10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
	1934 FOR THE QUARTERLY PERIOD ENDED September 30, 2013

☐	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)

Delaware	1-12497	33-1084375
(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) 856-2500

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   ☒     NO   ☐.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES    ☒      NO   ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “accelerated filer”, “large accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer [  ] Non-accelerated filer [  ] Accelerated filer [  ] Smaller reporting company [ X ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): YES [  ] NO [X]

As of November 12, 2013 the registrant had 11,590,067 shares of Common Stock outstanding.

ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of United States Dollars, except shares)

 

	September 30,			December 31,
	2013			2012
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	3,293		$	12,372
Restricted cash		15,515			6,245
Accounts receivable, net		1,473			1,498
Product inventories, net		5,229			7,416
Prepaid expenses and other assets, current		1,846			937
Deferred contract costs		1,831			4,532
Other assets, related party		1,791			1,754
Total current assets		30,978			34,754
Restricted cash					11,803
Property, plant and equipment, net		11,702			4,076
Property, plant and equipment, net held and not used					1,857
Patents, net		217			274
Prepaid equipment purchases		1,351
Land use right, net		22,359			13,625
Total Assets	$	66,607		$	66,389
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade accounts payable	$	2,860		$	2,599
Accrued salaries and benefits		676			632
Accrued warranty		634			418
Accrued liabilities		376			384
Deferred revenues		5,639			7,218
Warrant liabilities		120			90
Notes payable, current		11,533			6,680
Capital lease obligation		6			5
Total current liabilities		21,844			18,026
Deferred income		17,627			11,803
Capital lease obligation, less current portion					4
Total Liabilities		39,471			29,833
Commitments and Contingencies
Stockholders' equity
Common stock, $.001 par value, 200,000,000 shares authorized; 11,590,067 shares issued and outstanding at September 30, 2013 and December 31, 2012		12			12
Additional paid in capital		259,198			259,065
Accumulated deficit		(232,558	)		(222,409	)
Accumulated other comprehensive income (loss)		484			(112	)
Total stockholders' equity		27,136			36,556
Total Liabilities and Stockholders' Equity	$	66,607		$	66,389

See notes to the consolidated financial statements.

ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in thousands of United States Dollars, except shares and per share amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues
Product sales	$	1,072		$	300		$	5,958		$	891
License fees		60			60			180			180
Total revenues		1,132			360			6,138			1,071
Cost of goods sold
Product		1,206			788			6,586			2,282
Total cost of goods sold		1,206			788			6,586			2,282
Gross loss		(74	)		(428	)		(448	)		(1,211	)
Operating expenses
Research and development		1,079			1,423			3,124			5,046
Sales and marketing		201			499			883			2,344
General and administrative		1,908			1,837			4,843			5,010
Depreciation and amortization		444			252			1,063			771
Gain on disposal of assets		49						31
Total operating expenses		3,681			4,011			9,944			13,171
Loss from operations		(3,755	)		(4,439	)		(10,392	)		(14,382	)
Other income (expense)
Interest income, net		25			37			237			67
Change in market value of warrants		(20	)		(267	)		(30	)		(88	)
Other income		7			(2	)		36			(2	)
Total other income (expense), net		12			(232	)		243			(23	)
Net loss	$	(3,743	)	$	(4,671	)	$	(10,149	)	$	(14,405	)
Loss per common share - basic and diluted	$	(0.32	)	$	(0.40	)	$	(0.88	)	$	(1.24	)
Weighted average shares - basic and diluted		11,590,067			11,590,067			11,590,067			11,590,067

See notes to the consolidated financial statements.

ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Expressed in thousands of United States Dollars)

(Unaudited)

	Three Months Ended September 30,
	2013			2012
Net loss	$	(3,743	)	$	(4,671	)
Other comprehensive loss, net of tax:
Foreign currency translation adjustment		(17	)		(61	)
Comprehensive loss	$	(3,760	)	$	(4,732	)

	Nine Months Ended September 30,
	2013			2012
Net loss
	$	(10,149	)	$	(14,405	)
Other comprehensive loss, net of tax:
Foreign currency translation adjustment		596			(193	)
Comprehensive loss	$	(9,553	)	$	(14,598	)

See notes to the consolidated financial statements.

ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Expressed in thousands of United States Dollars, except shares)

(Unaudited)

	Common Stock				Additional Paid In		Accumulated			Accumulated Other Comprehensive
	Shares		Amount		Capital		Deficit			Income (Loss)			Total
Balance, July 1, 2012		11,590,067	$	12	$	257,881	$	(214,157	)	$	(132	)	$	43,604
Net loss								(4,671	)					(4,671	)
Other comprehensive loss											(61	)		(61	)
Reduction in issuance costs from legal claims settlement						1,050								1,050
Share-based compensation						73								73
Balance, September 30, 2012		11,590,067	$	12	$	259,004	$	(218,828	)	$	(193	)	$	39,995

	Common Stock				Additional Paid In		Accumulated			Accumulated Other Comprehensive
	Shares		Amount		Capital		Deficit			Income (Loss)			Total
Balance, July 1, 2013		11,590,067	$	12	$	259,154	$	(228,815	)	$	501		$	30,852
Net loss								(3,743	)					(3,743	)
Other comprehensive loss											(17	)		(17	)
Share-based compensation						44								44
Balance, September 30, 2013		11,590,067	$	12	$	259,198	$	(232,558	)	$	484		$	27,136

	Common Stock				Additional Paid In		Accumulated			Accumulated Other Comprehensive
	Shares		Amount		Capital		Deficit			Income (Loss)			Total
Balance, January 1, 2012		11,590,067	$	12	$	257,884	$	(204,423	)				$	53,473
Net loss								(14,405	)					(14,405	)
Other comprehensive loss											(193	)		(193	)
Reduction in issuance costs from legal claims settlement						1,050								1,050
Share-based compensation						70								70
Balance, September 30, 2012		11,590,067	$	12	$	259,004	$	(218,828	)	$	(193	)	$	39,995

	Common Stock				Additional Paid In		Accumulated			Accumulated Other Comprehensive
	Shares		Amount		Capital		Deficit			Income (Loss)			Total
Balance, January 1, 2013		11,590,067	$	12	$	259,065	$	(222,409	)	$	(112	)	$	36,556
Net loss								(10,149	)					(10,149	)
Other comprehensive income											596			596
Share-based compensation						133								133
Balance, September 30, 2013		11,590,067	$	12	$	259,198	$	(232,558	)	$	484		$	27,136

See notes to the consolidated financial statements.

ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of United States Dollars)

(Unaudited)

	Nine Months Ended September 30,
	2013			2012
Cash flows from operating activities:
Net loss	$	(10,149	)	$	(14,405	)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization		1,063			771
Share-based compensation		133			70
Change in fair value of warrants		30			88
Changes in operating assets and liabilities:
Accounts receivable, net		27			(616	)
Product inventories		645			(1,211	)
Prepaid expenses and other current assets		(858	)		(356	)
Deferred contract costs		2,701			(3,331	)
Trade accounts payable		263			(203	)
Accrued salaries and benefits		45			(280	)
Accrued warranty		216			43
Deferred revenues		(1,527	)		3,710
Accrued liabilities		(8	)		24
Cash flows from operating activities		(7,419	)		(15,696	)
Cash flows from investing activities:
Decrease (increase) in restricted cash		3,007			(293	)
Purchase of land use right		(8,591	)
Purchase of property, plant and equipment		(6,268	)		(170	)
Cash flows from investing activities		(11,852	)		(463	)
Cash flows from financing activities:
Issuance of common shares for cash, net of issuance costs					1,050
Deferred income		6,162
Proceeds from notes payable		5,893			1,000
Repayment of notes payable		(1,025	)
Repayment of capital lease obligation		(3	)		(4	)
Cash flows from financing activities		11,027			2,046
Effect of exchange rate changes on cash and cash equivalents		(835	)		(193	)
Decrease in cash and cash equivalents		(9,079	)		(14,306	)
Cash and cash equivalents, beginning of period		12,372			46,519
Cash and cash equivalents, end of period	$	3,293		$	32,213
Supplemental disclosures:
Cash paid for interest	$	221		$	28
Cash paid for income taxes	None			None
Non-cash transactions:
Transfer of inventory to property, plant and equipment	$	1,593

See notes to the consolidated financial statements.

Note 1.   Basis of Presentation and Going Concern

The interim consolidated financial statements of Altair Nanotechnologies Inc. and its subsidiaries (the “Company”) are unaudited. These consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The 2012 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). This Form 10-Q (this “Report”) should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, which includes all disclosures required by GAAP.

The Company incurred net losses of $10.1 million for the nine months ended September 30, 2013 and has an accumulated deficit of $232.6 million as of September 30, 2013. The Company used $7.4 million in its operations for the nine months ended September 30, 2013 and working capital levels have decreased from $16.7 million at December 31, 2012 to $9.1 million at September 30, 2013. The Company has substantial debt coming due in the next 12 months. We expect to continue to have negative cash flows from operations as we ramp up production at our new manufacturing facilities. If we are not able to refinance this debt or obtain additional capital, we will not be able to pay off our current debt obligations. This matter raises substantial doubt about the Company’s ability to continue as a going concern. To address this matter, management is taking actions to refinance existing loans, obtain additional loans collateralized by the land use rights and to obtain approval for the remaining grant incentives from the Government of Wu’an, China. Restricted cash is available to fund development of operations (both capital and non-capital) in China subject to meeting certain guidelines agreed upon by the Wu’an government and the Company.   Based on our current forecast, we expect to use the existing restricted cash to support the non-capital development of our China operations.  If the non-capital needs are met, excess restricted cash or additional grant funds received will be used for capital needs. The consolidated financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments if the Company were unable to do so.

Note 2.   Recently Adopted and Recently Issued Accounting Guidance

Adopted  

On January 1, 2013, the Company adopted changes to the disclosure of offsetting assets and liabilities. These changes require an entity to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The enhanced disclosures will enable users of an entity’s financial statements to understand and evaluate the effect or potential effect of master netting arrangements on an entity’s financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. The adoption of these changes had no impact on the Consolidated Financial Statements or related disclosures.

On January 1, 2013, the Company adopted changes to the information provided about the amounts reclassified out of accumulated other comprehensive income by component. These changes require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The adoption of these changes had no impact on the Consolidated Financial Statements or related disclosures.

Note 3.   Fair Value Measurements and Other Financial Measurements

Our financial instruments are accounted for at fair value on a recurring basis. We have no financial instruments accounted for on a non-recurring basis as of September 30, 2013 or December 31, 2012. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

In arriving at fair-value estimates, we utilize the most observable inputs available for the valuation technique employed. If a fair-value measurement reflects inputs at multiple levels within the hierarchy, the fair-value measurement characterized based upon the lowest level of input that is significant is applied to the fair-value measurement. For us, recurring fair-value measurements are performed for warrant liabilities.

All warrant liability financial instruments are recognized in the balance sheet at their fair value. Changes in the fair values of warrant liability financial instruments are reported in earnings. We do not hold any derivative liability financial instruments that reduce risk associated with hedging exposure and we have not designated any of our warrant liability financial instruments as hedge instruments.

The Company has no items valued using Level 1 and Level 2 inputs. The fair values and corresponding classifications under the appropriate level of the fair value hierarchy of outstanding warrants recorded as recurring liabilities in the consolidated balance sheet were as follows:

In thousands of dollars

	Level		September 30, 2013		December 31, 2012
Warrant liabilities:		3	$	120	$	90

     The following table presents quantitative information for Level 3 measurements:

In thousands of dollars

	Fair value at September 30, 2013		Valuation technique	Unobservable input
Liabilities:
Warrant liabilities	$	120	Monte Carlo option simulation model	Prevailing interest rates, Company’s stock price volatility, expected warrant term

         

There have been no transfers between Level 1, Level 2, or Level 3 categories.

The following table summarizes current warrant liabilities recorded at fair value at September 30, 2013:

In thousands of dollars

	Fair Value		Carrying Value
Warrant liabilities:	$	120	$	120
Total	$	120	$	120

Financial instruments classified as Level 3 in the fair value hierarchy represent warrant liabilities in which management has used at least one significant unobservable input in the valuation model. The following table represents a reconciliation of activity for such warrant liabilities:

In thousands of dollars

Warrant liabilities
Opening balance – December 31, 2012	$	90
Purchases, sales, issuances, and settlements
Transfers into and (or) out of Level 3
Change in fair value		30
Unrealized gains / (losses)
Other adjustments
Closing balance – September 30, 2013	$	120

There were no purchases, sales, transfers, issuances or settlements of Level 3 financial instruments. There were no assets or liabilities measured on a non-recurring basis as of September 30, 2013 and December 31, 2012.

Other Financial Instruments

The carrying values and fair values of the Company’s other financial instruments were as follows:

In thousands of dollars

		September 30, 2013				December 31, 2012
		Carrying value		Fair value		Carrying value		Fair value
Accounts receivable, net	2	$	1,473	$	1,473	$	1,498	$	1,498
Trade accounts payable	2	$	2,860	$	2,860	$	2,599	$	2,599
Capital lease obligation	2	$	6	$	6	$	9	$	9
Note payable	2	$	11,533	$	11,533	$	6,680	$	6,680

  

The following methods were used to estimate the fair values of other financial instruments:

Accounts receivable, Trade accounts payable, Capital lease obligation and Notes payable. The carrying amounts approximate fair value due to their short term nature.

Note 4.   Product Inventories

Product inventories consist of the following:

In thousands of dollars

	September 30, 2013		December 31, 2012
Raw materials	$	1,359	$	2,337
Work in process		1,614		3,666
Finished goods		2,256		1,413
Total product inventories	$	5,229	$	7,416

As of September 30, 2013 and December 31, 2012, inventory relates to the production of battery systems targeted at the electric grid, transportation, and industrial markets.

Inventory valuation allowances, totaled $250,000 and $331,000 at September 30, 2013 and December 31, 2012, respectively.

Note 5.   Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

In thousands of dollars

	September 30, 2013		December 31, 2012
Deferred contract costs	$	1,831	$	4,532
Other assets, related party	$	1,791	$	1,754
Prepaid equipment purchases	$	1,351	$	-
Prepaid inventory purchases		1,039		159
Deposits		342		342
Prepaid insurance		395		258
Other prepaid expenses and current assets		70		178
Total prepaid expenses and other current assets	$	1,846	$	937

Other prepaid expenses and current assets consist primarily of prepaid property taxes, service contracts, marketing expenses and rent. Other assets, related party, relates to a payment made to Yintong Energy (YTE) (an affiliate of Canon) as the Company will be working with YTE to supply the initial order of fifty electric buses to Wu’an, China. The deferred contract costs were incurred, under the completed contract method, for multiple large scale projects for which revenue has not been recognized. Prepaid equipment purchases relate to payments made for production equipment to be used by our Northern Altair facilities.

Note 6.   Property, Plant and Equipment

In thousands of dollars
	September 30, 2013			December 31, 2012
Machinery and equipment, held and used	$	11,241		$	6,643
Building and improvements		4,324			4,324
Furniture, office equipment & other		1,669			1,930
Leased assets		1,593
Construction in progress		4,345
		23,172			12,897
Less accumulated depreciation		(11,470	)		(8,821	)
Total property, plant and equipment held & used	$	11,702		$	4,076

Property, plant and equipment held and not used in operations consists of the following:

In thousands of dollars
	September 30, 2013		December 31, 2012
Machinery and equipment, held and not used	$	-	$	4,249
Less accumulated depreciation				(2,392	)
Total property, plant and equipment held and not used	$	-	$	1,857

The construction in progress relates to our new facilities under construction in Wu’an, China. Three new facilities are expected to be operational and fully accepted during the fourth quarter of 2013. Property, plant and equipment held and not used relates to machinery and equipment that was decommissioned at our Reno, Nevada facility and shipped to our China subsidiary. This machinery and equipment was received and installed during the third quarter by our China subsidiary for use in operations.

       The lease asset includes a 1.8 megawatt system for Energy Storage Holdings, LLC. (ESH), which is providing commercial frequency regulation services in the PJM market on the East Coast. This system went into operation in January 2013. We are leasing the ALTI-ESS Advantage™ system to ESH and receive lease payments of approximately $20,000 per month and a share of the revenue generated by the system under the agreed upon terms. The lease term ends February 2016, and ESH has an option to purchase the system during the lease term.

Depreciation expense, for the nine months ended September 30, 2013 and 2012, totaled $721,000 and $714,000, respectively.

Note 7.   Land Use Right and Patents

Northern Altair signed an agreement in April 2012 to receive a Land Use Right for a period of 50 years with respect to approximately 66 acres of industrial land in Wu’an, China from Heibei Wu’an Municipal People’s Government. Northern Altair was required to bid for the Land Use Right. Northern Altair completed the bidding process and paid approximately $13,670,000 which included various land transfer taxes and fees of approximately $1,670,000. Closing occurred on November 9, 2012 and Northern Altair received the Land Use Right (Wu State-Used, State-Owned Land Use) on this date. This Land will be used for the Company’s nLTO and energy storage system manufacturing operations in China.

Northern Altair signed an agreement in May 2013 to receive a second Land Use Right for a period of 50 years with respect to approximately 40 acres of industrial land in Wu’an, China from Heibei Wu’an Municipal People’s Government. Northern Altair was required to bid for the Land Use Right. Northern Altair completed the bidding process and paid approximately $8,600,000 which included various land transfer taxes and fees of approximately $1,200,000. Closing occurred on May 27, 2013 and Northern Altair received the Land Use Right (Wu State-Used, State-Owned Land Use) on this date. This Land will be used for the Company’s nLTO and energy storage system manufacturing operations in China. Shortly after closing, Northern Altair applied for approximately $8.6 million in cash incentives from the City of Wu’an, China. The amortized land use right’s balances as of September 30, 2013 and December 31, 2012 were:

In thousands of dollars
	September 30, 2013			December 31, 2012
Land use right	$	22,689		$	13,670
Less accumulated amortization		(330	)		(45	)
Total land use right, net	$	22,359		$	13,625

The land use rights were recorded at cost and will be amortized on a straight-line basis over their 50 year useful life at approximately $445,000 per year. Amortization expense for the nine months ended September 30, 2013 totaled $285,000.

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 September 30, 2013 and December 31, 2012 were:

In thousands of dollars
	September 30, 2013			December 31, 2012
Patents and patent applications	$	1,366		$	1,366
Less accumulated amortization		(1,149	)		(1,092	)
Total patents and patent applications	$	217		$	274

The weighted average amortization period for patents is approximately 2.9 years. Amortization expense, which represents the amortization relating to the identified amortizable patents, for the nine months ended September 30, 2013 and December 31, 2012, was $57,000. For each of the next two years, amortization expense relating to patents is expected to be approximately $76,000 per year. Amortization expense is expected to be approximately $65,000 in the third year.

Note 8.   Stock-Based Compensation

As of September 30, 2013, we have the Altair Nanotechnologies Inc. 2005 Stock Incentive Plan (the “Plan”), administered by the Board of Directors, which provides for the granting of options and restricted shares to employees, officers, directors and other service providers of ours.  This Plan is described in more detail below.  

The total number of shares authorized to be granted under the Plan was increased from 125,000 to an aggregate of 375,000 based on the proposal approved at the annual and special meeting of shareholders on May 30, 2007. On June 23, 2011, we held an annual and special meeting of shareholders. The proposal to increase the number of authorized shares under the Plan from 375,000 to 1,208,333 shares was approved at this meeting. The additional 833,333 shares approved by the stockholders are not available for stock option issuance at this time, as the Board of Directors has not authorized the filing of the related Registration Statement on Form S-8.

Prior stock option plans, under which we may not make future grants, authorized a total of 275,000 shares, of which options for 127,667 shares of common stock were granted (net of expirations) and options for 1,041 shares of common stock are outstanding and unexercised at September 30, 2013. Options granted under the plans are granted with an exercise price equal to the fair value of a common share at the date of grant, have five-year or ten-year terms and typically vest over periods ranging from immediately to four years from the date of grant.  The estimated fair value of equity-based awards, less expected forfeitures, is amortized over the awards’ vesting period utilizing the graded vesting method.  Under this method, unvested amounts begin amortizing at the beginning of the month in which the options are granted.

Note 9.  Warrants

Warrants Issued to Investors

The fair value of the warrants was determined using the Monte Carlo Simulation model and the following weighted average assumptions were used:

	September 30, 2013			September 30, 2012
Stock Price	$	2.57		$	4.44
Exercise Price	$	14.93		$	14.93
Expected Volatility		77	%		112	%
Expected Dividend Yield	None			None
Expected Term (in years)		2.8			4.0
Risk-free Interest Rate		0.66	%		0.37	%

 

As of September 30, 2013, the value of the warrant liabilities was $120,000 and the change in fair value during the first nine months of 2013 was a loss of $30,000. The loss was recorded as other expense in the statement of operations. 

Warrant activity for the nine months ended September 30, 2013 and 2012 is summarized as follows:

	2013				2012
	Warrants		Weighted Average Exercise Price		Warrants		Weighted Average Exercise Price
Outstanding at January 1,		412,776	$	14.93		412,776	$	14.93
Issued
Expired
Warrant redemption Exercised
Outstanding at September 30,		412,776	$	14.93		412,776	$	14.93
Currently exercisable		412,776	$	14.93		412,776	$	14.93

The following table summarizes information about warrants outstanding at September 30, 2013:

		Warrants Outstanding and Exercisable
Range of Exercise Prices			Warrants		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
	$13.80			112,776		2.6	$	13.80
$13.86	to	$24.00		300,000		3.0		15.36
				412,776		2.8	$	14.93

 The warrants expire on various dates ranging to September 2016.

Note 10. Note Payable

Notes payable consisted of the following at September 30, 2013 and December 31, 2012:

In thousands of dollars

	September 30, 2013		December 31, 2012
Note payable Mortgage	$	975	$	1,000
Note payable Bank of China		1,980		1,980
Note payable ICBC		3,700		3,700
Note payable Handan Bank		4,878
Total	$	11,533	$	6,680

On August 8, 2012, we entered into a Note payable secured by, a Deed of Trust, corporate guaranty and hazardous materials indemnity agreement for the provision of a $1,000,000 loan secured by the Company’s Reno, Nevada Facility. Under the terms of the loan documents, interest accrues on the outstanding principal balance at the rate of 11% per annum. We were obligated to pay five months of prepaid interest to the lender upon closing and make interest-only payments on a monthly basis during the remaining term of the loan and to repay all principal and any outstanding interest on or before August 1, 2013. The required interest payments were made and the proceeds of the loan were used for general working capital requirements.

On August 1, 2013, the Company entered into a First Modification of Note and First Modification of Deed of Trust (the “Modification Agreement”) pursuant to which the maturity date for the above-described loan was extended until August 1, 2014. As part of the Modification Agreement, the Company agreed to pay a $19,750 amendment fee and agreed to make a payment of $12,500 to reduce the outstanding principal amount and to make three additional principal payments of $12,500 each on September 1, 2013, October 1, 2013 and November 1, 2013. The $975,000 modified loan is secured by the Company’s Reno, Nevada Facility.

         In October 2012, the Company and Northern Altair entered into a series of transactions, wherein, Northern Altair set aside, as restricted cash, $2,057,900 with the Bank of China. In return, the Bank of China loaned the Company $1,980,000 for use as operating capital. The interest rate on this loan is .0053% daily and the maturity date is October 18, 2013. This loan was paid off in October 2013. See Note 13 for additional information.      

In November 2012, the Company and Northern Altair entered into a series of transactions, wherein, Northern Altair set aside, as restricted cash, $3,894,180 with the Industrial and Commercial Bank of China (“ICBC”). In return, the ICBC loaned the Company $3,700,000 for use as operating capital. The interest rate on this loan is .0056% daily and the maturity date is November 15, 2013.  This loan was paid off in November 2013.  See Note 13 for additional information.

In August 2013, Northern Altair entered into a loan agreement for $8,130,000 with Handan Bank. On September 27, 2013, Northern Altair received approximately $4,878,000 with the final balance of approximately $3,252,000 received on October 15, 2013. The due date of the loan is August 27, 2014 and it is secured by the second land use right in Wu’an.

Note 11. Business Segment Information

Management views the Company as operating in two major business segments: Power and Energy Group, and All Other operations.

The Power and Energy Group develops, produces, and sells battery systems.  The All Other group consists of the remaining portions of the previous Life Sciences and Performance Materials groups.  

During the nine months ended September 30, 2013, the Company and its affiliates received a total of $4,924,000 in cash payments for its various Power and Energy Group projects. Of this received amount, $2,766,000 was associated with contractual milestone payments for our larger utility-scale energy storage system projects, two of which have not been recognized in our reportable segment data for the year, as the related contracts are recognized under the completed contract method.

Reportable segment data reconciled to the consolidated financial statements as of the three and nine months ended September 30, 2013 and September 30, 2012 is as follows: 

In thousands of dollars:
Three Months	Net Revenue		Loss (Income) From Operations			Depreciation and Amortization		Assets
September 30, 2013
Power & Energy Group	$	1,072	$	3,796			425	$	66,330
All Other		60		(41	)		19		277
Consolidated Total	$	1,132	$	3,755		$	444	$	66,607
September 30, 2012
Power & Energy Group	$	296	$	4,483		$	233	$	54,087
All Other		64		(44	)		19		353
Consolidated Total	$	360	$	4,439		$	252	$	54,440

Nine Months	Net Revenue		Loss (Income) From Operations			Depreciation and Amortization		Assets
September 30, 2013
Power & Energy Group	$	5,958	$	10,515			1,006	$	66,330
All Other		180		(123	)		57		277
Consolidated Total	$	6,138	$	10,392		$	1,063	$	66,607
September 30, 2012
Power & Energy Group	$	886	$	14,507		$	714	$	54,087
All Other		185		(125	)		57		353
Consolidated Total	$	1,071	$	14,382		$	771	$	54,440

In the table above, the Loss (Income) from Operations column includes such expenses as business consulting, general legal expense, accounting and audit, general insurance expense, stock-based compensation expense, shareholder information expense, investor relations, and general office expense.

