   |   | (162,204 | ) |
| Accumulated other comprehensive loss                                                   |   |   | (1,682 | ) |   |   | (1,560 | ) |
| Total Altair Nanotechnologies, Inc.’s stockholders’ equity                 |   |   | 29,949 |   |   |   | 35,684 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| Noncontrolling interest in Subsidiary                                                  |   |   | 537 |   |   |   | 541 |   |
| Total stockholders’ equity                                                       |   |   | 30,486 |   |   |   | 36,225 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity                                             |   | $ | 35,188 |   |   | $ | 40,317 |   |
|                                                                                   |   |   |   |   |   |   |   |   |
|  See notes to the unaudited condensed consolidated financial statements.          |   |

----

|                                                                    |   |               |        |   |   |   |
|-------------------------------------------------------------------------|--------|--------------------|-------------|--------|--------|--------|
|                                                                    |   | Three Months Ended |        |
|                                                                    |   | March 31,          |        |
|                                                                    |   | 2010               |        |   | 2009   |   |
| Revenues                                                                |   |               |        |   |   |   |
| Product sales                                                           |   | $                  | 75          |   |   | $      | 191 |   |
| Commercial collaborations                                               |   |               | 294         |   |   |   | 699 |   |
| Contracts and grants                                                    |   |               | 823         |   |   |   | 12 |   |
| Total revenues                                                          |   |               | 1,192       |   |   |   | 902 |   |
|                                                                    |   |               |        |   |   |   |   |   |
| Cost of goods sold                                                      |   |               |        |   |   |   |   |   |
| Product                                                                 |   |               | 53          |   |   |   | 185 |   |
| Commercial collaborations                                               |   |               | 178         |   |   |   | 229 |   |
| Contracts and grants                                                    |   |               | 611         |   |   |   | 22 |   |
| Warranty and inventory reserves                                         |   |               | 53          |   |   |   | - |   |
| Total cost of goods sold                                                |   |               | 895         |   |   |   | 436 |   |
|                                                                    |   |               |        |   |   |   |   |   |
| Gross profit                                                            |   |               | 297         |   |   |   | 466 |   |
|                                                                    |   |               |        |   |   |   |   |   |
| Operating expenses                                                      |   |               |        |   |   |   |   |   |
| Research and development                                                |   |               | 2,439       |   |   |   | 3,044 |   |
| Sales and marketing                                                     |   |               | 1,185       |   |   |   | 601 |   |
| General and administrative                                              |   |               | 2,286       |   |   |   | 2,560 |   |
| Depreciation and amortization                                           |   |               | 476         |   |   |   | 733 |   |
| Total operating expenses                                                |   |               | 6,386       |   |   |   | 6,938 |   |
| Loss from operations                                                    |   |               | (6,089      | )      |   |   | (6,472 | ) |
|                                                                    |   |               |        |   |   |   |   |   |
| Other (expense) income                                                  |   |               |        |   |   |   |   |   |
| Interest expense                                                        |   |               | (8          | )      |   |   | (18 | ) |
| Interest income                                                         |   |               | 26          |   |   |   | 71 |   |
| Realized loss on investment                                             |   |               | -           |   |   |   | (18 | ) |
| Loss on foreign exchange                                                |   |               | -           |   |   |   | (4 | ) |
| Total other income, net                                                 |   |               | 18          |   |   |   | 31 |   |
|                                                                    |   |               |        |   |   |   |   |   |
| Net loss                                                                |   |               | (6,071      | )      |   |   | (6,441 | ) |
|                                                                    |   |               |        |   |   |   |   |   |
| Less:  Net loss attributable to non-controlling interest      |   |               | 4           |   |   |   | 56 |   |
|                                                                    |   |               |        |   |   |   |   |   |
| Net loss attributable to Altair Nanotechnologies, Inc.                  |   | $                  | (6,067      | )      |   | $      | (6,385 | ) |
|                                                                    |   |               |        |   |   |   |   |   |
| Loss per common share - basic and diluted                               |   | $                  | (0.06       | )      |   | $      | (0.07 | ) |
|                                                                    |   |               |        |   |   |   |   |   |
| Weighted average shares - basic and diluted                             |   |               | 105,094,234 |   |   |   | 92,983,131 |   |
|                                                                    |   |               |        |   |   |   |   |   |
| See notes to the unaudited condensed consolidated financial statements. |   |

----

| ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES                                          |
|----------------------------------------------------------------------------------------|
| CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE LOSS |
| (Expressed in thousands of United States Dollars, except shares and per share amounts) |
| (Unaudited)                                                                            |

