UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
    ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM   ______________ TO _______________


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

     Province of
      Ontario,
       Canada                         1-12497                   None

(State or other jurisdiction    (Commission File No.)       (IRS Employer
     of incorporation)                                    Identification No.)


                         1725 Sheridan Avenue, Suite 140
                               Cody, Wyoming 82414

          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (307) 587-8245



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


 As of July 23, 2001, the registrant had 20,315,986 Common Shares outstanding.



                                       1
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                   ALTAIR INTERNATIONAL INC. AND SUBSIDIARIES
                         (An Exploration Stage Company)
                           CONSOLIDATED BALANCE SHEETS
                      (Expressed in United States Dollars)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                   June 30,          December 31,
                                                                     2001               2000
                                                               -----------------  -----------------
                            ASSETS
<S>                                                            <C>                <C>
Current Assets
   Cash and cash equivalents                                   $         115,520  $       1,335,729
   Restricted cash                                                     2,070,860          2,250,000
   Other current assets                                                   15,186            390,351
                                                               -----------------  -----------------
     Total current assets                                              2,201,566          3,976,080

Restricted Cash                                                        1,200,000          1,750,000

Property and Equipment, net                                            6,375,434          6,601,917

Patents and Related Expenditures, net                                  3,928,491          4,111,740

Other Assets                                                             162,035            212,033
                                                               -----------------  -----------------
                         Total Assets                          $      13,867,526  $      16,651,770
                                                               =================  =================
             LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
   Accounts payable and accrued liabilities                    $         518,561  $         158,642
   Note payable - current portion                                      3,500,004          3,500,004
   Capital lease obligations - current portion                            13,273             24,763
   Deferred revenue                                                       57,957             57,957
                                                               -----------------  -----------------
     Total current liabilities                                         4,089,795          3,741,366

Note Payable, Long-Term Portion                                        1,386,568          2,687,181

Capital Lease Obligations, Long-Term Portion                                                  2,312

Commitments and Contingencies

Stockholders' Equity
   Common stock, no par value, unlimited shares authorized;
     20,110,985 and 19,325,488  shares issued and
     outstanding at June 30, 2001 and December 31, 2000               34,336,619         32,388,589
   Stock subscription receivable                                        (100,000)          (561,300)
   Deficit accumulated during the development stage                  (25,845,456)       (21,606,378)
                                                               -----------------  -----------------
                  Total Shareholders' Equity
                                                                       8,391,163         10,220,911
                                                               -----------------  -----------------
          Total Liabilities and Shareholders' Equity           $      13,867,526  $      16,651,770
                                                               =================  =================
</TABLE>



                                       2
<PAGE>

                   ALTAIR INTERNATIONAL INC. AND SUBSIDIARIES
                         (An Exploration Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (Expressed in United States Dollars)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                                       Period
                                                                                                                    April 9, 1973
                                                                                                                       (date of
                                                      Three Months Ended                 Six Months Ended            inception) to
                                                           June 30,                          June 30,                  June 30,
                                                 -------------------------------  --------------------------------
                                                      2001           2000              2001             2000             2001
                                                 --------------  ---------------  ---------------  ---------------  ---------------
<S>                                              <C>             <C>              <C>              <C>              <C>
Revenues                                              None           None              None             None             None

Operating Expenses:
   Mineral exploration and development           $      238,300  $       234,323  $       599,754  $       367,705  $     5,587,642
   Research and development                             145,383          348,827          268,271          706,561        2,837,776
   Professional services                                208,525          108,850          313,656          167,111        2,284,480
   General and administrative expenses                  766,985          575,839        1,570,805        1,139,700       10,593,641
   Depreciation and amortization                        284,813          309,378          564,693          617,946        3,943,899
                                                 --------------  ---------------  ---------------  ---------------  ---------------
     Total operating expenses                         1,644,006        1,577,217        3,317,179        2,999,023       25,247,438
                                                 --------------  ---------------  ---------------  ---------------  ---------------
Loss From Operations                                  1,644,006        1,577,217        3,317,179        2,999,023       25,247,438
                                                 --------------  ---------------  ---------------  ---------------  ---------------
Other (Income) Expense:
   Interest expense                                     734,027           38,560        1,034,267           81,867        2,537,141
   Interest income                                      (43,172)         (43,113)        (112,577)         (44,466)        (777,437)
   (Gain) Loss on foreign exchange                          443         (236,936)             209         (795,699)        (558,970)
                                                 --------------  ---------------  ---------------  ---------------  ---------------
     Total other (income) expense, net                  691,298         (241,489)         921,899         (758,298)       1,200,734
                                                 --------------  ---------------  ---------------  ---------------  ---------------
Loss Before Extraordinary Items                       2,335,304        1,335,728        4,239,078        2,240,725       26,448,172
Extraordinary Items:
   (Gain) on forgiveness of debt                                                                                           (795,972)
   Loss on redemption of convertible debentures                                                                             193,256
                                                 --------------  ---------------  ---------------  ---------------  ---------------
     Total extraordinary items                             --               --               --               --           (602,716)
                                                 --------------  ---------------  ---------------  ---------------  ---------------
Net Loss                                         $    2,335,304  $     1,335,728  $     4,239,078  $     2,240,725  $    25,845,456
                                                 ==============  ===============  ===============  ===============  ===============
Loss Before Extraordinary Items
    per Common Share:
   Basic and diluted                             $         0.12  $          0.08  $          0.22  $          0.14  $          3.87
Effect of  Extraordinary Items
    on Earnings per Share:
   Basic and diluted                                                                                                          (0.09)
                                                 --------------  ---------------  ---------------  ---------------  ---------------
Loss per Common Share:
   Basic and diluted                             $         0.12  $          0.08  $          0.22  $          0.14  $          3.78
                                                 ==============  ===============  ===============  ===============  ===============
Weighted Average Shares:
   Basic and diluted                                 19,276,553       17,031,682       19,306,218       16,324,169        6,840,691
                                                 ==============  ===============  ===============  ===============  ===============
</TABLE>



