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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
---------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003
[ ] 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 None
----------------------------- --------------------- -------------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
204 Edison Way
Reno, Nevada 89502
-------------------------------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (775) 858-3750
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 [ ].
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act). YES [ ] NO [X]
As of August 11, 2003 the registrant had 38,290,162 Common Shares outstanding.
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed in United States Dollars)
(Unaudited)
June 30, December 31,
2003 2002
------------ ------------
ASSETS
Current Assets
Cash and cash equivalents $ 1,032,248 $ 244,681
Accounts receivable 536 132,859
Other current assets 26,742 22,598
------------ ------------
Total current assets 1,059,526 400,138
Property, Plant and Equipment, net 6,973,068 7,349,818
Patents and Related Expenditures, net 1,103,409 1,146,249
Other Assets 18,200 18,200
------------ ------------
Total Assets $ 9,154,203 $ 8,914,405
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 448,582 $ 455,246
Accrued liabilities 242,366 149,257
Note payable - current portion 853,711 --
------------ ------------
Total current liabilities 1,544,659 604,503
------------ ------------
Note Payable, Long-Term Portion 2,594,006 3,905,040
------------ ------------
Commitments and Contingencies (Notes 1, 3, 4 and 5)
Stockholders' Equity
Common stock, no par value, unlimited
shares authorized; 37,282,787 and
30,244,348 shares issued and outstanding
at June 30, 2003 and December
31, 2002 47,226,583 43,787,850
Deficit accumulated during the development stage (42,211,045) (39,382,988)
------------ ------------
Total Shareholders' Equity 5,015,538 4,404,862
------------ ------------
Total Liabilities and Shareholders' Equity $ 9,154,203 $ 8,914,405
============ ============
(See Notes to Financial Statements)
2
ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited)
Period
April 9, 1973
Three Months Ended Six Months Ended (date of
June 30, June 30, inception) to
------------------------------------------------------------ June 30,
2003 2002 2003 2002 2003
------------ ------------ ------------ ------------ ------------
Sales $ 4,434 $ 4,734 $ 24,711 $ 53,671 $ 321,022
Cost of sales 938 1,151 15,888 31,326 127,646
------------ ------------ ------------ ------------ ------------
Gross Margin 3,496 3,583 8,823 22,345 193,376
------------ ------------ ------------ ------------ ------------
Operating Expenses
Mineral exploration and development 15,167 206,589 43,881 358,777 6,561,523
Research and development 202,388 164,040 415,181 302,649 4,131,277
Professional services 157,208 229,367 341,566 455,440 3,618,008
General and administrative expenses 599,050 638,086 1,156,888 1,246,214 15,364,685
Depreciation and amortization 218,359 285,702 436,984 571,401 5,952,106
Asset impairment -- 2,759,956 -- 2,759,956 2,759,956
------------ ------------ ------------ ------------ ------------
Total operating expenses 1,192,172 4,283,740 2,394,500 5,694,437 38,387,555
------------ ------------ ------------ ------------ ------------
Loss from Operations 1,188,676 4,280,157 2,385,677 5,672,092 38,194,179
------------ ------------ ------------ ------------ ------------
Other (Income) Expense:
Interest expense 146,119 308,539 266,292 596,837 4,801,631
Interest income (204) (832) (384) (1,534) (816,329)
Loss (gain) on foreign exchange -- 390 -- 390 (557,942)
Loss on extinguishment of debt -- -- -- -- 914,667
Gain on forgiveness of debt -- -- -- -- (795,972)
Loss on redemption of convertible
debentures -- -- -- -- 193,256
------------ ------------ ------------ ------------ ------------
Total other expense, net 145,915 308,097 265,908 595,693 3,739,311
------------ ------------ ------------ ------------ ------------
Net loss 1,334,591 4,588,254 2,651,585 6,267,785 41,933,490
Preferential Warrant Dividend 176,472 -- 176,472 -- 277,555
------------ ------------ ------------ ------------ ------------
Net Loss Applicable to Shareholders $ 1,511,063 $ 4,588,254 $ 2,828,057 $ 6,267,785 $ 42,211,045
============ ============ ============ ============ ============
Loss per common share - Basic and diluted $ .04 $ .19 $ .09 $ .27 $ 4.80
============ ============ ============ ============ ============
Weighted average shares - Basic and diluted 35,287,020 24,021,819 32,920,570 23,435,395 8,794,046
============ ============ ============ ============ ============
(See Notes to Financial Statements)
3
ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited)
Period
April 9, 1973
Six Months Ended (date of
June 30, inception) to
---------------------------- June 30,
2003 2002 2003
------------ ------------ ------------
Cash flows from exploration activities:
Net loss $ (2,651,585) $ (6,267,785) $(41,933,490)
Adjustments to reconcile net loss to net cash
used in exploration activities:
Depreciation and amortization 436,984 571,401 5,952,106
Shares issued for services 89,298 -- 392,724
Shares issued for interest 97,037 160,985 1,213,072
Issuance of stock options to non-employees 30,256 4,732 3,061,397
Issuance of stock options to employees -- -- 78,220
Issuance of stock warrants 37,066 108,556 961,927
Amortization of discount on note payable 88,966 215,179 888,655
Amortization of debt issuance costs -- 220,674 504,567
Asset impairment -- 2,759,956 2,759,956
Loss on extinguishment of debt -- -- 914,667
Loss on redemption of convertible debentures -- -- 193,256
Gain on forgiveness of debt -- -- (795,972)
Loss on disposal of fixed assets -- -- 1,945
Gain on foreign currency translation -- -- (559,179)
Deferred financing costs written off -- -- 515,842
Changes in assets and liabilities (net of effects
of acquisition):
Accounts receivable 132,323 (7,495) (536)
Other current assets (4,144) 23,665 1,707,856
Other assets -- (2,000) (170,720)
Trade accounts payable (6,664) 115,216 334,083
Accrued liabilities 93,109 590,100 87,651
Deferred revenue -- (40,972) --
------------ ------------ ------------
Net cash used in exploration activities (1,657,354) (1,547,788) (23,891,973)