|                         |   | Altair Nanotechnologies, Inc. Shareholders |       |   | Noncontrolling Interest in Subsidiary |   |    |        |   |
|------------------------------|--------|--------------------------------------------|------------|--------|---------------------------------------|--------|---------|-------------|--------|
|                         |   |                                       |       |   |                                  |   |    |        |   |   |   |   |   | Accumulated |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |   |   |   |
|                         |   |                                       |       |   |                                  |   |    |        |   |   |   |   |   | Other |   |   |   |   |   |   |   |   | Other |   |   |   |   |   |   |   |
|                         |   |                                       |       |   |                                  |   |    | Additional  |   |   |   |   |   | Compre- |   |   |   |   |   | Interest |   |   | Compre- |   |   |   |   |   |   |   |
|                         |   | Common Stock                               |       |   | Paid In                               |   |    | Accumulated |   |   | hensive |   |   |   |   |   | In |   |   | hensive |   |   |   |   |   |   |   |
|                         |   | Shares                                     |       |   | Amount                                |   |    | Capital     |   |   | Deficit |   |   | Gain (Loss) |   |   | Subtotal |   |   | Subsidiary |   |   | Gain (Loss) |   |   | Subtotal |   |   | Total |   |
|                         |   |                                       |       |   |                                  |   |    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2009     |   |                                       | 93,143,271 |   |                                  | $      | 180,105 |        |   | $ | 5,378 |   |   | $ | (140,892 | ) |   | $ | (1,873 | ) |   | $ | 42,718 |   |   | $ | 1,098 |   |   | $ | - |   |   | $ | 1,098 |   |   | $ | 43,816 |   |
| Comprehensive loss:          |   |                                       |       |   |                                  |   |    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                     |   |                                       | -          |   |                                  |   | -       |        |   |   | - |   |   |   | (6,385 | ) |   |   | - |   |   |   | (6,385 | ) |   |   | (56 | ) |   |   | - |   |   |   | (56 | ) |   |   | (6,441 | ) |
| Other comprehensive gain     |   |                                       | -          |   |                                  |   | -       |        |   |   | - |   |   |   | - |   |   |   | 118 |   |   |   | 118 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 118 |   |
| Comprehensive loss:          |   |                                       |       |   |                                  |   |    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (6,267 | ) |   |   |   |   |   |   |   |   |   |   | (56 | ) |   |   | (6,323 | ) |
| Share-based compensation     |   |                                       | -          |   |                                  |   | 22      |        |   |   | 236 |   |   |   | - |   |   |   | - |   |   |   | 258 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 258 |   |
| Issuance of restricted stock |   |                                       | 10,000     |   |                                  |   | -       |        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Balance, March 31, 2009      |   |                                       | 93,153,271 |   |                                  | $      | 180,127 |        |   | $ | 5,614 |   |   | $ | (147,277 | ) |   | $ | (1,755 | ) |   | $ | 36,709 |   |   | $ | 1,042 |   |   | $ | - |   |   | $ | 1,042 |   |   | $ | 37,751 |   |

|                     |   | Altair Nanotechnologies, Inc. Shareholders |        |   | Noncontrolling Interest in Subsidiary |   |    |        |   |
|--------------------------|--------|--------------------------------------------|-------------|--------|---------------------------------------|--------|---------|-------------|--------|
|                     |   |                                       |        |   |                                  |   |    |        |   |   |   |   |   | Accumulated |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |   |   |   |
|                     |   |                                       |        |   |                                  |   |    |        |   |   |   |   |   | Other |   |   |   |   |   |   |   |   | Other |   |   |   |   |   |   |   |
|                     |   |                                       |        |   |                                  |   |    | Additional  |   |   |   |   |   | Compre- |   |   |   |   |   | Interest |   |   | Compre- |   |   |   |   |   |   |   |
|                     |   | Common Stock                               |        |   | Paid In                               |   |    | Accumulated |   |   | hensive |   |   |   |   |   | In |   |   | hensive |   |   |   |   |   |   |   |
|                     |   | Shares                                     |        |   | Amount                                |   |    | Capital     |   |   | Deficit |   |   | Gain (Loss) |   |   | Subtotal |   |   | Subsidiary |   |   | Gain (Loss) |   |   | Subtotal |   |   | Total |   |
|                     |   |                                       |        |   |                                  |   |    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2010 |   |                                       | 105,400,728 |   |                                  | $      | 188,515 |        |   | $ | 10,933 |   |   | $ | (162,204 | ) |   | $ | ( 1,560 | ) |   | $ | 35,684 |   |   | $ | 541 |   |   | $ | - |   |   | $ | 541 |   |   | $ | 36,225 |   |
| Comprehensive loss:      |   |                                       |        |   |                                  |   |    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                 |   |                                       | -           |   |                                  |   | -       |        |   |   | - |   |   |   | (6,067 | ) |   |   | - |   |   |   | (6,067 | ) |   |   | (4 | ) |   |   | - |   |   |   | (4 | ) |   |   | (6,071 | ) |
| Other comprehensive loss |   |                                       | -           |   |                                  |   | -       |        |   |   | - |   |   |   | - |   |   |   | (122 | ) |   |   | (122 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (122 | ) |
| Comprehensive loss:      |   |                                       |        |   |                                  |   |    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (6,189 | ) |   |   |   |   |   |   |   |   |   |   | (4 | ) |   |   | (6,193 | ) |
| Share-based compensation |   |                                       | -           |   |                                  |   | 62      |        |   |   | 392 |   |   |   | - |   |   |   | - |   |   |   | 454 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 454 |   |
| Balance, March 31, 2010  |   |                                       | 105,400,728 |   |                                  | $      | 188,577 |        |   | $ | 11,325 |   |   | $ | (168,271 | ) |   | $ | (1,682 | ) |   | $ | 29,949 |   |   | $ | 537 |   |   | $ | - |   |   | $ | 537 |   |   | $ | 30,486 |   |

----

| ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES     |   |
|---------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS   |   |
| (Expressed in thousands of United States Dollars) |   |
| (Unaudited)                                       |   |
|                                              |   |   |   |   |   |   |
|                                              |   | Three Months Ended |   |
|                                              |   | March 31, |   |
|                                              |   | 2010 |   |   | 2009 |   |
| Cash flows from operating activities:             |   |   |   |   |   |   |
| Net loss                                          |   | $ | (6,067 | ) |   | $ | (6, 385 | ) |
| Adjustments to reconcile net loss to net cash     |   |   |   |   |   |   |   |   |
| used in operating activities:                     |   |   |   |   |   |   |   |   |
| Depreciation and amortization                     |   |   | 476 |   |   |   | 733 |   |
| Noncontrolling interest in operations             |   |   | (4 | ) |   |   | (56 | ) |
| Securities received in payment of license fees    |   |   | (3 | ) |   |   | - |   |
| Share-based compensation                          |   |   | 454 |   |   |   | 258 |   |
| Loss on disposal of fixed assets                  |   |   | 47 |   |   |   | 10 |   |
| Changes in operating assets and liabilities:      |   |   |   |   |   |   |   |   |
| Restricted cash                                   |   |   | - |   |   |   | (450 | ) |
| Accounts receivable, net                          |   |   | (157 | ) |   |   | 467 |   |
| Product inventories                               |   |   | (847 | ) |   |   | (10 | ) |
| Prepaid expenses and other current assets         |   |   | 180 |   |   |   | 43 |   |
| Other assets                                      |   |   | - |   |   |   | 18 |   |
| Trade accounts payable                            |   |   | 535 |   |   |   | 304 |   |
| Accrued salaries and benefits                     |   |   | 942 |   |   |   | 168 |   |
| Accrued warranty                                  |   |   | 3 |   |   |   | (2 | ) |
| Accrued liabilities                               |   |   | (219 | ) |   |   | (393 | ) |
|                                              |   |   |   |   |   |   |   |   |
| Net cash used in operating activities             |   |   | (4,660 | ) |   |   | (5,295 | ) |
|                                              |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:             |   |   |   |   |   |   |   |   |
| Purchase of property and equipment                |   |   | (392 | ) |   |   | (248 | ) |
|                                              |   |   |   |   |   |   |   |   |
| Net cash used in investing activities             |   |   | (392 | ) |   |   | (248 | ) |
|                                              |   |   |   |   |   |   |   |   |
|                                              |   |   |   |   |   |   |   |   |
|                                              |   |   |   |   |   | (continued) |   |

