Edgar Filing: ALTAIR NANOTECHNOLOGIES INC

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

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report
(Date of earliest event reported): February 2, 2004 (January 15, 2004)

Altair Nanotechnologies Inc.
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(Exact name of registrant as specified in its charter)

Province of
Ontario,
Canada 1-12497 None
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(State or other (Commission File No.) (IRS Employer
jurisdiction Identification No.)
of incorporation)

204 Edison Way
Reno, Nevada 89502
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(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (775) 858-3750

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(Former Name, if Changed Since Last Report)

Item 5. Other Events

Altair Nanotechnologies Inc. (the "Company" or "we") is filing this
Current Report on Form 8-K in order ensure that information regarding certain
business developments is incorporated by reference into the Company's various
registration statements that incorporate subsequent annual, quarterly and
current reports by reference. This information is as follows:

Titanium Metals Corporation. In July 2003, we entered into the
memorandum of understanding with Titanium Metals Corporation to provide custom
oxide electrode feedstocks for a novel, four-year, titanium metal research
program funded by the Department of Defense, Defense Advanced Research Projects
Agency. The program's goal is to lower the cost of titanium metal and titanium
metal alloys to enable a broader market use. The Department of Defense is
specifically interested in lowering the cost of titanium metal and titanium
metal alloys to provide for a broader use in military apoplications such as
aerospace and weapons systems. On January 15, 2004, we entered into a Technology
Investment Agreement with Titanium Metals Corporation under which we are
entitled to receive $150,000 during an initial six month period, with the
possibility of receiving additional revenue in follow up phases, in exchange for
engineering, optimizing and producing customized electrodes for the titanium
production project. Once we have optimized the design, we will provide
significant quantities (10 large-scale runs of 50 lbs. of titanium metal each)
of customized electrodes to TIMET.

Our Hydrochloride/Titanium Pigment Production Process. We recently
entered into a license agreement with Western Oil Sands, Inc. with respect to
its possible use of the Altair Hydrochloric Pigment Process (AHPP) for the
production of titanium dioxide pigment and pigment-related products at the
Athabasca Oil Sands Project in Alberta, Canada, and elsewhere. Upon execution of
the agreement, we granted Western Oil Sands an exclusive, conditional license to
use the AHPP on heavy minerals derived from oil sands in Alberta, Canada. The
agreement also contemplates a three-phase, five-year program pursuant to which
the parties will work together to further evaluate, develop and commercialize
the AHPP. In the first phase of the program, Western Oil Sands is expected to
spend $650,000 ($500,000 of which is scheduled to be paid to Altair for work
performed) to evaluate the AHPP and confirm that the AHPP will produce pigment
from oil sands. Assuming phase one is successful, Western Oil Sands may elect to
commence phase two, the construction of a demonstration titanium pigment
production facility using the AHPP. If phase two is successful, Western Oil
Sands may elect to commence phase three, the construction and operation of a
full-scale commercial titanium pigment production facility using the AHPP.

The scope of the license granted to Western Oil Sands under the
agreement will vary with Western Oil Sand's commitment to the project. The
initial license, related to use of the AHPP on heavy minerals derived from oil
sands in Alberta, Canada, will terminate if Western Oil Sands fails to complete
phase one and will convert to a non-exclusive license if Western Oil Sands
commences phase two but fails to complete, or spend at least $25 million in an
effort to complete, phase two.

If Western Oil Sands completes phase one and commences phase two,
Western Oil Sand's license will be expanded to include the right to use the AHPP
for the production of titanium dioxide pigment and pigment-related products from
oil sands resources, primary ore resources and titanium deposits in Canada and
Minnesota and for the production of titanium dioxide pigment and pigment-related
products from oil sands resources world wide. This expanded license will
continue on an exclusive basis if Western Oil Sands completes phase two and
completes, or spends at least $50 million in an effort to complete, phase three.
This expanded licenses will continue, but on a non-exclusive basis, if Western
Oil Sands completes phase two but, after spending more than $5 million but less
than $50 million on phase three, does not complete phase three. If Western Oils
Sands does not commence, or spends less than $5 million with respect to, phase
three, the expanded license terminates.