------------ ------------ ------------
Cash flows from investing activities:
Asset acquisition -- -- (9,625,154)
Purchase of property and equipment (17,394) (57,730) (3,678,819)
Purchase of patents and related expenditures -- -- (1,882,187)
------------ ------------ ------------
Net cash used in investing activities (17,394) (57,730) (15,186,160)
------------ ------------ ------------
(continued)
4
ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited)
Period
April 9, 1973
Six Months Ended (date of
June 30, inception) to
---------------------------- June 30,
2003 2002 2003
------------ ------------ ------------
Cash flows from financing activities:
Issuance of common shares for cash, net of
issuance costs $ 2,367,103 $ 1,125,000 $ 23,875,884
Collection of stock subscription receivable -- -- 561,300
Issuance of shares under Employee Stock
Purchase Plan 277,212 -- 369,395
Issuance of convertible debenture -- -- 5,000,000
Proceeds from exercise of stock options 98,000 -- 2,806,491
Proceeds from exercise of warrants -- 300,477 4,917,805
Issuance of related party notes -- 6,243 174,243
Issuance of notes payable -- -- 19,130,540
Payment of notes payable (280,000) -- (13,823,579)
Payment of related party notes -- (149,243) (174,243)
Payment on capital lease -- (2,312) (27,075)
Purchase of call options -- -- (449,442)
Redemption of convertible debentures -- -- (2,250,938)
------------ ------------ ------------
Net cash provided by financing activities 2,462,315 1,280,165 40,110,381
------------ ------------ ------------
Net increase (decrease) in cash and equivalents 787,567 (325,353) 1,032,248
Cash and cash equivalents, beginning of period 244,681 599,884 None
------------ ------------ ------------
Cash and cash equivalents, end of period $ 1,032,248 $ 274,531 $ 1,032,248
============ ============ ============
Supplemental disclosures:
Cash paid for interest $ 80,289 None
============ ============
Cash paid for income taxes None None
============ ============
Supplemental schedule of non-cash investing and financing activities:
For the six months ended June 30, 2003:
- We issued 681,994 common shares to Doral 18, LLC in payment of $266,290 of
principal on our note payable.
- We repriced warrants, held by a shareholder, for 796,331 common shares. The
repriced warrants have an incremental fair value of $176,472 and have been
accounted for as a preferential warrant dividend.
For the six months ended June 30, 2002:
- None
(concluded)
(See Notes to Financial Statements)
5
ALTAIR NANOTECHNOLOGIES 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 Nanotechnologies
Inc. and its subsidiaries (collectively, "Altair", "we" or the "Company") have
been prepared in accordance with the rules and regulations of the United States
Securities and Exchange Commission (the "Commission"). Such rules and
regulations allow the omission of certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States, 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, 2002, as filed with the Commission on March 17, 2003.
The accompanying consolidated financial statements have been prepared on
a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As shown in the
consolidated financial statements, we incurred net losses of $2,651,585 for the
six months ended June 30, 2003, and since the date of inception have incurred
cumulative net losses of $41,933,490. At June 30, 2003, current liabilities
exceeded current assets by $485,133. These factors, among others, may raise
substantial doubt about the Company's ability to continue as a going concern.
The consolidated financial statements do not include certain adjustments
relating to the recoverability and classification of recorded asset amounts or
the amounts and classification of liabilities that might be necessary should we
be unable to continue as a going concern. Our continuation as a going concern is
dependent upon our ability to generate sufficient cash flow to meet our
obligations on a timely basis, to obtain additional financing or refinancing as
may be required, to develop commercially viable products and processes, and
ultimately to establish successful operations. We are in the process of
developing and commercializing ceramic oxide nanoparticle products that are made
with our titanium processing technology. The recoverability of amounts
capitalized as property and equipment and patents and related expenditures is
dependent upon our ability to successfully develop and commercialize these
products.
At June 30, 2003, we had cash and cash equivalents of $1,032,248, and
during the period July 1, 2003 through August 7, 2003 we received net proceeds
of $757,795 from sales of common shares and warrants. These amounts of cash are
sufficient to fund our basic operations through December 2003. In order to
conserve cash, we have reduced our cash expenditures to the extent possible
without significantly affecting our development efforts with respect to the
titanium processing technology. We will require additional financing during
December 2003 in order to provide working capital to fund our day-to-day
operations.
Because our projected near-term sales of nanoparticle products are minimal,
we expect to generate such funds through additional private placements of our
common stock and warrants to purchase our common stock or other debt or equity
securities. As of August 7, 2003, we have no commitments to provide additional
financing or to purchase a significant quantity of nanoparticle products. If we
are unable to obtain financing on a timely basis, we may be forced to more
significantly curtail and, at some point, discontinue operations.
The results of operations for the three- and six-month periods ended
June 30, 2003 are not necessarily indicative of the results to be expected for
the full year.
Note 2. Summary of Significant Accounting Policies
Net Loss Per Common Share - 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 securities 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
Long-Lived Assets - We evaluate the carrying value of long-term assets,
including intangibles, when events or circumstance indicate the existence of a
possible impairment, based on projected undiscounted cash flows, and recognize
impairment when such cash flows will be less than the carrying values.