----

| ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES     |   |
|---------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS   |   |
| (Expressed in thousands of United States Dollars) |   |
| (Unaudited)                                       |   |
|                                              |   |   |   |   |   |   |
|                                              |   | Three Months Ended |   |
|                                              |   | March 31, |   |
|                                              |   | 2010 |   |   | 2009 |   |
| Cash flows from financing activities:             |   |   |   |   |   |   |
| Payment of notes payable                          |   |   | (716 | ) |   |   | (652 | ) |
| Proceeds from long-term debt                      |   |   | - |   |   |   | 58 |   |
| Repayment of long-term debt                       |   |   | (4 | ) |   |   | (4 | ) |
|                                              |   |   |   |   |   |   |   |   |
| Net cash used in financing activities             |   |   | (720 | ) |   |   | (598 | ) |
|                                              |   |   |   |   |   |   |   |   |
| Net decrease in cash and cash equivalents         |   |   | (5,772 | ) |   |   | (6,141 | ) |
|                                              |   |   |   |   |   |   |   |   |
| Cash and cash equivalents, beginning of period    |   |   | 18,122 |   |   |   | 28,088 |   |
|                                              |   |   |   |   |   |   |   |   |
| Cash and cash equivalents, end of period          |   | $ | 12,350 |   |   | $ | 21,947 |   |
|                                              |   |   |   |   |   |   |   |   |
| Supplemental disclosures:                         |   |   |   |   |   |   |   |   |
| Cash paid for interest                            |   | $ | 43 |   |   | $ | 86 |   |
|                                              |   |   |   |   |   |   |   |   |
| Cash paid for income taxes                        |   | None |   |   | None |   |

| Supplemental schedule of non-cash investing and financing activities:                                                                            |
|--------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                             |
| For the three months ended March 31, 2010:                                                                                                       |
| - We made capital equipment purchases of $69,000 which are included in accounts payable at March 31, 2010.                                       |
| - We had an unrealized loss on available for sale securities of $122,000.                                                                        |
|                                                                                                                                             |
| For the three months ended March 31, 2009:                                                                                                       |
| - We had an unrealized gain on available for sale securities of $118,000.                                                                        |
| - We issued 10,000 shares of restricted stock to directors having a fair value of approximately $17,000 for which no cash will be received. |

----

| Beginning Balance, January 1, 2010              |   | $      | 161 |   |
|-------------------------------------------------|--------|--------|-----|--------|
| Additions charged to costs and expenses         |   |   | -   |   |
| Net deductions (write-offs, net of collections) |   |   | -   |   |
| Ending Balance, March 31, 2010                  |   | $      | 161 |   |

----

----

----

|   | Level 1  - | Quoted prices for identical instruments in active markets. |
|--------|----------------------|------------------------------------------------------------|

|   | Level 2  - | Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
|--------|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3  - | Significant inputs to the valuation model are unobservable. |
|--------|----------------------|-------------------------------------------------------------|

----

| Assets at fair value :                      |   | Total  |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|---------------------------------------------|--------|--------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Auction rate corporate notes                |   | $      | 2,448  |   |    | $      | -      |    |   | $      | -       |   |   | $ | 2,448 |   |
| Spectrum Pharmaceuticals, Inc.              |   |   | 525    |   |    |   | 525    |    |   |   | -       |   |   |   | - |   |
| Investment in available for sale securities |   | $      | 2,973  |   |    | $      | 525    |    |   | $      | -       |   |   | $ | 2,448 |   |

| Assets at fair value:                       |   | Total  |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|---------------------------------------------|--------|--------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Auction rate corporate notes                |   | $      | 2,587  |   |    | $      | -      |    |   | $      | -       |   |   | $ | 2,587 |   |
| Spectrum Pharmaceuticals, Inc.              |   |   | 505    |   |    |   | 505    |    |   |   | -       |   |   |   | - |   |
| Investment in available for sale securities |   | $      | 3,092  |   |    | $      | 505    |    |   | $      | -       |   |   | $ | 2,587 |   |

|  Fair Value Measurements Using Significant Unobservable Inputs (Level 3) |   | Auction ratecorporate notes2010 |   |   | Auction ratecorporate notes2009 |   |
|-------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|
| Beginning Balance, January 1                                                  |   | $                               | 2,587  |   |                            | $      | 2,816 |   |
| Total gains or losses (realized/unrealized):                                  |   |                            |   |   |                            |   |   |   |
| Included in other comprehensive income                                        |   |                            | (141   | )      |                            |   | 55 |   |
| Other adjustments                                                             |   |                            | 2      |   |                            |   | (5 | ) |
| Ending Balance, March 31                                                      |   | $                               | 2,448  |   |                            | $      | 2,866 |   |