For the nine months ended September 30, 2013, we had revenue to three major customers, which accounted for 10% or more of revenues. The Company did not have material related party revenue during the nine months ended September 30, 2013. Total revenue to the customer for the nine months ended September 30, 2013 and the balance of the accounts receivable at September 30, 2013 were as follows:

In thousands of dollars

Customer	Revenue Nine Months Ended September 30, 2013		Accounts Receivable Balance at September 30, 2013
Power and Energy Group:
Hawaiian Electric Light Company	$	2,082
Proterra, LLC		1,529	$	676
Vestas		1,291		62

For the nine months ended September 30, 2012, we had revenue to four major customers, each of which accounted for 10% or more of revenues. Total revenue from these customers for the nine months ended September 30, 2012 and the balance of their accounts receivable at September 30, 2012 were as follows:

In thousands of dollars

Customer	Revenue Nine Months Ended September 30, 2012		Accounts Receivable Balance at September 30, 2012
Power and Energy Group:
Emrol	$	139
Hybricon		131
Proterra		121	$	121
ABB Secheron		111		2

Revenues for the nine-month period ended September 30, 2013, and 2012 by geographic area were as follows:

In thousands of dollars  

 

	Revenue Nine Months Ended		Sales Nine Months Ended
Geographic information (a)	2013		2012
United States	$	4,542	$	251
Denmark		1,291
Belgium		137		139
Germany				145
Sweden		43		131
Switzerland				111
Other foreign countries		125		294
Total	$	6,138	$	1,071

(a) Revenues are attributed to countries based on location of customer.

  

Geographic information for long-lived assets was as follows (based on physical location of the assets):

In thousands of dollars

Long-lived assets:	Balance at September 30, 2013		Balance at December 31, 2012
United States	$	4,841	$	6,207
China		29,436		13,625
Total	$	34,277	$	19,832

Note 12. Commitments and Contingencies

On October 31, 2012, Northern Altair entered into a Contract on Assignment of State-owned Construction Land Use Right as described in Note 7. As consideration for the land use right, Northern Altair agreed to make fixed asset investments on the land of approximately $167 million, subject to loan guarantees and other incentives from Wu’an, China, over an unspecified period of time up to the 50 year life of the land use right, with initial construction being required to begin by March 31, 2013. In January 2013, initial construction on a manufacturing facility began on the Company’s land use right in China. The costs incurred to date by the Company total $4.3 million. The Company estimates the remaining costs of this project will cost approximately $1.4 million and will be completed in the fourth quarter of 2013. The remaining costs of this project are expected to be funded by loan guarantees or other incentives from Wu’an, China. Additional construction is contingent upon loan guarantees and other incentives from Wu’an, China as well as other market conditions. The total fixed asset investments shall include the cost of buildings, structures, auxiliary facilities, and equipment, as well as the land-use fee. Northern Altair may transfer and sublease portions of the granted land once it has invested 25% of the required fixed asset investments amount and completed 25% of the project. Closing occurred on November 9, 2012.

On May 16, 2013, Northern Altair entered into a second Contract on Assignment of State-owned Construction Land Use Right as described in Note 7. As consideration for the second land use right, Northern Altair agreed to make fixed asset investments on the land of approximately $99.1 million, subject to loan guarantees and other incentives from Wu’an, China, over an unspecified period of time up to the 50 year life of the land use right, with initial construction being required to begin by May 16, 2014.  In November 2013, initial construction on a manufacturing facility began on the Company’s second land use right in China. There are minimal costs incurred to date by the Company, although the expected total is approximately $4 million. The Company estimates this next phase will be completed in the first quarter 2014. The remaining costs of this project are expected to be funded by loan guarantees or other incentives from Wu’an, China. Additional construction is contingent upon loan guarantees and other incentives from Wu’an, China as well as other market conditions. The total fixed asset investments shall include the cost of buildings, structures, auxiliary facilities, and equipment, as well as the land-use fee. Northern Altair may transfer and sublease portions of the granted land once it has made 25% of the required investments. Closing occurred on May 27, 2013.

Contingencies — We are subject to claims in the normal course of business.  Except for the items noted below, management, after consultation with legal counsel, believes that liabilities, if any, resulting from such claims will not materially affect our financial position or results of operations.

Supplier Concentration — We rely on certain suppliers as the sole-source, or as a primary source, of certain services, raw materials and other components of our products.  We do not yet have long-term supply or service agreements engaged with any such suppliers, which are subject to claims in the normal course of business. 

Note 13. Subsequent Events

In the third quarter, Northern Altair entered into a loan agreement for $8.1 million with the Bank of Handan. On September 27, 2013 Northern Altair received $4.9 million with the final balance of $3.3 million deposited on October 15, 2013. The due date of the loan is August 27, 2014 and is secured by the Company’s Land Use Right with respect to industrial land in Wu’an, China.

In September 2013, the Company and Northern Altair entered into a series of agreements, wherein, Northern Altair set aside restricted cash of $2.8 million with the ICBC. In return, the ICBC loaned the Company $2.7 million which was received in October 2013. The interest rate on this loan is .0053% daily and the maturity date is September 27, 2014. A portion of the loan proceeds was used to pay off the $1.98 million loan with the Bank of China in October 2013 and released restricted cash of $2.06 million.

On October 31, 2013, Northern Altair received approximately $12.2 million of a $16.1 million loan from the Rural Credit Cooperative. The due date of the loan is October 31, 2014 and is secured by the Company’s Land Use Right with respect to industrial land in Wu’an, China.

In November 2013, the Company and Northern Altair entered into a series of agreements, wherein, Northern Altair set aside restricted cash of approximately $4.0 million with the Bank of China. In return, the Bank of China loaned the Company $3.8 million which was received in November 2013. The interest rate on this loan is .0053% daily and the maturity date is November 7, 2014. A portion of the loan proceeds was used to pay off the $3.7 million loan with the ICBC in November 2013 and released restricted cash of $3.9 million.

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Report contains various forward-looking statements. 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. When considering such forward-looking statements, you should keep in mind the risk factors noted under “Risk Factors” below and other cautionary statements throughout this Report and our other 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 other applicable filings materializes, or any other underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected, or intended.

Overview

We are a Delaware company that develops, manufactures and sells nano lithium titanate batteries and energy storage systems. Our nano lithium titanate battery systems offer higher power density, longer cycle life, rapid charge and discharge capabilities, a wider operating temperature range and higher levels of safety than conventional lithium-ion batteries. We target applications that effectively utilize the key attributes of our technology, and these applications can be found primarily in the electric grid, transportation (commercial vehicles), and industrial market segments.

We believe that in the aggregate, our target markets are multi-billion dollar emerging markets with room for a number of successful suppliers. At the present time, we perceive no dominant provider and we believe that as a result of our significant differentiated product attributes, the overall strength of our management team, and the recognition we are receiving in the marketplace, that we have a reasonable chance of becoming one of the successful suppliers. Our proprietary technology platform gives our products a number of unique, highly sought after attributes that clearly differentiate our products from their alternatives. Included in these attributes are substantially longer cycle and calendar lives, a rapid recharge time, the ability to provide instantaneous high power, a wide operating temperature range and increased operational safety. Generally speaking, our systems are projected to have a longer useful life and a lower total cost of ownership than competing battery systems.

Our historical revenues have been generated by license fees, product sales, commercial collaborations, and government contracts and grants. We expect future revenues to consist primarily of product sales and government contracts. We currently have agreements in place to deliver: (1) energy storage systems for electric grid applications; (2) battery modules to EV integrators and manufacturers; and (3) battery systems for various industrial applications.

In 2012, we formed Altair Nanotechnologies (China) Co., Ltd. (“Altair China”) and Northern Altair Nanotechnologies Co., Ltd. (“Northern Altair”) in order to aggregate key elements of our supply chain and expand into the Chinese market. We anticipate this expansion will allow us to participate in the fast-growing China market.

General Outlook

Our current focus is on the development and sale of energy storage systems that we anticipate will eventually bring a substantial amount of revenue volume and gross profit from product sales into the electric grid, transportation, and industrial markets. As we attempt to expand our revenues from product sales, manufacturing and other sources in 2013, some of the key near-term events that will affect our long-term success prospects include the following:

● In 2012, we adopted a new manufacturing and supply chain strategy. Given that our contract cell manufacturers were all based in Asia, we decided to move our nano lithium titanate materials production to China. In addition, we decided to enhance our battery module and energy storage system manufacturing capabilities by building a new plant in China. In this way, we are better able to aggregate critical portions of our supply chain in order to reduce lead times, cost, and ultimately support the emerging Asian markets. Previously, we expected to be manufacturing our nano lithium titanate materials in Reno, Nevada, shipping those materials to our contract cell manufacturer in Asia, and then shipping those cells back to Anderson, Indiana to produce battery modules and packs. We expect that, when implementation is complete, our new manufacturing strategy will greatly streamline this process.

● In April 2012, we entered into an economic development deal with the cities of Wu’an and Handan in Hebei Province in China. Under our multi-year contract with the City of Wu’an, Northern Altair is required to sell and deliver 200 electric buses to Wu’an over a multi-year period. In August 2012, we received a $1.9 million down payment on the first $6.3 million electric bus order from Wu’an. We are currently procuring these buses from an affiliate, Yintong Energy. We anticipate that the deliveries will occur in 2014, 2015 and 2016 for this order and the corresponding $4.4 million payment will be made based on the delivery schedule, at which time we will be able to recognize the revenue and gross margin associated with this order.

● On October 25, 2012, Northern Altair successfully completed a bidding process for a 66 acre parcel of land in Wu’an China, which will be used for the Company’s nLTO and energy storage system manufacturing operations in China. On October 31, 2012, Northern Altair entered into a Contract on Assignment of State-owned Construction Land Use Right (the "Land-Use Agreement"), pursuant to which Northern Altair acquired the right to use the 66 acres of commercial land north of Dongzhuchang Village in Wu'an City, China for a period of 50 years subject to the terms and conditions of the Land-Use Agreement.  As consideration for the land use right, Northern Altair paid a land use fee of approximately $11.8 million and land transfer taxes and fees of approximately $1.7 million and agreed to make fixed asset investments on the land of approximately $167 million, subject to loan guarantees and other incentives from Wu’an, China, over an unspecified period of time up to the 50 year life of the land use right, with initial construction being required to begin by March 31, 2013. 

● In January 2013, initial construction on a manufacturing facility began on the Company’s first land use right in China. The Company is building a 136,760 square foot nano lithium titanate production facility and a 130,200 square foot assembly facility for battery modules and energy storage systems. The Company estimates the remaining costs of the initial phase of this project to cost approximately $1.4 million and is scheduled to be completed in the fourth quarter of 2013. Additional construction phases will be contingent upon loan guarantees and other incentives from Wu’an, China as well as other market conditions. The Company has not yet obtained loan guarantees for these costs, but has entered into discussions with a number of banks regarding potential project financing. Northern Altair may transfer and sublease portions of the granted land once it has invested 25% of the total fixed asset investments amount and completed 25% of the project. The total fixed asset investments shall include the cost of buildings, structures, auxiliary facilities, and equipment, as well as the land-use fee. Closing occurred on November 9, 2012. Separate from the Land-Use Agreement, Northern Altair received $11.8 million package of cash incentives in November 2012 to facilitate Northern Altair’s establishment of operations and construction efforts. The actual scope of Northern Altair’s construction project and manufacturing operations will be based on the anticipated market demand for the Company’s products and on the level of negotiated incentives.

● In May 2013, Northern Altair bid for and acquired a second conditional 50-year land use right with respect to approximately 40 acres of industrial land in Wu’an, China with an acquisition price of approximately $8,600,000 which includes various land transfer taxes and fees that are equal to approximately $1,200,000. In turn, we expect to receive cash incentives as part of our economic development deal, which shall be equal to our acquisition price. The closing occurred on May 27, 2013 and Northern Altair received the Land Use Right (Wu State-Used, State-Owned Land Use) on this date. This Land will be used for the Company’s nano lithium titanate and energy storage system manufacturing operations in China. As consideration for the second land use right, Northern Altair agreed to make fixed asset investments on the land of approximately $99.1 million, subject to loan guarantees and other incentives from Wu’an, China, over an unspecified period of time up to the 50 year life of the land use right, with initial construction being required to begin by May 16, 2014.  In November 2013, initial construction on a manufacturing facility began on the Company’s second land use right in China. There are minimal costs incurred to date by the Company, although the expected total is approximately $4 million. The Company estimates this next phase will be completed in the first quarter 2014. The Company has obtained loan guarantees for these costs. Northern Altair may transfer and sublease portions of the granted land once it has made 25% of the required investments.

● In 2012, we built five 1 to 2 megawatt energy storage systems for our energy storage system customers. Four of these systems were shipped during the year.

o Two 1 megawatt systems were built for the Hawaiian Electric Light Company (“HELCO”) and Hawaii Natural Energy Institute (“HNEI”). The first HELCO/HNEI system was commissioned at the Hawi Wind Farm on Hawaii’s Big Island in March 2013. The second HNEI system, which is slated for installation on Oahu, was built in 2012. We are currently finalizing the site location details with our customer and anticipate that this system will be commissioned in the first quarter of 2014.

o We built a 1.2 megawatt system for Vestas Wind Systems, which is being used to integrate wind power at a wind farm in Denmark. This system was fully commissioned in March 2013. We received a final payment of $117,035 in July 2013.

o We built a 1.8 megawatt system for Energy Storage Holdings, LLC. (ESH), which is providing commercial frequency regulation services in the PJM market on the East Coast. This system went into operation in January 2013. We are leasing the ALTI-ESS Advantage™ system to ESH and receive monthly lease payments and a share of the revenue generated by the system under the agreed upon terms. The lease term ends February 2016, and ESH has an option to purchase the system during the lease term.

o We built a 2 megawatt ALTI-ESS Advantage™ system for TSK Solar, which shall be used for the integration of solar power at the San Fermin 26 MW photovoltaic solar farm in Loiza, Puerto Rico. This system was delivered in December 2012 and installed in January 2013 and is scheduled to be commissioned in the fourth quarter of 2013 upon the completion of the solar farm.

	We anticipate that the deployment, demonstration and commercial use of these energy storage systems will further establish the commercial value of our products and facilitate the future sale of our systems.
●	In June 2013, we entered into a memorandum of understanding with Tauron Dystrybucja SA. to jointly determine the necessary infrastructure needs for stationary energy storage systems based on nano lithium titanate batteries, and for the construction of power and frequency stabilization systems in Poland. TAURON is a subsidiary of TAURON Polska Energia S.A., Poland's second largest energy company.
●	In January 2013, the Hawaii Natural Energy Institute agreed to purchase its third energy storage system from us. They ordered our new 2 megawatt ALTI-ESS Advantage™, and we are working with them to schedule the installation of this system in early-2014.
●	In May 2012, we signed a contract to supply nano lithium titanate battery modules to Proterra, a leading developer of all-electric transit buses. Proterra uses Altair’s battery modules to create a rapid charging electric bus, which can recharge in as little as six minutes. Proterra’s buses can deliver 22.5 miles per gallon (mpg) equivalent versus 3.8 mpg for a comparable diesel bus. The running cost per mile for a Proterra electric bus is just $0.18 versus $1.05 for a diesel bus. In June 2012, Proterra released its first purchase order under the agreement. We commenced shipments to Proterra in February 2013 and are scheduled to ship modules through the end of the year. Proterra’s customers include Foothill Transit and San Joaquin Regional Transit District in California; the City of Seneca in South Carolina; Star Metro in Florida; and Via Metropolitan in Texas. In 2013, Proterra expanded their target market to include commercial customers.

● We have entered into discussions with a number of transportation and industrial customers in the U.S, Europe and Asia regarding joint development products or purchases of our battery products. Some of these customers are now testing our modules, application kits and Power Rack battery systems in a variety of applications, where the unique attributes of a nano lithium titanate battery system are a critical consideration.

● In August 2012, we entered into a memorandum of understanding with Shenhua Science & Technology and the National Institute of Low Carbon Energy (NICE) in China. We entered into discussions about a possible pilot project that would test and demonstrate the commercial use of our systems. We continue to work with Shenhua to identify the best commercial applications of our technology.

● In 2012, we submitted our nano lithium titanate battery cells for testing at the 201 Institute, which regulates the sale of batteries in China. We received approval for the sale of our nano lithium titanate batteries in China in December 2012.

The Company operates in emerging markets for energy storage. We remain optimistic with respect to our current key projects, but we continue to facedevelopment, marketing, partnering and other risks. However, we now have a growing number of reference customers, including AES, Vestas, HNEI, HELCO and ESH, which should help us validate the technical merits and commercial operation of our systems to our prospective customers.

Liquidity and Capital Resources

Current and Expected Liquidity

Altair’s cash and cash equivalents decreased by $9.1 million, from $12.4 million at December 31, 2012 to $3.3 million at September 30, 2013. The net decrease of $9.1 million resulted from the net change in operating activities of $(7.4) million, net change in investing activities of $(11.8) million and the net change in financing activities of $11.0 million. The investing activities included the acquisition of the second land use right from the Government of Wu’an, China, which was paid for by using restricted cash and the purchase of fixed assets by Northern Altair. The financing activity included the increase of deferred income against the amortization period cost for the second land use right and the receipt of the $5.5 million in grant incentives which were applied for after the receipt of the first land use right.

Cash inflows included receipts related to closing three large projects during the nine months ending September 30, 2013. Two of these projects were completed contracts; one for an ALTI-ESS Advantage™ to Vestas Wind Systems A/S and one for an ALTI-ESS to Hawaiian Electric Light Company (“HELCO”) and Hawaii Natural Energy Institute (“HNEI”). The third project was for an ALTI-ESS Advantage™ system which was delivered as an equipment lease to Energy Storage Holdings, LLC.

The Company incurred net losses of $10.1 million for the nine months ended September 30, 2013 and has an accumulated deficit of $232.6 million as of September 30, 2013. The Company used $7.4 million in its operations for the nine months ended September 30, 2013 and working capital levels have decreased from $16.7 million at December 31, 2012 to $9.1 million at September 30, 2013. The Company has substantial debt coming due in the next 12 months. We expect to continue to have negative cash flows from operations as we ramp up production at our new manufacturing facilities. If we are not able to refinance this debt or obtain additional capital, we will not be able to pay off our current debt obligations. This matter raises substantial doubt about the Company’s ability to continue as a going concern. To address this matter, management is taking actions to refinance existing loans, obtain additional loans collateralized by the land use rights and to obtain approval for the remaining grant incentives from the Government of Wu’an, China. Restricted cash is available to fund development of operations (both capital and non-capital) in China subject to meeting certain guidelines agreed upon by the Wu’an government and the Company.   Based on our current forecast, we expect to use the existing restricted cash to support the non-capital development of our China operations.  If the non-capital needs are met, excess restricted cash or additional grant funds received will be used for capital needs.

A summary of our cash position at September 30, 2013 included cash and cash equivalents of $3.3 million. In addition, we had $15.5 million in restricted cash of which $6.7 million, related to collateral for indebtedness, is classified as short-term leaving $8.8 million in short-term grant incentives. In May 2013, we applied for additional grant incentives in the amount of approximately $8.6 million. We received $3.6 million of the expected grant incentives in the third quarter and expect the remaining amount of $5.0 million in the fourth quarter of 2013. We received $4.9 million in customer receipts during the nine months ended September 30, 2013.

In the near term, U.S. operations may be supported from revenues from product sales, by selling inventory, equipment and services to Altair China and receiving fees associated with intellectual property licensing and royalties. In the longer term, U.S. operations will need to obtain capital, which we anticipate it would obtain through the issuance of equity securities, strategic partnerships or investments or loans supported by its Chinese assets.

We evaluate our capital needs and the availability of capital on an ongoing basis and, consistent with past practice, expect to seek capital when appropriate and on such terms as are available to us and we deem appropriate, based upon our assessment of our current liquidity, capital needs and the availability of capital. We continue to use significant amounts of cash for our operations and have no commitments to receive capital and can provide no assurance adequate capital will be available when and as required.

Over the long-term, we anticipate substantially increasing revenues by entering into new contracts and increasing product sales in the stationary power, electric bus and selected other industrial markets.

Capital Commitments and Expenditures

The following table discloses aggregate information about our contractual obligations and the periods in which payments are due as of September 30, 2013:

In thousands of dollars

 

Contractual Obligations	Total		< 1 yr		1-3 yrs		3-5 yrs		> 5 yrs
Note payable	$	11,533	$	11,533	$	-	$	-	$	-
Contractual service agreements		601		601
Capital leases		6		6
Purchase obligations		25,050		13,636		11,414
Total	$	37,190	$	25,776	$	11,414	$	-	$	-

*Purchase obligations include a commitment to “YTE” a related party. 

Off-Balance Sheet Arrangements

The Company did not have any off-balance sheet transactions during the nine months ending September 30, 2013.

Recently Adopted and Recently Issued Accounting Guidance

See Note 2 to the interim consolidated financial statements in Part I Item 1 of this form 10-Q.

Results of Operations

Three and Nine Months Ended September 30, 2013 and Compared to Three and Nine Months Ended September 30, 2012

In thousands of dollars

	Power and Energy Group						All Other				Consolidated
	Three Months Ended September 30						Three Months Ended September 30				Three Months Ended September 30
	2013			2012			2013		2012		2013			2012
Revenues
Product sales	$	1,072		$	296		$	-	$	-	$	1,072		$	296
License fees								60		64		60			64
Total revenues		1,072			296			60		64		1,132			360
Cost of goods sold
Product		1,206			788							1,206			788
Total cost of goods sold		1,206			788			-		-		1,206			788
Gross (loss) profit		(134	)		(492	)		60		64		(74	)		(428	)
Operating expenses
Research and development		1,079			1,422					1		1,079			1,423
Sales and marketing		201			499							201			499
General and administrative		1,908			1,837							1,908			1,837
Depreciation and amortization		425			233			19		19		444			252
Gain on disposal of assets		49										49
Total operating expenses		3,662			3,991			19		20		3,681			4,011
(Loss) income from operations		(3,796	)		(4,483	)		41		44		(3,755	)		(4,439	)
Other income (expense)
Interest (expense)income, net		25			37							25			37
Change in market value of warrants		(20	)		(267	)						(20	)		(267	)
Other income		7			(2	)						7			(2	)
Total other income, net		12			(232	)		-		-		12			(232	)
(Loss) income from continuing operations		(3,784	)		(4,715	)		41		44		(3,743	)		(4,671	)
Net (loss) income	$	(3,784	)	$	(4,715	)	$	41	$	44	$	(3,743	)	$	(4,671	)

Revenues

Power and Energy Group revenue for the quarter ended September 30, 2013 was $1.1 million. This amount included product revenue from selling 537 battery modules sold to three customers and 255 battery cells sold to four customers. Revenues increased by $0.8 million, from approximately $0.3 million in 2012 to approximately $1.1 million during the quarter ending September 30, 2013.

Cost of Goods Sold

Power and Energy Group cost of goods sold for product sales for the quarter ending September 30, 2013 was $1.2 million. Cost of goods sold (COGS) exceeded product sales by $0.1 million, compared to $0.5 million for the same period in 2012. The gross margin includes decreases to our warranty and inventory reserves of approximately $140,000.

Our gross margins in any quarter are not indicative of future gross margins. At this early stage of development, our product mix, volume, per-unit pricing and cost structure may change significantly from quarter to quarter, and our margins may expand or contract depending upon the mix and timing of orders in future quarters. In general, we expect our margins to increase as our volume of business increases, and as we completely transition from product prototypes to commercial, scalable manufacturing processes.

Operating Expenses

Operating expenses overall were down $0.3 million during the quarter ending September 30, 2013, from $4.0 million to $3.7 million. This reduction is the result of constrained spending in almost all areas of the Company during the quarter ending September 30, 2013. Average employee headcount in the U.S. decreased by 40%, from 78 employees during 2012 to 47 employees for the corresponding 2013 period. Employee headcount in China had an increase of 103 employees for the quarter ending September 30, 2013. Research and development expenses decreased $0.3 million or 24% from $1.4 million during the quarter ending September 30, 2012 to $1.1 million during the same period in 2013. Sales and marketing expenses decreased by $0.3 million, or 60%, from $0.5 million during 2012 to $0.2 million during 2013. General and administrative expenses increased by $0.1 million, or 4%, from $1.8 million during 2012 to $1.9 million during 2013, primarily due to the ramp up of our China operations. We continue to focus on reducing our cost structure in areas that will not adversely affect growing our product revenues.

Net Loss

Overall net loss for the quarter ending September 30, 2013 decreased $0.9 million from $4.6 million ($.40 per share) in 2012 to $3.7 million ($.32 per share) in 2013, primarily due to a decrease in overall operating expenses and an improved gross margin.

	Power and Energy Group						All Other				Consolidated
	Nine Months Ended September 30						Nine Months Ended September 30				Nine Months Ended September 30
	2013			2012			2013		2012		2013			2012
Revenues
Product sales	$	5,958		$	886		$	-	$	-	$	5,958		$	886
License fees								180		185		180			180
Total revenues		5,958			886			180		185		6,138			1,071
Cost of goods sold
Product		6,586			2,282							6,586			2,282
Total cost of goods sold		6,586			2,282			-		-		6,586			2,282
Gross (loss) profit		(628	)		(1,396	)		180		185		(448	)		(1,211	)
Operating expenses
Research and development		3,124			5,043					3		3,124			5,046
Sales and marketing		883			2,344							883			2,344
General and administrative		4,843			5,010							4,843			5,010
Depreciation and amortization		1,006			714			57		57		1,063			771
Gain on diposal of assets		31										31
Total operating expenses		9,887			13,111			57		60		9,944			13,171
(Loss) income from operations		(10,515	)		(14,507	)		123		125		(10,392	)		(14,382	)
Other income (expense)
Interest income		237			67							237			67
Change in market value of warrants		(30	)		(88	)						(30	)		(88	)
Other income		36			(2	)						36			(2	)
Total other income, net		243			(23	)		-		-		243			(23	)
(Loss) income from continuing operations		(10,272	)		(14,530	)		123		125		(10,149	)		(14,405	)
Net (loss) income	$	(10,272	)	$	(14,530	)	$	123	$	125	$	(10,149	)	$	(14,405	)

Revenues

Power and Energy Group revenue for the nine months ending September 30, 2013 was $6.0 million. This amount included product revenue from commissioning two ALTI ESS systems, leasing an ALTI ESS Advantage^TM system to Energy Storage Holdings, LLC, 975 battery modules sold to ten customers and 313 battery cells sold to 6 customers. Revenues increased by $5.1 million, from approximately $0.9 million in 2012 to approximately $6.0 million during the nine months ending September 30, 2013, primarily as a result of revenue recognized for the sale of one ALTI ESS Advantage^TM system sold to Vestas Wind Systems A/S, one sold to HELCO and HNEI.