Measurement of the amounts of impairments, if any, is based upon the difference
between carrying value and fair value. Events or circumstances that could
indicate the existence of a possible impairment include obsolescence of the
technology, an absence of market demand for the product, and/or continuing
technology rights protection.
Deferred Income Taxes - We use the asset and liability approach for
financial accounting and reporting for income taxes. Deferred income taxes are
provided for temporary differences in the bases of assets and liabilities as
reported for financial statement purposes and income tax purposes. We have
recorded a valuation allowance against all net deferred tax assets.
Recent Accounting Pronouncements - In June 2001, the FASB issued
Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset
Retirement Obligations, which requires asset retirement obligations to be
recognized when they are incurred and displayed as liabilities. SFAS No. 143 is
effective for the year ending December 31, 2003. We adopted SFAS No. 143 on
January 1, 2003. The impact was not significant on our consolidated financial
statements.
In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation-Transition and Disclosure. SFAS No. 148 amends SFAS No.
123, Accounting for Stock-Based Compensation, to provide alternative methods of
transition to SFAS No. 123's fair value method of accounting for stock-based
employee compensation. SFAS No. 148 also amends the disclosure provisions of
SFAS No. 123 and APB Opinion No. 28, Interim Financial Reporting, to require
disclosure in the summary of significant accounting policies of the effects of
an entity's accounting policy with respect to stock-based employee compensation
on reported net income and earnings per share in annual and interim financial
statements. We adopted this statement effective January 1, 2003 but have
elected, as permitted under SFAS No. 123, to continue to follow the accounting
provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees, and to furnish the pro forma disclosures required
under SFAS No. 148.
On April 30, 2003, the FASB issued SFAS No. 149, Amendment of Statement
133 on Derivative Instruments and Hedging Activities. SFAS No. 149 amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. The new guidance amends SFAS No. 133 for decisions made as part of the
Derivatives Implementation Group ("DIG") process that effectively required
amendments to SFAS No. 133, and decisions made in connection with other FASB
projects dealing with financial instruments and in connection with
implementation issues raised in relation to the application of the definition of
a derivative and characteristics of a derivative that contains a financing
component that warrants special reporting in the statement of cash flows. SFAS
No. 149 is effective for contracts entered into or modified after June 30, 2003
and for hedging relationships designated after June 30, 2003. We do not believe
that the adoption of SFAS No. 149 will have an impact on the consolidated
financial statements.
SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liability and Equity, was issued in May 2003. SFAS No.
150 establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liability and equity in its
statement of financial position. SFAS No. 150 is effective for the Company for
new or modified financial instruments beginning June 1, 2003, and for existing
instruments beginning August 1, 2003. The adoption of SFAS No. 150 is not
expected to have a material impact on the consolidated financial statements.
Stock-Based Compensation - We have elected to follow the accounting
provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees, and to furnish the pro forma disclosures required
under Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation. To estimate compensation expense that would be
recognized under SFAS 123, we have used the modified Black-Scholes option
pricing model. If we had accounted for our stock options using the accounting
method prescribed by SFAS 123, our net loss and loss per share would be as
follows:
7
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net loss applicable to shareholders (basic and
diluted) as reported $1,511,063 $4,588,254 $2,828,057 $6,267,785
Deduct: stock-based employee compensation
expense included in reported net loss, net of
related tax effects -- -- -- --
Add: total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related tax
effects 69,362 104,016 77,997 142,663
---------- ---------- ---------- ----------
Pro forma net loss applicable to shareholders $1,580,425 $4,692,270 $2,906,054 $6,410,448
========== ========== ========== ==========
Loss per common share (basic and diluted):
As reported $ 0.04 $ 0.19 $ 0.09 $ 0.27
========== ========== ========== ==========
Pro forma $ 0.04 $ 0.20 $ 0.09 $ 0.27
========== ========== ========== ==========
8
Note 3. Common Stock
Common stock transactions during the six months ended June 30, 2003 were
as follows:
Common Stock
-----------------------------
Stated
Shares Amount
-----------------------------
Balance, December 31, 2002 30,244,348 $43,787,850
Shares issued for cash 5,162,402 2,367,103
Stock options issued to non-employees - 30,256
Shares issued for services 213,102 89,298
Stock warrants issued - 37,066
Shares issued under Employee Stock Purchase Plan 598,322 277,212
Shares issued for settlement of debt 681,994 266,290
Shares issued for interest 242,619 97,037
Exercise of stock options 140,000 98,000
Preferential warrant dividend - 176,472
-----------------------------
Balance, June 30, 2003 37,282,787 $47,226,583
=============================
During the six months ended June 30, 2003, shares issued for cash
consisted of the following transactions:
o On March 31, 2003, we issued 1,750,000 common shares and 1,750,000
warrants in a private placement for cash proceeds of $595,000. The
warrants have an exercise price of $1.00 per share and expire in March
2008.
o From April 17 to May 14, 2003, we issued 1,396,898 common shares and
698,450 warrants in a public offering for cash proceeds of $472,103.
The warrants have an exercise price of $1.00 per share and expire in
April and May 2008.
o On May 20 and May 22, 2003, we issued 2,015,504 common shares and
1,007,753 warrants in private placements for cash proceeds of
$1,300,000. The warrants have an exercise price of $1.35 per share and
expire in May 2008.
During the six months ended June 30, 2003, we issued 213,102 common
shares and 51,551 warrants with a value of $89,298 in return for consulting and
investor relations services. The warrants have an exercise price of $1.00 per
share and expire in May 2008.
On August 6, 2002, we adopted an Employee Stock Purchase Plan ("ESPP")
which allows employees to purchase common shares through payroll deductions.