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|                      |   | March 31, 2010 |   |   | December 31, 2009 |   |
|---------------------------|--------|---------------------|--------|--------|-------------------|--------|
|                      |   |                |   |   |              |   |
| Raw materials             |   | $                   | 3,760  |   |              | $      | 3,933 |   |
| Work in process           |   |                | 1,655  |   |              |   | 908 |   |
| Finished goods            |   |                | 517    |   |              |   | 202 |   |
| Total product inventories |   | $                   | 5,932  |   |              | $      | 5,043 |   |

|                                            |   | March 31, 2010 |   |   | December 31, 2009 |   |
|-------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                            |   |           |   |   |              |   |
| Prepaid inventory purchases                     |   | $              | 716    |   |              | $      | 802 |   |
| Prepaid insurance                               |   |           | 175    |   |              |   | 301 |   |
| Deposits                                        |   |           | 340    |   |              |   | 340 |   |
| Other prepaid expenses and current assets       |   |           | 409    |   |              |   | 377 |   |
| Total prepaid expenses and other current assets |   | $              | 1,640  |   |              | $      | 1,820 |   |

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|                                  |   | March 31, 2010 |   |   | December 31, 2009 |   |
|---------------------------------------|--------|----------------|--------|--------|-------------------|--------|
| Patents and patent applications       |   | $              | 1,366  |   |              | $      | 1,518 |   |
| Less accumulated amortization         |   |           | (883   | )      |              |   | (967 | ) |
| Total patents and patent applications |   | $              | 483    |   |              | $      | 551 |   |

|                                                  |   | March 31,2010 |   |   | December 31, 2009 |   |
|-------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
| Note payable to BHP Minerals International, Inc.      |   |          | -      |   |              | $      | 600 |   |
| Note payable to AICCO, Inc.                           |   | $             | 78     |   |              |   | 194 |   |
| Capital leases                                        |   |          | 49     |   |              |   | 53 |   |
| Subtotal                                              |   |          | 127    |   |              |   | 847 |   |
| Less current portion                                  |   |          | (94    | )      |              |   | (810 | ) |
| Long-term portion of notes payable and capital leases |   | $             | 33     |   |              | $      | 37 |   |

----

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|                   |   |      |   |   |            |   |   | Depreciation |   |   |   |   |
|------------------------|--------|-----------|--------|--------|-----------------|--------|--------|--------------|--------|--------|--------|--------|
|                   |   |      |   |   | Loss            |   |   | and          |   |   |   |   |
| Three Months Ended     |   | Net Sales |   |   | From Operations |   |   | Amortization |   |   | Assets |   |
| March 31, 2010:        |   |      |   |   |            |   |   |         |   |   |   |   |
| Power and Energy Group |   | $         | 903    |   |            | $      | 2,202  |         |   | $      | 295    |   |   | $ | 12,234 |   |
| All Other              |   |      | 289    |   |            |   | 105    |         |   |   | 136    |   |   |   | 3,354 |   |
| Corporate              |   |      | -      |   |            |   | 3,782  |         |   |   | 45     |   |   |   | 19,600 |   |
| Consolidated Total     |   | $         | 1,192  |   |            | $      | 6,089  |         |   | $      | 476    |   |   | $ | 35,188 |   |
|                   |   |      |   |   |            |   |   |         |   |   |   |   |   |   |   |   |
|                   |   |      |   |   |            |   |   |         |   |   |   |   |   |   |   |   |
| March 31, 2009:        |   |      |   |   |            |   |   |         |   |   |   |   |   |   |   |   |
| Power and Energy Group |   | $         | 848    |   |            | $      | 2,283  |         |   | $      | 356    |   |   | $ | 6,800 |   |
| All Other              |   |      | 54     |   |            |   | 516    |         |   |   | 333    |   |   |   | 5,406 |   |
| Corporate              |   |      | -      |   |            |   | 3,673  |         |   |   | 44     |   |   |   | 29,278 |   |
| Consolidated Total     |   | $         | 902    |   |            | $      | 6,472  |         |   | $      | 733    |   |   | $ | 41,484 |   |

|                     |   | Sales              |   |   | Accounts Receivable |   |
|--------------------------|--------|--------------------|--------|--------|---------------------|--------|
|                     |   | Three Months Ended |   |   | Balance at          |   |
| Customer                 |   | March 31, 2010     |   |   | March 31, 2010      |   |
| Power and Energy Group:  |   |               |   |   |                |   |
| Office of Naval Research |   | $                  | 602    |   |                | $      | 528 |   |
| Proterra LLC             |   | $                  | 283    |   |                | $      | 85 |   |
|                     |   |               |   |   |                |   |   |   |
| All Other:               |   |               |   |   |                |   |   |   |
| US Army RDECOM           |   | $                  | 203    |   |                | $      | 193 |   |

----

|                                      |   | Sales              |   |   | Accounts Receivable |   |
|-------------------------------------------|--------|--------------------|--------|--------|---------------------|--------|
|                                      |   | Three Months Ended |   |   | Balance at          |   |
| Customer                                  |   | March 31, 2009     |   |   | March 31, 2009      |   |
| Power and Energy Group:                   |   |               |   |   |                |   |
| BAE Systems Science & Technology Inc. |   | $                  | 482    |   |                | $      | 202 |   |
| BAE Systems Marine Limited                |   | $                  | 215    |   |                | $      | 59 |   |
| Amperex Technology Limited                |   | $                  | 103    |   |                | $      | 103 |   |

|                                                                    |   | Sales              |   |   | Sales              |   |
|-------------------------------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
|                                                                    |   | Three Months Ended |   |   | Three Months Ended |   |
| Geographic information (a):                                             |   | March 31, 2010     |   |   | March 31, 2009     |   |
| United States                                                           |   | $                  | 1,192  |   |               | $      | 572 |   |
| Other foreign countries                                                 |   |               | -      |   |               |   | 330 |   |
| Total                                                                   |   | $                  | 1,192  |   |               | $      | 902 |   |
|                                                                    |   |               |   |   |               |   |   |   |
| (a) Revenues are attributed to countries based on location of customer. |   |