                                       3
<PAGE>

                   ALTAIR INTERNATIONAL INC. AND SUBSIDIARIES
                         (An Exploration Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (Expressed in United States Dollars)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                                        Period
                                                                                                                     April 9, 1973
                                                                                                                       (date of
                                                                                     Six Months Ended June 30,       inception) to
                                                                                  --------------------------------     June 30,
                                                                                       2001             2000             2001
                                                                                  ---------------  ---------------  ---------------
<S>                                                                               <C>              <C>              <C>
Cash Flows from Development Activities:
  Net loss                                                                        $    (4,239,078) $    (2,240,725) $   (25,845,455)
  Adjustments to reconcile net loss to net cash
  used in development activities:
   Depreciation and amortization                                                          564,693          617,946        3,943,899
   Shares issued for services                                                                                                99,926
   Shares issued for settlement of debt                                                                                      75,228
   Shares issued for property                                                                                               159,166
   Issuance of stock options to non-employees                                             112,353          424,062        2,957,804
   Issuance of stock options to employees                                                  81,600                           159,820
   Issuance of stock warrants                                                             314,077                            734,259
   Amortization of discount on note payable                                               206,223                           218,275
   Loss on redemption of convertible debenture                                                                              193,256
   Gain on forgiveness of debt                                                                                             (795,972)
   Loss on disposal of fixed assets                                                                                           1,945
   Gain on foreign currency transactions                                                                  (864,669)        (559,179)
   Deferred financing costs written off                                                                                     515,842
  Changes in assets and liabilities (net of effects of acquisition):
   Restricted cash                                                                        729,140                        (3,270,860)
   Other current assets                                                                   375,165          704,553        2,065,766
   Other assets                                                                            49,998          (16,200)        (119,608)
   Accounts payable and accrued liabilities                                               359,919           80,560          249,347
   Deferred revenue                                                                                                           57,957
                                                                                  ---------------  ---------------  ---------------
    Net cash used in development activities                                            (1,445,910)      (1,294,473)     (19,158,584)
                                                                                  ---------------  ---------------  ---------------
Cash Flows from Investing Activities:
  Asset acquisition                                                                                                      (2,422,417)
  Purchase of property and equipment                                                     (154,964)         (30,830)      (1,291,344)
  Purchase of patents and related expenditures                                                                           (1,888,120)
                                                                                  ---------------  ---------------  ---------------
    Net cash used in investing activities                                                (154,964)         (30,830)      (5,601,881)
                                                                                  ---------------  ---------------  ---------------
                                                                                                                        (Continued)
</TABLE>


                                       4
<PAGE>
<TABLE>
<CAPTION>

<S>                                                                               <C>                    <C>             <C>
Cash Flows from Financing Activities:
  Issuance of common shares for cash, net of share issue costs                    $     1,300,000  $     7,094,970  $    16,823,659
  Collection of stock subscription receivable                                             561,300                           561,300
  Issuance of convertible debenture                                                                                       5,000,000
  Proceeds from exercise of stock options                                                  40,000          335,778        2,618,491
  Proceeds from exercise of warrants                                                                                      3,903,995
  Issuance of notes payable                                                                                               7,000,000
  Payment of notes payable                                                             (1,520,635)      (4,406,910)      (8,331,080)
  Purchase of call options                                                                                                 (449,442)
  Redemption of convertible debentures                                                                                   (2,250,938)
                                                                                  ---------------  ---------------  ---------------
    Net cash provided by financing activities                                             380,665        3,023,838       24,875,985
                                                                                  ---------------  ---------------  ---------------
Net Increase (Decrease) in Cash and Cash Equivalents                                   (1,220,209)       1,698,535          115,520
Cash and Cash Equivalents, Beginning of Period                                          1,335,729          153,580             None
                                                                                  ---------------  ---------------  ---------------
Cash and Cash Equivalents, End of Period                                          $       115,520  $     1,852,115  $       115,520
                                                                                  ===============  ===============  ===============


                                                                                     Six Months Ended June 30,
                                                                                  --------------------------------
                                                                                       2001             2000
                                                                                  ---------------  ---------------
Supplemental Disclosures:
  Cash paid for interest                                                          $       279,728  $        37,125
                                                                                  ===============  ===============
  Cash paid for income taxes                                                                 None             None
                                                                                  ===============  ===============
</TABLE>

Supplemental Schedule of Non-Cash Investing and Financing Activities:
For the Six Months Ended June 30, 2000:
  - We  entered  into a capital  lease  obligation  of  $46,395  for  laboratory
equipment.