Cost of Goods Sold

Power and Energy Group cost of goods sold for product sales for the nine months ending September 30, 2013 was $6.6 million. Cost of goods sold (COGS) exceeded product sales by $0.6 million, compared to $1.4 million for the same period in 2012, primarily due to inventory cost adjustments and an increase in our warranty and inventory reserves.

Our gross margins in any quarter are not indicative of future gross margins. At this early stage of development, our product mix, volume, per-unit pricing and cost structure may change significantly from quarter to quarter, and our margins may expand or contract depending upon the mix and timing of orders in future quarters. In general, we expect our margins to increase as our volume of business increases and we completely transition from product prototypes to commercial, scalable manufacturing processes.

Operating Expenses

Operating expenses overall were down $3.3 million during the nine months ending September 30, 2013, from $13.2 million to $9.9 million. This reduction is the result of constrained spending in almost all areas of the Company during the nine months ending September 30, 2013. Average employee headcount in the U.S. decreased by 31%, from 81 employees during 2012 to 56 employees for the corresponding 2013 period. Employee headcount in China increased during the nine months ending September 30, 2013 from 14 to 181 employees. Research and development expenses decreased $1.9 million or 38% from $5.0 million during the nine months ending September 30, 2012 to $3.1 million during the same period in 2013. Sales and marketing expenses decreased by $1.4 million, or 61%, from $2.3 million during the nine months ending September 30, 2012 to $0.9 million during the same corresponding nine months in 2013. General and administrative expenses decreased by $0.2 million, or 4%, from $5.0 million during the nine months ending September 30, 2012 to $4.8 million during the same corresponding nine months of 2013. We continue to focus on reducing our cost structure in areas that will not adversely affect growing our product revenues.

Net Loss

Overall net loss for the nine months ending September 30, 2013 decreased $4.3 million from $14.4 million ($1.24 per share) in 2012 to $10.1 million ($.88 per share) in 2013, primarily due to a decrease in overall operating expenses and improved gross margins.

Risk Factors 

An investment in our shares of common stock and related derivative securities involves significant risks. You should carefully consider the risks described in this Report before making an investment decision. Any of these risks could materially and adversely affect our business, financial condition or results of operations. In such case, you may lose all or part of your investment. Some factors in this section are forward-looking statements.

We may continue to experience significant losses from operations.

We have experienced a net loss in every fiscal year since our inception. Our loss from operations was $10.1 million for the nine months ended September 30, 2013. We may never be profitable in the future. Even if we are profitable in one or more future years, subsequent developments in the economy, our industry, customer base, business or cost structure, or an event such as significant litigation or a significant transaction, may cause us to again experience losses.

We may not be able to raise sufficient equity capital to finance our operations due to our operating results, market conditions and similar factors.

As of September 30, 2013, we had approximately $3.3 million in cash and cash equivalents and $15.5 million in restricted cash. Of the restricted cash, approximately $6.7 million serves as collateral for short-term loans and the balance represents cash incentives received from Wu’an as part of our economic development deal. This capital is earmarked for the development of our operations in Wu’an, China.  We expect that in the future we will again need to raise capital.  With respect to any such capital raise, we may be unable to raise the amount of capital needed and may be forced to pay an extremely high price for capital.  Factors affecting the availability and price of capital may include the following:

● market factors affecting the availability and cost of capital generally, including increases or decreases in major stock market indexes, the stability of the banking and investment banking systems and general economic stability or instability;

● the price, volatility and trading volume of our shares of common stock;

● our financial results, particularly the amount of revenue we are generating from product sales;

● the market's perception of our ability to execute our business plan and any specific projects identified as uses of proceeds;

● our ownership structure and recent or anticipated dilution;

● the amount of our capital needs;

● our project investment requirements in China;

● Nasdaq Capital Market rules prohibiting, with limited exceptions, the issuance in a single financing of securities representing more than 20% of our outstanding shares of common stock;

● volume limitations on the use of our shelf registration statement;

● the market's perception of our company and companies in our line of business; and

● the economics of projects being pursued.

If we are unable to raise required capital, we may be forced to discontinue operations.

We have entered into contractual provisions that may significantly limit our ability to raise capital.

In conjunction with the closing of purchase by an affiliate of Canon Investment Holdings Ltd. of shares representing over 50% of our outstanding shares in 2011, we granted certain rights to Canon, including the right to proportional representation on our Board of Directors, certain registration rights, and an option to purchase a sufficient number of our equity securities at market price to maintain their percentage of ownership should we offer, sell or issue new securities. These rights may dissuade potential investors from purchasing our capital or may require us to accept less than favorable terms in future financings.

Laws governing repatriation of investments in a China WFOE may contribute to a need to obtain capital to finance our non-China operations in the near future.

We have established a Wholly Foreign Owned Enterprise, or WFOE, in China through which we conduct our Chinese operations. When establishing a WFOE, we have been required to designate a minimum registered capital amount and contribute at least such amount to the WFOE. Chinese law severely limits the ability of a WFOE to repatriate money to its non-Chinese parent. In general, any distributions to the non-Chinese parent must derive from profits, as determined in accordance with Chinese accounting standards and regulations. Our WFOE will also be required to set aside at least 10% of its after-tax profit based on Chinese accounting standards each year to a statutory surplus reserve fund until the accumulative amount of such reserve reaches 50% of registered capital. These reserves are not distributable as dividends.

In addition, our WFOE may be required to allocate a portion of its after-tax profit to a staff welfare and bonus fund. Moreover, if our WFOE incurs debt on its own behalf in the future, the instruments governing the debt may restrict our WFOEs’ ability to pay dividends or make other distributions to us. Any limitation on the ability of our WFOE to distribute dividends and other distributions to us could materially and adversely limit our ability to make investments or enter into joint ventures that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

U.S. news sources report that the Chinese government has recently placed, or began enforcing, limitations on lending by Chinese banks, which limits may affect our ability to borrow capital for our Chinese capital investment projects and operations.

Many U.S. news sources recently reported that, due to an increase in bad loans and other reasons, the Chinese government has imposed, or began enforcing, limitations on lending by Chinese banks. Northern Altair has been seeking loans from Chinese banks for its proposed capital investments and operations. This increased regulation and scrutiny may decrease the likelihood that Northern Altair can qualify for debt financing to fund proposed projects. Even if Northern Altair does qualify, terms of financing may be more onerous than anticipated. Any inability to finance our Chinese operations through debt would likely slow our growth in China and may prevent us from completing all aspects of our proposed nano lithium titanate and energy storage system manufacturing facility in China.

We may become subject to international economic and political risks over which we have little or no control and may be unable to alter our business practice in time to avoid the possibility of reduced revenues.

We conduct a portion of our business outside the United States and plan to significantly increase our presence in China. Doing business outside the United States subjects us to various risks, including changing economic and political conditions, major work stoppages, exchange controls, currency fluctuations, armed conflicts and unexpected changes in United States and foreign laws relating to tariffs, trade restrictions, transportation regulations, foreign investments and taxation. We have no control over most of these risks and may be unable to anticipate or adapt to changes in international economic and political conditions. This may lead to sudden and unexpected revenue reductions or expense increases.

China’s economic policies, laws and regulations could affect our business.

While China’s economy has experienced significant growth in the past twenty years, such growth has been uneven, both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall economy of China, but they may also have a negative effect on us. For example, operating results and financial conditions may be adversely affected by the government control over capital investments or changes in tax regulations. The economy of China has been transitioning from a planned economy to a more market-oriented economy. In recent years, the PRC government has implemented measures emphasizing the utilization of market forces for economic reform and the reduction of state ownership of productive assets, and the establishment of corporate governance in business enterprises; however, a substantial portion of productive assets in China are still owned by the PRC government. In addition, the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. It also exercises significant control over China’s economic growth through the allocation of resources, the control of payment of foreign currency-denominated obligations, the setting of monetary policy and the provision of preferential treatment to particular industries or companies. Any adverse change in the economic conditions or government policies in China could directly harm our business or harm overall economic growth in China, which in either case could increase our expenses and decrease expected revenues.

We may have difficulty establishing adequate management, legal and financial controls internationally.

As a result of differences in management, accounting, legal, language and cultural norms, we may experience difficulty in establishing and enforcing management, legal and financial controls. We may also experience difficulty collecting financial data and preparing financial statements, books of account and corporate records and instituting standard business practices for our international projects as well as in our China-based operations. Any failure to maintain controls, institute business practices or accurately collect information may have an effect on the efficiency of our business and could lead to a restatement, a regulatory action or a legal action. In addition, our international efforts may divert management attention and consume a significant amount of capital without anticipated results.

If relations between the United States and China worsen, investors may be unwilling to hold or buy our stock and our stock price may decrease.

At various times during recent years, the United States and China have had significant disagreements over political and economic issues. Controversies may arise in the future between these two countries. Any political or trade controversies between the United States and China, whether or not directly related to our business, could reduce the price of our common stock.

China could change its policies toward private enterprise or even nationalize or expropriate private enterprises.

Our business is expected to be subject to significant political and economic uncertainties and may be affected by political, economic and social developments in China. Over the past several years, the PRC government has pursued economic reform policies including the encouragement of private economic activity and greater economic decentralization. The PRC government may not continue to pursue these policies or may significantly alter them to our detriment from time to time with little, if any, prior notice.

Changes in policies, laws and regulations or in their interpretation or the imposition of confiscatory taxation, restrictions on currency conversion, restrictions or prohibitions on dividend payments to shareholders, or devaluations of currency could cause a decline in the price of our common stock.

The nature and application of many laws of China create an uncertain environment for business operations and they could have a negative effect on us.

The legal system in China is a civil law system. Unlike the common law system, the civil law system is based on written statutes in which decided legal cases have little value as precedents. The promulgation of new laws, changes of existing laws and the abrogation of local regulations by national laws could harm our business operations and financial condition. In addition, as these laws, regulations and legal requirements are relatively recent, their interpretation and enforcement involve significant uncertainty. Furthermore, the political, governmental and judicial systems in China are sometimes impacted by corruption. There is no assurance that we will be able to obtain recourse in any legal disputes with suppliers, customers or other parties with whom we conduct business.

We may not be able to sell the land use rights in China we have acquired, and expect to acquire, at appraised value or at all, in part due to applicable restrictions.

In October 2012, we acquired a 50-year land use right in China related to 66 acres of commercial land north of Dongzhuchang Village in Wu'an City, China. In May 2013, we acquired a 50-year land us right for an adjoining 40 acre parcel. Our land use right are subject to certain requirements and limitations. The requirements on the existing land uses right include an obligation, over the life of the land use right, to invest approximately $266.1 million in the project. The limitations include a prohibition on the transfer of the land use right prior to our investment of at least 25% of our committed investment. These requirements and limitations may harm the value of the land use right.

We have disclosed the appraised value of the land use right. Appraisals are inherently subjective and may overstate the value of the land use right. The actual value of the land use right may be less than the appraised value. In addition, the market for the land use rights in Dongzhuchang Village, which is distant from China’s major industrial centers, may be limited. As a result, regardless of the apparent value of any land use rights, were we to need to sell all of part of any land use right, we may be unable to find suitable buyers. Investors should not place undue reliance on the appraised value of any land use rights.

We may face delays or related issues if we cannot effectively transfer know-how from our U.S.-based employees to our China-based employees.

We are constructing a facility in China to be the sole site for our nLTO manufacturing and an additional site for our energy storage system assembly. The processes of manufacturing nLTO and assembling energy storage systems are complex. We will need to transfer the complex know-how for the nLTO manufacturing and energy storage system assembly from our U.S.-based employees to our existing or new Chinese employees. Language and cultural differences, as well as the inherent difficulty of communicating skills learned through experience, may lead to difficulties in the education and training of Chinese employees. Any failure to adequately educate and train Chinese employees in company-specific know-how may result in additional costs, delays, quality concerns, warranty costs and other issues.

Following the acquisition of a majority interest in the Company by an affiliate of Canon, we face risks associated with having a majority shareholder.

In July 2011, an affiliate of Canon acquired a majority of our outstanding shares of common stock, which presents certain risks to us, including the following:

● The majority shareholder controls the appointments on the Board of Directors and may appoint persons less qualified, or more loyal to the majority shareholder, than would be appointed absent a controlling shareholder;

● The majority shareholder may be able to influence our Board of Directors to enter into transactions with related or third parties that are more favorable to such parties than would be negotiated by an independent Board of Directors;

● The majority shareholder controls all matters requiring approval by the shareholders, including any determination with respect to the acquisition or disposition of assets, future issuances of a material number of securities and other major transactions; and

● This concentration of ownership may also delay, defer or prevent a change in control and otherwise prevent shareholders other than our affiliates from influencing our direction and future.

If one or more of these risks, or other risks, materializes, our business will be harmed, and it may be harmed materially.

Cultural, language and other differences between the U.S. and China may create inefficiencies in our management and operations.

Our majority shareholder, and a majority of our directors, reside in China and several of our directors exclusively speak Chinese. As we ramp up our China-based operations, we may experience conflicts or misunderstandings within our management structure that are primarily or partially rooted in language and cultural differences, particularly differences in management and communication styles. Language and cultural differences may also affect strategy formation and create inefficient and limited communication among technical and management employees located in different countries. The occurrence of any of these events may harm our growth potential, increase costs and decrease operational efficiency.

Our nano lithium titanate battery materials and battery business is currently dependent upon a few customers and potential customers, which presents various risks.

Our nano lithium titanate battery materials and battery business is dependent upon a few current or potential customers. In addition, many of these customers are, or are expected to be, development partners who are subsidizing the research and development of products for which they may be the sole, or one of a few, potential purchasers. As a result of the small number of potential customers and partners, our existing or potential customers and partners may have significant leverage on pricing terms, exclusivity terms and other economic and noneconomic terms. This may harm our attempts to sell products at prices that reflect desired gross margins. In addition, the decision by a single or potential customer to chose not to purchase or abandon the use or development of a product may significantly harm both our financial results and the development track of one or more products.

We depend upon several sole-source and limited-source third-party suppliers.

We rely on certain suppliers as the sole-source, or as a primary source, of certain services, raw materials and other components of our products. We do not yet have long-term supply or service agreements engaged with any such suppliers. As a result, the providers of such services and components could terminate or alter the terms of service or supply with little or no advance notice. If our arrangements with any sole-source supplier were terminated, or if such a supplier failed to provide essential services or deliver essential components on a timely basis, failed to meet our product specifications and/or quality standards, or introduced unacceptable price increases, our production schedule would be delayed, possibly by as long as one year. Any such delay in our production schedule would result in delayed product delivery and may also result in additional production costs, customer losses and litigation.

An area in which our dependence upon a limited number of sources creates significant vulnerability is the manufacturing of our nano lithium titanate cells. As of the date hereof, we have one contract manufacturing source for our nano lithium titanate cells, and we are currently working with a second manufacturer to qualify their cells.  We have had quality issues with some of our past contract manufacturers. Our nano lithium titanate battery cells are the building blocks of all of our products (other than our nano lithium titanate powder). If we were to experience quality issues with any of our suppliers, we may be unable to meet our deadlines, or quality specifications, with respect to existing or future orders.  This would harm our reputation and our ability to grow our business. 

Our operating results have fluctuated significantly in the past and will continue to fluctuate in the future, which could cause our stock price to decline.

Our operating results have fluctuated significantly in the past, and we believe that they will continue to fluctuate in the future, due to a number of factors, many of which are beyond our control. If in future periods our operating results do not meet the expectations of investors or analysts who choose to follow our company, the price of our shares of common stock may fall. Factors that may affect our operating results include the following:

● fluctuations in the size, quantity and timing of customer orders;

● timing of delivery of our services and products;

● additions of new customers or losses of existing customers;

● positive or negative business or financial developments announced by us or our key customers;

● our ability to commercialize and obtain orders for products we are developing;

● costs associated with developing our manufacturing capabilities;

● the retention of our key employees;

● new product announcements or introductions by our competitors or potential competitors;

● the effect of variations in the market price of our shares of common stock on our equity-based compensation expenses;

● disruptions in the supply of raw materials or components used in the manufacture of our products;

● the pace of adoption of regulation facilitating our ability to sell our products in our target markets;

● technology and intellectual property issues associated with our products;

● general political, social, geopolitical and economic trends and events; and

● availability of components sourced from Korea if tensions between North Korea and South Korea erupt into a greater military conflict.

Our patents and other protective measures may not adequately protect our proprietary intellectual property.

We regard our intellectual property, particularly our proprietary rights in our nano lithium titanate technology, as critical to our success. We have received various patents, and filed other patent applications, for various applications and aspects of our nano lithium titanate technology and other intellectual property. Such patents and agreements and various other measures we take to protect our intellectual property from use by others may not be effective for various reasons, including the following:

● Our pending patent applications may not be granted for various reasons, including the existence of conflicting patents or defects in our applications, the existence of relevant prior art or the determination by an examiner that an invention was obvious to a person skilled in the art, whether or not there were other existing patents. Risks associated with patent applications are enhanced because patent applications of others remain confidential for a period of approximately 18 months after filing; as a result, our belief that we are the first creator of an invention or the first to patent it may prove incorrect, as information related to conflicting patents is first published or first brought to our attention;

● The patents we have been granted may be challenged, invalidated, narrowed or circumvented because of the pre-existence of similar patented or unpatented intellectual property rights or for other reasons;

●  The patents we have been granted have a limited life span, and many will expired in the coming years and offer no legal protection to the technologies and processes described therein;

● The costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make aggressive enforcement cost prohibitive;

● We have not filed for patent protection in many countries in which we are currently selling product or seek to sell product; as a result, we may be unable to prevent competitors in such markets from selling infringing products;

● Even if we enforce our rights aggressively, injunctions, fines and other penalties may be insufficient to deter violations of our intellectual property rights; and

● Other persons may independently develop proprietary information and techniques that, although functionally equivalent or superior to our intellectual proprietary information and techniques, do not breach proprietary rights.

Our inability to protect our proprietary intellectual property rights or gain a competitive advantage from such rights could harm our ability to generate revenues and, as a result, our business and operations.

We may be involved in lawsuits to protect or enforce our patents, which could be expensive, time consuming and involve adverse publicity and adverse results.

Competitors or others may infringe our patents. To counter infringement or unauthorized use, we may be required to file patent infringement claims, which can be expensive and time-consuming. Interference proceedings brought by the United States Patent and Trademark Office may be necessary to determine the priority of inventions with respect to our patent applications. Litigation or interference proceedings may result in substantial costs and be a distraction to our management.

Because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure. In addition, during the course of this litigation (even if ultimately successful), there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our shares of common stock.

In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover that technology. An adverse determination of any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.

We may not prevail in any litigation or interference proceeding in which we are involved. Even if we do prevail, these proceedings can be expensive, result in adverse publicity and distract our management.

Other paties may bring intellectual property infringement claims against us, which would be time-consuming and expensive to defend, and if any of our products or processes is found to be infringing, we may not be able to procure licenses to use patents necessary to our business at reasonable terms, if at all.

Our success depends in part on avoiding the infringement of other parties’ patents and proprietary rights. We may inadvertently infringe existing third-party patents or third-party patents issued on existing patent applications. Third party holders of such patents or patent applications could bring claims against us that, even if resolved in our favor, could cause us to incur substantial expenses and, if resolved against us, could cause us to pay substantial damages. Under some circumstances in the United States, these damages could be triple the actual damages the patent holder incurs.

If we have supplied infringing products to third parties for marketing or licensed third parties to manufacture, use or market infringing products, we may be obligated to indemnify these third parties for any damages they may be required to pay to the patent holder and for any losses the third parties may sustain themselves as the result of lost sales or damages paid to the patent holder. In addition, we have, and may be required to, make representations as to our right to supply and/or license intellectual property and to our compliance with laws. Such representations are usually supported by indemnification provisions requiring us to defend our customers and otherwise make them whole if we license or supply products that infringe on third party technologies or violate government regulations. Further, if a patent infringement suit were brought against us, we and our customers, development partners and licensees could be forced to stop or delay research, development, manufacturing or sales of products based on our technologies in the country or countries covered by the patent we infringe, unless we can obtain a license from the patent holder. Such a license may not be available on acceptable terms, or at all, particularly if the third party is developing or marketing a product competitive with products based on our technologies. Even if we were able to obtain a license, the rights may be nonexclusive, which would give our competitors access to the same intellectual property.

Any successful infringement action brought against us may also adversely affect marketing of products based on our technologies in other markets not covered by the infringement action. Furthermore, we may suffer adverse consequences from a successful infringement action against us even if the action is subsequently reversed on appeal, nullified through another action or resolved by settlement with the patent holder. As a result, any infringement action against us would likely harm our competitive position, be costly and require significant time and attention of our key management and technical personnel.

We may be unable to adequately prevent disclosure of trade secrets and other proprietary information.

We rely on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is appropriate or obtainable. Trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, contractors, consultants, outside scientific collaborators and other advisors to protect our trade secrets and other proprietary information. Parties to the confidentiality agreements may have such agreements declared unenforceable or, even if the agreements are enforceable, may breach such agreements. Remedies available in connection with the breach of such agreements may not be adequate, or enforcing such agreement may be cost prohibitive. Courts outside the United States may be less willing to protect trade secrets. In addition, others may independently discover our trade secrets or independently develop processes or products that are similar or identical to our trade secrets. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection would harm our competitive business position.

If we are sued on a product liability claim, our insurance policies may not be sufficient.

Our insurance may not cover all potential types of product liability claims to which manufacturers are exposed or may not be adequate to indemnify us for all liability that may be imposed. Any imposition of liability that is not covered by insurance or is in excess of our insurance coverage could harm our business, including our relationships with current customers and our ability to attract and retain new customers. In addition, if the liability were substantial relative to the size of our business, any uncovered liability could harm our liquidity and ability to continue as a going concern.

Laws regulating the manufacture or transportation of batteries may be enacted which could result in a delay in the production of our batteries or the imposition of additional costs that could harm our ability to be profitable.

At the present time, international, federal, state and local laws do not directly regulate the storage, use and disposal of the component parts of our batteries. However, laws and regulations may be enacted in the future which could impose environmental, health and safety controls on the storage, use and disposal of certain chemicals and metals used in the manufacture of lithium and lithium-ion batteries. Satisfying any future laws or regulations could require significant time and resources from our technical staff, including those related to possible redesign which may result in substantial expenditures and delays in the production of our product, all of which could harm our business and reduce our future profitability.

The transportation of lithium and lithium-ion batteries is regulated both domestically and internationally. Under recently revised United Nations recommendations and as adopted by the International Air Transport Association, our batteries and battery systems currently fall within the level such that they are not exempt and require a Class 9 designation for transportation. The revised United Nations recommendations and other recommendations are not U.S. law until such time as they are incorporated into the Hazardous Material Regulations of the U.S. Department of Transportation, or DOT. However, DOT has proposed new regulations harmonizing with the U.N. guidelines and is reviewing other proposed changes under consideration for inclusion. At present it is not known if or when the proposed regulations would be adopted by the United States. Although we fall under the equivalency levels for the United States and comply with all safety packaging requirements worldwide, future DOT or IATA approval process could require significant time and resources from out technical staff and, if redesign were necessary, could delay the introduction of new products.

If our warranty expense estimates differ materially from our actual claims, or if we are unable to estimate future warranty expense for new products, our business and financial results could be harmed.

Our warranty for our products ranges from one to three years from the date of sale, depending on the type of product and its application. We expect that in the future some of our warranties may extend for longer periods. Because our supply arrangements are negotiated, the scope of our product warranties differ substantially depending upon the product, the purchaser and the intended use; however, we have granted and may grant broad warranties, addressing such issues as leakage, cycle life and decline in power. We have a limited product history on which to base our warranty estimates. Because of the limited operating history of our batteries and battery systems, our management is required to make assumptions and to apply judgment regarding a number of factors, including anticipated rate of warranty claims, the durability and reliability of our products, and service delivery costs. Our assumptions could prove to be materially different from the actual performance of our batteries and battery systems, which could cause us to incur substantial expense to repair or replace defective products in the future and may exceed expected levels against which we have reserved. If our estimates prove incorrect, we could be required to accrue additional expenses from the time we realize our estimates are incorrect and also face a significant unplanned cash burden at the time our customers make a warranty claim, which could harm our operating results.

In addition, with our new products and products that remain under development, we will be required to base our warranty estimates on historical experience of similar products, testing of our batteries under laboratory conditions and limited performance information learned during our development activities with the customer. As a result, actual warranty claims may be significantly different from our estimates and our financial results could vary significantly from period-to-period.

Product liability or other claims could cause us to incur losses or damage our reputation.

The risk of product liability claims and associated adverse publicity is inherent in the development, manufacturing and sale of batteries and battery system. Certain materials we use in our batteries, as well as our battery systems, could, if used improperly, cause injuries to others. Improperly charging or discharging our batteries could cause fires, as could a puncture, collision or other event. Any accident involving our batteries or other products could decrease or even eliminate demand for our products. Because some of our batteries are designed to be used in electric and hybrid electric buses, and because vehicle accidents can cause injury to persons and damage to property, we are subject to a risk of claims for such injuries and damages. In addition, we could be harmed by adverse publicity resulting from problems or accidents caused by third party products that incorporate our batteries. We could even be harmed by problems or accidents involving competing battery systems, such as those used in Tesla automobiles that have recently been subject to fires, if the market viewed our batteries as being vulnerable to similar problems. Any such claims, loss of customers or reputation harm would harm our financial results and ability to continue as a going concern.

Continuing adverse economic conditions could reduce, or delay demand for our products.

The financial markets and general economic conditions are still relatively weak in certain geographic markets worldwide. Our products are targeted primarily at large power producers worldwide bus manufacturers and other industrial parties. Due to economic factors, companies and government agencies in some of our target markets have reduced, delayed or eliminated many research and development initiatives, including those related to energy storage. This reduction or delay in development spending by targeted key customers is hindering our development and production efforts and will continue to do so until development spending increases from current depressed levels.