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|   | ● | Based on the success of the 2008 2 MW frequency regulation trial, as validated in the KEMA, Inc. analysis and report, we have experienced a substantial amount of interest in the product from other entities and are in active sales development discussions with a number of them.                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | ● | In August 2009, we signed a contract with Proterra, LLC, a Golden, Colorado based leading designer and manufacturer of heavy-duty drive systems, energy storage systems, vehicle control systems and transit buses to sell them battery modules for their all electric and hybrid electric buses. Proterra’s systems are scalable to all forms of commercial buses and Class 6-8 trucks.  On May 3, 2010 we received a new purchase order of $850,000 with Proterra to supply additional battery modules for delivery in the third quarter.  We anticipate additional larger orders from Proterra as it brings its new manufacturing plant on line and begins to scale up its operations. |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | ● | Based on the demonstrated success of our battery modules in the Proterra bus application and independent testing of our cells by other entities, we have also entered into discussions with a number of other bus manufacturers or systems integrators regarding the purchase of our battery products for their respective applications.                                                                                                                                                                                                                                                                                                                                                                            |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | ● | Our efforts in the military market continue to move forward on several different projects.  Initial testing phases on each project with the U.S. Army, U.S. Navy and the British Ministry of Defense have all been completed and ongoing government funding for 2010 for the U.S. Navy is already in place. Although the results of the work done in the other areas were equally well received, ongoing work is dependent on government funding in each country.  With the overall state of the economy still being weak, this funding is uncertain at the current time.                                                                                                                       |

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|   | ● | Spectrum is continuing its product development work and pre-clinical testing with the intention of filing an Investigational New Drug application with the U.S. Food and Drug Administration in 2010.  During 2009, we assisted Spectrum in selection of a third-party manufacturer of the RenazorbTM and RenalanTM active pharmaceutical ingredient.  Spectrum continues to enlist our analytical resources for development work.  Pre-clinical trial work still lies ahead for the RenazorbTM-based drugs. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | ● | On April 30, 2010 we sold our 70% interest in AlSher Titania, LLC to Sherwin-Williams, who will be taking these assets to further develop this business on their own.  We prepared a cash flow analysis on our expected cash receipts from the sale of our interest in AlSher and determined that the expected cash receipts are higher than the sum of the $418,000 of fixed assets and the $483,000 of patents as of March 31, 2010. In return Sherwin will make future payments to us based on the future business success of AlSher.   |

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|   | ● | The volume and timing of our customer sales,                   |
|--------|---------|----------------------------------------------------------------|
|   | ● | The timeliness of our collections efforts,                     |
|   | ● | The build-up of our inventory levels in anticipation of sales, |
|   | ● | The addition of headcount and other operating expenses, and    |
|   | ● | Our ability to raise additional capital.                       |

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|   | ● | reducing production levels;                                                                                                                        |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | deferring discretionary expenditures such as capital purchases, internal research costs, training, and routine equipment and building maintenance; |
|   | ● | eliminating or deferring filling non-critical positions through attrition; and                                                                     |
|   | ● | reductions in workforce.                                                                                                                           |

|                           |   |   |   |   | Less Than |   |   |      |   |   |      |   |   | After   |   |
|--------------------------------|--------|--------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|---------|--------|
| Contractual Obligations        |   | Total  |   |   | 1 Year    |   |   | 1-3 Years |   |   | 4-5 Years |   |   | 5 Years |   |
| Notes Payable                  |   | $      | 78     |   |      | $      | 78     |      |   | $      | -         |   |   | $       | -      |   |   | $ | - |   |
| Contractual Service Agreements |   |   | 397    |   |      |   | 397    |      |   |   | -         |   |   |    | -      |   |   |   | - |   |
| Property and Capital Leases    |   |   | 791    |   |      |   | 386    |      |   |   | 405       |   |   |    | -      |   |   |   | - |   |
| Unfulfilled Purchase Orders    |   |   | 1,646  |   |      |   | 1,646  |      |   |   | -         |   |   |    | -      |   |   |   | - |   |
| Total Contractual Obligations  |   | $      | 2,912  |   |      | $      | 2,507  |      |   | $      | 405       |   |   | $       | -      |   |   | $ | - |   |