For the Six Months Ended June 30, 2001:
  - We  recorded a stock  subscription  receivable  for 66,667  shares of common
  stock with an  investor.  - We issued  warrants for 83,333  common  shares for
  services rendered. The warrants had an estimated
    fair value of $119,806.
  - We issued  warrants for 300,000 common shares in connection  with amendments
    to the Doral 18, LLC.  note.  The warrants  had an  estimated  fair value of
    $368,092.
  - We paid $97,743 of  principal  and $262,051 of interest on the Doral 18, LLC
    note through the  exercise of call  options on 228,456  shares of our common
    stock.

                                                                     (concluded)


                                       5
<PAGE>

                   ALTAIR INTERNATIONAL INC. AND SUBSIDIARIES
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 1. Basis of Preparation of Financial Statements

        These unaudited  interim  financial  statements of Altair  International
Inc. and its subsidiaries  (collectively,  "Altair", "We" or the "Company") have
been prepared in accordance  with the rules and regulations of the United States
Securities  and  Exchange   Commission  (the   "Commission").   Such  rules  and
regulations allow the omission of certain  information and footnote  disclosures
normally included in financial  statements prepared in accordance with generally
accepted accounting principles, so long as the statements are not misleading. In
the opinion of Company management,  these financial  statements and accompanying
notes contain all adjustments  (consisting of only normal recurring adjustments)
necessary to present fairly the financial position and results of operations for
the  periods  shown.  These  interim  financial  statements  should  be  read in
conjunction with the audited financial statements and notes thereto contained in
our Annual  Report on Form 10-K for the year ended  December 31, 2000 filed with
the  Commission on April 2, 2001 and amended by Amendment No. 4 filed on June 8,
2001.

        Prior to fiscal  year 1998,  we prepared  our  financial  statements  in
accordance  with  accounting  principles  generally  accepted in Canada.  Due to
substantially  all of our operations being located in the United States, we have
elected to present  our  financial  statements  in  accordance  with  accounting
principles  generally  accepted in the United States of America  ("U.S.  GAAP").
Accordingly,   the  foregoing   unaudited  interim   financial   statements  are
denominated in U.S. Dollars and presented in accordance with U.S. GAAP.

        As shown in the consolidated  statements of operations,  we have not yet
achieved profitable operations. We incurred a net loss of $4,239,078 for the six
months ended June 30, 2001 and a cumulative  loss of $25,845,456  for the period
April 9, 1973 (date of  inception)  to June 30,  2001.  We are in the process of
developing the titanium processing  technology,  exploring the Tennessee mineral
property,  and  developing  the  centrifugal  jig. We have  financed  operations
primarily through the issuance of equity securities  (common stock,  convertible
debentures,  stock  options and  warrants),  and by the issuance of a $7 million
term note. Additional funds will be required to complete exploration  activities
on the Tennessee  mineral  property and  development of the titanium  processing
technology and the jig. We believe that current working  capital,  cash receipts
from  anticipated  sales,  and  funding  through  sales of common  stock will be
sufficient to enable us to continue as a going concern.

        The results of  operations  for the three- and  six-month  periods ended
June 30, 2001 are not  necessarily  indicative of the results to be expected for
the full year.


Note 2. Summary of Significant Accounting Policies

        Basic net loss per common  share is  calculated  by dividing net loss by
the weighted average number of common shares  outstanding during the period. The
existence of stock options,  warrants,  and convertible  debentures  affects the
calculation  of loss per  share  on a fully  diluted  basis.  When a net loss is
reported,  the number of shares used for basic and diluted net loss per share is
the same since the effect of including the additional  common stock  equivalents
would be antidilutive.


                                       6
<PAGE>

Note 3.  Common Stock

        Common stock transactions during the quarter ended June 30, 2001 were as
follows:
<TABLE>
<CAPTION>

                                                                            Common Stock
                                                                 --------------------------------
                                                                                      Stated
                                                                      Shares          Amount
                                                                 ---------------  ---------------
<S>                                                              <C>              <C>
         Balance, March 31, 2001                                      19,244,318  $    32,645,016
         Common stock issued through private placements                  866,667        1,300,000
         Stock options issued to non-employees                                              7,616
         Warrants issued for services                                                     119,806
         Warrants issued in connection with amendment of note
            payable                                                                       194,271
         Reduction in expense on repriced employee stock options                          (30,0900
         Common stock sold subject to collection of stock
         subscription receivable                                                          100,000
                                                                 ---------------  ---------------
         Balance, June 30, 2001                                       20,110,985  $    34,336,619
                                                                 ===============  ===============
</TABLE>


Note 4.  Note Payable

        Note payable  consisted  of the  following at June 30, 2001 and December
31, 2000:
<TABLE>
<CAPTION>

                                                                  June 30, 2001   December 31, 2000
                                                                 ---------------  -----------------
<S>                                                              <C>              <C>
         Note payable to Doral 18, LLC                           $     5,493,167  $       7,000,000
         Less current portion                                         (3,500,004)        (3,500,004)
         Less discount resulting from allocation
           of debt proceeds to warrant                                  (606,595)          (812,815)
                                                                 ---------------  -----------------
         Long-term portion of note payable                       $     1,386,568  $       2,687,181
                                                                 ===============  =================
</TABLE>