During the six months ended June 30, 2003, a total of 598,322 common shares were
issued under the ESPP at prices ranging from $0.33 to $1.18 per share.
In accordance with the terms of our note payable to Doral 18, LLC
("Doral"), a conversion right with respect to $280,000 of principal accrued on
March 1, 2003. Effective that date, Doral had the right to convert all or some
of the accrued principal into the Company's common shares using a conversion
price equal to 70% of the average closing price of our common shares for the
five trading days prior to March 1, 2003. During the six months ended June 30,
2003, Doral elected to exercise their conversion right with respect to $266,290
of principal and, as a result, we issued to them 924,613 common shares. Of this
amount, 681,994 common shares with a fair value of $266,290 relate to the
payment of principal against the note. The remaining 242,619 common shares with
a fair value of $97,037 represent additional shares issued in accordance with
the beneficial conversion feature of the note, and were recorded as additional
interest expense.
During the six months ended June 30, 2003, a total of 140,000 stock
options were exercised at $.70 each for net proceeds of $98,000.
On June 2, 2003, we reduced the exercise price of 796,331 outstanding
warrants held by a shareholder to $1.00 per share. As a result, we recorded a
preferential warrant dividend of $176,472 as of the repricing date. The warrants
had been previously issued with exercise prices ranging from $2.50 to $3.50.
9
Note 4. Notes Payable
Notes payable consisted of the following at June 30, 2003 and December
31, 2002:
June 30, 2003 December 31, 2002
---------------- ----------------
Note payable to BHP Minerals
International, Inc. $ 2,594,006 $ 2,505,040
Note payable to Doral 18, LLC 853,711 1,400,000
Less current portion (853,711) -
---------------- --------------
Long-term portion of notes payable $ 2,594,006 $ 3,905,040
================ ==============
Note 5. Intangible Assets
Our intangible assets consist of patents and related expenditures
associated with the titanium processing technology. In accordance with SFAS No.
142, we are amortizing these assets over their useful lives. The amortized
intangible asset balance as of June 30, 2003 was:
Gross Net
Carrying Accumulated Carrying
Amount Amortization Amount
--------------- ---------------- ---------------
Patents and related
expenditures $ 1,517,736 $ (414,327) 1,103,409
The weighted average amortization period for intangible assets is
approximately 16.5 years. Amortization expense was $42,840 for the six months
ended June 30, 2003, which represented the amortization relating to the
identified intangible assets still required to be amortized under SFAS No. 142.
For each of the next five years, amortization expense relating to intangibles
will be $85,680 per year. Management believes the net carrying amount of
intangible assets will be recovered by future cash flows generated by
commercialization of the titanium processing technology.
10
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, 2002 and June 30, 2003 and the material
changes in our results of operations and financial condition between the three-
and six-month periods ended June 30, 2002 and June 30, 2003. 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, 2002.
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.
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 8,700 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 initiated additional feasibility
testing, but have since suspended such testing due to a shortage of working
capital.
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 (the "titanium processing technology") and
all tangible equipment and other assets (the "titanium processing assets") used
by BHP to develop and implement the titanium processing technology.
The titanium processing technology has potential to produce both
titanium pigments, which are commercially traded in bulk, and nanoparticles,
which are sold on specialty product markets. The titanium processing technology
also has a potential pharmaceutical application, a new active pharmaceutical
ingredient that we call RenaZorb(TM), for the treatment of hyperphosphatemia
(elevated serum phosphate levels) in patients undergoing kidney dialysis. During
2002, and through June 30, 2003, our efforts were directed toward these three
applications of the titanium processing technology.
Liquidity and Capital Resources
We generated $24,711 of sales revenues in the first six months of 2003 but
incurred a net loss of $2,651,585. At June 30, 2003, our accumulated deficit was
$42,211,045, or an increase of $2,828,057 over the accumulated deficit at
December 31, 2002. This increase was due to the net loss for the period plus a
preferential warrant dividend of $176,472.
Our cash and short-term investments increased from $244,681 at December 31,
2002 to $1,032,248 at June 30, 2003 due to the receipt of $2,367,103 from the
sale of common shares and warrants, receipt of $98,000 from the exercise of
stock options and the collection of $130,000 of accounts receivable that were
outstanding at December 31, 2002. These increases in cash were partially offset
by normal cash operating expenditures and the payment of $280,000 of principal
against the Doral 18, LLC note.
On August 6, 2002, we adopted an Employee Stock Purchase Plan ("ESPP")
which allows employees to purchase common shares through payroll deductions.
During the six months ended June 30, 2003, a total of 598,322 common shares were
issued under the ESPP, resulting in proceeds of $277,212.
Current and Expected Liquidity. At June 30, 2003, we had cash and cash
equivalents of $1,032,248, an amount that would be sufficient to fund our basic
operations through October 2003. Between July 1, 2003 and the filing date of
this report, we sold 891,524 common shares and 445,762 warrants to purchase
11
common shares for proceeds of $757,795. This additional cash will allow us to
continue our operations through December 2003. After that date, we will require
additional financing to provide working capital to fund our day-to-day
operations. We will also require additional financing to continue our
development work on the titanium processing technology and the Tennessee mineral
property.
We expect to generate funds through offerings of our common stock and
warrants to purchase our common stock, and additional exercises of outstanding
warrants, during the remainder of 2003. We also expect to generate limited
revenues from sales of nanoparticle products, fees generated from development
and testing services provided to potential licensors of our titanium processing
technology and government grant programs for development of nanotechnology
applications. As of August 7, 2003, we have no commitments from investors to
provide additional financing for periods after August 2003, to purchase titanium
dioxide nanoparticles or to license our titanium processing technology.