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| ■ | 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 March 31, 2010, the carrying value of these assets was $11.3 million, or 32% of total assets.   We evaluate the carrying value of long-lived assets whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable.  The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows expected to be generated by the asset are less than the carrying value.  Our estimate of the cash flows is based on the information available at the time including the following:  internal budgets; sales forecasts; customer trends and order backlogs; anticipated production volumes; and market conditions over an estimate of the remaining useful life of the asset which may range from 3 to 10 years for most equipment and up to 22 years for our building and related building improvements.  If an impairment is indicated, the asset value is written to its fair value based upon market prices, or if not available, upon discounted cash flow value, at an appropriate discount rate determined by us to be commensurate with the risk inherent in the business model.  The determination of both undiscounted and discounted cash flows requires us to make significant estimates and consider the expected course of action at the balance sheet date.  Our assumptions about future sales and production volumes require significant judgment because actual sales prices and volumes have fluctuated significantly in the past and are expected to continue to do so.  Until our products reach commercialization, the demand for our products is difficult to estimate.  Subsequent changes in estimated undiscounted and discounted cash flows arising from changes in anticipated actions could impact the determination of whether impairment exists, the amount of the impairment charge recorded and whether the effects could materially impact our consolidated financial statements.  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 or the assets used to produce it, a history of operating or cash flow losses and/or the partial or complete lapse of technology rights protection. Fixed assets held by our joint venture with Sherwin Williams, AlSher Titania LLC, of $418,000, were also evaluated.  Based on our agreement to sell our 70% interest in AlSher to Sherwin Williams dated April 30, 2010, Sherwin-Williams will be taking these assets to further develop this business on their own.  We prepared a cash flow analysis on our expected cash receipts from the sale of our interest in AlSher and determined that the expected cash receipts are higher than the sum of the $418,000 of fixed assets and the $483,000 of patents as of March 31, 2010. We reviewed our four capitalized patents related to AlSher and determined that three of these patents have value in excess of their net book value of $483,000.  AlSher currently has an exclusive license to use this technology from Altair.  The fourth patent no longer has value.  The fourth patent had a net book value of $47,000 and an impairment charge of this amount was recorded in the quarter ended March 31, 2010. As of March 31, 2010, we estimate that our future cash flows, on an undiscounted basis, are greater than our $11.3 million in long-lived assets.  Our estimated future cash flows include anticipated product sales, commercial collaborations, and contracts and grant revenue, since our long-lived asset base, which is primarily composed of production, laboratory and testing equipment and our Reno facility, is utilized to fulfill contracts in all revenue categories.  Based on our assessment, which represents no change from the prior year in our approach to valuing long-lived assets, other than the $47,000 patent impairment charge described above, we believe that our long-lived assets are not impaired. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ■ | Stock-Based Compensation.  We have a stock incentive plan that provides for the issuance of stock options, restricted stock and other awards to employees and service providers.  We calculate compensation expense using a Black-Scholes Merton 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 9 of Notes to the 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 collectability is probable.  During the first quarter of 2010, our revenues were derived from three sources: product sales, commercial collaborations, and contract research and development.  License fees are recognized when the agreement is signed, we have performed all material obligations related to the particular milestone payment or other revenue component and the earnings process is complete.  Revenue for product sales is recognized upon delivery of the product, unless specific contractual terms dictate otherwise.  Based on the specific terms and conditions of each contract/grant, revenues are recognized on a time and materials basis, a percentage of completion basis and/or a completed contract basis.  Revenue under contracts based on time and materials is recognized at contractually billable rates as labor hours and expenses are incurred.  Revenue under contracts based on a fixed fee arrangement is recognized based on various performance measures, such as stipulated milestones.  As these milestones are achieved, revenue is recognized.  From time to time, facts develop that may require us to revise our estimated total costs or revenues expected.  The cumulative effect of revised estimates is recorded in the period in which the facts requiring revisions become known.  The full amount of anticipated losses on any type of contract is recognized in the period in which it becomes known.  Payments received in advance relating to future performance of services or delivery of products, are deferred until the customer accepts the service or the product title transfers to our customer.  Upfront payments received in connection with certain rights granted in contractual arrangements are deferred and amortized over the related time period over which the benefits are received.  Based on specific customer bill and hold agreements, revenue is recognized when the inventory is shipped to a third party storage warehouse, the inventory is segregated and marked as sold, the customer takes the full rights of ownership and title to the inventory upon shipment to the warehouse per the bill and hold agreement.  When contract terms include multiple components that are considered separate units of accounting, the revenue is attributed to each component and revenue recognition may occur at different points in time for product shipment, installation, and service contracts based on substantial completion of the earnings process. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ■ | Accrued Warranty. We provide a limited warranty for battery packs and energy storage systems.  A liability is recorded for estimated warranty obligations at the date products are sold.  Since these are new products, the estimated cost of warranty coverage is based on cell and module life cycle testing and compared for reasonableness to warranty rates on competing battery products.  As sufficient actual historical data is collected on the new product, the estimated cost of warranty coverage will be adjusted accordingly.  The liability for estimated warranty obligations may also be adjusted based on specific warranty issues identified.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| ■ | Overhead Allocation.  Facilities overheads, which are comprised primarily of occupancy and related expenses, are initially recorded in general and administrative expenses and then allocated monthly to research and development expense based on labor costs.  Facilities overheads and fringe benefits allocated to research and development projects may be chargeable when invoicing customers under certain research and development contracts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ■ | Allowance for Doubtful Accounts.  The allowance for doubtful accounts is based on our assessment of the collectability 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| ■ | Inventory.  We value our inventories generally at the lower of cost (first-in, first-out method) or market.  We employ a full absorption procedure using standard cost techniques.  The standards are customarily reviewed and adjusted quarterly.  Overhead rates are recorded to inventory based on normal capacity.  Any idle facility costs or excessive spoilage are recorded as current period charges.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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| ■ | Deferred Income Tax.  Income taxes are accounted for using the asset and liability method.  Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards.  Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  Future tax benefits are subject to a valuation allowance when management is unable to conclude that its deferred income tax assets will more likely than not be realized from the results of operations.  We have 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 it more likely than not that the Company will not realize benefits of these deductible differences as of March 31, 2010.  Management has, therefore, established a full valuation allowance against its net deferred income tax assets as of March 31, 2010.  Due to the significant increase in common shares issued and outstanding from 2005 through 2010, Section 382 of the Internal Revenue Code may provide significant limitations on the utilization of our net operating loss carry forwards.  As a result of these limitations, a portion of these loss and credit carryovers may expire without being utilized. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                               |   | Power and Energy Group |   |   | All Other |   |   | Corporate |   |   | Consolidated |   |
|--------------------------------------------------------------------|--------|------------------------|--------|--------|-----------|--------|--------|-----------|--------|--------|--------------|--------|
|                                                               |   | 2010                   |   |   | 2009      |   |   | 2010      |   |   | 2009         |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
| Revenues                                                           |   |                   |   |   |      |   |   |      |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Product sales                                                      |   | $                      | -      |   |      | $      | 137    |      |   | $      | 75           |   |   | $ | 54 |   |   | $ | - |   |   | $ | - |   |   | $ | 75 |   |   | $ | 191 |   |
| Commercial collaborations                                          |   |                   | 283    |   |      |   | 699    |      |   |   | 11           |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 294 |   |   |   | 699 |   |
| Contracts and grants                                               |   |                   | 620    |   |      |   | 12     |      |   |   | 203          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 823 |   |   |   | 12 |   |
| Total revenues                                                     |   |                   | 903    |   |      |   | 848    |      |   |   | 289          |   |   |   | 54 |   |   |   | - |   |   |   | - |   |   |   | 1,192 |   |   |   | 902 |   |
| Cost of goods sold                                                 |   |                   |   |   |      |   |   |      |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Product                                                            |   |                   | -      |   |      |   | 166    |      |   |   | 53           |   |   |   | 19 |   |   |   | - |   |   |   | - |   |   |   | 53 |   |   |   | 185 |   |
| Commercial collaborations                                          |   |                   | 170    |   |      |   | 194    |      |   |   | 8            |   |   |   | 35 |   |   |   | - |   |   |   | - |   |   |   | 178 |   |   |   | 229 |   |
| Contracts and grants                                               |   |                   | 465    |   |      |   | 22     |      |   |   | 146          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 611 |   |   |   | 22 |   |
| Warranty and inv. reserves                                         |   |                   | 53     |   |      |   | -      |      |   |   | -            |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 53 |   |   |   | - |   |
| Total cost of goods sold                                           |   |                   | 688    |   |      |   | 382    |      |   |   | 207          |   |   |   | 54 |   |   |   | - |   |   |   | - |   |   |   | 895 |   |   |   | 436 |   |
| Gross profit                                                       |   |                   | 215    |   |      |   | 466    |      |   |   | 82           |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 297 |   |   |   | 466 |   |
| Operating expenses                                                 |   |                   |   |   |      |   |   |      |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Research and development                                           |   |                   | 1,976  |   |      |   | 2,293  |      |   |   | 5            |   |   |   | 175 |   |   |   | 458 |   |   |   | 576 |   |   |   | 2,439 |   |   |   | 3,044 |   |
| Sales and marketing                                                |   |                   | -      |   |      |   | -      |      |   |   | -            |   |   |   | - |   |   |   | 1,185 |   |   |   | 601 |   |   |   | 1,185 |   |   |   | 601 |   |
| General and administrative                                         |   |                   | 144    |   |      |   | 99     |      |   |   | 47           |   |   |   | 8 |   |   |   | 2,095 |   |   |   | 2,453 |   |   |   | 2,286 |   |   |   | 2,560 |   |
| Depreciation and amortization                                      |   |                   | 296    |   |      |   | 357    |      |   |   | 136          |   |   |   | 333 |   |   |   | 44 |   |   |   | 43 |   |   |   | 476 |   |   |   | 733 |   |
| Total operating expenses                                           |   |                   | 2,416  |   |      |   | 2,749  |      |   |   | 188          |   |   |   | 516 |   |   |   | 3,782 |   |   |   | 3,673 |   |   |   | 6,386 |   |   |   | 6,938 |   |
| Loss from operations                                               |   |                   | (2,201 | )      |      |   | (2,283 | )         |   |   | (106         | )      |   |   | (516 | ) |   |   | (3,782 | ) |   |   | (3,673 | ) |   |   | (6,089 | ) |   |   | (6,472 | ) |
| Other (expense) income                                             |   |                   |   |   |      |   |   |      |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                                   |   |                   | (1     | )      |      |   | (1     | )         |   |   | -            |   |   |   | - |   |   |   | (7 | ) |   |   | (17 | ) |   |   | (8 | ) |   |   | (18 | ) |
| Interest income                                                    |   |                   | -      |   |      |   | -      |      |   |   | -            |   |   |   | - |   |   |   | 26 |   |   |   | 71 |   |   |   | 26 |   |   |   | 71 |   |
| Realized loss on investment                                        |   |                   | -      |   |      |   | -      |      |   |   | -            |   |   |   | - |   |   |   | - |   |   |   | (18 | ) |   |   | - |   |   |   | (18 | ) |
| Loss on foreign exchange                                           |   |                   | -      |   |      |   | -      |      |   |   | -            |   |   |   | - |   |   |   | - |   |   |   | (4 | ) |   |   | - |   |   |   | (4 | ) |
| Total other (expense) income, net                                  |   |                   | (1     | )      |      |   | (1     | )         |   |   | -            |   |   |   | - |   |   |   | 19 |   |   |   | 32 |   |   |   | 18 |   |   |   | 31 |   |
|                                                               |   |                   |   |   |      |   |   |      |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                           |   |                   | (2,202 | )      |      |   | (2,284 | )         |   |   | (106         | )      |   |   | (516 | ) |   |   | (3,763 | ) |   |   | (3,641 | ) |   |   | (6,071 | ) |   |   | (6,441 | ) |
|                                                               |   |                   |   |   |      |   |   |      |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less:  Net loss attributable to non-controlling interest |   |                   | -      |   |      |   | -      |      |   |   | 4            |   |   |   | 56 |   |   |   | - |   |   |   | - |   |   |   | 4 |   |   |   | 56 |   |
|                                                               |   |                   |   |   |      |   |   |      |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss attributable to Altair Nanotechnologies, Inc.             |   | $                      | (2,202 | )      |      | $      | (2,284 | )         |   | $      | (102         | )      |   | $ | (460 | ) |   | $ | (3,763 | ) |   | $ | (3,641 | ) |   | $ | (6,067 | ) |   | $ | (6,385 | ) |