        On June 7,  2001,  we  entered  into an  agreement  with  Doral 18,  LLC
("Doral")  which amended  certain  terms of the note payable.  We were given the
option to redeem  not more than  $1,652,252  and not less than  $500,000  of the
accrued  and  unpaid  monthly  payment  amounts,  with  the  addition  of a  10%
redemption  premium, if such redemptions were completed by the later of June 29,
2001 or the fifth day following the effective date of the registration statement
registering  the shares to be issued to Doral.  In  addition,  certain  exchange
right terms were amended,  and Doral waived the penalties  associated  with late
effectiveness  of the  registration  statement.  In  return,  we issued to Doral
warrants to purchase  300,000 common shares at an exercise  price of $3.00.  The
warrants  are  exercisable  at any time on or before the earlier of December 15,
2005 or the date 60 days after we provide  notice to the holder  that the market
price of the common  shares has been  equal to or greater  than  $12.00 for five
consecutive  days.  The  exercise  price is subject to  reduction  pursuant to a
formula set forth in the warrant.  The warrants have an estimated  fair value of
$368,000 as determined using the Black-Scholes pricing model.


                                       7
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND  ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

        The  following  discussion   summarizes  the  material  changes  in  our
financial condition between December 31, 2000 and June 30, 2001 and the material
changes in our results of operations and financial  condition between the three-
and  six-month  periods ended June 30, 2001 and June 30, 2000.  This  discussion
should be read in  conjunction  with  Management's  Discussion  and  Analysis of
Financial  Condition and Results of Operations  included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000.


Overview

        From  inception  through  the  end  of  1993,  our  business   consisted
principally  of the  exploration  of  mineral  properties  for  acquisition  and
exploration.  During  1994,  our  focus  changed  as we  became  engaged  in the
acquisition,  development and testing of mineral processing equipment for use in
the recovery of fine, heavy mineral particles including gold,  titanium,  zircon
and  environmental  contaminants.  Since that time, we have continued  exploring
mineral  properties  on which  we  might  use our  patented  mineral  processing
equipment.

        In 1996, we acquired all patent rights to the Campbell  Centrifugal Jig,
since modified and renamed the Altair Centrifugal Jig. Since April 1996, we have
acquired mineral leaseholds on approximately  14,000 acres of land in Tennessee.
A  prefeasibility  study issued in July 1998  confirmed  the  existence of heavy
minerals and suggests that the property warrants further  exploration.  Based on
the  results  of  these  independent   studies,  we  have  initiated  additional
feasibility testing.

        In November  1999, we acquired all patent  applications  and  technology
related to a hydrometallurgical process developed by BHP Minerals International,
Inc.  ("BHP")  primarily for the  production of titanium  dioxide  products from
titanium  bearing  ores  or  concentrates   (i.e.,   the  "titanium   processing
technology")  and all tangible  equipment and other assets (i.e.,  the "titanium
processing assets") used by BHP to develop and implement the titanium processing
technology.

Results of Operations

        We have  earned  no  operating  revenues  to date.  Net  losses  totaled
$4,239,078 ($.22 per share) in the six months ended June 30, 2001 and $2,240,725
($.14 per share) for the same period of 2000.  Principal factors contributing to
the losses  during these  periods were the absence of revenue  together with the
incurrence of operating expenses.

Three Months Ended June 30, 2001 Compared to Three Months Ended June 30, 2000

        Research and development  expense decreased from $348,827 in the quarter
ended June 30, 2000 to $145,383 in the quarter  ended June 30, 2001.  On January
1, 2001 we hired  fourteen  former BHP  employees  who had been  involved in the
development  of a titanium  processing  technology  that we acquired from BHP in
November 1999. When we acquired the titanium processing  technology,  we entered
into a services agreement with BHP under which we obtained the services of these
fourteen individuals,  and certain other BHP employees,  for the period November
15, 1999  through  December 31, 2000.  In the second  quarter of 2000,  the cost
associated with this services agreement was $342,000 and was charged to research
and development  expense.  During the second quarter of 2001, of the $264,000 in
salaries and overheads for these fourteen new employees,  $100,000 was allocated
to research  and  development  expense,  resulting  in a decrease of $242,000 in
research and  development  expense in the second quarter of 2001 from the second
quarter of 2000.  This  decrease  was  partially  offset by  expenses of $34,000
associated with a research agreement that we entered into with the Massachusetts
Institute of Technology in August 2000.

                                       8
<PAGE>

        Professional  services  increased from $108,850 during the quarter ended
June 30, 2000 to  $208,525  for the quarter  ended June 30,  2001.  In the first
quarter of 2001, we hired new auditors to audit our financial  statements.  As a
result of this,  our audit fees increased from $18,000 to $92,000 in the quarter
ended  June 30,  2001 from the same  quarter  of 2000.  We also  experienced  an
increase  in legal fees from  $34,000  in the  quarter  ended  June 30,  2000 to
$51,000  for  the  quarter  ended  June  30,  2001,  primarily  as a  result  of
preparation of regulatory  filings and other  documents  associated  with recent
financing  activities.  Consulting  expenses  increased  from $57,000 during the
quarter ended June 30, 2000 to $66,000 in the quarter ended June 30, 2001,  also
as a result of recent financing activities.