The commercialization of many of our products is dependent upon the efforts of commercial partners and other third parties over which we have no or little control.

The commercialization of our principal products requires the cooperation and efforts of commercial partners and customers. For example, because completion and testing of our large-scale stationary batteries for power suppliers requires input from utilities and connection to a power network, commercialization of such batteries can only be done in conjunction with a power or utility company. The commercialization of transportation and other applications of our technology are also dependent, in part, upon the expertise, resources and efforts of our commercial partners. This presents certain risks, including the following:

● we may not be able to enter into development, licensing, supply and other agreements with commercial partners with appropriate resources, technology and expertise on reasonable terms or at all;

● our commercial partners may not place the same priority on a project as we do, may fail to honor contractual commitments, may not have the level of resources, expertise, market strength or other characteristics necessary for the success of the project, may dedicate only limited resources to, and/or may abandon, a development project for reasons, including reasons such as a shift in corporate focus, unrelated to its merits;

● our commercial partners may be in the early stages of development and may not have sufficient liquidity to invest in joint development projects, expand their businesses and purchase our products as expected or honor contractual commitments;

● our commercial partners may terminate joint testing, development or marketing projects on the merits of the projects for various reasons, including determinations that a project is not feasible, cost-effective or likely to lead to a marketable end product;

● our commercial partners may not protect our intellectual property adequately or they may infringe our intellectual property rights;

● at various stages in the testing, development, marketing or production process, we may have disputes with our commercial partners, which may inhibit development, lead to an abandonment of the project or have other negative consequences; and

● even if the commercialization and marketing of jointly developed products is successful, our revenue share may be limited and may not exceed our associated development and operating costs.

As a result of the actions or omissions of our commercial partners, or our inability to identify and enter into suitable arrangements with qualified commercial partners, we may be unable to commercialize apparently viable products on a timely and cost-effective basis, or at all.

Interest in our nano lithium titanate batteries is affected by energy supply and pricing, political events, popular consciousness and other factors over which we have no control.

Currently, our marketing and development efforts for our batteries and battery materials are focused primarily on stationary power and transportation applications. In the transportation market, batteries containing our nano lithium titanate materials are designed to replace or supplement gasoline and diesel engines. In the stationary power applications, our batteries are designed to conserve and regulate the stable supply of electricity, including from renewable source, and to displace coal, gas and diesel generators used in frequency regulation. The interest of our potential customers and business partners in our products and services is affected by a number of factors beyond our control, including:

● economic conditions and capital financing and liquidity constraints;

● short-term and long-term trends in the supply and price of natural gas, gasoline, diesel, coal and other fuels;

● the anticipated or actual granting or elimination by governments of tax and other financial incentives favoring electric or hybrid electric vehicles and renewable energy production;

● the ability of the various regulatory bodies to define the rules and procedures under which this new technology can be deployed into the electric grid;

● the anticipated or actual funding, or elimination of funding, for programs that support renewable energy programs and electric grid improvements;

● changes in public and investor interest for financial and/or environmental reasons, in supporting or adopting alternatives to gasoline and diesel for transportation and other purposes;

● the overall economic environment and the availability of credit to assist customers in purchasing our large battery systems;

● the expansion or contraction of private and public research and development budgets as a result of global and U.S. economic trends; and

● the speed of incorporation of renewable energy generating sources into the electric grid.

Adverse trends in one or more of these factors may inhibit our ability to commercialize our products and expand revenues from our battery materials and batteries.

If we combine with other companies, we may be unable to successfully integrate our business, technology, management or other aspects of our business with the other party to the transaction.

As evidenced by our signing the Share Subscription Agreement with Canon and related agreements with YTE, we routinely consider entering into acquisition, strategic or combination transactions with other companies for strategic and/or financial reasons. If we do enter into such transactions with another company, we will be exposed to a number of risks, including:

● we may have difficulty integrating our assets, technologies, operations and personnel in connection with a business combination;

● our ongoing business and management's attention may be disrupted or diverted by transition or integration issues and the complexity of managing, or being a part of, a geographically or culturally diverse enterprises;

● we may find that the transaction does not further our business strategy or that the economic and strategic assumptions underlying the transaction have proved inaccurate;

● we may encounter difficulty entering and competing in new product or geographic markets;

● we may face business, product, structural or other limitations or prohibitions as our business becomes subject to the laws or customs of other jurisdictions; and

● we may experience significant problems or liabilities associated with product quality, technology and legal contingencies relating to the integrated business or technology, such as intellectual property or employment matters. 

In addition, from time to time we may enter into negotiations for acquisitions, dispositions, mergers or other transactions that are not ultimately consummated. These negotiations could result in significant diversion of management time, substantial out-of-pocket costs and, while such transactions are pending, limitations on the operation of our business (including negotiation of alternative business combinations and capital raising transactions). To the extent we issue shares of capital stock or other rights to purchase capital stock in any such transactions, including options and warrants, existing stockholders would be diluted. Any of these issues will harm our business and financial condition.

Our competitors may have more resources than we do, and may be supported by more prominent partners, which may give them a competitive advantage.

We have limited financial, personnel and other resources and, because of our early stage of development, have limited access to capital. We compete or may compete against entities that are much larger than we are, have more extensive resources than we do and have an established reputation and operating history. In addition, certain of our competitors may be partnered with, associated with or supported by larger business or financial partners. This may increase their ability to raise capital, attract media attention, develop products and attract customers. Because of their size, resources, reputation and history (or that of their business and financial partners), certain of our competitors may be able to exploit acquisition, development and joint venture opportunities more rapidly, easily or thoroughly than we can. In addition, potential customers may choose to do business with our more established competitors, without regard to the comparative quality of our products, because of their perception that our competitors are more stable, are more likely to complete various projects, are more likely to continue as a going concern and lend greater credibility to any joint venture.

As manufacturing becomes a larger part of our operations, we will become exposed to accompanying risks and liabilities.

In-house and outsourced manufacturing is becoming an increasingly significant part of our business. As a result, we expect to become increasingly subject to various risks associated with the manufacturing and supply of products, including the following:

● If we fail to supply products in accordance with contractual terms, including terms related to time of delivery and performance specifications, we may be required to repair or replace defective products and may become liable for direct, special, consequential and other damages, even if manufacturing or delivery was outsourced;

● Raw materials used in the manufacturing process, labor and other key inputs may become scarce and expensive, causing our costs to exceed cost projections and associated revenues;

● Manufacturing processes typically involve large machinery, fuels and chemicals, any or all of which may lead to accidents involving bodily harm, destruction of facilities and environmental contamination and associated liabilities;

● As our manufacturing operations expand, we expect that a significant portion of our manufacturing will be done overseas, either by third-party contractors or in a plant owned by the company. Any manufacturing done overseas presents risks associated with quality control, currency exchange rates, foreign laws and customs, timing and loss risks associated with overseas transportation and potential adverse changes in the political, legal and social environment in the host county; and

● We have made, and may be required to make, representations as to our right to supply and/or license intellectual property and to our compliance with laws. Such representations are usually supported by indemnification provisions requiring us to defend our customers and otherwise make them whole if we license or supply products that infringe on third-party technologies or violate government regulations.

Any failure to adequately manage risks associated with the manufacture and supply of materials and products could lead to losses (or smaller than anticipated gross profits) from that segment of our business and/or significant liabilities, which would harm our business, operations and financial condition.

Our past and future operations may lead to substantial environmental liability.

Virtually any prior or future production of our nanomaterials and titanium dioxide pigment technology is subject to federal, state and local environmental laws. Under such laws, we may be jointly and severally liable with prior property owners for the treatment, cleanup, remediation and/or removal of any hazardous substances discovered at any property we use. In addition, courts or government agencies may impose liability for, among other things, the improper release, discharge, storage, use, disposal or transportation of hazardous substances. If we incur any significant environmental liabilities, our ability to execute our business plan and our financial condition would be harmed.

Certain of our experts and directors reside in United Arab Emirates, or the UAR, or China and may be able to avoid civil liability.

A majority of our directors reside outside the United States in the UAR or China. As a result, investors may be unable to effect service of process upon such persons within the United States and may be unable to enforce court judgments against such persons predicated upon civil liability provisions of the U.S. securities laws. It is uncertain whether UAR or Chinese courts would enforce judgments of U.S. courts obtained against us or such directors, officers or experts predicated upon the civil liability provisions of U.S. securities laws or impose liability in original actions against us or our directors, officers or experts predicated upon U.S. securities laws.

We are dependent on key personnel.

Our continued success will depend, to a significant extent, on the services of our executive management team and certain key scientists and engineers. We do not have key man insurance on any of these individuals. We have experienced, and may continue to experience, turnover in key positions, which could result in the loss of company-specific knowledge, experience and expertise. The loss or unavailability of any or all of these individuals could harm our ability to execute our business plan, maintain important business relationships and complete certain product development initiatives, which would harm our business.

We may issue substantial amounts of additional shares without stockholder approval. 

Our articles of incorporation authorize the issuance of 200 million shares of common stock that may be issued without any action or approval by our stockholders. In addition, we have various stock option plans that have potential for diluting the ownership interests of our stockholders. The issuance of any additional shares of common stock would further dilute the percentage ownership of our company held by existing stockholders.

The market price of our shares of common stock is highly volatile and may increase or decrease dramatically at any time.

The market price of our shares of common stock is highly volatile. Our stock price may change dramatically as the result of announcements of product developments, new products or innovations by us or our competitors, uncertainty regarding the viability of our technology or our product initiatives, significant customer contracts, significant litigation, our liquidity situation, revenues or losses, or other factors or events that would be expected to affect our business, financial condition, results of operations and future prospects.

The market price for our shares of common stock may be affected by various factors not directly related to our business or future prospects, including the following:

● intentional manipulation of our stock price by existing or future shareholders or a reaction by investors to trends in our stock rather than the fundamentals of our business;

● a single acquisition or disposition, or several related acquisitions or dispositions, of a large number of our shares, including by short sellers covering their position;

● the interest of the market in our business sector, without regard to our financial condition, results of operations or business prospects;

● positive or negative statements or projections about our company or our industry, by analysts, stock gurus and other persons;

● the adoption of governmental regulations or government grant programs and similar developments in the United States or abroad that may enhance or detract from our ability to offer our products and services or affect our cost structure; and

● economic and other external market factors, such as a general decline in market prices due to poor economic conditions, investor distrust or a financial crisis.

If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our shares of common stock, our stock price and trading volume could decline.

The trading market for our shares of common stock is influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our shares of common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our shares of common stock would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial market, which in turn could cause the price or trading volume of our shares of common stock to decline.

We have never declared a cash dividend and do not intend to declare a cash dividend in the foreseeable future.

We have never declared or paid cash dividends on our shares of common stock. We currently intend to retain any future earnings, if any, for use in our business and, therefore, do not anticipate paying dividends on our shares of common stock in the foreseeable future.  

We are subject to various regulatory regimes, and may be adversely affected by inquiries, investigations and allegations that we have not complied with governing rules and laws.

In light of our status as a public company and our lines of business, we are subject to a variety of laws and regulatory regimes in addition to those applicable to all businesses generally.  For example, we are subject to the reporting requirements applicable to United States reporting issuers, such as the Sarbanes-Oxley Act of 2002, the rules of the NASDAQ Capital Market and certain other securities laws. We are also subject to state and federal environmental, health, safety and similar laws. Such laws and rules change frequently and are often complex.  In connection with such laws, we are subject to periodic audits, inquiries and investigations.  Any such audits, inquiries and investigations may divert considerable financial and human resources and adversely affect the execution of our business plan. 

Through such audits, inquiries and investigations, we or a regulator may determine that we are out of compliance with one or more governing rules or laws.  Remedying such non-compliance would divert additional financial and human resources.  In addition, in the future, we may be subject to a formal charge or determination that we have materially violated a governing law, rule or regulation. We may also be subject to lawsuits as a result of alleged violation of the securities laws or governing corporate laws.  Any charge or allegation, and particularly any determination, that we had materially violated a governing law would harm our ability to enter into business relationships, recruit qualified officers and employees and raise capital.

Item 3.     Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, we are not required to provide the information required by this item.

Item 4.     Controls and Procedures

(a)     Based on their evaluation as of September 30, 2013, which is the end of the period covered by this Quarterly Report on Form 10-Q, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) are effective, based upon an evaluation of those controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 of the Exchange.

(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 1. Legal Proceedings.

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not currently a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on the results of our operations or financial position.

Item 1A. Risk Factors

As a smaller reporting company, the Company is not required to provide the information required by this Item; however, certain risk factors are identified under the title "Risk Factors" as part of Part I, Item 2.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None

Item 6. Exhibits

a) See Exhibit Index attached hereto following the signature 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 Nanotechnologies Inc.
November 19, 2013	By: /s/ Richard W. Lee
Date	Richard W. Lee,
	Chief Executive Officer
November 19, 2013	By: /s/ Paula Conroy
Date	Paula Conroy,
	Chief Financial Officer

EXHIBIT INDEX
Exhibit No.	Exhibit	Incorporated by Reference/ Filed Herewith**
10.1	Employment Agreement dated October 23, 2013 with Richard Lee	Incorporated by reference to the Current Report on Form 8-K filed with the SEC on August 29, 2013
10.2	Client Lease (Renewal) dated July 1, 2013 between Altairnano, Inc. and Flagship Enterprise Center, Inc.	Incorporated by reference to the Current Report on Form 8-K filed with the SEC on July 2, 2013
10.3	First Modification of Note and First Modification of Deed of Trust dated August 1, 2013.	Incorporated by reference to the Current Report on Form 8-K filed with the SEC on August 1, 2013
10.4	Mortgage Contract dated August 27, 2013 with the Bank of Handan Co., Ltd. Wu’an Sub-branch	Filed herewith
10.5	Working Capital Loan Contract dated August 27, 2013 with the Bank of Handan Co., Ltd. Wu’an Sub-branch	Filed herewith
10.6	Working Capital Loan Contract dated September 27, 2013 with the Industrial and Commercial Bank of China Limited	Filed herewith
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	Filed herewith
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Offcer	Filed herewith
32.1	Section 1350 Certification of Chief Executive Officer	Filed herewith
32.2	Section 1350 Certification of Chief Financial Officer	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith
101.CAL	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith

** SEC File No. 1-12497. 

EX-10

Exhibit 10.4

[handwritten text is indicated in italics]

0000013

Contract No. 1862013DY08001520

Mortgage Contract

Mortgagor (Party A): Altairnano Inc.                                              

Location (Address): Altair New Energy Industrial Park, North Side of Handan-Wu’an Expressway

Legal representative: Zou Liming

Mortgagee (Party B): Bank of Handan Co., Ltd. Wu’an Sub-branch                       

Location (Address): No. 3, Fuben Garden, Fuqiang Street, Wu’an City

Legal representative: Guo Jianxin

[handwritten text is indicated in italics]

0000014

In order to ensure effective performance of the obligations of the borrower under No. xd201308213452 Loan Contract (hereinafter referred to as “the Principal Contract”) made between Altairnano Inc. (the Borrower) and Party B to this Contract on August 27, 2013, Party A is willing to provide mortgage guaranty. In order to define the rights and obligations of both parties, Party A and Party B have entered into this Contract in accordance with the “Contract Law,” “Guaranty Law” and other relevant laws and regulations of China through equal consultation and consensus.

Article 1    Warranties and Statements of Party A

1.1 Party A is the complete, valid and legal owner or the State-authorized manager of the mortgaged properties under this Contract; there is no dispute regarding the ownership or management right of such mortgaged properties.

1.2 Party A has completely understood the purpose of the loan for the Borrower under the Principal Contract; the mortgage guaranty provided by the Borrower under the Principal Contract is made completely under its free will, and the full intent expressed under this Contract is authentic.

1.3 Party A has given sufficient and reasonable explanation about any defect of the mortgaged properties under this Contract.

1.4 The mortgaged properties under this Contract may be mortgaged pursuant to the law.

1.5 The mortgage for which this Contract is made will not be subject to any restriction.

1.6 The mortgaged properties under this Contract are not sealed, seized or controlled pursuant to the law.

1.7 If the mortgaged properties under this Contract have been leased in part or in whole, Party A warrants to inform the lessee(s) of the mortgage as well as issue a written notice of the lease information to Party B.

Article 2    Type and Amount of the Principal Claim Guaranteed

2.1 The principal claim guaranteed under this Contract is the loan provided by Party B according to the Principal Contract, in the amount of RMB fifty million Yuan.

Article 3   Time Limit for the Borrower under the Principal Contract to Perform Obligation

3.1 The time limit for performance of the Principal Contract is 12 months, from August 27, 2013 to August 27, 2014. In case of any change, the Principal Contract shall prevail.

Article 4    Scope of Mortgage Guaranty

4.1 The scope of mortgage guaranty provided by Party A includes: all the loan principal, interest, compound interest, punitive interest, breach penalties, compensation, expenses for realization of mortgage rights (including but not limited to the court acceptance fee, lawyer’s fee, property custody fee, assessment fee, etc.) and any other expenses payable under the Principal Contract.

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Article 5    Mortgaged Properties

5.1 See the “List of Mortgaged Properties” for details of the mortgaged properties.

5.2 The value of the mortgaged properties specified in the “List of Mortgaged Properties” shall neither be deemed as the basis for the valuation of such mortgaged properties for disposal by Party B according to Article 9 of this Contract, nor as any restriction on Party B’s execution of mortgage rights.

5.3 The effective certifications and documents relating to the mortgaged properties shall be delivered by Party A to Party B for custody upon confirmation and archiving by both parties, unless otherwise specified by laws and regulations.

Article 6    Mortgage Registration

6.1 If mortgage registration shall be handled as stipulated by laws and regulations or as agreed by both parties, both Party A and Party B shall go through the formalities for the mortgage registration with the local relevant mortgage registration authority within 15 days upon signing this Contract.

6.2 In case of any change in the mortgage registration item(s), and change of registration needs to be handled pursuant to the law, both Party A and Party B shall go through the formalities for the change of registration with the relevant mortgage registration authority within 15 days upon change of the registration item(s).

Article 7    Occupation and Management of Mortgaged Properties

7.1 The mortgaged properties under this Contract will be occupied and managed by Party A. Party A shall keep the mortgaged properties intact during the period of occupation and management without using the mortgaged properties in any inappropriate manner, which may result in impaired value of the mortgaged properties. Party B has the right to inspect the use and management of the mortgaged properties.

7.2 In case of any damage and loss of the mortgaged properties, Party A shall notify Party B promptly, immediately take measures to prevent further expansion of the loss, and provide the certification regarding the facts and reasons of such damage or loss issued by the competent authority to Party B.

Article 8    Insurance

8.1 Within 15 days upon signing this Contract, Party A shall go through the formalities for basic insurance and additional risks [handwritten:] / of property insurance for the mortgaged properties with the relevant insurance agency. The insurance period shall be no shorter than the performance term of the Principal Contract, and the insured amount shall be no less than the principal and interest of the loan under the Principal Contract.

8.2 Party A shall indicate in the insurance policy that Party B is the first beneficiary in case of accident. The insurance policy shall not have any clause with limitations on Party B’s rights and interests.

8.3 Within the valid term of this Contract, Party A shall not discontinue or cancel the insurance for any reason. If the insurance is discontinued, Party B has the right to handle the insurance formalities on behalf of and at the expense of Party A.

8.4 Within the valid term of this Contract, if any insurance accident happens to the mortgaged properties, the full insurance compensation shall be paid to Party B in advance as [the equivalent of] the mortgaged properties, or shall be used to recover the value of the mortgaged properties with the permission of Party B.

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0000015

Article 9    Realization of Mortgage Rights

9.1 During execution of mortgage rights, pursuant to provisions of the law and through consultation with Party A, Party B has the right to offset the debts owed by the Borrower under the Principal Contract through conversion of the mortgaged properties or to be paid out of the proceeds from auction or sale of the mortgaged properties with priority.

9.2 During disposal of the mortgaged properties by Party B according to Article 9.1 of this Contract, Party A shall provide cooperation without setting any obstacle.

Article 10    Rights and Obligations of Party A

10.1 After this Contract comes into effect, Party A guarantees that the mortgaged properties under this Contract will not be set up for any other mortgage or pledge in any form or be leased, transferred or presented to any third party as a gift without the written permission of Party B.

10.2 After this Contract comes into effect, if Party B assigns the principal claim to a third party pursuant to the law, Party A shall continue to undertake the guaranty liability within the original scope of mortgage guaranty.

10.3 Party B and the Borrower under the Principal Contract may amend the Principal Contract by agreement without requiring the permission of Party A, except for extension of term or increase of the loan amount; Party A shall still undertake the guaranty liability within the scope of mortgage guaranty as specified in this Contract.

10.4 If any behavior of Party A has resulted in reduction of the value of the mortgaged properties, such behavior shall be stopped; if the value of the mortgaged properties is reduced, Party A has the obligation to recover the value of the mortgaged properties, or provide the guaranty that is equivalent to the reduced value, otherwise the liquidation of debts shall be conducted in advance.

10.5 If the reduction of the value of the mortgaged properties is not due to fault of Party A, the received compensation for the damage shall be used to liquidate, in advance, the guaranteed principal claim or be deposited with a third party as agreed by both parties. The part with unreduced value of the mortgaged properties shall still be deemed as the guaranty for the claim.

10.6 If the mortgaged properties under this Contract will be expropriated by the State due to needs of construction, the compensation obtained for such expropriation shall be used to liquidate, in advance, the guaranteed principal claim or be deposited with a third party as agreed by both parties.

10.7 Party A shall bear relevant expenses under this Contract, including but not limited to the expenses of attorney services, property insurance, appraisal, valuation, registration, transfer of ownership, custody and litigation.

10.8 In case of spin-off, merger, or reformation of shareholding system after this Contract comes into effect, the guaranty obligations under this Contract shall be properly implemented.

10.9 If the mortgage is infringed or possibly infringed by any third party, Party A has the obligation to notify Party B and protect Party B from any infringement.

10.10 Under any of the following circumstances, Party A shall give written notice to Party B promptly:

10.10.1 Change of the business operation mechanism, such as implementation of contracting, lease, joint operation, merger, spin-off, reformation of shareholding system, and cooperation with foreign party or joint venture, etc.;

10.10.2 Alteration of business scope and registered capital, change of shareholding;

10.10.3 Existence of affiliation, conduct of related-party transactions;

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10.10.4 Deterioration of financial condition or involvement in major financial dispute litigation;

10.10.5 Disputes arise with regard to the ownership of the mortgaged properties;

10.10.6 Bankruptcy, shutdown, dissolution, suspension of business for rectification, revocation of the business license, or cancellation;

10.10.7 Change of address, telephone, or legal representative.

10.11 Under the circumstances of 10.10.1 and 10.10.2, Party A shall give written notice to Party B 30 days in advance; under any other circumstances specified in Article 10.10, Party A shall give written notice to Party B within 5 days upon occurrence of the event.

10.12 If a project under construction is pledged as the mortgaged properties, Party A shall report any default of project payment to Party B at any time. After obtaining the certificate of property ownership upon completion and acceptance of the project, Party A shall actively cooperate with Party B to again go through the formalities for real estate mortgage registration with the relevant mortgage registration authority.

10.13 After the Borrower under the Principal Contract liquidates all debts under the Principal Contract, Party A has the right to request removal of the mortgage under this Contract.

Article 11    Rights and Obligations of Party B

11.1 Upon expiration of the performance term of the Principal Contract, if the Borrower fails to return the principal, pay the interest and other expenses according to the Contract, Party B has the right to dispose of the mortgaged properties under this Contract.

11.2 Under any of the following circumstances, Party B has the right to dispose of the mortgaged properties in advance and be compensated with the proceeds from the disposal with priority:

11.2.1 The Principal Contract is cancelled according to the provisions of the Principal Contract or laws and regulations;

11.2.2 The loan is called in ahead of schedule according to other circumstances specified in the Principal Contract, and the creditor’s rights under the Principal Contract are not realized or cannot be realized in whole.

11.3 Party B has the right to request Party A to provide assistance for purposes of protecting the mortgage rights from infringement by any third party.

11.4 During the valid term of this Contract, if Party B transfers the principal claim pursuant to the law, Party B shall notify Party A promptly.

11.5 After realization of the mortgage rights, Party B shall cooperate with Party A in executing its recourse against the Borrower to the extent possible.

11.6 Regarding the income from disposal of the mortgaged properties under this Contract, after payment for all debts within the scope of the mortgage guaranty under this Contract, the remainder, if any, shall be returned to Party A.

Article 12    Responsibilities for Breach of Contract

12.1 If Party A makes false representations and statements in Article 1 of this Contract, which has caused loss to Party B, Party A shall be responsible for compensation.

12.2 After this Contract comes into effect, both Party A and Party B shall perform the obligations stipulated in this Contract. Either party who fails to perform or fully perform the obligations stipulated in this Contract shall bear corresponding liabilities for breach of contract as well as make compensation for any loss thus caused to the other party.

12.3 In the event that this Contract becomes invalid due to fault of Party A, Party A shall make compensation for any loss to Party B within its original scope of mortgage guaranty.

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0000016

Article 13    Validity, Alteration, Cancellation and Termination of the Contract

13.1 This Contract shall come into effect as of the date of signature and seal by both Party A and Party B. If it is necessary to handle mortgage registration, the Contract shall come into effect as of the date of completing the formalities for mortgage registration with the relevant mortgage registration authority, and it will expire on the date when the loan principal, interest, compound interest, punitive interest, breach penalties, compensation, expenses for realization of creditor’s rights and any other expenses payable under the Principal Contract are paid off.

13.2 If the Principal Contract becomes invalid, besides the civil liability that Party A needs to undertake corresponding to its fault, Party A shall also bear the liabilities for mortgage guaranty regarding the civil liability to be undertaken by the principal debtor.

13.3 After this Contract comes into effect, neither Party A or Party B may alter this Contract or cancel this Contract ahead of schedule without permission. If this Contract needs to be altered or cancelled, Party A and Party B shall reach a written agreement through consultation and consensus. Before conclusion of the written agreement, all provisions of this Contract shall remain in force.