We also expect to generate revenues through the licensing of our titanium
processing technology, specifically the pharmaceutical application of the
technology (i.e. RenaZorb(TM)) and the application of our technology for
large-scale titanium pigment production. With respect to large-scale titanium
pigment production, Altair has completed initial testing for a materials company
and has submitted a phase-two proposal for the economic evaluation of a
demonstration titanium dioxide pigment plant that could be expanded to a
full-scale plant with production capabilities of between 10-20 metric tons of
titanium dioxide pigment per year. If the phase-two proposal is accepted in some
form, Altair would expect to generate limited revenues in 2003 (but not
sufficient to cover monthly operating expenses) in exchange for the testing and
development work associated with the evaluation of a demonstration titanium
dioxide plant. A licensing agreement associated with a full-scale plant would be
expected to generate significant revenues in the long-term, but significant
up-front revenues from such an agreement are unlikely.
With respect to RenaZorb(TM), testing of this product using animals was
initiated in late 2002 and completed in April 2003, with test results indicating
that RenaZorb(TM) has therapeutic potential in animal testing. In April 2003, we
hired a consultant to contact pharmaceutical companies that may be interested in
doing further testing and negotiating a license agreement. To date, several such
companies have expressed an interest in RenaZorb(TM). Altair is uncertain what
the terms of a RenaZorb(TM) license agreement would be, but pharmaceutical
license agreements often involve up front or staged payments, in addition to
royalties once the drug is approved by the FDA and marketed. We can, however,
provide no assurance that we will enter into such a license agreement or that
such license agreement would involve any significant up-front payments. If we
are unable to enter into a license agreement with respect to RenaZorb(TM) or
another product during 2003 (or otherwise consummate one or more significant
licensing, sale or equity transactions), we will be forced to significantly
curtail our operations and expenses, and our ability to continue as a going
concern will be uncertain.
Capital Commitments. The following table discloses aggregate information
about our contractual obligations including notes payable, mineral lease
payments and contractual service agreements, and the periods in which payments
are due as of June 30, 2003:
Less Than After
Contractual Obligations Total 1 Year 1-3 Years 4-5 Years 5 Years
- ----------------------- ---------- ---------- ---------- ---------- ----------
Notes Payable $3,853,711* $ 853,711 $ 600,000 $1,200,000 $1,200,000
Mineral Leases 1,135,021 181,410 452,868 392,055 108,688
Contractual Service Agreements 499,865 362,365 100,000 37,500 --
---------- ---------- ---------- ---------- ----------
Total Contractual Obligations $5,488,597 $1,397,486 $1,152,868 $1,629,555 $1,308,688
========== ========== ========== ========== ==========
* Before discount of $405,996.
Critical Accounting Policies and Estimates
Management based this discussion and analysis of our financial condition
and results of operations on our consolidated financial statements. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenue and
expenses, and related disclosure of contingent assets and liabilities. On an
on-going basis, we evaluate our critical accounting policies and estimates,
including those related to long-lived assets and stock-based compensation. We
base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.
12
We believe the following critical accounting policies affect the more
significant judgments and estimates used in the preparation of our consolidated
financial statements. These judgments and estimates affect the reported amounts
of assets and liabilities and the reported amounts of revenues and expenses
during the reporting periods. Changes to these judgments and estimates could
adversely affect the Company's future results of operations and cash flows.
o Long-lived assets. Our long-lived assets consist principally of
titanium processing assets, the intellectual property (patents and
patent applications) associated with it, and a building. At June 30,
2003, the carrying value of these assets was $8,064,000, or 88% of
total assets. We evaluate the carrying value of long-lived assets when
events or circumstances indicate that an impairment may exist. In our
evaluation, we estimate the net undiscounted cash flows expected to be
generated by the assets, and recognize impairment when such cash flows
will be less than the carrying values. Events or circumstances that
could indicate the existence of a possible impairment include
obsolescence of the technology, an absence of market demand for the
product, and/or the absence of continuing technology rights protection.
o Stock-Based Compensation. We have two stock option plans which provide
for the issuance of stock options to employees and service providers.
Although Statement of Financial Accounting Standards ("SFAS") No. 123,
Accounting for Stock Based Compensation, encourages entities to adopt a
fair-value-based method of accounting for stock options and similar
equity instruments, it also allows an entity to continue measuring
compensation cost for stock-based compensation using the
intrinsic-value method of accounting prescribed by Accounting
Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to
Employees. We have elected to follow the accounting provisions of APB
25 and to furnish the pro forma disclosures required under SFAS No.
123, but we also issue warrants and options to non-employees that are
recognized as expense when issued in accordance with the provisions of
SFAS No. 123. We calculate compensation expense under SFAS No. 123
using a modified Black-Scholes option pricing model. In so doing, we
estimate certain key variables used in the model. We believe the
estimates we use are appropriate and reasonable.
Results of Operations
Three Months Ended June 30, 2003 Compared to Three Months Ended June 30, 2002
- -----------------------------------------------------------------------------
The net loss applicable to shareholders for the quarter ended June 30,
2003, which was the second quarter of our 2003 fiscal year, totaled $1,511,063
($.04 per share) compared to $4,588,254 ($.19 per share) for the second quarter
of 2002. However, results for the second quarter of 2002 were significantly
affected by an asset impairment of $2,759,956 recorded in June 2002. Other than
this, the principal factors contributing to the losses during these periods were
the lack of substantial revenue combined with the incurrence of operating
expenses.
In the second quarter of 2003, we generated sales revenues of $4,434, all
of which came from sales of titanium dioxide nanoparticles. In the second
quarter of 2002, we generated sales revenues of $4,734 from sales of titanium
dioxide nanoparticles and lithium titanate nanoparticles.