        General and administrative expenses increased by $191,146 to $766,985 in
the quarter  ended June 30,  2001,  compared to $575,839 in the same  quarter of
2000.  Salaries and  overheads  increased by $183,000 to $271,000 in the quarter
ended June 30,  2001,  compared  to $88,000 for the same  quarter of 2000,  as a
result of hiring the  fourteen  former BHP  employees,  the  president of Altair
Technologies,  a marketing  manager and a general  counsel.  With respect to the
titanium  processing  technology,  we  experienced  an  increase  of  $87,000 to
$180,000 in the quarter  ended June 30,  2001,  compared to $93,000 for the same
quarter of 2000,  for  operating  supplies,  small  tools,  maintenance,  office
supplies and  production  of product  samples.  Our general  corporate  expenses
decreased by $34,000 to $207,000 in the quarter ended June 30, 2001, compared to
$241,000 for the same quarter of 2000, principally due to a decrease in investor
relations expenses.  In addition to this, the expense recognized for options and
warrants granted to employees and service providers  decreased by $53,000 in the
quarter  ended June 30, 2001 to $98,000  from  $151,000  in the same  quarter of
2000.

        On December  15,  2000,  we and an investor  entered  into a  Securities
Purchase  Agreement  pursuant  to which we issued to the  investor a  $7,000,000
Asset-Backed  Exchangeable  Term Note (the  "Note")  and a Warrant  to  purchase
350,000  common shares at an initial  exercise  price of $3.00 at any time on or
before December 15, 2005 (the "Warrant").  The Note,  Warrant and related rights
were sold to the  investor in exchange for  $7,000,000  (less  financing  fees).
Proceeds  from the Note were  allocated  between the Note and the  Warrant;  the
portion  allocated  to the  Warrant  resulted in a discount on the Note which is
being accreted to interest  expense over the term of the Note.  Interest expense
for the second  quarter of 2001 was  $734,027,  compared to interest  expense of
$38,560 in the same quarter of 2000, due to interest  expense of $170,000 on the
Note,  amortization  of the Warrant  discount of $103,000,  redemption  premiums
associated  with  principal  payments of $118,000  and fees in  connection  with
extending the deadline for the  effectiveness of the  registration  statement of
$100,000. In addition to this, interest expense of $194,000 was incurred related
to the estimated  fair value of the warrants  issued to the investor in exchange
for the waiver of penalties that would have accrued due to late effectiveness of
the  registration  statement and  modification  to the Note terms  involving the
redemption of exchange amounts.

        The  purchase  price  for the  titanium  processing  technology  that we
acquired  from  BHP  was  stated  in  Australian  dollars  and  was  payable  in
installments  through August 2000. During the second quarter of 2000, the United
States dollar strengthened  against the Australian dollar resulting in a gain on
foreign exchange of $237,000.

Six Months Ended June 30, 2001 Compared to Six Months Ended June 30, 2000

        During the first  quarter of 2001,  we completed  the  installation  and
began testing of the pilot plant facility at our Tennessee mineral property.  In
connection  with this, we incurred and expensed costs of $135,000 for completion
of  fabrication  and  installation  of the pilot plant and $69,000 for  internal
labor,  overheads,  supplies  and  materials  for  construction  and  subsequent
operation of the facility.  In addition to this, we spent $21,000 for an initial
aerial  survey in order to obtain  detailed  topographic  data of the  Tennessee
mineral property.  We incurred no comparable mineral exploration and development
expenses during the six months ended June 30, 2000. The normal ongoing  expenses
associated with our mineral  leaseholds,  which are principally  advance royalty
payments  and  labor  involved  in  exploration   activities,   did  not  change
significantly from the first half of 2000 to the first half of 2001.

        Research and development  expense decreased by $438,290 from $706,561 in
the six months  ended June 30, 2000 to $268,271 in the six months ended June 30,
2001. The decrease is attributable to the services  agreement  entered into upon
our  acquisition  of  the  titanium  processing  technology  from  BHP  and  the
subsequent  hiring of fourteen former BHP employees as described above in "Three
Months Ended June 30, 2001 Compared to Three Months Ended June 30, 2000." In the
first half of 2000, the cost associated with the services agreement was $684,000
and was charged to research and  development  expense.  During the first half of
2001,  of the  $528,000  in  salaries  and  overheads  for  these  fourteen  new
employees, $218,000 was allocated to research and development expense, resulting
in a decrease of $466,000 in research and development  expense in the first half
of 2001 from the first  half of 2000.  Research  and  development  expense  also
decreased by $17,000 due to decreased  development  spending on the  centrifugal
jig. These  decreases were  partially  offset by expenses of $68,000  associated
with a research agreement that we entered into with the Massachusetts  Institute
of Technology in August 2000.