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|   | ● | market factors affecting the availability and cost of capital generally, including recent increases or decreases in major stock market indexes, the stability of the banking and investment banking systems and general economic stability or instability; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | the price, volatility and trading volume of our common shares;                                                                                                                                                                                             |
|   | ● | our financial results, particularly the amount of revenue we are generating from product sales;                                                                                                                                                            |
|   | ● | the amount of our capital needs;                                                                                                                                                                                                                           |
|   | ● | the market's perception of companies in our line of business;                                                                                                                                                                                              |
|   | ● | the economics of projects being pursued; and                                                                                                                                                                                                               |
|   | ● | the market's perception of our ability to execute our business plan and any specific projects identified as uses of proceeds.                                                                                                                              |

|   | ● | fluctuations in the size and timing of customer orders from one quarter to the next;                         |
|--------|---------|--------------------------------------------------------------------------------------------------------------|
|   | ● | timing of delivery of our services and products;                                                             |
|   | ● | additions of new customers or losses of existing customers;                                                  |
|   | ● | positive or negative business or financial developments announced by us or our key 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; |
|   | ● | disruptions in the supply of raw materials or components used in the manufacture of our products;            |
|   | ● | technology and intellectual property issues associated with our products; and                                |
|   | ● | general political, social, geopolitical and economic trends and events.                                      |