We have significantly reduced our expenditures for mineral exploration and
development in order to conserve cash for operating requirements and development
of the titanium processing technology. In addition, certain employees who were
previously involved in mineral exploration and development have been reassigned
to research and development work, primarily titanium pigment process
development. Accordingly, mineral exploration and development expenses decreased
by $191,422 from $206,589 in the second quarter of 2002 to $15,167 in the second
quarter of 2003. We expect our expenditures on mineral exploration and
development to remain low throughout 2003.
Our research and development ("R&D") efforts in the second quarter of 2003
were directed principally to pharmaceuticals, titanium pigment process
13
development and nanoparticle products. R&D expenses increased by $38,348 from
$164,040 in the second quarter of 2002 to $202,388 in the same period of 2003,
principally as a result of increased staff time being devoted to these R&D
projects with a resulting decrease in time spent on mineral exploration and
development activities. We expect our R&D expenses for the remainder of fiscal
2003 to remain at levels higher than those of fiscal 2002.
Professional services, which consist principally of legal, consulting and
audit expenses, decreased by $72,159 from $229,367 during the second quarter of
2002 to $157,208 in the second quarter of 2003. In second quarter 2002, we
incurred $134,000 in consulting costs, primarily for assistance with new
financing, but in second quarter 2003, these costs were only $27,000. This
decrease is partially offset by an increase in legal expenses of $35,000
resulting from an increase in financing activities and related regulatory
filings, as well as increased patent work associated with the titanium
processing technology.
General and administrative expenses decreased by $39,036 from $638,086 in
second quarter of 2002 to $599,050 in the same period of 2003. Shareholder
information expenses decreased by $29,000 as the result of a difference in the
timing of these expenses from year to year. This timing difference is expected
to reverse in the third quarter. Stock exchange fees decreased by $23,000
principally due to a billing error by Nasdaq that resulted in an over-billing in
the second quarter of 2002. This error was corrected in the fourth quarter of
2002. Rents decreased by $63,000 due to our purchase, in August 2002, of the 204
Edison Way building that was previously leased. However, this decrease was
partially offset by an increase in property taxes and utilities for the Edison
Way building of $48,000. Sample costs decreased by $12,000 as more effort was
placed into development projects and less into sample preparation. Technical
operating costs such as laboratory supplies and small tools decreased by $21,000
as a result of our efforts to reduce expenditures. These decreases were
partially offset by an increase in investor relations expense of $32,000. This
increase resulted from a new investor relations program initiated in the second
quarter of 2003. In addition, stock options expense increased by $23,000 as the
result of options granted to a service provider, and general insurance expense
increased by $7,000.
During the second quarter of 2002, we recorded an asset impairment for the
jig assets which reduced their depreciable balance to zero. As a result,
depreciation is no longer recorded for these assets and depreciation and
amortization expense decreased by $67,343 from $285,702 in the second quarter of
2002 to $218,359 in the second quarter of 2003.
Interest expense decreased by $162,420 from $308,539 in the second quarter
of 2002 to $146,119 in the second quarter of 2003. The decrease is due to a
reduction in the principal balance of our note payable to Doral 18, LLC (the
"Doral Note") from $1,400,000 to $853,711 during the six months ended 2003, and
the effect of an amendment of the Doral Note in November 2002 which, among other
things, reduced the balance from $2,000,000 to $1,400,000. The accounting
guidance provided by EITF 96-19, Debtor's Accounting for a Modification or
Exchange of Debt Instruments, required that the amended note be recorded at its
face amount with no discount, whereas the prior note had been recorded at a
discount with subsequent amortization of the discount to interest expense. This
elimination of the debt discount expense contributed to the decrease in interest
expense from second quarter 2002 to second quarter 2003.
Six Months Ended June 30, 2003 Compared to Six Months Ended June 30, 2002
- -------------------------------------------------------------------------
For the six months ended June 30, 2003, the net loss applicable to
shareholders was $2,828,057 ($.09 per share) compared to $6,267,785 ($.27 per
share) for the same period of 2002. Again, results for the six months ended June
30, 2002 were significantly affected by an asset impairment of $2,759,956
recorded in June 2002.
During the six months ended June 30, 2003, sales revenues totaled
$24,711. Of this amount, $6,015 came from sales of titanium dioxide
nanoparticles. The remaining $18,696 of revenues came from fees earned under a
services agreement entered into with a materials company in September 2002.
Under the terms of the services agreement, we tested the materials company's
mineral concentrates in the production of titanium dioxide pigments using our
titanium processing technology. The testing is complete and a proposal for
further development work has been given to the materials company for evaluation.
As explained above, we have significantly reduced our expenditures for
mineral exploration and development and have reassigned certain employees to
research and development work. As a result of this, mineral exploration and
development expenses for the six months ended June 30, 2003 decreased by
$314,896 to $43,881 from $358,777 for the same period in 2002. In turn, research
and development expenses increased by $112,532 from $302,649 in the six months
ended June 30, 2002 to $415,181 in the same period of 2003.
14
Professional services decreased by $113,874 from $455,440 in the six
months ended June 30, 2002 to $341,566 in the same period of 2003. Consulting
expenses, which were incurred primarily for assistance with new financing,
decreased from $250,000 in the six months ended June 30, 2002 to $105,000 during
the same period in 2003. This decrease was partially offset by an increase in
legal expenses for preparation of financing documents and regulatory filings,
and additional patent work.