                                       9
<PAGE>

        Professional  services  increased  from  $167,111  during the six months
ended June 30, 2000 to $313,656 for the six months  ended June 30, 2001.  During
the first half of 2001, we hired new auditors to audit our financial statements.
As a result of this,  our audit fees  increased  by  $130,000  in the six months
ended June 30, 2001, compared to the same period of 2000. We also experienced an
increase  in legal fees from  $65,000 in the six months  ended June 30,  2000 to
$110,000  in the six  months  ended  June 30,  2001,  primarily  as a result  of
preparation of regulatory  filings and other  documents  associated  with recent
financing  activities.  These  increases were partially  offset by a decrease in
consulting  fees of $30,000 to  $74,000 in the six months  ended June 30,  2001,
compared to $104,000 for the same period of 2000,  which were primarily  related
to the titanium processing technology.

        General and administrative  expenses increased by $431,105 to $1,570,805
in the six months ended June 30, 2001, compared to $1,139,700 in the same period
of 2000.  Salaries  and  overheads  increased by $348,000 to $532,000 in the six
months ended June 30, 2001, compared to $184,000 for the same period of 2000, as
a result of hiring the fourteen  former BHP  employees,  the president of Altair
Technologies,  a marketing  manager and a general  counsel.  With respect to the
titanium  processing  technology,  we  experienced  an  increase  of $190,000 to
$283,000 in the six months ended June 30, 2001, compared to $93,000 for the same
period  of 2000,  for  operating  supplies,  small  tools,  maintenance,  office
supplies and  production  of product  samples.  Our general  corporate  expenses
decreased by $22,000 to $416,000 in the six months ended June 30, 2001, compared
to  $438,000  for the same  period of 2000,  principally  due to a  decrease  in
investor  relations  expenses.  In addition to this, the expense  recognized for
options and warrants  granted to employees  and service  providers  decreased by
$110,000 in the six months ended June 30, 2001 to $314,000  from $424,000 in the
same period of 2000.

        Depreciation and amortization  expense  decreased by $53,253 to $564,693
in the six months ended June 30, 2001,  compared to $617,946 for the same period
of 2000,  principally as a result of  lengthening  the  amortization  periods of
certain  patents.  The  amortization  periods were  extended to equal the patent
lives.

        Interest expense  increased by $952,400 to $1,034,267 for the six months
ended June 30, 2001 from $81,867 for the same period in 2000 due to the Note and
Warrant  discussed  above in "Three Months Ended June 30, 2001 Compared to Three
Months Ended June 30, 2000." The increase is attributable to interest expense of
$341,000,  amortization of the Warrant discount of $206,000, redemption premiums
associated  with  principal  payments of $118,000  and fees in  connection  with
extending the deadline for the  effectiveness of the  registration  statement of
$100,000. In addition to this, interest expense of $194,000 was incurred related
to the estimated  fair value of the warrants  issued to the investor in exchange
for the waiver of penalties that would have accrued due to late effectiveness of
the  registration  statement and  modification  to the Note terms  involving the
redemption of exchange amounts.  At the same time, interest income has increased
over the six months  ended June 30, 2000 due to interest  earned on the proceeds
received from the Note.

        The  purchase  price  for the  titanium  processing  technology  that we
acquired  from  BHP  was  stated  in  Australian  dollars  and  was  payable  in
installments through August 2000. During the six months ended June 30, 2000, the
United States dollar  strengthened  against the Australian dollar resulting in a
gain on foreign exchange of $796,000.


Liquidity and Capital Resources

        We have earned no  revenues  and have  incurred  recurring  losses.  Our
accumulated  deficit  increased  during  the six months  ended June 30,  2001 by
$4,239,078 to $25,845,456 due to the net loss for the period of $4,239,078.

        Our  cash  and  short-term  investments  decreased  from  $1,335,729  at
December 31, 2000 to $115,520 at June 30, 2001,  principally as a result of cash
used for operations and payment of principal and interest on the Note.

        The Note is in the principal  amount of $7,000,000 and bears interest at
a rate of 10% per  annum.  Under  the  Note,  we are  required  to make  monthly
payments  on or  before  the 15th day of each  calendar  month in the  principal
amount of $291,667 plus accrued interest through December 2002; however, we have
the option of electing not to make such monthly  payments,  in which case rights
to exchange  the monthly  payment  amount and accrued  interest for common stock
automatically  accrue  to the  holder  of the Note  (the  "Holder").  We filed a
registration  statement  (the  "Registration  Statement")  on January  22,  2001
registering  the resale of the common stock issuable to the Holder upon exercise

                                       10
<PAGE>

of this exchange right. On April 20, 2001, we entered into an agreement with the
Holder  under which we were  granted an  extension  of time in which to make the
Registration Statement effective in return for the payment of a fee of $100,000.
On June 7, 2001, we entered into another  agreement  with the Holder under which
we were  granted  the option to redeem up to  $1,652,252  of the unpaid  monthly
payment amounts with the addition of a 10% redemption premium. In addition,  the
Holder agreed to waive the penalties  associated with late  effectiveness of the
Registration  Statement and gave us the option to redeem the unexercised portion
of  exchange  rights  that  are  not  exercised   within  90  days  of  becoming
exercisable.  In return for this,  we granted  the Holder  warrants  to purchase
300,000 common shares at an exercise price of $3.00.  The warrants expire on the
earlier of  December  15, 2005 or the date 60 days  following  the fifth day the
closing price of our common shares equals or exceeds $12.00.