Article 14    Settlement of Dispute

14.1 Any dispute arising from execution of this Contract between Party A and Party B shall be settled first by both parties through consultation; if settlement cannot be reached through consultation, the method as provided in [handwritten:] 14.1.2 below shall be adopted for settlement:

14.1.1 Accept arbitration by [handwritten:]                  /                   ;

14.1.2 File a lawsuit to the court in the place where Party B is located.

Article 15     Other Issues Agreed by Both Parties

15.1

15.2

15.3

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Article 16    Attachments

16.1 The attachments of this Contract constitute an integral part of this Contract and have the same legal force as this Contract.

16.2 The attachments of this Contract include:

Attachment 1: “List of Mortgaged Properties”

Attachment 2:

Article 17    Supplementary Provisions

17.1 This Contract has three originals; Party A, Party B and the relevant mortgage registration authority shall retain one copy respectively, and all of them have the same legal force.

 

Party A (official seal):	Party B (official seal):
[seal:] Altairnano Inc.;	[seal:] Bank of Handan Co., Ltd. Wu’an Sub-branch;
1304310017657	1304810013252
Legal representative:	Legal representative (or person in charge)
(Or authorized agent) [signature]	(Or authorized agent) [signature]
[handwritten:] August 27, 2013	[handwritten:] August 27, 2013

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[handwritten text is indicated in italics]

000001

Attachment 1:

List of Mortgaged Properties (Real Estate)

Name of mortgaged properties	Land use right
Owner	Altairnano Inc.
User	Altairnano Inc.
Type	Assignment		Term of use		50 years
Location	East Zhuchang Village, East Changyuan Village, Wu’an City
Four boundaries	East	-	West	-
	South	-	North	-
Floor area (square meters)	163,630.3		Building area (square meters)					-
Structure	-		Number  of floors			Floor		-
Construction cost (Yuan)	-		Current value (Yuan)				-
Property ownership certificate number	Wu Guo Yong (2013) No. 032
Certificate issuing authority	Wu’an People’s Government
Issuing date	May 27, 2013
Insurance type	-

Mortgagor (signature and seal)	Mortgagee (official seal)
[seal:] [Altairnano Inc.];	[seal:] Bank of Handan Co., Ltd. Wu’an Sub-branch;
[illegible]	1304810013252
	Bank handler (signature): [signature]
	Date: August 27, 2013

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EX-10

Exhibit 10.5

No.: xd201308213452

Working Capital Loan Contract

Note: This Contract is entered into by and between the borrower and the lender after negotiation according to law and on the basis of equality and voluntariness, and all the clauses hereof are true declarations of both parties’ intentions. To protect the borrower’s lawful rights and interests, the lender specially reminds the borrower to pay adequate attention to all the clauses related to both parties’ rights and obligations, especially the contents in bold.

[handwritten text is indicated in italics]

Lender: Bank of Handan Co., Ltd. Wu’an Sub-branch

Person in charge: Guo Jianxin	Contact person:
Domicile (Address): No.3 Fuzhong Garden, Fuqiang Street, Wu’an City	Zip code:

Tel: Fax: Email:

Borrower: Northern Altair Nanotechnologies Co., Ltd.

Legal representative: Zou Liming Contact person:

Domicile (Address): Zip code:

Tel: Fax: Email:

Through negotiation on an equal footing, the borrower and the lender reach agreement on the lender’s granting of the loan hereunder to the borrower and hereby enter into this Contract.

Article 1 Purpose of Loan

The loan hereunder shall be used for the following purpose and without the lender’s written consent, the borrower shall not appropriate the loan for any other purpose, and the lender is entitled to supervise the use of the loan.

Purpose of loan: Purchase of goods                                                                                                                                                                                                                                      

Article 2 Amount and Term of Loan

2.1 The loan hereunder is denominated in RMB, adding up to RMB 50,000,000 (SAY FIFTY MILLION YUAN ONLY) (in case of discrepancy between the amounts in figures and words, the latter shall prevail).

2.2 The term of the loan hereunder is 12 months, commencing on the date of actual drawing (or commencing on the date of first drawing in case of several drawings) subject to the IOU.

Article 3 Interest Rate, Interest and Costs

3.1 The interest rate of the loan in RMB shall be decided in the following manner (1):

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(1) Fixed interest rate, bearing a monthly interest rate of 9‰ and remaining unchanged within the term hereof.

(2) Floating interest rate, bearing a loan interest rate which is a sum of a benchmark interest rate plus a floating range, the benchmark interest rate being the one of the People’s Bank of China corresponding to ________ (date of drawing/effective date of the Contract) and the term of the loan as agreed in Article 2.2. The floating range shall be ______ (plus/minus) ___________%, remaining unchanged within the term hereof. After the borrower draws the loan, the benchmark interest rate shall be adjusted once a period which shall consist of ___________ (1/3/6/12) month(s), and the interest shall accrue by period. The deciding date of the interest rate for the second period shall be the corresponding date which is one period after the date of drawing. If the month of adjustment does not have the date corresponding to the date of drawing, the last day of such month shall be deemed as the corresponding date, and the rest of the other periods can be dealt with in the same manner. In case the borrower draws the loan several times, regardless of the number of drawings within a period, the current loan interest rate decided on the deciding date of the interest rate for such period shall apply and an adjustment shall be made in the following period.

(3) Other: __________________________

3.2 The interest of the loan hereunder shall accrue on a daily basis from the date of actual drawing and shall be settled on a monthly (monthly/quarterly/semiannual) basis. When the loan becomes mature, the interest shall be paid in full together with the principal. Daily interest rate = annual interest rate/360.

3.3 The default interest rate hereunder shall be the original loan interest rate plus 50%, and the interest rate of the interest penalty for the misappropriated loan shall be the original loan interest rate plus 100%.

3.4 If the floating interest rate applies to the loan hereunder, the interest rate shall still be adjusted in the original manner after the loan becomes overdue.

3.5 If the interest of the loan is settled on a monthly basis, the date of interest settlement shall be the 20^th day of each month; if the interest of the loan is settled on a quarterly basis, the date of interest settlement shall be the 20^th day of the last month of each quarter; and if the interest of the loan is settled on a semiannual basis, the date of interest settlement shall be June 20 and December 20, respectively.

3.6 The first interest period shall commence on the date of actual drawing by the borrower and end on the first date of interest settlement; the last interest period shall commence on the day immediately following the end of the previous interest period and end on the date of final repayment of the loan; and the other interest periods shall commence on the day immediately following the end of the previous interest period and end on the following date of interest settlement.

3.7 In case the People’s Bank of China adjusts the measures for deciding the loan interest rate, such measures shall apply without further notice from the lender to the borrower.

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Article 4 Grant and Payment of Loan

4.1 The borrower shall draw the loan according to its actual spending demand. The first drawing of the loan must be made before September 30, 2013 and the last drawing thereof before _______; otherwise the lender shall be entitled to cancel all or part of the loan. (This Article shall not apply to any revolving loan)

4.2 With respect to the date of actual drawing and the date of repayment, the dates recorded in the IOU handled by the borrower and the lender shall apply. The IOU and the loan drawing voucher(s) are an integral part hereof, and except the dates, in case of discrepancy between other recorded matters and those in this Contract, the latter shall prevail.

4.3 The borrower must satisfy the following preconditions when drawing the loan; otherwise the lender shall have no obligation to grant the borrower any money unless the lender agrees to grant such loan in advance:

(1) Except any credit loan, the borrower has provided a guarantee as required by the lender and has completed handling relevant guarantee formalities;

(2) There is no occurrence of any breach under this Contract or any other contract between the borrower and the lender; and

(3) The purpose of the loan as indicated in the provided certificate complies with the agreed purpose.

4.4 Any written document provided by the borrower to the lender at the time of drawing must be original; if the borrower is unable to provide the original, the borrower may provide a copy affixed with its official seal with the lender’s consent.

4.5 In applying for drawing, the borrower must submit a drawing application to the lender at least 5 banking days earlier. Once such drawing application is submitted, it shall not be canceled without the written consent of the lender.

4.6 After the borrower satisfies the drawing preconditions or the lender agrees to grant the loan in advance, the lender shall be deemed to have granted the loan to the borrower under this Contract when the lender transfers the loan to the borrower’s designated account.

4.7 According to relevant regulatory provisions and the lender’s management requirements, any loan that exceeds a certain amount or complies with other conditions shall take the manner of imposing entrusted payment on the lender, and the lender shall, according to the borrower’s drawing application and payment entrustment, pay the loan to the payee in compliance with the agreed purpose agreed herein. For this reason, the borrower shall otherwise sign an agreement with the lender for entrusted payment as an appendix attached hereto, and the borrower shall specially open or designate an account with the lender to handle the entrusted payment.

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Article 5 Repayment

5.1 The main sources for the borrower’s repayment of the principal and interest hereunder include without limitation:

(1) the borrower’s sales incomes and profits; and

(2) the realization of any of the borrower’s lawful assets.

5.2 The borrower shall repay the loan hereunder in the following manner (1):

(1) The borrower shall repay the loan in lump-sum.

(2) The borrower shall repay the loan in installments according to the following repayment plan (another page may be attached when such plan contains too many contents):

Date of planned repayment Amount of planned repayment (ten thousand yuan)

5.3 Where the loan hereunder belongs to the following circumstance, the borrower shall forthwith repay the loan when the corresponding capital becomes available, and in case of early repayment caused thereby, the borrower shall not be required to pay any compensation:

_____________________________________________________________________

_____________________________________________________________________

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5.4 Except the circumstance agreed in Article 5.3, in case of early repayment, the borrower shall pay the lender compensation equal to _____% of the amount of repayment.

5.5 The borrower shall repay in full the principal and interest of the loan and other amounts payable on time under this Contract. The borrower shall, one banking day before the date of repayment and each date of interest settlement, deposit in full the current interest and principal payable and other amounts payable in its repayment account opened with the lender, and the lender shall be entitled to proactively transfer and receive the same on such date of repayment or of interest settlement, or to require the borrower to cooperate with the lender in handling relevant transfer formalities. If the amount of the repayment account is insufficient to pay all of the borrower’s amounts due and payable, the lender shall be entitled to decide the reimbursement order.

5.6 If the borrower applies for early repayment of all or part of the loan, the borrower shall submit a written application to the lender 10 banking days earlier to seek the lender’s consent and shall pay compensation to the lender according to the standard agreed herein.

5.7 In case of early repayment with the lender’s consent, the borrower shall, on the date of early repayment, simultaneously pay in full the principal and interest of the loan and other amounts, which become due and payable under the Contract until such date of early repayment.

5.8 The lender is entitled to resume the loan earlier according to the borrower’s capital receipt.

5.9 Where the borrower repays the loan earlier or the lender resumes the loan earlier under this Contract so that the actual term of the loan is shortened, the level of the corresponding interest rate shall not be adjusted and the original loan interest rate shall remain in force and effect.

Article 6 Special Agreement on Revolving Loan (as an optional clause, this article is ☐ applicable ☐ inapplicable)

6.1 The loan hereunder may be used cyclically, and the amount and term of the loan as set forth in the aforesaid Article 2 are respectively the quota of the revolving loan and the term of such quota which shall commence on the effective date hereof.

6.2 In addition to the interest, the borrower shall also pay the lender a commitment fee, which shall be paid in the following manner ______:

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(1) The commitment fee shall be _____% of the quota of the revolving loan and shall be paid to the lender in lump-sum on the effective date hereof.

(2) After this Contract takes effect, the commitment fee shall, according to the difference between the quota of the revolving loan and the amount already drawn by the borrower (daily balance within the charging cycle) and an annual rate of ___%, be paid to the lender on the 20^th day of each _____ (month/quarter/six months) until the term of such quota expires.

(3) _______________________________________________.

6.3 Where the loan hereunder may be used cyclically, the sum of the borrower’s balance at any time point within the term of the quota of the revolving loan shall not exceed such quota; the loan term of each of the borrower’s drawings shall commence on the date of actual drawing and end on the agreed date of repayment subject to the record of the IOU, and the date of repayment for each drawing shall not exceed the term of the said quota.

6.4 Where the loan hereunder may be used cyclically, the lender shall be entitled to cancel the quota of the revolving loan if the borrower fails to conduct any drawing for 3 consecutive months from the date of execution hereof.

Article 7 Guarantee

7.1 Except credit loans, the borrower shall provide the performance of its obligations hereunder with a lawful and valid guarantee accepted by the lender. A guarantee contract shall be signed separately.

7.2 The loan hereunder is a guaranteed (credit/guaranteed) loan.

7.3 Where the loan hereunder is a guaranteed loan, the guarantee manner is land mortgage based on joint and several liability.

Where the guarantee is a maximum guarantee, the corresponding maximum guarantee contract reads as follows:

Name of maximum guarantee contract: ______________ (No.: ________)

Surety (Pledgor/Mortgagor): ___________________________________________

7.4 In case the collateral hereunder is damaged, depreciates, suffers from property right dispute, or is attached or detained, or the mortgagor disposes of the collateral without authorization, or the surety securing the guarantee encounters adverse change in financial position or any other change detrimental to the lender, then the borrower shall promptly notify the lender and otherwise provide another guarantee accepted by the lender.

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7.5 Where the loan hereunder is pledged with accounts receivable, in case of any of the following circumstances within the term hereof, the lender shall be entitled to announce early maturity of the loan and to require the borrower to forthwith repay part or all of the principal and interest of the loan, or to add any lawful, valid and sufficient guarantee accepted by the lender:

(1) The bad debt ratio of the pledgor’s accounts receivable by the payer has increased for 2 consecutive months;

(2) The pledgor’s accounts receivable by the payer which have become due but have not been collected take up more than _____% of the balance of such payer’s accounts receivable;

(3) The pledgor of the accounts receivable has trade dispute (including without limited to dispute related to quality, technologies and services) or debt dispute with the payer or any other third party, causing the accounts receivable may fail to be repaid on time on the due date.

Article 8 Financial Agreement (as an optional clause, this article is ☐ applicable☑ inapplicable)

Within the term hereof, the borrower shall abide by the following agreement on financial indices:

______________________________________________________________________________

_______________________________________________________________________________

Article 9 Account Management

9.1 The borrower shall specially designate a capital receipt account at the lender, which shall be used to receive corresponding sales incomes or to plan the amount of repayment. Where such sales incomes are settled in a non-cash manner, the borrower shall ensure that upon receipt thereof, such incomes will be promptly transferred to the capital receipt account.

9.2 The lender is entitled to supervise the capital receipt account, including without limited to understanding and overseeing the capital receipt and expenditure thereof, and the borrower shall cooperate with the lender in this respect. If required by the lender, the borrower shall specially sign an account supervision agreement with the lender.

Article 10 Representations and Warranties

The borrower makes to the lender the following representations and warranties, which remain always in force and effect within the term hereof:

10.1 The borrower has the qualification as a borrower according to law and has the qualification and ability to sign and perform this Contract;

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10.2 All the authorizations or approvals necessary for the execution hereof have been obtained, and the execution and performance hereof neither violate the Company’s articles of association and relevant laws and regulations nor contradict the obligations under other contracts that shall be assumed;

10.3 Other debts due and payable have been repaid on time and there is no malicious default on the principal and interest of banking loans;

10.4 The borrower has a sound organization and a sound financial management system and has never experienced any major violation of provisions or discipline in the course of production and operation within the most recent year, and its incumbent officers have no major bad records;

10.5 All the documents and materials provided to the lender are authentic, accurate, complete and valid and do not contain false records, major omission or misleading representations;

10.6 The financial accounting reports provided to the lender are prepared according to China’s accounting standard and reflect truthfully, fairly and completely the borrower’s operating status and liabilities, and since the ending date of the latest financial accounting report, the borrower’s financial position has never suffered any major adverse change; and

10.7 The borrower has never concealed any lawsuit, arbitration or claim related to the borrower from the lender.

Article 11 Borrower’s Undertakings

11.1 The borrower will draw and use the loan according to the term and purpose agreed herein and will not use the loan to invest in fixed assets or equity or make the loan available in any way to securities markets, futures markets or other purposes forbidden or restricted by relevant laws or regulations.

11.2 The borrower will repay the principal and interest of the loan and other amounts payable under this Contract.

11.3 The borrower will accept and actively cooperate with the lender in inspecting and overseeing the use of the loan, including the purpose thereof, through account analysis, voucher inspection and on-site investigation, and will regularly summarize and report the use of the loan as required by the lender.

11.4 The borrower will accept the lender’s credit check, and at the request of the lender, provide such accounting materials as balance sheets and profit and loss statements as well as other materials reflecting the borrower’s solvency, and actively assist and cooperate with the lender in investigating, understanding and overseeing the borrower’s production, operation and financial position.

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11.5 Without the written consent of the lender, the borrower will in no way distribute dividends or bonuses before fully repaying the principal and interest of the loan hereunder and other accounts payable.

11.6 In case of any merger, division, capital reduction, equity change, transfer of major assets and creditor’s rights, major external investment, substantial increase in debt financing or any other action that may adversely affect the lender’s rights and interests, the borrower will obtain the lender’s written consent beforehand or make arrangements for the realization of the lender’s creditor’s rights to the satisfaction of the lender before conducting any of the said actions.

11.7 The borrower will promptly notify the lender if:

(1) The Company’s articles of association, business scope, registered capital, or legal representative changes;

(2) The borrower goes out of business, is dissolved or liquidated, stops doing business for internal rectification, or applies (or suffers application) for bankruptcy, or its business license is revoked or canceled;

(3) The borrower is or may be involved in any major economic dispute, lawsuit or arbitration, or its property is attached, detained or supervised according to law; or

(4) The borrower’s shareholders, directors and/or incumbent officers are suspected of involving in any major case or economic dispute.

11.8 The borrower will disclose promptly, comprehensively and accurately the relationship with affiliated parties and any affiliated transactions to the lender.

11.9 The borrower will promptly sign for various notices mailed by the lender or otherwise served.

11.10 The borrower will not dispose of its own assets in such a manner as may reduce its solvency; the borrower’s provision of a guarantee to a third party will not damage the lender’s rights and interests.

11.11 If the loan hereunder is granted in a credit manner, the borrower will regularly report its external guarantee to the lender completely, truthfully and accurately and will sign an account supervision agreement as required by the lender. Where the borrower’s provision of any external guarantee may affect the performance of its obligations hereunder, such provision shall be subject to the written consent of the lender.

11.12 The borrower will bear any expenses arising from the execution and performance hereof and any expenses that have been paid and become due and payable by the lender in order to realize the creditor’s rights hereunder, including without limited to legal costs or arbitration cost, property preservation expenses, attorney fees, enforcement fees, assessment fees, auction expenses, and public announcement expenses.

11.13 The reimbursement order of the debt hereunder will prevail over that of the debt owed to the borrower’s shareholders, and the debt hereunder will have a status at least equal to that of the same type of debt owed by the borrower to other creditors. 

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 [continued from missing Page 10]

authority’s investigation according to law or limit the personal freedom, which has affected or may affect the performance of obligations hereunder.

(8) The borrower uses any false contract with any affiliated party or any transaction without any actual transaction background to extract the lender’s capital or credit extension, or intentionally escapes the lender’s creditor’s rights through any affiliated transaction;

(9) The borrower has or may gone or go out of business, been or be dissolved or liquidated, stopped or stop doing business for internal rectification, or applied or apply (or suffered or suffer application) for bankruptcy, or its business license has been or may be revoked or canceled;

(10) The borrower causes any responsibility accident owing to its violation of laws and regulations, regulatory provisions or industry standards in respect of food safety, production safety and environmental protection, which has affected or may affect the performance of its obligations hereunder;

(11) If the loan hereunder is granted in a credit manner, the creditor’s indices such as credit rating, profitability, asset-liability ratio, and net cash flow from operating fail to comply with the lender’s credit loan conditions; or without the written consent of the lender, the borrower creates any mortgage/pledge or provides any external security to others with its effective operating assets, which has affected or may affect the performance of its obligations hereunder;

(12) There occurs any other circumstance that may cause the realization of the lender’s creditor’s rights hereunder to be affected adversely.

13.2 If the borrower breaches the Contract, the lender shall be entitled to take one or more of the following measures:

(1) To require the borrower to cure such breach within a time limit;

(2) To stop granting the borrower the loan and other financing amounts under this Contract and other contracts between the lender and the borrower, and to cancel in part or in whole the loan and other financing amounts that the borrower fails to draw;

(3) To announce immediate maturity of the outstanding loan and other financing amounts under this Contract and other contracts between the lender and the borrower and to immediately resume the outstanding amounts;

(4) To require the borrower to compensate the lender for any loss caused by the said breach; and/or

(5) To take other measures which are prescribed by laws and regulations, which are agreed herein or which the lender thinks necessary.

13.3 Where the loan becomes mature (including being announced mature immediately) but the borrower fails to repay the loan as agreed, the lender shall be entitled to charge an interest penalty at the default interest rate agreed herein from the date of default. The interest that the borrower fails to pay on time shall be compounded at the default interest rate.

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13.4 Where the borrower fails to use the loan for the purpose agreed herein, the lender shall be entitled to impose an interest penalty on the misappropriated part at the interest rate of the interest penalty for the misappropriated loan as agreed herein from the date of such misappropriation, and the interest that fails to be paid during the misappropriation of the loan shall be compounded at the interest rate of the interest penalty for the misappropriated loan.

13.5 Where both the circumstances set forth in the said Articles 13.3 and 13.4 occur to the borrower at the same time, the default interest rate or the interest rate of the interest penalty, whichever is higher, shall apply, provided that both rates shall not apply concurrently.

13.6 Where the borrower fails to repay on time the principal and interest (including default interest, interest penalty and compound interest) of the loan or other accounts payable, the lender shall be entitled to call such repayment through public announcement on the media.

13.7 Where the relationship of control or being controlled between the borrower’s affiliated party and the borrower changes, or the circumstances specified in Article 13.1 other than in Articles 13.1(1) and (2) occur to the borrower’s affiliated party, which has affected or may affect the performance of the borrower’s obligations hereunder, the lender shall be entitled to take various measures agreed herein.

Article 14 Deduction

14.1 Where the borrower fails to pay as agreed the debt hereunder that becomes due and payable (including being announced due and payable immediately), the lender shall be entitled to deduct a corresponding amount as a reimbursement from all of the borrower’s RMB and foreign currency accounts opened with the lender or its other branches until the whole of the borrower’s debt hereunder is reimbursed in full.

14.2 Where the currency of any deduction is different from the currency hereunder, the conversion thereof shall be made based on the exchange rate applicable to the lender on the date of deduction. The borrower shall bear the interest and other expenses incurred from the date of deduction until the date of reimbursement (the date when the lender converts the deduction into the currency hereunder according to national foreign exchange administration policies and actually reimburses the debt hereunder) and the difference arising from fluctuation in the exchange rate during such period.

14.3 Where the amount deducted by the lender is insufficient to reimburse the whole of the borrower’s debt, the lender shall be entitled to decide the reimbursement order.

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Article 15 Assignment of Rights and Obligations

15.1 The lender is entitled to assign all or part of its rights hereunder to a third party and such assignment is not subject to the borrower’s consent. Without the written consent of the lender, the borrower shall not assign any of its rights and obligations hereunder.

15.2 The lender may, according to the operation and management need, authorize or entrust any of its other branches to perform its rights and obligations hereunder, or put the creditor’s rights of the loan hereunder under the takeover and management of any of its other branches, which is accepted by the borrower and is not subject to the borrower’s consent. The branch that takes over the lender’s rights and obligations shall be entitled to exercise all the rights hereunder and to in the name of the branch, file a lawsuit with the people’s court, submit to arbitration or petition for enforcement with respect to the dispute hereunder.

Article 16 Taking Effect, Modification and Cancellation

16.1 This Contract shall take effect on the date of execution and shall terminate on the date when the performance of all of the borrower’s obligations hereunder is completed.

16.2 Any modification hereto shall be agreed by the parties through negotiation and shall be made in writing. The modification clause or agreement constitutes a part hereof and has the same legal force and effect as this Contract. Except the modified part, the remainder hereof shall remain in force and effect and so shall the original clauses before the modified part takes effect.

16.3 No modification or cancellation hereof shall affect the contracting parties’ rights to claim compensation for any loss. No cancellation hereof shall affect the force and effect of the dispute resolution clause.

Article 17 Applicable Laws and Dispute Resolution

The execution, force and effect, interpretation, performance and dispute resolution hereof shall be governed by the laws of the People’s Republic of China. Any dispute or controversy arising from or in connection with this Contract shall be resolved by both parties through negotiation; shall such negotiation fail, it shall be resolved in the manner agreed herein.

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Article 18 Notices

18.1 All the notices hereunder shall be sent in writing. Unless otherwise agreed, both parties’ designated domiciles as specified herein shall be the mailing and contact addresses. Where either party changes its mailing address or any other contact information, such party shall promptly notify the other party in writing.

18.2 If either party hereto refuses to sign for any notice or any notice cannot be served, the notifying party may serve such notice by means of notarization or public announcement.

Article 19 Miscellaneous

19.1 The lender’s non-exercise or partial exercise of or delay in exercise of any right hereunder shall not constitute any waiver or modification of such right or any other right or affect its further exercise of such right or any other right.

19.2 The invalidity or unenforceability of any clause hereof shall not affect the validity and enforceability of the remaining clauses hereof or the force and effect of the whole Contract.

19.3 The lender is entitled to, in accordance with the provisions of relevant laws and regulations or the requirements of the financial regulatory authority, provide the credit reference system of the People’s Bank of China and any other legally established credit information database with any information on this Contract and the borrower’s other relevant information for inquiry and use by organizations or individuals with appropriate qualification. For the purpose of the execution and performance hereof, the lender is also entitled to inquire about the borrower’s relevant information through the credit reference system of the People’s Bank of China and any other legally established credit information database.

19.4 For the purpose hereof, such expressions as “affiliated parties”, “relationship with affiliated parties”, “affiliated transaction”, “major individual investor”, and “key management personnel” shall have the same meaning of the same expressions in the Corporate Accounting Standard No. 36 – Disclosure of Affiliated Parties (Cai Kuai [2006] No. 3) and any subsequent revision thereof.

19.5 The documents and vouchers related to the loan hereunder which are prepared and kept by the lender according to its business rules constitute valid evidence proving the relationship between the borrower and the lender in respect of the creditor’s rights and the debt and are legally binding upon the borrower.

19.6 For the purpose hereof, (1) any reference hereto includes any amendment or supplement hereto; and (2) the clause headings are for reference only, constituting neither any interpretation hereof nor any limitation to the contents thereunder and the scope thereof.