If commercialization occurs, Western Oil Sands is required to pay
Altair royalties of two percent of net sales revenue from any production
facility.

In addition to our work with Western Oil Sands, we have submitted
proposals to five international minerals and energy resources companies to
develop and license our titanium pigment production process. We have completed
initial testing for a company located in the Pacific Rim and 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 10,000 and 20,000 metric tons of titanium
dioxide pigment per year. We have been informed that this proposal is under
consideration and subject to due diligence evaluation. If the phase-two proposal
is accepted in some form, we would expect to generate limited revenues 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 may generate significant revenues in the long-term, but
significant up-front revenues from such an agreement are unlikely.

We submitted phased development proposals for the testing and economic
evaluation of our titanium pigment production process technology to the other
four minerals and energy resources companies during the first three quarters of
2003. We recently entered into a testing and development license with one of
these companies, called Avireco and located in Vietnam, and anticipate that we
may enter into additional testing agreements during 2004. If the results of
testing by one or more such companies is positive, we hope to enter into a
long-term license agreement for regional exclusive use of the pigment
technology. If one or more of such minerals and energy resources companies
obtains such a license and subsequently constructs a full-scale production
plant, we would expect to receive development fees and royalties over the
long-term, but no significant up-front payments. We can provide no assurance
that the results of any testing will be positive, that we will enter into a
long-term license or that the licensee will construct a full-scale production
plan in order to use our technology.

RenaZorb(TM). RenaZorb(TM) is a potential drug using our technology
that may be useful in phosphate control in kidney dialysis patients.
Pre-clinical trials, in-vitro testing and animal testing done to date indicate
RenaZorb(TM) may be effective for use with kidney dialysis patients with
end-stage renal disease. We have not, however, conducted human trials using
RenaZorb(TM) or submitted an application to the FDA seeking approval to market
RenaZorb(TM). During April 2003, we hired a consultant to contact pharmaceutical
companies that may be interested in doing further tests and negotiating a
license agreement for rights to test and produce RenaZorb(TM). To date, several
such companies have expressed an interest in RenaZorb(TM), which is a
lanthanum-based compound. An alternative lanthanum-based drug candidate,
Fosrenol(TM), produced by Shire Pharmaceuticals Group plc, is currently under
review for approval by the FDA. We do not expect to be able to enter into a
license agreement unless and until Fosrenol(TM) obtains FDA approval, and we
cannot predict when or if FDA approval for Fosrenol(TM) will be granted. Even if
FDA approval is granted for Fosrenol(TM), we can provide no assurance that we
will subsequently be able to enter into a license agreement for our
lanthanum-based product, RenaZorb(TM). If we are able to enter into a license
agreement, we are uncertain what the terms of the license would be.

Battery Technology. We have developed a proprietary process to
manufacture nano-sized lithium titanate spinel for use in lithium ion batteries
requiring fast charge and discharge rates and high energy, such as car
batteries. Battery prototypes utilizing our nano-sized lithium titanate spinel
have been developed by Rutgers Energy Storage Research Group (formerly known as

Telcordia Technologies) and, according to Rutgers Energy, exhibit battery
characteristics that significantly exceed Department of Energy standards. The
Department of Energy standards, as reported by Rutgers Energy, were established
through a cooperative research and development program between the federal
government and the United States Council for Automotive Research. To date, we
have supplied only sample quantities of lithium titanate spinel to Rutgers
Energy and other battery research groups, and we have no contracts for delivery
of additional materials. New battery technology and the incorporation of new
materials such as lithium titanate spinel may require long lead times for
development prior to commercial production. There is no certainty as to when
sales of our lithium titanate spinel will reach commercial levels, if ever.