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

|   | ● | we may not be able to enter into development, licensing, supply and other agreements with commercial partners with appropriate resources, technology and expertise on reasonable terms or at all;                                                                                                                                                                                                                                          |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | our commercial partners may not place the same priority on a project as we do, may fail to honor contractual commitments, may not have the level of resources, expertise, market strength or other characteristics necessary for the success of the project, may dedicate only limited resources to, and/or may abandon, a development project for reasons, including reasons such as a shift in corporate focus, unrelated to its merits; |
|   | ● | our commercial partners may be in the early stages of development and may not have sufficient liquidity to invest in joint development projects, expand their businesses and purchase our products as expected or honor contractual commitments;                                                                                                                                                                                           |
|   | ● | 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;                                                                                                                                                                           |

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|   | ● | 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.                                                     |

|   | ● | economic conditions and capital financing and liquidity constraints;                                                                                                                                               |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | short-term and long-term trends in the supply and price of gasoline, diesel, coal and other fuels;                                                                                                                 |
|   | ● | the anticipated or actual granting or elimination by governments of tax and other financial incentives favoring electric or hybrid electric vehicles and renewable energy production;                              |
|   | ● | the ability of the various regulatory bodies to define the rules and procedures under which this new technology can be deployed into the electric grid;                                                            |
|   | ● | the anticipated or actual funding, or elimination of funding, for programs that support renewable energy programs, electric grid improvements, certain military electric vehicle initiatives and related programs; |
|   | ● | changes in public and investor interest for financial and/or environmental reasons, in supporting or adopting alternatives to gasoline and diesel for transportation and other purposes;                           |
|   | ● | the overall economic environment and the availability of credit to assist customers in purchasing our large battery systems;                                                                                       |
|   | ● | the expansion or contraction of private and public research and development budgets as a result of global and U.S. economic trends; and                                                                            |
|   | ● | the speed of incorporation of renewable energy generating sources into the electric grid.                                                                                                                          |

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|   | ● | we may find that the transaction does not further our business strategy, that we overpaid for the company or its technology or that the economic conditions underlying our transaction decision have changed;                           |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | we may have difficulty integrating the assets, technologies, operations or personnel of a company we have acquired or merged with, or retaining and integrating key personnel;                                                          |
|   | ● | 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 integrated business or technology, such as intellectual property or employment matters.  |

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|   | ● | If we fail to supply products in accordance with contractual terms, including terms related to time of delivery and performance specifications, we may be required to repair or replace defective products and may become liable for direct, special, consequential and other damages, even if manufacturing or delivery was outsourced;                                                                                                                                                                        |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | Raw materials used in the manufacturing process, labor and other key inputs may become scarce and expensive, causing our costs to exceed cost projections and associated revenues;                                                                                                                                                                                                                                                                                                                              |
|   | ● | Manufacturing processes typically involve large machinery, fuels and chemicals, any or all of which may lead to accidents involving bodily harm, destruction of facilities and environmental contamination and associated liabilities;                                                                                                                                                                                                                                                                          |
|   | ● | As our manufacturing operations expand, we expect that a significant portion of our manufacturing will be done overseas, either by third-party contractors or in a plant owned by the company.  Any manufacturing done overseas presents risks associated with quality control, currency exchange rates, foreign laws and customs, timing and loss risks associated with overseas transportation and potential adverse changes in the political, legal and social environment in the host county; and |
|   | ● | We may have made, 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.                                                                                        |

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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 conditions, investor distrust or a financial crisis.                                                                                |

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| Name                                                            | Minimum/Target IncentiveBonus Opportunity (payoutas a % of base salary) | Maximum Incentive BonusOpportunity (payout as a %of base salary) |
|-----------------------------------------------------------------|-------------------------------------------------------------------------|------------------------------------------------------------------|
| Terry M. Copeland, President, Chief Executive Officer           | 80                                                                      | 120                                                              |
| John C. Fallini, Chief Financial Officer                        | 60                                                                      | 90                                                               |
| Bruce J. Sabacky, Vice President & Chief Technology Officer | 60                                                                      | 90                                                               |
| Stephen Balogh, Vice President Human Resources                  | 60                                                                      | 90                                                               |
| Daniel Voelker, Vice President Engineering and Operations       | 60                                                                      | 90                                                               |

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|   |         |   | Altair Nanotechnologies Inc.          |
|--------|--------------|--------|---------------------------------------|
|   |         |   |                                  |
|   |         |   |                                  |
|   | May 10, 2010 |   | By: /s/ Terry M. Copeland   |
|   | Date         |   | Terry M. Copeland,                    |
|   |         |   | President and Chief Executive Officer |
|   |         |   |                                  |
|   |         |   |                                  |
|   | May 10, 2010 |   | By: /s/ John Fallini        |
|   | Date         |   | John Fallini,                         |
|   |         |   | Chief Financial Officer and Secretary |

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| 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  |
| 10.1        |   | Employment Agreement dated April 7, 2010 with Terry Copeland                     |   | Incorporated by reference to the Current Report on Form 8-K filed with the SEC on April 9, 2010, File No. 001-12497                                                  |
| 10.2        |   | Amendment to Employment Agreement dated March 15, 2010 with Robert Pedraza  |   | Filed herewith                                                                                                                                                       |
| 10.3        |   | Definitive Agreement dated April 30, 2010 with The Sherwin-Williams Company      |   | Incorporated by reference to the Current Report on Form 8-K filed with the SEC on May 5, 2010, File No. 001-12497                                                    |
| 10.4        |   | Redemption Agreement dated April 30, 2010 with The Sherwin-Williams Company      |   | Incorporated by reference to the Current Report on Form 8-K filed with the SEC on May 5, 2010, File No. 001-12497                                                    |
| 10.5        |   | License Agreement dated April 30, 2010 The Sherwin-Williams Company              |   | Incorporated by reference to the Current Report on Form 8-K filed with the SEC on May 5, 2010, File No. 001-12497                                                    |
| 10.6        |   | Product Purchase Agreement dated May 4, 2010 with Proterra Inc.                  |   | Incorporated by reference to the Current Report on Form 8-K filed with the SEC on May 6, 2010, File No. 001-12497                                                    |
| 10.7        |   | 2010 Annual Incentive Bonus Plan                                                 |   | Filed herewith*                                                                                                                                                      |
| 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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