General and administrative expenses decreased by $89,326 from $1,246,214
during the six months ended June 30, 2002 to $1,156,888 in the same period of
2003. Shareholder information expenses decreased by $38,000 as the result of a
difference in the timing of these expenses from year to year. This timing
difference is expected to reverse in the third quarter. Stock exchange fees
decreased by $34,000 principally due to a billing error by Nasdaq that resulted
in an over-billing in the second quarter of 2002. This error was corrected in
the fourth quarter of 2002. Rents decreased by $129,000 due to our purchase, in
August 2002, of the 204 Edison Way building that was previously leased. However,
this decrease was partially offset by an increase in utilities for the Edison
Way building of $82,000. Sample costs decreased by $34,000 as more effort was
placed into development projects and less into sample preparation. Technical
operating costs such as laboratory supplies and small tools decreased by $44,000
as a result of our efforts to reduce expenditures. These decreases were
partially offset by an increase in investor relations expense of $76,000. This
increase resulted from new investor relations programs initiated during the
first six months of 2003. In addition, stock options expense increased by
$23,000 as the result of options granted to a service provider, and general
insurance expense increased by $10,000.
During the second quarter of 2002, we recorded an asset impairment for
the jig assets which reduced their depreciable balance to zero. As a result,
depreciation is no longer recorded for these assets and depreciation and
amortization expense decreased by $134,417 from $571,401 in the six months ended
June 30, 2002 to $436,984 in the same period of 2003.
Interest expense decreased by $330,545 from $596,837 in the six months
ended June 30, 2002 to $266,292 in the same period in 2003. The decrease is due
to a reduction in the principal balance of the Doral Note from $1,400,000 at
December 31, 2002 to $853,711 at June 30, 2003, and the effect of an amendment
of the Doral Note in November 2002 which, among other things, reduced the
balance from $2,000,000 to $1,400,000. The accounting guidance provided by EITF
96-19, Debtor's Accounting for a Modification or Exchange of Debt Instruments,
required that the amended note be recorded at its face amount with no discount,
whereas the prior note had been recorded at a discount with subsequent
amortization of the discount to interest expense. This elimination of the debt
discount expense contributed to the decrease in interest expense from the six
months ended June 30, 2002 to the six months ended June 30, 2003.
Forward-Looking Statements
This Quarterly Report on Form 10-Q (this "Report") 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 ability of the Company to raise working capital necessary
to fund our operations, development of the titanium processing technology and
assets (including for pharmaceutical use), licensing of the titanium processing
technology for pharmaceutical or other uses, development of the centrifugal jig
and the Tennessee mineral property, 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, the following:
15
o We have not generated any substantial operating revenues and may not
ever generate substantial revenues.
o As shown in the consolidated financial statements for the six months
ended June 30, 2003, we incurred a net loss of $2,651,585 for the six
months ended June 30, 2003, and since the date of inception have
incurred cumulative net losses of $41,933,490. At June 30, 2003,
current liabilities exceeded current assets by $485,133. These factors,
among others, may raise substantial doubt about the Company's ability
to continue as a going concern.
o We may not be able to raise sufficient capital to meet future
obligations. As described in this Report, we need to raise additional
capital in the short-term and in the long-term in order to continue our
basic, day-to-day operations and continue development of the titanium
processing technology. If we are unable to obtain sufficient capital,
we may be unable to meet future obligations or adequately exploit
existing or future opportunities, and may be forced to discontinue
operations.
o The sale in the open market of recently sold common shares and common
shares issuable upon the exercise of purchase rights under existing
notes, options and warrants may place downward pressure on the market
price of our common shares. Speculative traders may anticipate the
exercise of purchase rights and, in anticipation of a decline in the
market price of our common shares, engage in short sales of our common
shares. Such short sales could further negatively affect the market
price of our common shares.
o We have pledged all of the intellectual property, fixed assets and
common stock of Altair Nanomaterials, Inc., our second-tier
wholly-owned subsidiary, to secure repayment of a Secured Term Note
with a face value of $1,400,000 issued on November 21, 2002. Altair
Nanomaterials, Inc. owns and operates the titanium and nanoparticle
processing technology we acquired from BHP in 1999. The Secured Term
Note is also secured by a pledge of the common stock and leasehold
assets of Mineral Recovery Systems, Inc., which owns and operates our
leasehold interests in the Camden, Tennessee area. The Secured Term
Note is due and payable on March 31, 2004. If we default on the Secured
Term Note, severe remedies will likely be available to the holder of
the Secured Term Note, including immediate seizure and disposition of
all pledged assets.
o In the short run, to the extent we generate any significant revenue, we
expect such revenue to come through the licensing of our titanium
processing technology, specifically the pharmaceutical application of
the technology (i.e. RenaZorb(TM)) and the application of our
technology for large-scale titanium pigment production. With respect to
both possible applications, we have conducted, and/or interested
parties have conducted, initial testing, and we are in discussions
regarding follow up testing that could reasonably lead to a significant
license agreement. However, with respect to both possible applications,
we have no formal or informal commitments to license our technology and
cannot predict when, or if, any significant licensing agreement will be
signed. If we are unable to enter into such a license agreement during
2003 (or otherwise consummate one or more significant licensing, sale
or equity transactions), we will be forced to significantly curtail our
operations and expenses, and our ability to continue as a going concern
will be uncertain.
o In the short run, we also plan to use the titanium processing
technology to produce TiO2 nanoparticles, and we also intend to license
the technology to others. TiO2 nanoparticles and other products we
intend to initially produce with the titanium processing technology
generally must be customized for a specific application working in
cooperation with the end user. We are still testing and customizing our
TiO2 nanoparticle products for various applications and have no
long-term agreements with end users to purchase any of our TiO2
nanoparticle products. In addition, we have not yet entered into any
agreements to license the technology. We may be unable to recoup our
investment in the titanium processing technology and titanium
processing equipment.