        In connection with the issuance of the Note and the Warrant,  we agreed,
among  certain other  covenants,  to maintain a letter of credit in favor of the
Investor in an amount equal to 57.15% of the principal balance of the Note until
certain  conditions are met, after which the required  amount will be reduced to
50% of the  principal  balance of the Note.  The  letter of credit is  currently
secured by cash  proceeds from the issuance of the Note equal to the face amount
of the letter of credit.  Such cash proceeds are reflected as restricted cash in
the  Consolidated  Balance  Sheets.  On July  18,  2001,  we met the  conditions
required to reduce the letter of credit to 50% of the  principal  balance of the
Note and on July 26,  2001 we  received  proceeds  from the  letter of credit of
$357,761, being the difference between 57.15% and 50% of the principal balance.

        During the second  quarter,  we sold 866,667 common shares together with
866,667 warrants in private placements for gross proceeds of $1,300,000. Half of
the  warrants  are  exercisable  at $2.50 per share and expire on the earlier of
five  years from the date of issue or the date 60 days  following  the fifth day
the closing  price equals or exceeds  $3.50.  The other half of the warrants are
exercisable  at $3.50 per share and expire on the earlier of five years from the
date of issue or the date 60 days  following  the  fifth day the  closing  price
equals or exceeds $4.50.  Subsequent to the end of the second  quarter,  on July
11, July 12, and July 23, 2001,  we sold an  additional  400,002  common  shares
together  with  400,002  warrants in private  placements  for gross  proceeds of
$600,000. The warrants are identical to those described above.

        We expect to generate funds through additional private placements of our
common stock and draws from restricted cash. Because of the favorable conversion
rate included in the Note,  we anticipate  the Holder will exercise its exchange
rights under the Note as they accrue. Assuming all exchange rights are exercised
soon  after  they  accrue,  we  will  be  able  to  draw  from  restricted  cash
approximately  $145,834  in cash  each  month  until the Note is paid in full in
December  2002.  This  amount,  together  with cash flow from sales of  titanium
dioxide  nanoparticles  which are  anticipated  to begin  during  late 2001,  is
expected  to  provide  adequate  working  capital.  We will  require  additional
financing in order to expand our nanoparticle  production facility when, and if,
current  capacity  cannot  keep pace with  product  sales  and to  continue  our
accelerated  development  work on the  titanium  processing  technology  and the
Tennessee mineral property.

Forward-Looking Statements

        This Quarterly Report on Form 10-Q contains  forward-looking  statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.  Such statements
can  be  identified  by  the  use of  the  forward-looking  words  "anticipate,"
"estimate,"  "project,"  "likely,"  "believe,"  "intend,"  "expect,"  or similar
words.  These  statements  discuss  future  expectations,   contain  projections
regarding future developments,  operations,  or financial  conditions,  or state
other  forward-looking  information.  Statements  in this report  regarding  the
sufficiency  of the  Company's  working  capital,  development  of the  titanium
processing technology and assets, the centrifugal jig or any mineral properties,
and any future acquisition activities are forward-looking statements. You should
keep in mind  that all  forward-looking  statements  are  based on  management's
existing beliefs about present and future events outside of management's control
and on assumptions that may prove to be incorrect.

        Among the key factors  that may have a direct  bearing on the  Company's
operating results are various risks and uncertainties including, but not limited
to,  those  attributable  to the  absence  of  operating  revenues  or  profits,
uncertainties regarding the development and commercialization of the centrifugal
jig,  development risks associated with the Tennessee  mineral  property,  risks
related to the Company's  proposed  development and exploitation of the titanium
processing  technology  and assets and  uncertainties  regarding  the  Company's
ability to obtain capital  sufficient to pursue its proposed business  strategy.
Risk factors, cautionary statements and other conditions that could cause actual
results to differ are contained in the Company's filings with the Securities and
Exchange Commission,  including the Company's Annual Report on Form 10-K for the
year ended December 31, 2000, as amended on Form 10-K/A.


                                       11
<PAGE>

                           PART II - OTHER INFORMATION


Item 2. Changes in Securities and Use of Proceeds

On June 7, 2001,  we entered into an agreement  with the Holder under which,  in
exchange  for the  Holder's  grant to the  Company  of an option to redeem up to
$1,652,252 of the accrued exchange rights at a 10% redemption premium and waiver
of certain penalties,  we granted the Holder warrants to purchase 300,000 common
shares at an  exercise  price of $3.00.  The  warrants  expire on the earlier of
December 15, 2005 or the date 60 days  following the fifth day the closing price
of our common shares equals or exceeds $12.00.

The  above-described  issuance to the Holder was  effected in reliance  upon the
exemption for sales of securities not involving a public offering,  as set forth
in Section  4(2) of the  Securities  Act of 1933,  as amended  (the  "Securities
Act"), based upon the Holder's representations,  in connection with the issuance
of the Note,  that it was an  "accredited  investor,"  as defined in Rule 501 of
Regulation  D  promulgated  under the  Securities  Act and had such  background,
education,  and  experience in financial  and business  matters as to be able to
evaluate the merits and risks of an investment in the securities, the absence of
a public  offering or general  solicitation  with respect to the  offering,  the
Holder's  representations  that  it was  acquiring  the  securities  for its own
account  and not with an intent to  distribute  such  securities,  the  Holder's
acknowledgement that all securities being purchased were "restricted securities"
for purposes of the Securities  Act and the Holder's  agreement to transfer such
securities  only in a transaction  registered  with the SEC under the Securities
Act or exempt from registration under the Securities Act.