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Article 20 Dispute Resolution

The dispute hereunder shall be settled in the following manner (2):

(1) The dispute shall be submitted to __________________ Arbitration Commission for arbitration according to its arbitration rules then in force and effect, and the place of arbitration shall be ___________. The arbitration award shall be final and binding upon both parties.

(2) The dispute shall be resolved by filing a lawsuit with the court at the place where the lender locates.

Article 21 Miscellaneous

21.1 This Contract is made in three copies, with the borrower, the lender and Wu’an Municipal Bureau of Land and Resources each holding one copy, and all the copies have the same legal force and effect.

21.2 The following appendices and other appendices jointly confirmed by both parties constitute an integral part hereof and have the same legal force and effect as this Contract.

Appendix 1: Drawing Application

Appendix 2:

Appendix 3:

Article 22 Other Matters Agreed by Both Parties

Article 5.4 is unenforceable for the time being.

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It is confirmed by both parties that both the borrower and the lender have fully negotiated all the clauses hereof. The lender has reminded the borrower to pay special attention to all the clauses related to both parties’ rights and obligations and to have a comprehensive and accurate understanding thereof, and has interpreted and explained relevant clauses at the request of the borrower. The borrower has carefully read and fully understood all the clauses hereof, and the borrower and the lender have a completely identical understanding of the clauses hereof and have no objection to the contents hereof.

Lender (Official seal): [seal:] Bank of Handan Co., Ltd. Wu’an Sub-branch, [1304810013252]

Person in charge/Authorized agent: [signature]                                                                              

Borrower (Official seal): [seal:] Northern Altair Nanotechnologies Co., Ltd., [1304810017957]

Legal representative/Authorized agent: [signature]                                                                         

Signed on: August 27, 2013

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Appendix 1:

Drawing Application

To: Bank of Handan Co., Ltd. Wu’an Sub-branch

According to the Working Capital Loan Contract (hereinafter referred to as the “Loan Contract) numbered xd201308213452 that was entered into by and between you and us on August 27, 2013, we have comprehensively fulfilled all the preconditions for drawing as agreed therein and hereby make the following drawing application to you:

I. We intend to draw from you the loan with an amount of RMB (currency) FIFTY MILLION YUAN ONLY (in words) on September 23, 2013.

II. The term of this loan is 12 months, ending on August 27, 2014.

III.	Please transfer this loan to our following account:
	Account name: Northern Altair Nanotechnologies Co., Ltd.
	Account number: 866350100100082672
	Bank of deposit: Bank of Handan Co., Ltd. Wu’an Sub-branch
IV.	According to the loan contract and the entrusted payment agreement, this loan shall be paid by:☑ entrusting the lender with payment; or☐ the borrower’s independent payment.
	By entrusting the lender with payment, we authorize and entrust you to transfer this loan to our account and then to pay the loan to the account of the following payee in compliance with the purpose agreed in the Loan Contract:
	Account name: Altair Nanotechnologies (China) Co., Ltd.
	Account number: 674358611[8]49
	Bank of deposit: Bank of China, Bonded Area Sub-branch

[If this loan needs to be paid to several payees, see the appendix for the list of payees and accounts]

 V. We hereby confirm to you as follows:

1. This loan will be used for the purpose agreed in the Loan Contract;

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2. On the date of sending such application and the date of drawing, all of our representations, warranties and undertakings in the Loan Contract are still authentic, accurate, complete and valid;

3. As of the date of sending this Application, our production and operation as well as financial and credit status have never suffered any major adverse change;

4. On the date of sending this Application, there is no breach or anticipatory breach under or in connection with the Loan Contract, and we further confirms that no breach will occur or exist on the date of drawing; and

5. This Application shall be irrevocable after being sent.

Borrower (Official seal): [seal:] Northern Altair Nanotechnologies Co., Ltd., [1304810017957]

Legal representative/Authorized agent: [signature]                                                                        

Date: September 23, 2013

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EX-10

Exhibit 10.6

编号：            PP(2013)050                    

                                    Contract No.:    PP(2013)050                    

流动资金借款合同

Working Capital Loan Contract

（2012年版）

(2012 version)

特别提示：本合同系借贷双方在平等、自愿的基础上依法协商订立，所有合同条款均是双方意思的真实表示。为维护借款人的合法权益，贷款人特提请借款人对有关双方权利义务的全部条款、特别是黑体部分内容予以充分注意。

Important Notice: This Contract is entered into by the Parties in accordance with laws based on equality and free will, and the terms and conditions of this Contract fully reflect the genuine intention of the Parties hereto. In order to protect legal rights and interests of the Borrower, the Lender hereby draws the Borrower's special attention to the terms and conditions of this Contract in relation to each Party's rights and obligations, in particular those in bold.

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贷款人: 中国工商银行股份有限公司 [金边分行]

Lender: Industrial and Commercial Bank of China Limited,   Phnom Penh Branch (“ICBC Phnom Penh Branch”)

负责人:  牛建军联系人：罗淑珠

Person in Charge        Niu Jianjun       Contact Person:   Ly Sokchou   

住所（地址）:  柬埔寨金边诺罗敦大街 15 号

Address:    No.15, Preah Norodom Boulevard, Phnom Penh Branch    

电话： +855 23965269       传真： +855 23965268       电子邮件： lysokchou@kh.icbc.com.cn

Telephone:     +855 23965269      Fax:      +855 23965268      Email:     lysokchou@kh.icbc.com.cn _

借款人:     奥钛纳米公司

Borrower:           ALTAIRNANO,INC                            

法定代表人:    Stephen B.Huang               联系人：    Stephen B.Huang    

Legal Representative:    Stephen B.Huang    Contact Person:        Stephen B.Huang    

住所（地址）:       204 Edison Way, Reno, NV89502                       

Address:          204 Edison Way, Reno, NV89502                

电话： +1(775)858-3714 传真： +1(775)856-1619    电子邮件： shuang@altairnano.com     

Telephone:     +1(775)858-3714    Fax: +1(775)856-1619      Email:      shuang@altairnano.com     

借款人、贷款人经平等协商，就贷款人向借款人发放贷款事宜达成一致，特订立本合同。

Upon equal negotiations and mutual agreement, the Lender and the Borrower enter into this Contract in relation to the provision of relevant loan by the Lender to the Borrower.

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第一部分基本约定

Part I          General Provisions

第一条借款用途

Article 1          Purpose of Loan

本合同项下借款用于下列用途，未经贷款人书面同意，借款人不得将借款挪作他用，贷款人有权监督款项的使用。

     借款用途：用于日常流动资金。

The loan hereunder shall be used for the following purposes. Without written consent of the Lender, the Borrower may not use the loan for any purpose other than those listed below. The Lender may supervise the use of the proceeds of the loan.

Purpose: For daily working capital .

第二条借款金额和期限

Article 2          Amount and Term of Loan

2.1 本合同项下借款币种为美元，金额为USD 2,744,000.00 （大写：美元贰佰柒拾肆万肆仟元整）（大小写不一致时，以大写为准）。

2.1     The currency and amount of the loan hereunder shall be USD2,744,000.00 (in words: Say In United States Dollar Two Million Seven Hundred Forty Four Thousand Only) (if there is any inconsistency between the amount in figures and the amount in words, the amount in words shall prevail.)

2.2 本合同项下的借款期限为 360 天，自实际提款日起算（分次提款的，自首次提款日起算），实际提款日以借据为准。

2.2     The term of the loan hereunder shall be 360 Days commencing from the actual drawdown date (or if there are more than one drawdown, the first drawdown date) as stated on the receipt of loan.

第三条利率、利息和费用

Article 3          Interest Rate, Interest and Fees

3.1 【人民币借款利率确定方式】

3.1     [Determination of Interest Rate for RMB Loans]

人民币借款利率为固定利率，年利率为    %，在合同有效期内利率不变。

Interest rate for RMB loans shall be Fixed interest rate at ____% per annum, which shall remain unchanged within the term of this Contract.

（2）其他：

(2) Others: ________________________________________________.

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3.2 【外币借款利率确定方式】

3.2     [Determination of Interest Rate for Foreign Currency Loans]

外币借款利率按下列第 (2)   种方式确定：

Interest rate for foreign currency loans shall be determined in accordance with Item (2) below:

（1）固定利率，年利率为    %，在合同有效期内利率不变。

(1) Fixed interest rate at ____% per annum, which shall remain unchanged within the term of this Contract.

（2）浮动利率，借款利率以 3 个月的 LIBOR （LIBOR/HIBOR）为基准利率加 200 基点（一个基点为0.01%）的利差组成的浮动利率。合同期限内加点利差保持不变。采用分笔提款的，每笔提款利率分别计算。借款人提款后，按下列第 B 种方式对基准利率进行调整，分段计息：

(2) Floating interest rate. The loan interest rate shall be 3_month LIBOR (LIBOR/HIBOR) (the benchmark interest rate) plus a margin equal to 200 base point(s) (a base point is equal to 0.01%). The margin shall remain unchanged within the term of this Contract. If the Borrower makes more than one drawdown, the loan interest rate for each drawdown shall be calculated separately. After the Borrower makes drawdown, the benchmark interest rate will be adjusted in accordance with Item B below, and the loan interest for each interest period shall be calculated according to the loan interest rate as adjusted and applicable to such interest period:

A、基准利率按照其对应的期限进行浮动。第二期的基准利率调整日为提款日满一期之后的对应日，如果调整当月不存在与提款日对应的日期，则以该月最后一日为对应日，其他各期依此类推。

A. the benchmark interest rate will be adjusted in each interest period as applicable to such benchmark interest rate. The benchmark interest rate applicable to each interest period subsequent to the initial period shall be determined on the same numerical date in the month of such adjustment as the drawdown date. If there is no same numerical date in the month of adjustment as the drawdown date, the benchmark interest rate for such period shall be determined on the last day of such month of adjustment; or

B、在每个利息期的第一天对基准利率进行调整。

B. the benchmark interest rate for each interest period shall be adjusted on the first day of such interest period.

（3）其他：

(3) Others: ________________________________________________.

3.3 本合同项下借款自实际提款日起按日计息，按季（月/季/半年）结息。借款到期，利随本清。其中日利率=年利率/360。

3.3     The loan interest hereunder shall accrue from the actual drawdown date on a daily basis, and be settled every Quarter (month/quarter/half year). Upon maturity of the loan, all outstanding interest shall be paid together with the principal. The daily interest rate shall be applicable annual interest rate/360.

3.4 本合同项下逾期罚息利率在原借款利率基础上上浮 30 %确定，挪用借款罚息利率在原借款利率基础上上浮 50 %确定。

3.4     Penalty interest will be imposed in addition to the loan interest rate hereunder at 30 % on any overdue amount (overdue penalty interest rate), or at 50 % on any amount that is used for any purpose other than those set out hereunder (misappropriation penalty interest rate).

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3.5 除利息外，借款人还应向贷款人支付承诺费。承诺费按第二条约定的借款金额与借款人已提款项（计费周期内日均余额)的差额和 /   ‰ 的年费率，按下列第 /   种方式支付：

3.5     In addition to the loan interest, the Borrower shall also pay to the Lender the commitment fee, which shall be the difference between the amount of the loan under Article 2 above and the amount for which the Borrower has made drawdown (the daily average balance during the period for which such commitment fee is paid (the Fee Period) multiplied by a rate of __/___‰ per annum, and shall be paid in accordance with Item _/___ below:

（1）在计费周期届满日一次性支付给贷款人。

(1) the commitment fee shall be paid to the Lender in one lump sum upon the expiry date of the Fee Period; or

（2）本合同生效后，在每   /   （月/季度/半年）的20日，分次向贷款人支付，直至计费周期届满日。

(2) the commitment fee shall be paid to the Lender in installments on 20th day of / (each month/the last month of each quarter/the last month of each half-year), from the effectiveness date of this Contract until the expiry date of the Fee Period.

本合同项下借款可循环使用的，计费周期指循环借款额度使用期限；本合同项下借款不可循环使用的，计费周期指本合同签订日至第四条约定的最后一笔借款的提取日之间的期限。

The Fee Period means, in case of a revolving loan, the period within which the revolving facility may be used, or in case of a non-revolving loan, the period from the date of this Contract to the date of the last drawdown as agreed under Article 4.

承诺费分次支付的，如借款人未按期支付承诺费，贷款人有权停止发放借款或部分或全部取消借款人未提取款项。

If the commitment fee is to be paid in installments and the Borrower fails to promptly pay any installment of the commitment fee, then the Lender may cease to advance the loan, or cancel all or part of the amount for which the Borrower has not made drawdown.

3.6本合同第三条所述借款人应向贷款人支付的所有利息和费用，不包含任何依法应由相关国家、政府机构或有权机关征收的税或相关其它费用。

3.6 In pursuance to the foregoing provisions of Article 3 hereof, all interests and fees payable by the Borrower to the Lender shall not comprise any taxes, levies and charges imposed upon such interests and fees required by any countries, government agencies or any relevant entities in accordance with the all applicable laws.

3.7 基于上述第3.6条，借款人向贷款人支付的任何利息和费用不得因抵扣、预提相关税或相关费用而减少或变化。如果相关法律要求借款人须就上述利息和费用进行抵扣或预提的，则借款人有义务确保支付给贷款人的金额在抵扣或预提后不少于本合同第三条约定的所有利息和费用总额。

3.7 Without prejudice to the foregoing Article 3.6, the Borrower shall be obligated to make all payments of the interest and fees under this Contract without any tax deduction or withholding. In the event that the Borrower is required by the applicable laws to make a tax deduction or withholding of such payments, the Borrower shall further be obligated to ensure an increase of the amount payable by it to the Lender which (after make relevant tax deduction or withholding) leaves an amount equal to or no less than the aforesaid payments of the interests and fees which would have been if no such tax deduction or withholding had been required.       

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第四条提款（循环借款不适用）

Article 1 Drawdown

借款人应根据实际用款需求，于 2013 年 10 月 15 日之前一次性或多次提清借款。如借款人未在规定时间内提款，贷款人有权取消部分或全部借款人未提之贷款。（条款不适用于循环贷款）

The Borrower shall make drawdown according to its actual need for fund. The drawdown shall be made before  2013/ 10 / 15  . If the Borrower fails to make drawdown as required above, the Lender may cancel all or part of the loan. (This article is not applicable to revolving loan.)

第五条还款

Article 2 Repayment

5.1借款人按照下列 (1) 种方式归还本合同项下借款：

5.1 The Borrower shall repay the loans hereunder in accordance with Item _(1)_ below:

（1）借款到期一次性偿还。

(1) the Borrower shall fully repay the loan in one lump sum upon its maturity.

（2）按照下列还款计划分期偿还（内容较多时，可另附页）：

(2) the Borrower shall repay the loan in installments according to the following schedule (if there is not enough space below, please state the repayment schedule on a separate page):

计划还款时间	计划还款金额（万元）
Time of repayment	Amount of repayment (in 10,000)

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5.2 本合同项下借款属于下列情形的，借款人应在相应资金到位后立即归还借款，因此导致提前还款的，借款人无需支付补偿金：

5.2 If the loan hereunder falls in any of the following events, the Borrower shall immediately repay the loan upon receipt of relevant fund, without any compensation to be paid by the Borrower for prepayment caused thereby:

_借款人提前30个工作日通知贷款人提前还款金额。__________________________________

   The Borrower has give the Lender a prepayment notice not less than 30 business days.

5.3 除5.2条约定情形外，借款人提前还款，应按提前还款金额的_1 % 向贷款人支付补偿金。

5.3 Except for the event under Article 5.2 above, if the Borrower prepays any amount of the loan hereunder, the Borrower shall pay a prepayment fee of 1% of the amount to be prepaid in the event of any prepayment of the loan or any part thereof.

第六条循环借款特别约定（选择性条款，本条 □适用 ■不适用）

Article 3 Special Provisions in Relation to Revolving Loans (optional clause: this article is □applicable/■not applicable)

6.1 本合同项下借款可循环使用，前述第二条所述之借款金额和借款期限即为循环借款额度和循环借款额度使用期限，其中循环借款额度使用期限自本合同生效之日起计算。

6.1 The loan hereunder is provided on a revolving basis. The amount and the term of the loan as set out in Article 2 above is the limit of the revolving credit line and the term to use such revolving credit line, respectively. The term to use the revolving credit line shall commence on the date when this Contract takes effect.

第七条担保

Article 4 Security

7.1 本合同项下借款为担保贷款的，担保方式为中国工商银行广东分行开出的不可撤销的、见索即付型保函（或备用信用证）, 金额为USD 2,800,000.00 (大写: 美元贰佰捌拾万元整).

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4.1      If the loan hereunder is a secured loan, such loan is secured by an irrevocable and unconditional Bank Guarantee （or a Standby Letter of Credit） in favor of the Lender by ICBC Guangdong Branch. Amounting to USD2,800,000.00 (in words: Say In United States Dollar Two Million Eight hundred thousand Only)

7.2 本合同项下借款担保为最高额担保的，对应的最高额担保合同如下：

最高额担保合同名称：（编号：）

担保人：

4.2      If the security for the loan hereunder is a security with a maximum secured amount, the relevant security contract (with the maximum secured amount) is as follows:

Name of the security contract (with the maximum secured amount): ________________________ (No.:___________________)

Security Provider:                        

第八条财务约定（选择性条款，本条 □适用 ■不适用）

Article 5 Financial Covenants (optional clause: this article is □applicable/■not applicable)

在本合同有效期内，借款人应遵守下列财务指标约定：

_________________________________________________

_________________________________________________

Within the term of this Contract, the Borrower shall comply with the following covenants in relation to financial indicators:

_________________________________________________

_________________________________________________

第九条争议解决

Article 6 Dispute Resolution

本合同项下争议解决方式为 (3)   ：

All disputes under this Contract shall be solved in accordance with Item (3) below:

（1）将争议提交仲裁委员会，按提交仲裁申请时该会有效之仲裁规则，在（仲裁地点）进行仲裁。仲裁裁决是终局性的，对双方均有约束力。

(1) Such dispute shall be submitted to _________________Arbitration Commission for arbitration at ________________(place of arbitration) in accordance with the arbitration rules of such commission in force upon submission of arbitration application. The arbitration award shall be final and binding upon both parties; or

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（2）在贷款人所在地法院通过诉讼方式解决。

(2) Such dispute shall be submitted to the jurisdiction of the competent court of place where the Lender is located.

（3）在担保人所在地法院通过诉讼方式解决。

(3) To resolve the dispute through litigation at the court where the Guarantor is located.

第十条其他

Article 7 Miscellaneous

10.1 本合同一式　贰　份，借款人、贷款人各执　壹　份，中英文表达不一致时，以中文为准。

7.1     This Contract is made in _TWO_ copies, with each of the Borrower, the Lender and holding _ONE_ copy(ies), In the event that any part of the Chinese version of this Contract is in conflict with its English version, the Chinese version shall always prevail.

10.2 下列附件及经双方共同确认的其他附件构成本合同不可分割的组成部分，与本合同具有同等法律效力：

附件1：提款通知书（格式）

7.2     The following appendices and other appendices as confirmed by both parties shall constitute integral part of this Contract and have equal legal effect as this Contract:

Appendix 1:     Form of Drawdown Notice

第十一条双方约定的其他事项

Article 8 Other Matters Agreed by the Parties

11.1 借款人承诺：本合同项下贷款资金不以借贷、股权投资或证券投资等形式直接或通过第三方间接调回中国境内使用。

11.1 The Borrower’s commitment: The Loan shall not be disbursed back to China directly or indirectly through lending, investing in the stock market or futures market in any form.

11.2 贷款的发放以中国工商银行广东分行开出的不可撤销的、无条件见索即付型保函(或备用信用证)为前提条件，每次提款金额和期限不超过保函所载明的金额和期限范围内。

11.2 The withdrawal will only be approved to the Borrower only after the Lender has received an irrevocable and unconditional Bank Guarantee （or a Standby Letter of Credit） in favor of the Lender by ICBC Guangdong Branch, and the amount and term of each drawn-down shall be within that of the Bank Guarantee.

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11.3如果因汇率变动因素，导致以上第11.2条约定的担保方式下，贷款金额与担保金额的比例达到或超过__%的情况，则借款人须在贷款人向其就上述情况发出书面通知后15个工作日内，履行以下第___项义务:

（1）归还贷款人相应部分贷款本金，且该金额由上述贷款人向借款人发出的书面通知为准;

（2）向贷款人追加提供相应担保，且该担保追加方式和金额由上述贷款人向借款人发出的书面通知为准；

（3）与贷款人叙做交割日为贷款到期日的不交割本金的远期结汇交易, 交易金额等于贷款金额。

In the event that the ratio between the loan amount hereof and the amount of security, as provided in the foregoing Section 11.2, reaches the threshold of __:100, the Borrower shall, within fifteen (15) business days after the issuance of a written notice by the Lender to such Borrower about the foregoing event, perform the obligation as set forth in ___ Item as follows:

(1) repay the Lender the relevant portion of principal amount, as specified in such written notice made by the Lender to the Borrower; or

(2) provide the Lender with an additional security, as the type and the amount of such additional security being specified in such written notice made by the Lender to the Borrower; or

(3) make a deal of NDF with the Lender with the trading amount equivalent to principal amount and value date equivalent to loan maturity date.

11.4 如果借款人违反以上第11.3条的约定，则贷款人有权在上述书面通知发出15个工作日之后立即向担保人就担保金额的部分或全部索偿。

11.4 In the event that the Borrower defaults in the performance of its obligation as provided in the foregoing Section 11.3, the Lender shall be entitled to, upon the expiry of the period of fifteen (15) business days after the issuance of the aforesaid written notice by the Lender to the Borrower, claim for the portion or the entirety of the security amount against the Guarantor herein.

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第二部分具体条款

    Part II          Specific Provisions

第一条利率和利息

Article 1         Interest Rate and Interest

1.1 LIBOR为提款日或基准利率调整前两个银行工作日由中国工商银行总行发布的贷款币种同业拆放利率。

1.1     LIBOR means the interbank offered rate of the currency under this Agreement on the Loan drawdown date or two bank working days before the benchmark interest rate determination date published by the Head Office of Industrial and Commercial Bank of China Limited.

1.2 本合同项下借款采用浮动利率的，借款逾期后利率调整规则仍按照原方式执行。

1.2     If the loan hereunder adopts a floating interest rate, the interest rate will continue to be adjusted in accordance with the original adjustment rules after such loan is overdue.

1.3 借款按月结息的,结息日为每月20日;按季结息的,结息日为每季度末月的20日;按半年结息的,结息日为每年6月20日和12月20日。

1.3     If interest is settled on a monthly basis, the settlement date shall be 20th day of each month; if interest is settled on a quarterly basis, the settlement date shall be 20th day of the last month of each quarter; and if interest is settled on a half-year basis, the settlement date shall be 20 June and 20 December of each year.

1.4 第一个利息期是从借款人实际提款之日起至第一个结息日止；最后一个利息期是从上一个利息期结束之次日起至最终还款日；其余利息期是从上一个利息期结束之次日起至下一个结息日。

1.4     The first interest period shall commence from the actual drawdown date to the first interest settlement date; the last interest period shall commence from the day immediately following the end of the preceding interest period to the final repayment date; and each of the other interest period shall commence from the day immediately following the end of the preceding interest period to the next interest settlement date.

第二条借款发放和支付

Article 2       Advance and Payment of Loan

2.1 借款人提取借款必须满足下列前提条件，否则贷款人没有义务向借款人发放任何款项，贷款人同意先行放款的除外：

2.1 The Lender has no obligation to advance any loan to the Borrower until all following conditions have been satisfied by the Borrower or waived by the Lender:

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（1）除信用贷款外，借款人已按贷款人要求提供相应担保且已经办理完毕相关担保手续；

(1)   except for unsecured loans, the Borrower has provided security as required by the Lender and completed relevant formalities for provision of such security;

（2）未发生本合同项下或借款人与贷款人签署的其他合同项下的违约情形；

(2)   there is no default event occurring under this Contract or any other contract between the Borrower and the Lender; and

（3）所提供的借款用途证明材料与约定用途相符；

(3)   the purpose of loan as stated in the supporting documents provided by the Borrower is consistent with the purpose as agreed hereunder.

（4）借款人已按照本合同第2.3条的约定，在实际提款日前至少5个工作日向贷款人提交提款通知书，且上述提款通知书项下内容经由贷款人同意，并书面确认回复借款人。如果借款人未履行本合同第2.3条项下其全部或部分义务的，或上述提款通知书项下内容未经贷款人同意并书面确认回复借款人的，贷款人有权取消部分或全部借款人未提之贷款，并终止本合同。

(4)     the Borrower has submitted a drawdown notice to the Lender at least 5 bank business days prior to the proposed drawdown date, in pursuance to Article 2.3 hereunder, and the terms and conditions of such drawdown notice have been acknowledged and approved by the Lender with such acknowledgement and approval being sent to the Borrower in writing. In the event that the Borrower fails to perform its obligations, in part or in whole, as per Article 2.3, or the aforesaid terms and conditions of such drawdown notice have not been acknowledged or approved by the Lender, the Lender shall be entitled to cancel the part or the entirety of the loan, and thereby terminate this Contract.    

（5）提交贷款人要求的其他资料。

(5)   other materials required by the Lender have been submitted to the Lender.

2.2 借款人提款时向贷款人提供的书面文件须为原件；不能提供原件的，征得贷款人同意后可以提供加盖借款人公章的复印件。

2.2 All written documents provided by the Borrower to the Lender for drawdown shall be originals. If no original is available, the Borrower may, upon consent of the Lender, provide photocopies affixed with the Borrower's company seal.

2.3 借款人申请提款须提前至少5个银行工作日向贷款人提交提款通知书。提款通知一经提交，未经贷款人书面同意不得撤销。

2.3 When applying for drawdown, the Borrower shall submit a drawdown notice to the Lender at least 5 bank business days prior to the proposed drawdown date. Once submitted, a drawdown notice will be irrevocable unless otherwise agreed by the Lender in writing.