o We have not completed testing of, or developed a production model of,
any series of the jig. In part because of our liquidity shortage, we do
not expect to complete testing and development of the jig during the
coming year and have determined to focus most of our limited resources
on the titanium processing technology. We may never develop a
production model of the jig.
o Our capital shortage has also forced us to discontinue development work
on the Tennessee mineral property and make only those expenditures that
16
are necessary to maintain the property. If additional capital becomes
available, we intend to resume the process of conducting feasibility
testing of the Tennessee mineral property. Because we are at an early
stage of testing, we are unable to provide any assurance that mining of
the Tennessee mineral property is feasible. Our test production at the
pilot plant, economic analysis and additional exploration activities
may indicate any of the following:
o that the Tennessee mineral property does not contain heavy minerals of
a sufficient quantity, quality or continuity to permit any mining;
o that production costs exceed anticipated revenues;
o that end products do not meet market requirements or customer
expectations;
o that there is an insufficient market for products minable from the
Tennessee mineral property; or o that mining the Tennessee mineral
property is otherwise not economically or technically feasible.
In addition to the foregoing, we recommend that you review the risk
factors and other cautionary statements contained in the Company's other filings
with the Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K for the year ended December 31, 2002.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We do not have any derivative instruments, commodity instruments, or
other financial instruments for trading or speculative purposes, nor are we
presently at risk for changes in foreign currency exchange rates.
Item 4. Controls and Procedures
(a) Based on the evaluation of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e))
required by paragraph (b) of Rules 13a-15 or 15d-15, our chief executive officer
and our chief financial officer, have concluded that, as of June 30, 2003, our
disclosure controls and procedures were effective.
(b) There have been no changes in our internal control over financial
reporting identified in connection with the evaluation required by paragraph (d)
of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Between May 20, 2003 and May 22, 2003, we sold 2,015,504 common shares and
1,007,753 Series 2003C warrants in exchange for aggregate consideration of
$1,300,000 in a private placement to three institutional accredited investors.
The warrants have an exercise price of $1.35 per share and expire in May 2008.
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 and Rule 506 promulgated under the
Securities Act based upon the following: (a) each investor represented and
warranted to the Company that it was an institutional "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;
(b) 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; (c) each investor was provided with an offering summary, a copy of
the most recent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K of the Company and all other information requested
by the investor with respect to the Company, (d) 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 (e) 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.
17
Item 4. Submission of Matters to a Vote of Security Holders.
We held an Annual Meeting of Shareholders on June 27, 2003 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:
Name of Nominee Votes For Votes Withheld/Abstentions Broker Non-Votes
William Long 29,373,879 137,491 -0-
James Golla 29,349,629 221,681 -0-
George Hartman 29,422,699 148,611 -0-
Robert Sheldon 29,393,299 178,011 -0-
Edward Dickinson 29,439,419 131,891 -0-
2. The shareholders considered whether to appoint Deloitte & Touche, LLP
as auditors and authorize the Board of Directors to fix their remuneration.
There were 29,471,755 votes cast in favor, 60,000 votes cast against, 39,555
votes withheld, and no broker non-votes, which vote was sufficient for approval.
3. The shareholders considered a proposal to authorize, approve, adopt
and ratify the issuance of common shares in connection with note, warrant and
equity transactions between the Company and Doral 18, LLC. There were 8,587,577
votes cast in favor, 405,080 votes cast against, 104,095 votes withheld, and
20,474,558 broker non-votes, which vote was sufficient for approval.
4. The shareholders considered a proposal to approve an amendment to the
by-laws of the Company related to the indemnification of officers and directors
of the Company. There were 29,063,352 votes cast in favor, 390,766 votes cast
against, 117,192 votes withheld, and no broker non-votes, which vote was
sufficient for approval.
Item 6. Exhibits and Reports on Form 8-K
a) See Exhibit Index attached hereto.
b) On May 28, 2003, the Company filed a Current Report on Form 8-K
supplying a pro-forma balance sheet as of April 30, 2003 (with certain
May 2003 transactions included) showing in excess of $5,000,000 in net
assets. Such report was filed in order to certify to the NASD that the
Company met certain shareholders'equity requirements related to its
continued listing on the Nasdaq SmallCap Market.
18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Altair Nanotechnologies Inc.
August 13, 2003 By: /s/ William P. Long
---------------------------
Date William P. Long,
Chief Executive Officer
August 13, 2003 By: /s/ Edward H. Dickinson
---------------------------
Date Edward H. Dickinson,
Chief Financial Officer
19
EXHIBIT INDEX
Exhibit No. Exhibit Incorporated by Reference/Filed Herewith
- ---------------- --------------------------------------------------- ---------------------------------------------
3.1 Bylaws Filed herewith
4.1 Articles of Continuance Incorporated by reference to the Current
Report on Form 8-K filed with the SEC on
July 18, 2002
4.3 Form of Series 2003C Warrant 1ncorporated by reference to the Company's
Iurrent Report on Form 8-K filed with the
Commission on May 28, 2003, File No.
C-12497.
4.4 Form of Series 2003D Warrant Incorporated by reference to the Company's
Registration Statement on Form S-3, File
Ro. 333-106138, filed with the Commission
on June 16, 2003.
4.5 Amendment to Common Share Purchase Warrants dated Incorporated by reference to the Company's
June 5, 2003 Registration Statement on Form S-3, File
No. 333-106138, filed with the Commission
on June 16, 2003.
31.1 Section 302 Certification of Chief Executive Filed herewith
Officer
31.2 Section 302 Certification of Chief Financial Filed herewith
Officer
32.1 Section 906 Certification of Chief Executive Filed herewith
fficer
O
32.2 Section 906 Certification of Chief Financial Filed herewith
Officer
20