In addition,  during the three-month period ended June 30, 2001, we sold 866,667
common shares  together with 866,667  warrants in a private  placement for gross
proceeds of $1,300,000.  Half of the warrants were Series 2001A Warrants,  which
are  exercisable at $2.50 per share and expire on the earlier of five years from
the date of issue or the date 60 days  following the fifth day the closing price
equals or  exceeds  $3.50.  The other half of the  warrants  were  Series  2001B
Warrants,  which are exercisable at $3.50 per share and expire on the earlier of
five  years from the date of issue or the date 60 days  following  the fifth day
the closing price equals or exceeds $4.50.

 Such common  shares and  warrants  were  offered and sold in reliance  upon the
exemption for sales of securities not involving a public offering,  as set forth
in  Section  4(2) of the  Securities  Act  based  upon  the  following:  (a) the
investors  were a small  group of current  shareholders  of the Company who have
previously  purchased  common  shares from the Company in private  offerings and
closely follow the Company and its common shares, (b) each investor  represented
and warranted to the Company that it was an "accredited investor," as defined in
Rule 501 of  Regulation  D  promulgated  under the  Securities  Act and had such
background, education, and experience in financial and business matters as to be
able to evaluate the merits and risks of an  investment in the  securities;  (c)
there was no  public  offering  or  general  solicitation  with  respect  to the
offering,  and each investor represented and warranted that it was acquiring the
securities  for its own  account  and not  with an  intent  to  distribute  such
securities; (d) each investor was provided with a copy of the most recent Annual
Reports  on Form 10-K and Form  10-Q of the  Company  and all other  information
requested  by the  investor  with  respect  to the  Company,  (e) each  investor
acknowledged  that all securities being purchased were  "restricted  securities"
for purposes of the Securities  Act, and agreed to transfer such securities only
in a transaction registered with the SEC under the Securities Act or exempt from
registration  under  the  Securities  Act;  and (f) a legend  was  placed on the
certificates and other documents representing each such security stating that it
was restricted and could only be transferred if  subsequently  registered  under
the  Securities Act or  transferred  in a transaction  exempt from  registration
under the Securities Act.

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

        We held an Annual Meeting of  Shareholders on June 22, 2001 at which the
shareholders considered and voted as follows on the items described below:

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

<S>                                 <C>             <C>                              <C>
        Name of Nominee             Votes For       Votes Withheld/Abstentions       Broker Non-Votes
        William Long                15,409,969                77,018                        -0-
        James Golla                 15,408,969                78,018                        -0-
        George Hartman              15,408,969                78,018                        -0-
        Robert Sheldon              15,408,969                78,018                        -0-
</TABLE>


                                       12
<PAGE>

        2. The shareholders considered whether to appoint Deloitte & Touche, LLP
as auditors and  authorize  the Board of  Directors  to fix their  remuneration.
There were 15,409,336  votes cast in favor, no votes cast against,  77,651 votes
withheld, and no broker non-votes.


Item 6.  Exhibits and Reports on Form 8-K

(a)      See Exhibit Index attached hereto.

         (b)      Reports on Form 8-K

                       On April 18, 2001, we filed Amendment No. 1 on Form 8-K/A
         amending our Current  Report on Form 8-K dated  December 15, 2000 filed
         with the SEC on  December  26,  2000 in  order to  attach a copy of the
         Exhibits containing conformed signature pages.


                                       13
<PAGE>

                                   SIGNATURES

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


                                   Altair International Inc.



August 13, 2001                    By: /s/ William P. Long
Date                               -----------------------
                                           William P. Long, President



August 13, 2001                    By: /s/ Edward H. Dickinson
Date                               ---------------------------
                                           Edward H. Dickinson,
                                           Chief Financial Officer



                                       14
<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

                  Exhibit                                                                 Incorporated   Filed
                     No.                               Exhibit                            by Reference   Herewith
                  ----------   --------------------------------------------------------- ---------------------------
                  <S>          <C>                                                       <C>              <C>
                  3.1          Articles of Incorporation of the Registrant                     (1)
                  3.2          Amendment to Articles of Incorporation of the                   (2)
                               Registrant dated November 6, 1996
                  3.3          Bylaws of the Registrant                                        (1)
                  4.1          Form of  Series 2001A Warrant                                                 X
                  4.2          Form of Series 2001B Warrant                                                  X
                  10.1         Letter dated June 7, 2001 amending Doral Asset-Backed           (3)
              Exchangeable Term Note and Doral Registration Rights
                               Agreement
</TABLE>

-----------------------


(1)  Incorporated  by  reference to  Registration  Statement on Form 10-SB filed
     with the Commission on November 25, 1996.

(2)  Incorporated by reference to Amendment No. 1 to  Registration  Statement on
     Form 10-SB/A filed with the Commission on December 23, 1996.

(3)  Incorporated  by  reference  to the  Amendment  No.  4 to the  Registration
     Statement  on  Form  S-3  filed  with  the  Commission  on  July  3,  2001,
     File No. 333-54092.


                                       15
<PAGE>