2.4 借款人满足提款前提条件或经贷款人同意先行放款后,贷款人将借款划入指定的借款人账户，即视为贷款人已经按照本合同约定向借款人发放了借款。

2.4 After all conditions precedent to drawdown have been satisfied by the Borrower or waived by the Lender, the Lender will remit the loan into a designated account of the Borrower. Such remittance shall be deemed as advance of the loan by the Lender to the Borrower in accordance with this Contract.

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2.5 根据相关监管规定和贷款人管理要求，超过一定金额或符合其他条件的借款，应采用贷款人受托支付方式，由贷款人根据借款人的提款申请和支付委托，将借款支付给符合本合同约定用途的支付对象。为此，借款人应和贷款人另行签订委托支付协议作为本合同附件，并在贷款人处开立或指定专门账户用以办理受托支付事宜。

2.5 In accordance with relevant regulatory requirement and management requirement of the Lender, a loan exceeding certain value or meeting certain other conditions shall be subject to the entrusted payment arrangement, where the Lender will, upon and in accordance with drawdown request and payment entrustment issued by the Borrower, pay the proceeds of the loan to relevant payees for the purpose as agreed under this Contract. For this purpose, the Borrower shall enter into an entrusted payment agreement with the Lender, which shall be attached hereto as an appendix, and shall open or designate a dedicated account with the Lender for such entrusted payment.

第三条还款

Article 3        Repayment

3.1　借款人应按本合同约定按时足额偿还借款本金、利息和其他应付款项。在还款日和每一结息日前叁个银行工作日，借款人应在其于贷款人处开立的还款账户中足额存入当期应付利息、本金和其他应付款项，贷款人有权在该还款日或结息日主动划收，或要求借款人配合办理有关划款手续。如果还款账户中的款项不足以支付借款人全部到期应付款项，贷款人有权决定清偿顺序。

汇款指示：

BENEFICIARY: INDUSTRIAL AND COMMERCIAL BANK OF CHINA PHNOM PENH BRANCH

A/C NO: 861121003549

SWIFT CODE: ICBKKHPP

ACCOUNT BANK: INDUSTIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED

SWIFT CODE: UBHKHKHH

附言：INTEREST (PRINCIPAL) FOR LOAN AGREEMENT NO. PP(2013)050

3.1      The Borrower shall repay the principal of and pay the interest on the loan hereunder and other amount payable in accordance with the amount and schedule as required under this Contract. The Borrower shall, on the day that is three bank business day prior to the repayment date and each interest settlement date, deposit into a repayment account opened by the Borrower with the Lender sufficient fund to repay the principal, interest and other amount to be paid on such repayment date or interest settlement date. The Lender may transfer an amount equal to such principal, interest and other amount payable out of such account on such repayment date or interest settlement date without further instruction from the Borrower, or require the Borrower to cooperate in completing relevant formalities for such transfer. If the balance of the repayment account is not sufficient to pay all amounts to be paid by the Borrower, the Lender may decide the priority sequence of each item to be settled.

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Remittent Instruction:

BENEFICIARY: INDUSTRIAL AND COMMERCIAL BANK OF CHINA PHNOM PENH BRANCH

A/C NO: 861121003549

SWIFT CODE: ICBKKHPP

ACCOUNT BANK: INDUSTIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED

SWIFT CODE: UBHKHKHH

附言：INTEREST (PRINCIPAL) FOR LOAN AGREEMENT NO. PP(2013)050

3.2 借款人申请提前偿还全部或部分借款的，应提前30个银行工作日向贷款人提交书面申请，征得贷款人同意，并按照本合同约定标准向贷款人支付补偿金。

3.2      If the Borrower applies for prepayment of all or part of the loan, it shall submit a written application to the Lender for its approval 30 bank business days prior to such prepayment, and pay to the Lender relevant compensation as agreed hereunder.

3.3 经贷款人同意提前还款的，借款人应于提前还款日同时付清至提前还款日止，依据本合同约定到期应付的借款本金、利息和其他款项。

3.3      If the Lender approves any prepayment, the Borrower shall fully pay on the prepayment date all principal, interest and other amounts due and payable as of such prepayment date hereunder.

3.4 贷款人有权根据借款人资金回笼情况提前收回借款。

3.4     The Lender may require the Borrower to early repay any loan based on the Borrower's collection of receivables.

3.5 因借款人提前还款或贷款人根据本合同约定提前收回借款导致实际借款期限缩短的，相应利率档次不作调整，仍执行原借款利率。

3.5      The applicable interest rate grade (based on term of loan) will not change if the actual term of loan is shortened due to any prepayment by the Borrower or early repayment as required by the Lender in accordance with this Contract.

第四条循环借款

Article 4            Revolving loan

4.1 本合同项下借款可循环使用的，在循环借款额度使用期限内，借款人任一时点的借款余额之和不得超过循环借款额度；借款人每次提款的借款期限自实际提款日起至约定还款日止，以借据的记载为准，且任何一笔提款的还款日不得超过循环借款额度使用期限。

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4.1      If the loan hereunder is provided on a revolving basis, the aggregate amount of outstanding loans taken by the Borrower at any time within the term to use the revolving credit line may not exceed the amount of the revolving credit line. The term of each drawdown made by the Borrower shall commence from the actual drawdown date to the agreed repayment date, each as stated on relevant receipt of loan. No drawdown may have a repayment date that is beyond the term to use the revolving credit line.

4.2 本合同项下借款可循环使用的，自本合同签订之日起，借款人如连续3个月未作任何提款，则贷款人有权取消循环借款额度。

4.2      If the loan hereunder is provided on a revolving basis, and the Borrower fails to make any drawdown within three consecutive months from the date of this Contract, the Lender may cancel the revolving credit line.

第五条担保

Article 5          Security

5.1 除信用借款外，借款人应为其在本合同项下义务的履行提供贷款人认可的合法有效的担保。担保合同另行签订。

5.1      Except for unsecured loans, the Borrower shall provide legal and effective security acceptable to the Lender for the performance of its obligations hereunder. A security contract will be entered into separately.

5.2 本合同项下担保物发生受损、贬值、产权纠纷、被查封或扣押，或抵押人擅自处理抵押物，或保证担保的保证人财务状况发生不利变化或发生其他不利于贷款人债权的变化，借款人应及时通知贷款人，并另行提供贷款人认可的其他担保。

5.2      The Borrower shall promptly notify the Lender of any damage, depreciation, title dispute, seizure or attachment of the collateral hereunder, or unauthorized disposal of the collateral by the mortgagor, or any adverse change to the guarantor's financial condition, or any other adverse change to the claims of the Lender, and provide other security that is acceptable to the Lender.

5.3 本合同项下借款以应收账款提供质押担保的,在本合同有效期内，出现下列情形之一,贷款人有权宣布借款提前到期,要求借款人立即偿还部分或全部借款本息，或追加贷款人认可的合法、有效、足额的担保：

5.3      Where the loan hereunder is secured by a pledge over accounts receivable, the Lender may declare accelerated maturity of the loan and require the Borrower to immediately repay all or part of the principal and pay the interest of the loan, or provide additional legal, effective and sufficient security acceptable to the Lender, if any of the following events occurs within the term of this Contract:

（1）应收账款出质人对付款方的应收账款坏账率连续2个月上升；

(1) the bad debt ratio in relation to accounts receivable by the pledgor from the payer of such accounts receivable increases for two consecutive months;

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（2）应收账款出质人对付款方已到期未收回的应收账款占对该付款方应收账款余额的5%以上；

(2) the accounts receivable that are due but not recovered by the pledgor from the payer of such accounts receivable represent at least 5% of the total outstanding accounts receivable to be paid by such payer to the pledgor; or

（3）应收账款出质人与付款方或其他第三方产生贸易纠纷（包括但不限于质量、技术、服务方面的纠纷）或债务纠纷，导致应收账款可能无法到期按时偿付的。

(3) any trade dispute (including without limitation dispute over quality, technology or service) or debt dispute arises between the pledgor of the accounts receivable and relevant payer or other third party, which may prevent the accounts receivable from being settled when they become due.

第六条账户管理

Article 6            Account management

6.1　借款人应在贷款人处指定专门资金回笼账户，用于收取对应销售收入或计划还款资金。对应销售收入以非现金方式结算的，借款人应确保在收到款项后及时划入资金回笼账户。

6.1     The Borrower shall designate a special collection account with the Lender, which will be used to collect relevant sales revenue or fund to be used to repay the loan. If any sales revenue is settled by non-cash method, the Borrower shall ensure that the proceeds of such revenue will be promptly transferred into the special collection account when it receives the same.

6.2　贷款人有权对资金回笼账户进行监管，包括但不限于对该账户的资金收入和支出情况进行了解和监督，借款人应予配合。如贷款人要求，借款人应与贷款人签订专门的账户监管协议。

6.2     The Lender may supervise on the special collection account, including without limitation monitoring and supervising income and expenditure of such account, and the Borrower shall cooperate with the Lender in such supervision. If requested by the Lender, the Borrower shall enter into an account supervision agreement with the Lender.

第七条陈述和保证

Article 7                  Representations and Warranties

借款人向贷款人做出以下陈述和保证，该陈述和保证在本合同有效期内始终有效：

The Borrower makes the following representations and warranties to the Lender, and these representations and warranties will remain valid and effective within the term of this Contract:

7.1 依法具备借款人主体资格，具有签订和履行本合同的资格和能力。

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7.1     It is eligible to act as a borrower hereunder, and has all qualifications and capacity to enter into and perform this Contract.

7.2 签订本合同已获得所有必需的授权或批准，签订和履行本合同不违反本公司章程和相关法律法规的规定，与应承担的其他合同项下的义务均无抵触。

7.2     It has obtained all necessary authorizations or approvals to enter into this Contract. Its execution and performance of this Contract does not violate its articles of association or any applicable laws or regulations, or conflict with any of its obligations under other contracts.

7.3 应付的其他债务已按期偿付，无恶意拖欠银行贷款本息行为。

7.3     Its other debts have been repaid when they become due and it has not committed any malicious default in repaying any principal or interest of bank loan.

7.4 有健全的组织机构和财务管理制度，在最近一年内的生产经营过程中未发生重大违规违纪行为，现任高级管理人员无任何重大不良记录。

7.4     It has a well-established organizational structure and financial management system. It has not committed any material violation of regulations or disciplines during its production and operation in the past one year. Its current senior management has no material negative record.

7.5 提供给贷款人的所有文件和资料都是真实、准确、完整和有效的，不存在虚假记载、重大遗漏或误导性陈述。

7.5     All documents and information provided by the Borrower to the Lender are true, accurate, complete and effective and do not contain any false record, gross omission or misleading statement.

7.6 提供给贷款人的财务会计报告乃依据香港財務報告准則会计准则编制，真实、公正、完整地反映了借款人的经营状况和负债情况，并且自最新的财务会计报告截至日以来，借款人的财务状况未发生任何重大不利变化。

7.6     The financial and accounting reports provided by the Borrower to the Lender are prepared in accordance with the general accepted accounting principle of _ Hong Kong Financial Reporting Standards _ and give true, fair and complete presentation of the operation and indebtedness status of the Borrower. The financial condition of the Borrower has no material adverse change since the end date of its latest financial and accounting reports.

7.7 未向贷款人隐瞒其所涉及的诉讼、仲裁或索赔事件。

7.7     It has not concealed from the Lender any litigation, arbitration or claim involving the Borrower.

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第八条借款人承诺

Article 8        Undertakings of the Borrower

8.1 按照本合同约定的期限和用途提取和使用借款，所借款项不用于固定资产和股权等投资，不以任何形式流入证券市场、期货市场以及相关法律法规禁止或限制的其他用途。

8.1     The Borrower undertakes to draw down and use the loan in accordance with the schedule and purpose as agreed hereunder. The Borrower shall not use the proceeds of the loan hereunder for investment in fixed assets or equity, or for investment in securities or futures market, or any other purpose prohibited or restricted by applicable laws and regulations.

8.2 按照本合同的约定清偿借款本金、利息和其他应付款项。

8.2     The Borrower undertakes to settle principal, interest and any other amount payable in relation to the loan hereunder in accordance with this Contract.

8.3 接受并积极配合贷款人以账户分析、凭证检查、现场调查等方式对包括用途在内的借款资金使用情况的检查和监督，按照贷款人要求定期汇总报告借款资金使用情况。

8.3     The Borrower undertakes to accept and actively cooperate with the Lender's check and supervision on use of the proceeds of the loan (including purpose of the loan) including account analysis, voucher verification and on-site investigation, and to regularly summarize and report information on the use of proceeds of the loan as requested by the Lender.

8.4 接受贷款人的信贷检查，按照贷款人要求提供资产负债表、损益表等财务会计资料和反映借款人偿债能力的其他资料，积极协助并配合贷款人对其生产经营和财务情况的调查、了解和监督。

8.4     The Borrower undertakes to accept credit check by the Lender, to provide financial documents including balance sheets and income statements and other documents that reflect the Borrower's ability to repay its debts, as requested by the Lenders, and to actively assist and cooperate with the Lender in investigating, understanding and supervising its production, operation and financial conditions.

8.5 在还清本合同项下借款本息和其他应付款项前，不以任何形式分配股息和红利。

8.5     The Borrower undertakes not to distribute any dividend or profit in any form before full settlement of principal, interest and other amount payable in relation to the loan hereunder.

8.6 进行合并、分立、减资、股权变动、重大资产和债权转让、重大对外投资、实质性增加债务融资以及其他可能对贷款人权益造成不利影响的行动时，事先征得贷款人书面同意或就贷款人债权的实现作出令贷款人满意的安排方可进行。

8.6     The Borrower undertakes to obtain prior written consent of the Lender or make appropriate arrangements in relation to the realization of the Lender's claims to the Lender's satisfaction, before it carries out any merger, division, decrease of capital, equity change, transfer of material assets and creditor's rights, material external investment, material increase of debt financing and other action that may cause an adverse impact on the Lender's rights and interests.

8.7 发生下列情形之一，及时通知贷款人：

 8.7 The Borrower undertakes to promptly notify the Lender upon occurrence of any of the following events:

（1）公司章程、经营范围、注册资本、法定代表人变更；

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（1）any change to its articles of association, business scope, registered capital or legal representative;

（2）歇业、解散、清算、停业整顿、被吊销营业执照、被撤销或申请（被申请）破产；

（2）its winding-up, dissolution, liquidation, suspension of business, revocation or cancellation of its business licence, or application (or be applied for) for bankruptcy;

（3）涉及或可能涉及重大经济纠纷、诉讼、仲裁，或财产被依法查封、扣押或监管；

（3） it is or may be involved in any material economic dispute, litigation or arbitration, or its property is subject to seizure, attachment or supervision in accordance with applicable laws; or

（4）股东、董事和现任高级管理人员涉嫌重大案件或经济纠纷。

（4）any of its shareholders, directors or current senior management personnel is suspected of major crime or involved in any material economic dispute.

8.8 及时、全面、准确地向贷款人披露关联方关系及关联交易。

8.8 The Borrower undertakes to disclose its related party relationship and related transaction to the Lender in a prompt, complete and accurate manner.

8.9 对贷款人寄出或以其他方式送达的各类通知及时签收。

8.9 The Borrower undertakes to promptly confirm receipt of all notices sent by the Lender by post or any other means.

8.10 不以降低偿债能力的方式处置自有资产；向第三方提供担保不损害贷款人的权益。

8.10 The Borrower undertakes not to dispose of its own assets in a way that will reduce its ability to repay its debts. The Borrower undertakes not to provide security to the benefit of any third party in a way that will harm the Lender's rights and interests.

8.11 如本合同项下借款系以信用方式发放，完整、真实、准确地定期向贷款人报送对外担保情况，并根据贷款人的要求，签订账户监管协议。对外提供担保可能影响其在本合同项下义务的履行的，须经贷款人书面同意。

8.11 If the loan hereunder is an unsecured loan, the Borrower undertakes to regularly make complete, true and accurate disclosure to the Lender in relation to all securities provided by the Borrower for others, and enter into an account supervision agreement as requested by the Lender. If any provision of security may affect its ability to perform its obligations hereunder, the Borrower shall obtain written consent of the Lender on such provision of security.

8.12 承担贷款人为实现本合同项下债权而产生的费用，包括但不限于律师费、评估费、拍卖费等。

8.12 The Borrower undertakes to bear the expenses incurred by the Lender for realization of its claim hereunder, including without limitation legal fee, appraisal fee and auction fee.

8.13 本合同项下债务的清偿顺序优先于借款人对其股东的债务,并且与借款人对其他债权人的同类债务至少处于平等地位。

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8.13 The debt hereunder is senior to the debts owed by the Borrower to its shareholders, and is not subordinated to similar debts owed by the Borrower to other creditors.

8.14 加强环境和社会风险管理，并就此接受贷款人的监督检查。如贷款人要求，向贷款人提交环境和社会风险报告。

8.14 The Borrower undertakes to reinforce the management of environmental and social risks, and agrees to accept the Lender's supervision and inspection in this regard. If requested by the Lender, the Borrower shall provide the Lender with relevant environmental and social risk report.

第九条贷款人承诺

Article 9        Undertakings of the Lender

9.1 　按照本合同约定向借款人发放借款。

9.1 The Lender undertakes to advance the loan to the Borrower in accordance with this Contract.

9.2 　对借款人提供的非公开资料及信息保密，但法律法规另有规定和本合同另有约定的除外。

9.2 The Lender undertakes to keep non-public materials and information provided by the Borrower confidential, unless otherwise required by applicable laws and regulations or agreed hereunder.

第十条违约

 Article 10        Default

10.1 发生下列下情形之一的，构成借款人违约：

10.1 The Borrower will be in default upon occurrence of any of the following events:

（1）借款人未按照约定偿还本合同项下借款本息及其他应付款项，或未履行本合同项下任何其他义务，或违背在本合同项下的陈述、保证或承诺的；

(1) The Borrower fails to repay any principal, interest or other amount payable in relation to the loan hereunder in accordance with this Contract, or fails to perform any other obligations hereunder, or breaches any of its representations, warranties or undertakings hereunder;

（2）本合同项下担保发生了不利于贷款人债权的变化，借款人未另行提供贷款人认可的其他担保的；

(2) the Borrower fails to provide other security acceptable to the Lender when the security provided hereunder suffers any change that is adverse to the claim of the Lender;

（3）借款人任何其他债务在到期（包括被宣布提前到期）后未能清偿，或者不履行或违反在其他协议项下的义务，已经或可能影响到其在本合同项下义务的履行的：

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(3) the Borrower fails to settle any other debt when it becomes due (including due to accelerated maturity declared by the creditor), or is in default or breach of any of its obligations under other agreements, which has affected or may affect performance of its obligations hereunder;

（4）借款人的盈利能力、偿债能力、营运能力和现金流量等财务指标突破约定标准，或发生恶化已经或可能影响到其在本合同项下义务的履行的；

(4) the Borrower's ability to make profit, repay debts or operate its business, or its financial indictors such as cash flow do not comply with agreed standard or suffer deterioration, which has affected or may affect performance of its obligations hereunder;

（5）借款人股权结构、生产经营、对外投资等发生重大不利变化，已经或可能影响到其在本合同项下义务的履行的；

(5) the Borrower's equity structure, production, operation or external investment suffers any material adverse change, which has affected or may affect performance of its obligations hereunder;

（6）借款人涉及或可能涉及重大经济纠纷、诉讼、仲裁，或资产被查封、扣押或被强制执行，或被司法机关或行政机关依法立案查处或依法采取处罚措施，或因违反国家有关规定或政策被媒体曝光，已经或可能影响到其在本合同项下义务的履行的；

(6) the Borrower is or may be involved in any material economic dispute, litigation or arbitration, or its property is subject to attachment, seizure or enforcement, or the Borrower is investigated or punished by any competent judicial or administrative authority in accordance with laws, or any media report that the Borrower has violated relevant regulations or policies of the State, which has affected or may affect performance of its obligations hereunder;

（7）借款人主要投资者个人、关键管理人员异常变动、失踪或被司法机关依法调查或限制人身自由，已经或可能影响到其在本合同项下义务的履行的；

(7) there is any abnormal change or missing of major individual investor or key management personnel of the Borrower, or any competent judicial authority has launched investigation on or restricted right of freedom of such investor or personnel in accordance with laws, which has affected or may affect performance of the Borrower's obligations hereunder;

（8）借款人利用与关联方之间的虚假合同，利用无实际交易背景的交易套取贷款人资金或授信，或通过关联交易有意逃废贷款人债权的；

(8) the Borrower obtains fund or credit facility from the Lender by using false contracts between the Borrower and its related party or transactions that do not actually exist, or intentionally uses related transactions to evade from or invalidate the Lender's claim;

（9）借款人已经或可能歇业、解散、清算、停业整顿、被吊销营业执照、被撤销或申请（被申请）破产；

(9) the Borrower is or may be under winding-up, dissolution, liquidation, suspension of business, or its business licence has been or may be revoked or cancelled, or it has applied or been applied, or may apply or be applied, for bankruptcy;

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（10）借款人因违反食品安全、安全生产、环境保护及其他环境和社会风险管理相关法律法规、监管规定或行业标准而造成责任事故、重大环境和社会风险事件，已经或可能影响到其在本合同项下义务的履行的;

(10) there is any liability accident or major environmental and social risk event caused by the Borrower's violation of applicable laws and regulations, regulatory rules or industry standard in relation to food safety, production safety, environmental protection or other environmental and social risk management, which has affected or may affect performance of its obligations hereunder;

（11）如本合同项下借款系以信用方式发放，借款人的信用等级、盈利水平、资产负债率、经营活动现金净流量等指标不符合贷款人信用贷款条件的；或借款人未经贷款人书面同意，以其有效经营资产向他人设定抵/质押担保或对外提供保证担保，已经或可能影响到其在本合同项下义务的履行的；

(11) where the loan hereunder is an unsecured loan, the Borrower's credit rating, profitability, asset liability ratio, net cash flow in operation activities, etc. do not comply with the Lender's requirement on grant of unsecured loans, or the Borrower creates mortgage or pledge over its effective operation assets or provides guarantee to the benefit of others without written consent of the Lender, which has affected or may affect performance of the Borrower's obligations hereunder; or

（12）可能导致贷款人在本合同项下债权的实现受到不利影响的其他情形。

(12) other events that may cause adverse impact on realization of the Lender's claim hereunder.

10.2 借款人违约，贷款人有权采取下列一项或多项措施：

10.2 If the Borrower is in default, the Lender may take any one or more of the following steps:

（1）要求借款人限期纠正违约行为；

(1) the Lender may require the Borrower to remedy its default within a designated period;

（2）停止依据本合同和贷款人与借款人之间的其他合同向借款人发放借款和其他融资款项，部分或全部取消借款人未提取借款和其他融资款项；

(2) the Lender may cease to advance the loans and other amounts to the Borrower under this Contract or any other contract between the Lender and the Borrower, and cancel all or part of the loan or other amount for which the Borrower has not made drawdown;

（3）宣布本合同和贷款人与借款人之间其他合同项下未偿还的借款和其他融资款项立即到期，立即收回未偿还款项；

(3) the Lender may declare immediate maturity of all outstanding loans and other amounts under this Contract or any other contract between the Lender and the Borrower, and require immediate repayment of such loans and amounts;

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（4）在无须征得借款人同意情况下，向担保人就担保金额的部分或全部索偿。

The Lender shall be entitled to claim for the portion or the entirety of the security amount against the Guarantor herein without any further consent by the Borrower;

（5） 要求借款人赔偿因其违约给贷款人造成的损失;

(5) the Lender may require the Borrower to compensate the Lender against all losses caused by such default of the Borrower; and

（6） 法律法规规定、本合同约定或贷款人认为必要的其他措施。

(6)     other steps that are set out under applicable laws and regulations, agreed under this Contract or deemed necessary by the Lender.

10.3 借款到期（含被宣布立即到期）借款人未按约偿还的，贷款人有权自逾期之日起按本合同约定的逾期罚息利率计收罚息。对借款人未按时支付的利息，按逾期罚息利率计收复利。

10.3 If the Borrower fails to repay any loan when it becomes due (including due to accelerated maturity as declared by the Lender), the Lender may impose penalty interest on the Borrower at the overdue penalty interest rate as agreed hereunder from the day immediately following the due date. Compound interest will accrue at the overdue penalty interest rate on any interest that the Borrower fails to pay when it becomes due.

10.4 借款人未按本合同约定用途使用借款的，贷款人有权自借款被挪用之日起，对挪用部分按本合同约定的挪用借款罚息利率计收罚息，借款被挪用期间未按时支付的利息，按挪用借款罚息利率计收复利。

10.4 If the Borrower fails to use the loan for the purpose as agreed hereunder, the Lender may impose penalty interest on the misappropriated part of the loan at the misappropriation penalty interest rate as agreed hereunder from the date of misappropriation. When the loan is being misappropriated, compound interest will accrue at the misappropriation penalty interest rate on any interest that the Borrower fails to pay when it becomes due.

10.5 　借款人同时发生上述第10.3、10.4条所述情形的，罚息利率择其重者确定，不能并处。

10.5 If both of the penalty interest rates under Articles 10.3 and 10.4 are applicable to the Borrower, the higher of the two interest rates will apply. The two types of penalty interest may not be applied at the same time.

10.6 借款人未按期偿还借款本金、利息（包括罚息和复利）或其他应付款项的，贷款人有权通过媒体进行公告催收。

10.6 The Lender may make a public announcement in media to demand repayment if the Borrower fails to repay any principal, interest (including penalty interest and compound interest) or any other amount payable as scheduled.

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10.7 借款人的关联方与借款人之间的控制或被控制关系发生变化，或借款人的关联方发生上述第10.1条中除第（1）、（2）两项之外的其他情形，已经或可能影响到借款人在本合同项下义务的履行的，贷款人有权采取本合同约定的各项措施。

10.7 If the control relationship between the Borrower and its related party has changed, or any related party of the Borrower is in any event under Articles 10.1 (excluding Articles 10.1(1) and (2)), which has affected or may affect performance of the Borrower's obligations hereunder, the Lender may take all steps as set out under this Contract.

第十一条扣收

Article 11          Deduction and Setoff

11.1 借款人未按照约定偿还本合同项下到期（包括被宣布立即到期）债务的，贷款人有权从借款人开立在贷款人或中国工商银行其他分支机构的所有本外币账户中扣收相应款项用以清偿，直至借款人在本合同项下的所有债务全部清偿完毕为止。

11.1 If the Borrower fails to repay any debt due hereunder (including due to accelerated maturity declared by the Lender) in accordance with this Contract, the Lender may deduct relevant amount from all RMB and foreign exchange accounts opened by the Borrower with the Lender or any other branch office of Industrial and Commercial Bank of China to set off such debt, until all debts of the Borrower hereunder are fully settled.

