Note 7 - Land Use Right and Patents

12 Months Ended

Dec. 31, 2012

Intangible Assets Disclosure [Text Block]

7.  LAND USE RIGHT AND PATENTS

Northern Altair, an indirect wholly owned subsidiary of Altair Nanotechnologies Inc., signed an agreement on April 18, 2012 to receive a 66 acre Land Use Right with respect to land in Wu’an, China from Heibei Wu’an Municipal People’s Government (“Wu’an”). Northern Altair was required to bid for the Land Use Right. On October 31, 2012, Northern Altair completed the bidding process and paid approximately $12,000,000 and land transfer taxes and fees of approximately $1,670,000 in exchange for the 66 acre Land Use Right for a period of 50 years. Closing occurred on November 9, 2012 and Northern Altair received the Land Use Right (Wu State-Used, State-Owned Land Use Certificate No. 139) on this date. This Land will be used for the company’s nLTO and energy storage system manufacturing operations in China.  The amortized land use right’s balances as of December 31, 2012 were:

In thousands of dollars

	2012			2011
Land use right	$	13,670			-
Less accumulated amortization		(45	)		-
Total land use right, net	$	13,625			-

The land use right was recorded at cost and will be amortized on a straight-line basis over its 50 year useful life at approximately $273,000 per year. The amortization expense of $45,000 was for the last two months of 2012.

Our patents are associated with the nanomaterials and titanium dioxide pigment technology.  We are amortizing these assets on a straight-line basis over their useful lives. The amortized patents’ balances as of December 31, 2012 and 2011 were:

In thousands of dollars

	2012			2011
Patents and patent applications	$	1,366		$	1,366
Less accumulated amortization		(1,092	)		(1,016	)
Total patents and patent applications	$	274		$	350

The weighted average amortization period for patents is approximately 16.7 years.  Amortization expense, which represents the amortization relating to the identified amortizable patents, for the twelve months ended December 31, 2012 and 2011, was $76,000.  For each of the next three years, amortization expense relating to patents is expected to be approximately $76,000 per year. Amortization expense is expected to be approximately $46,000 in the fourth year.