Note 7 - Land Use Right and Patents

3 Months Ended

Mar. 31, 2013

Intangible Assets Disclosure [Text Block]

Note 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 March 31, 2013 and December 31, 2012 were:

In thousands of dollars

	March 31, 2013			December 31, 2012
Land use right	$	13,751		$	13,670
Less accumulated amortization		(115	)		(45	)
Total land use right, net	$	13,636		$	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. Amortization expense for the three months ended March 31, 2013 totaled $70,000.

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 March 31, 2013 and December 31, 2012 were:

In thousands of dollars

	March 31, 2013			December 31, 2012
Patents and patent applications	$	1,366		$	1,366
Less accumulated amortization		(1,111	)		(1,092	)
Total patents and patent applications	$	255		$	274

            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 three months ended March 31, 2013 and March 31, 2012, was $19,000.  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 $27,000 in the fourth year.