Dental Applications. We have developed a nano-sized zirconium oxide
material that may have applications in dental products such as fillings and
prosthetic devices. We have recently placed our first samples of this material
with developers of non-toxic UV-cured dental materials. Zirconium oxide is
currently being tested in this application by others but it is not currently
used commercially in dental devices, and there is no assurance that future
dental applications will prove feasible or economic. Zirconia does possess
certain characteristics such as hardness and opaqueness to x-rays that suggest
use in dental filling applications in a polymer matrix, but this application
would have to be proven through testing. Testing is being conducted by the
Southwest Research Institute, San Antonio, Texas under a National Institute of
Health grant.

Government Sponsored Research. In September 2003, we entered into an
agreement with Western Michigan University to provide research services
involving a technology used in the detection of chemical, biological and
radiological agents. The teaming/research agreement with Western Michigan
University, funded by the Department of Energy, provides for total payments to
Altair of $356,500 over a two-year period. H.R. 2673, the conference committee
report for the omnibus spending bill passed in December 2003, earmarks an
additional $2 million to be used by the Department of Energy to continue the
research. We are also actively pursuing other government grants through joint
teaming agreements and government Small Business Innovative Research proposals.

Altair Centrifugal Jig and Tennessee Mineral Property. In October 2003,
we entered into a technology license agreement with Bateman Luxembourg S.A. for
the manufacture, installation and operation of our centrifugal jig. Under the
terms of the agreement, Bateman will have exclusive use of our centrifugal jig
for specifically identified applications in selected territories throughout the
world. We will be compensated by Bateman through a licensing fee for each
project managed by Bateman that utilizes our centrifugal jig. Compensation is
determined by an agreed upon formula and will vary based on the size and scope
of the individual projects. We retain the right to use our centrifugal jig for
our own projects and may terminate the agreement if Bateman does not meet
certain production thresholds. There is no assurance that Bateman will ever
utilize our centrifugal jig in its projects or pay fees to Altair. Bateman is
not required to pay any fees under the agreement unless and until Bateman begins
generating revenue using our centrifugal jig.

Notwithstanding this positive development with respect to our
centrifugal jig, we are taking steps to more narrowly focus our limited
resources on the development and exploitation of our titanium and nanoparticle
processing technology. Accordingly, we have determined to limit our expenditures
on our centrifugal jig and our Tennessee mineral property to the minimum amount
necessary to preserve their basic value for the short term. We are reviewing the
viability and desirability of various strategic alternatives for our centrifugal
jig and our Tennessee mineral property, including their possible sale, use in a
joint venture, spin-off to shareholders or abandonment. We can not, however,
provide any assurance that we will be successful in using or disposing of such
assets in a manner that provides value to shareholders.

This report contains various forward-looking statements. These
statements can be identified by the use of the forward-looking words
"anticipate," "estimate," "project," "likely," "believe," "intend," "expect," or
similar words. These statements discuss future expectations, contain projections
regarding future developments, operations, or financial conditions, or state
other forward-looking information. When considering these forward-looking
statements, you should keep in mind the risk factors noted in the Company's
periodic filings with the SEC. You should also keep in mind that all
forward-looking statements are based on management's existing beliefs about
present and future events outside of management's control and on assumptions
that may prove to be incorrect. If one or more risks identified in this report
or any applicable filings materialize, or any other underlying assumptions prove
incorrect, the Company's actual results may vary materially from those
anticipated, estimated, projected, or intended.

Item 7. Financial Statements and Exhibits

Exhibit No. Exhibit Incorporated by Reference/ Filed Herewith
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10.1 Technology Investment Agreement dated Filed herewith.
January 8, 2004, between Titanium Metals
Corporation and Altair Nanomaterials, Inc.*

10.2 License Agreement for Altair TiO2 Pigment Filed herewith.
Technology between Altair Nanotechnologies,
Inc. and Western Oil Sands, Inc.*

*Certain confidential portions of this exhibit were omitted. This exhibit, with
the omitted information, has been filed separately with the Secretary of the SEC
pursuant to an Application for Confidential Treatment under Rule 24b-2 under the
Securities Exchange Act of 1934.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned thereunto duly authorized.

Altair Nanotechnologies Inc.

February 2, 2004 By: /s/ Edward Dickinson
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Date Edward Dickinson
Chief Financial Officer