11.2 扣收款项与本合同币种不一致的，按扣收日贷款人适用的汇率进行折算。扣收日至清偿日（贷款人根据国家外汇管理政策将扣划款项兑换成本合同币种并实际清偿本合同项下债务之日）期间产生的利息和其他费用，以及在此期间因汇率波动而产生的差额部分由借款人承担。

11.2 If the currency of deducted amount is different from that of the loan hereunder, the amount will be converted in accordance with applicable exchange rate published by the Lender on the date of such deduction. The Borrower shall bear all interest and other expenses incurred between the deduction date and the actual settlement date (i.e. the date when the debts hereunder are actually settled after the Lender converts the deducted amount into the currency of the loan hereunder in accordance with applicable State policies on administration of foreign exchange), as well as the difference caused by fluctuation of exchange rate during such period.

11.3 贷款人扣收款项不足以清偿借款人所有债务的，贷款人有权决定清偿顺序。

11.3 If the amount deducted by the Lender is insufficient to repay all debts owed by the Borrower, the Lender may decide the priority sequence of each item to be settled.

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第十二条权利和义务转让

Article 12          Transfer of Rights and Obligations

12.1 贷款人有权将其在本合同项下的权利部分或全部转让给第三方，贷款人的转让行为无须获得借款人同意。未经贷款人书面同意，借款人不得转让其在本合同项下的任何权利和义务。

12.1 The Lender may transfer all or part of its rights hereunder to a third party, without consent of the Borrower. The Borrower may not transfer any of its rights or obligations hereunder without written consent of the Lender.

12.2 贷款人或中国工商银行股份有限公司（“工商银行”）可根据经营管理需要授权或委托工商银行其他分支机构履行本合同项下权利及义务，或将本合同项下贷款债权划归工商银行其他分支机构承接并管理，借款人对此表示认可，贷款人上述行为无须再行征得借款人同意。承接贷款人权利义务的工商银行其他分支机构有权行使本合同项下全部权利，有权就本合同项下纠纷以该机构名义向法院提起诉讼、提请仲裁或申请强制执行。

12.2 The Borrower acknowledges that the Lender or Industrial and Commercial Bank of China Limited (ICBC) may, based on operation and management requirements, authorize or appoint another branch office of ICBC to perform the rights and obligations hereunder, or transfer the loan hereunder to another branch office of ICBC. Such transfer by the Lender does not require further consent of the Borrower. The branch office of ICBC that is the transferee of the rights and obligations of the Lender hereunder may exercise all rights hereunder, and may in its own name initiate litigation or arbitration or apply for enforcement in relation to the dispute hereunder.

第十三条生效、变更和解除

Article 13          Effectiveness, Amendment and Termination

13.1 本合同自签订之日起生效，至借款人在本合同项下的义务全部履行完毕之日终止。

13.1 This Contract shall take effect as of the date hereof, and end upon the date when all of the Borrower's obligations hereunder are fully performed.

13.2 对本合同的任何变更应由各方协商一致并以书面形式作出。变更条款或协议构成本合同的一部分，与本合同具有同等法律效力。除变更部分外，本合同其余部分依然有效，变更部分生效前原条款仍然有效。

13.2 Any amendment to this Contract shall be agreed by the Parties and made in writing. Amended clauses or amendment agreement shall constitute an integral part of this Contract and have equal legal effect as this Contract. The rest terms of this Contract which are not amended shall remain effective. The original terms of this Contract which are to be amended shall remain effective until the relevant amendments take effect.

13.3 本合同的变更和解除，不影响缔约各方要求赔偿损失的权利。本合同的解除，不影响有关争议解决条款的效力。

13.3 Amendments to or termination of this Contract shall not prejudice each Party's right to claim compensation for loss. The dispute resolution clause hereof shall survive termination of this Contract.

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第十四条法律适用和争议解决

Article 14      Governing Law and Dispute Resolution

本合同的订立、效力、解释、履行及争议的解决均适用中华人民共和国法律。凡由本合同引起的或与本合同有关的争议和纠纷，甲乙双方应协商解决，协商不成按本合同约定的方式解决。

The execution, validity, interpretation, performance and dispute resolution of this Contract shall be governed by the PRC law. All disputes and controversies arising from or in connection with this Contract shall be solved by the Parties through consultations, failing which, be solved by the means agreed hereunder.

第十五条完整合同

Article 15          Entire Agreement

本合同第一部分《基本约定》和第二部分《具体条款》共同组成一份完整的《流动资金借款合同》，两部分中的同一词语具有相同含义。借款人本笔借款受上述两部分的共同约束。

Part I (General Provisions) and Part II (Specific Provisions) of this Contract shall constitute a complete working capital loan contract, and the same term shall have the same meaning in both parts. Both parts above are applicable to the loan granted to the Borrower hereunder.

第十六条通知

Article 16      Notices

16.1 本合同项下的所有通知应以书面形式发出。除另有约定外，双方指定本合同载明的住所地为通讯及联系地址。任何一方通讯地址或其他联系方式发生变更的，应以书面形式及时通知对方。

16.1 All notices hereunder shall be sent in writing. Unless otherwise agreed, the address of each Party as stated in this Contract will be its address for communication and contact. If the contact address or other contact information of a Party changes, such Party shall promptly notify the other Party of such change in writing.

16.2 本合同任何一方拒绝签收或发生其他无法送达的情形，通知方可采取公证或公告方式进行送达。

16.2 If either Party hereto refuses to confirm receipt of a notice or a notice is otherwise unable to be delivered, the Party sending such notice may serve such notice by means of notarization or public announcement.

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第十七条其他

Article 17          Miscellaneous

17.1 贷款人未行使或部分行使或迟延行使本合同项下的任何权利，不构成对该权利或其他权利的放弃或变更，也不影响其进一步行使该权利或其他权利。

17.1 Failure to exercise, partial exercise or delay in exercise by the Lender of any of its rights hereunder will not constitute waiver of or amendment to such right or any other right, nor will it affect the Lender's further exercise of such right or any other right.

17.2 本合同任何条款的无效或不可执行，不影响其他条款的有效性和可执行性，也不影响整个合同的效力。

17.2 Invalidity or unenforceability of any provision hereof will not affect validity or enforceability of any other provision hereof or validity of the whole Contract.

17.3 贷款人有权依据有关法律法规的规定或金融监管机构的要求，将与本合同有关的信息和借款人其他相关信息提供给中国人民银行和其他国家征信系统及其他依法设立的信用信息数据库，供具有适当资格的机构或个人查询和使用。贷款人也有权为本合同订立和履行之目的，通过中国人民银行征信系统和其他依法设立的信用信息数据库查询借款人的相关信息。

17.3 If so required by applicable laws, regulations, or other financial regulators, the Lender may provide the information related to this Contract and other information related to the Borrower to the credit information database of the People's Bank of China and other countries or other credit database created in accordance with laws for duly qualified institutions or individuals to check or use. The Lender may also enquire information related to the Borrower by using the credit information basic database of the People's Bank of China or other credit database created in accordance with laws for purpose of execution and performance of this Contract.

17.4　本合同所述之“关联方”、“关联方关系”、“关联方交易”、“主要投资者个人”、“关键管理人员”等词语与中国财政部颁布的《企业会计准则第36号——关联方披露》（财会[2006]3号）以及其后对该准则的修订中的相同词语具有相同含义。

17.4 The terms used in this Contract including "related party", "related party relationship", "related transaction", "major individual investor" and "key management personnel" shall have the meaning given to them in the Accounting Standard for Business Enterprises No. 36—Disclosure of Related Parties (Cai Kuai [2006] No. 3) issued by the Ministry of Finance of the People's Republic of China and its amendments.

17.5　本合同所述之环境和社会风险指借款人及其重要关联方在建设、生产、经营活动中可能给环境和社会带来的危害及相关风险，包括与耗能、污染、土地、健康、安全、移民安置、生态保护、气候变化等有关的环境与社会问题。

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17.5 The environmental and social risks referred to herein means any harm that may be caused by the Borrower or its material affiliates to the environment and society during their construction, production and operation activities, and related risks, including the environmental and social problems in relation to energy consumption, pollution, land, health, safety, relocation and settlement of residents, ecological protection and climate change.

17.6 贷款人根据其业务规则制作保留的关于本合同项下借款的单据和凭证，构成证明借贷双方债权债务关系的有效证据，对借款人具有约束力。

17.6 The documents and vouchers prepared and retained by the Lender in relation to the loan hereunder in accordance with its business practice shall constitute valid proof of debt relationship between the Borrower and the Lender, and shall be binding upon the Borrower.

17.7 在本合同中，⑴ 凡提及本合同应包括对本合同的修改或补充；⑵条款标题仅用于参考，不构成对本合同的任何解释，对标题项下内容及其范围也不构成任何限制；⑶提款日、还款日为非银行工作日，则顺延至下一个银行工作日。

17.7 In this Contract, (1) any reference to this Contract shall include all amendments and supplements to this Contract; (2) the headings are for reference only, and do not constitute any interpretation of this Contract, or restriction on contents or scope of provisions under such headings; and (3) if a drawdown date or repayment date is not a bank business day, it shall be postponed to the immediate following bank business day.

-28- 

双方签字或盖章确认：借贷双方已对本合同的所有条款进行了充分协商。贷款人已提请借款人特别注意有关双方权利义务的全部条款，对其作全面准确的理解，并已应借款人要求对相关条款作出解释和说明。借款人已认真阅读并充分理解所有合同条款（包括第一部分《基本约定》和第二部分《具体条款》），借贷双方对本合同各条款的理解完全一致，对合同内容无异议。

The Parties hereby confirm by signing or affixing of seal that all terms of this Contract have been fully negotiated by the Borrower and the Lender. The Lender has brought the Borrower's special attention to all terms in relation to the rights and obligations of each Party, asked the Borrower to fully and accurately understand all such terms, and upon the Borrower's request, made explanation on relevant terms. The Borrower has carefully read and fully understands all contractual terms hereof (including Part I (General Provisions) and Part II (Specific Provisions). The understanding of the Borrower and the Lender of this Contract is consistent, and the Parties have no dispute over the terms of this Contact.

贷款人（盖章）：

Lender (seal):____________________________

负责人/授权代理人：

Person-in-charge/authorized representative: ___________________________________

借款人（盖章）：

Borrower (seal):___                                                                                    ___

法定代表人/授权代理人：

Legal representative/authorized representative: Stephen B. Huang

合同签订日：年月日

Date: ______________________

附件1：

Appendix 1:

-29- 

提款通知书

Drawdown Notice

中国工商银行股份有限公司金边分行：

Industrial and Commercial Bank of China, 【Phnom Penh Branch】(“ICBC Phnom Penh Branch”)：

根据　　年　　月　　日我方与贵行签订的编号为　PP(2013)050 的《流动资金借款合同》（下称“借款合同”），我方已全面落实借款合同约定的各项提款前提条件，特向贵行发出如下提款通知：

In accordance with the Working Capital Loan Contract between you and us on ______________ (contract no: _ PP(2013)050 _) (the Loan Contract), we have fully satisfied all conditions precedent to drawdown as required under the Loan Contract, and hereby send this drawdown notice to you:

一、我方拟于年月日向贵行提取金额为美元（币种）　2,744,000.00 元的借款。

I. We intend to draw down a loan equal to _USD_ (currency) 2,744,000.00 (amount) on _________________________.

二、本笔借款期限为 __ __ ，到期日为年月日。

II. The term of loan under this notice is _______, and the maturity date is _____________.

三、请将本笔借款划入我方下列专门账户：

III. Please remit the loan to the following account:

户名：       Altairnano.Inc                    

Account name:                Altairnano.Inc          

账号：    8003008490              

Account number:           8003008490        

开户行：    East West Bank               

Bank:          East West Bank         

四、根据借款合同和委托支付协议的约定，本笔借款中，受托支付_0_万元；自主支付_USD 2,744,000.00_元。

IV.      In accordance with the Loan Contract and the Entrusted Payment Agreement, 0 of this loan will be advanced through entrusted payment arrangement, and USD 2,744,000.00 of this loan will be advanced to and paid out by the Borrower at its own discretion.

-30- 

在贷款人受托支付方式下，我方授权和委托贵行在将本笔借款划入我方账户后，支付给符合借款合同约定用途的下列支付对象账户：

Under the entrusted payment arrangement mentioned above, after the loan is remitted to our account above, we authorize you to make relevant payment to the following account for the purpose as agreed under the Loan Contract:

户名：

Account name:      Altairnano, Inc.                                                              

账号：

Account number:      8003008490                                                                 

开户行：

Bank:       East West Bank                                                                    

【本笔借款需同时支付给多个支付对象的，支付对象和账户清单见附件】

[If the loan under this notice is to be paid to more than one payees, please refer to the list of payees and accounts attached hereto.]

五、我方谨向贵行确认：

V.     We hereby warrant to you:

１.该笔借款将用于借款合同约定的用途；

1. the loan under this notice will be used for the purpose as agreed under the Loan Contract;

２.在该通知发出之日及提款日，我方在借款合同中所作的所有陈述、保证和承诺仍然真实、准确、完整、有效。

2.     on the date of this notice and the drawdown date, all representations, warranties and understandings made by us in the Loan Contract remain true, accurate, complete and effective;

3.截至本通知发出之日，我方的生产经营和财务信用状况未发生重大不利变化。

3.     as of the date of this notice, there has not been any material adverse change to our production, operation or financial or credit condition;

4.在本通知发出之日，不存在任何借款合同项下或与借款合同有关的违约或预期违约事件，我方进一步确认，在提款日也不会发生或存续任何违约事件。

4.     as of the date of this notice, there is no default or expected event of default under or in relation to the Loan Contract. We further warrant that no event of default will occur or continue on the drawdown date; and

-31- 

5.本通知发出之后即为不可撤销。

5. this notice is irrevocable once sent.

借款人（盖章）：　　

Borrower (seal):_                                ____

法定代表人/授权代理人：　　　　　　　　

Legal representative/authorized representative: Stephen B. Huang

日期：年月日

Date: ______________________

-32-

EX-31

Exhibit 31.1

CERTIFICATION

I, Richard W. Lee, certify that:

1.     I have reviewed this report on Form 10-Q of Altair Nanotechnologies Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.      The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.     The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 19, 2013

/s/ Richard W. Lee

Richard W. Lee, Chief Executive Officer

EX-31

Exhibit 31.2

CERTIFICATION

I, Paula Conroy, certify that:

1.     I have reviewed this report on Form 10-Q of Altair Nanotechnologies Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.     The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 19, 2013

/s/ Paula Conroy

Paula Conroy, Chief Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Altair Nanotechnologies Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard W. Lee, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Richard W. Lee

Richard W. Lee, Chief Executive Officer

November 19, 2013

EX-32

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Altair Nanotechnologies Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paula Conroy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)     The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Paula Conroy

Paula Conroy, Chief Financial Officer

November 19, 2013

XML

Note 10 - Note Payable

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 10. Note Payable

Notes payable consisted of the following at September 30, 2013 and December 31, 2012:

In thousands of dollars

	September 30, 2013		December 31, 2012
Note payable Mortgage	$	975	$	1,000
Note payable Bank of China		1,980		1,980
Note payable ICBC		3,700		3,700
Note payable Handan Bank		4,878
Total	$	11,533	$	6,680

On August 8, 2012, we entered into a Note payable secured by, a Deed of Trust, corporate guaranty and hazardous materials indemnity agreement for the provision of a $1,000,000 loan secured by the Company’s Reno, Nevada Facility. Under the terms of the loan documents, interest accrues on the outstanding principal balance at the rate of 11% per annum. We were obligated to pay five months of prepaid interest to the lender upon closing and make interest-only payments on a monthly basis during the remaining term of the loan and to repay all principal and any outstanding interest on or before August 1, 2013. The required interest payments were made and the proceeds of the loan were used for general working capital requirements.

On August 1, 2013, the Company entered into a First Modification of Note and First Modification of Deed of Trust (the “Modification Agreement”) pursuant to which the maturity date for the above-described loan was extended until August 1, 2014. As part of the Modification Agreement, the Company agreed to pay a $19,750 amendment fee and agreed to make a payment of $12,500 to reduce the outstanding principal amount and to make three additional principal payments of $12,500 each on September 1, 2013, October 1, 2013 and November 1, 2013. The $975,000 modified loan is secured by the Company’s Reno, Nevada Facility.

         In October 2012, the Company and Northern Altair entered into a series of transactions, wherein, Northern Altair set aside, as restricted cash, $2,057,900 with the Bank of China. In return, the Bank of China loaned the Company $1,980,000 for use as operating capital. The interest rate on this loan is .0053% daily and the maturity date is October 18, 2013. This loan was paid off in October 2013. See Note 13 for additional information.      

In November 2012, the Company and Northern Altair entered into a series of transactions, wherein, Northern Altair set aside, as restricted cash, $3,894,180 with the Industrial and Commercial Bank of China (“ICBC”). In return, the ICBC loaned the Company $3,700,000 for use as operating capital. The interest rate on this loan is .0056% daily and the maturity date is November 15, 2013.  This loan was paid off in November 2013.  See Note 13 for additional information.

In August 2013, Northern Altair entered into a loan agreement for $8,130,000 with Handan Bank. On September 27, 2013, Northern Altair received approximately $4,878,000 with the final balance of approximately $3,252,000 received on October 15, 2013. The due date of the loan is August 27, 2014 and it is secured by the second land use right in Wu’an.

XML

Note 11 - Business Segment Information (Details) - Revenues and Accounts Receivable by Major Customers (Current Period) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Revenue, Major Customer [Line Items]
Sales	$ 1,132	$ 360	$ 6,138	[1]	$ 1,071	[1]
Hawaiian Electric Light Company [Member]
Revenue, Major Customer [Line Items]
Sales			2,082
Proterra, LLC [Member]
Revenue, Major Customer [Line Items]
Sales			1,529		121
Accounts Receivable	676	121	676		121
Vestas [Member]
Revenue, Major Customer [Line Items]
Sales			1,291
Accounts Receivable	$ 62		$ 62

[1] Revenues are attributed to countries based on location of customer.

XML

Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Revenues
Product sales	$ 1,072	$ 300	$ 5,958		$ 891
License fees	60	60	180		180
Total revenues	1,132	360	6,138	[1]	1,071	[1]
Cost of goods sold
Product	1,206	788	6,586		2,282
Total cost of goods sold	1,206	788	6,586		2,282
Gross loss	(74)	(428)	(448)		(1,211)
Operating expenses
Research and development	1,079	1,423	3,124		5,046
Sales and marketing	201	499	883		2,344
General and administrative	1,908	1,837	4,843		5,010
Depreciation and amortization	444	252	1,063		771
Gain on disposal of assets	49		31
Total operating expenses	3,681	4,011	9,944		13,171
Loss from operations	(3,755)	(4,439)	(10,392)		(14,382)
Other income (expense)
Interest income, net	25	37	237		67
Change in market value of warrants	(20)	(267)	(30)		(88)
Other income	7	(2)	36		(2)
Total other income (expense), net	12	(232)	243		(23)
Net loss	$ (3,743)	$ (4,671)	$ (10,149)		$ (14,405)
Loss per common share - basic and diluted (in Dollars per share)	$ (0.32)	$ (0.40)	$ (0.88)		$ (1.24)
Weighted average shares - basic and diluted (in Shares)	11,590,067	11,590,067	11,590,067		11,590,067

[1] Revenues are attributed to countries based on location of customer.

XML

Note 3 - Fair Value Measurements and Other Financial Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 3.   Fair Value Measurements and Other Financial Measurements

Our financial instruments are accounted for at fair value on a recurring basis. We have no financial instruments accounted for on a non-recurring basis as of September 30, 2013 or December 31, 2012. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

In arriving at fair-value estimates, we utilize the most observable inputs available for the valuation technique employed. If a fair-value measurement reflects inputs at multiple levels within the hierarchy, the fair-value measurement characterized based upon the lowest level of input that is significant is applied to the fair-value measurement. For us, recurring fair-value measurements are performed for warrant liabilities.

All warrant liability financial instruments are recognized in the balance sheet at their fair value. Changes in the fair values of warrant liability financial instruments are reported in earnings. We do not hold any derivative liability financial instruments that reduce risk associated with hedging exposure and we have not designated any of our warrant liability financial instruments as hedge instruments.

The Company has no items valued using Level 1 and Level 2 inputs. The fair values and corresponding classifications under the appropriate level of the fair value hierarchy of outstanding warrants recorded as recurring liabilities in the consolidated balance sheet were as follows:

In thousands of dollars

	Level		September 30, 2013		December 31, 2012
Warrant liabilities:		3	$	120	$	90

     The following table presents quantitative information for Level 3 measurements:

In thousands of dollars

	Fair value at September 30, 2013		Valuation technique	Unobservable input
Liabilities:
Warrant liabilities	$	120	Monte Carlo option simulation model	Prevailing interest rates, Company’s stock price volatility, expected warrant term

There have been no transfers between Level 1, Level 2, or Level 3 categories.

The following table summarizes current warrant liabilities recorded at fair value at September 30, 2013:

In thousands of dollars

	Fair Value		Carrying Value
Warrant liabilities:	$	120	$	120
Total	$	120	$	120

Financial instruments classified as Level 3 in the fair value hierarchy represent warrant liabilities in which management has used at least one significant unobservable input in the valuation model. The following table represents a reconciliation of activity for such warrant liabilities:

In thousands of dollars

Warrant liabilities
Opening balance – December 31, 2012	$	90
Purchases, sales, issuances, and settlements
Transfers into and (or) out of Level 3
Change in fair value		30
Unrealized gains / (losses)
Other adjustments
Closing balance – September 30, 2013	$	120

There were no purchases, sales, transfers, issuances or settlements of Level 3 financial instruments. There were no assets or liabilities measured on a non-recurring basis as of September 30, 2013 and December 31, 2012.

Other Financial Instruments

The carrying values and fair values of the Company’s other financial instruments were as follows:

In thousands of dollars

		September 30, 2013				December 31, 2012
		Carrying value		Fair value		Carrying value		Fair value
Accounts receivable, net	2	$	1,473	$	1,473	$	1,498	$	1,498
Trade accounts payable	2	$	2,860	$	2,860	$	2,599	$	2,599
Capital lease obligation	2	$	6	$	6	$	9	$	9
Note payable	2	$	11,533	$	11,533	$	6,680	$	6,680

The following methods were used to estimate the fair values of other financial instruments:

Accounts receivable, Trade accounts payable, Capital lease obligation and Notes payable. The carrying amounts approximate fair value due to their short term nature.

XML

Note 6 - Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

In thousands of dollars
	September 30, 2013			December 31, 2012
Machinery and equipment, held and used	$	11,241		$	6,643
Building and improvements		4,324			4,324
Furniture, office equipment & other		1,669			1,930
Leased assets		1,593
Construction in progress		4,345
		23,172			12,897
Less accumulated depreciation		(11,470	)		(8,821	)
Total property, plant and equipment held & used	$	11,702		$	4,076

In thousands of dollars
	September 30, 2013		December 31, 2012
Machinery and equipment, held and not used	$	-	$	4,249
Less accumulated depreciation				(2,392	)
Total property, plant and equipment held and not used	$	-	$	1,857

XML

Note 11 - Business Segment Information (Details) - Long-lived Assets by Geographic Area (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Note 11 - Business Segment Information (Details) - Long-lived Assets by Geographic Area [Line Items]
Long-lived assets	$ 34,277	$ 19,832
United States [Member]
Note 11 - Business Segment Information (Details) - Long-lived Assets by Geographic Area [Line Items]
Long-lived assets	4,841	6,207
China [Member]
Note 11 - Business Segment Information (Details) - Long-lived Assets by Geographic Area [Line Items]
Long-lived assets	$ 29,436	$ 13,625

XML

Note 11 - Business Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 11. Business Segment Information

Management views the Company as operating in two major business segments: Power and Energy Group, and All Other operations.

The Power and Energy Group develops, produces, and sells battery systems.  The All Other group consists of the remaining portions of the previous Life Sciences and Performance Materials groups.  

During the nine months ended September 30, 2013, the Company and its affiliates received a total of $4,924,000 in cash payments for its various Power and Energy Group projects. Of this received amount, $2,766,000 was associated with contractual milestone payments for our larger utility-scale energy storage system projects, two of which have not been recognized in our reportable segment data for the year, as the related contracts are recognized under the completed contract method.

Reportable segment data reconciled to the consolidated financial statements as of the three and nine months ended September 30, 2013 and September 30, 2012 is as follows: 

In thousands of dollars:
Three Months	Net Revenue		Loss (Income) From Operations			Depreciation and Amortization		Assets
September 30, 2013
Power & Energy Group	$	1,072	$	3,796			425	$	66,330
All Other		60		(41	)		19		277
Consolidated Total	$	1,132	$	3,755		$	444	$	66,607
September 30, 2012
Power & Energy Group	$	296	$	4,483		$	233	$	54,087
All Other		64		(44	)		19		353
Consolidated Total	$	360	$	4,439		$	252	$	54,440

Nine Months	Net Revenue		Loss (Income) From Operations			Depreciation and Amortization		Assets
September 30, 2013
Power & Energy Group	$	5,958	$	10,515			1,006	$	66,330
All Other		180		(123	)		57		277
Consolidated Total	$	6,138	$	10,392		$	1,063	$	66,607
September 30, 2012
Power & Energy Group	$	886	$	14,507		$	714	$	54,087
All Other		185		(125	)		57		353
Consolidated Total	$	1,071	$	14,382		$	771	$	54,440

In the table above, the Loss (Income) from Operations column includes such expenses as business consulting, general legal expense, accounting and audit, general insurance expense, stock-based compensation expense, shareholder information expense, investor relations, and general office expense.

For the nine months ended September 30, 2013, we had revenue to three major customers, which accounted for 10% or more of revenues. The Company did not have material related party revenue during the nine months ended September 30, 2013. Total revenue to the customer for the nine months ended September 30, 2013 and the balance of the accounts receivable at September 30, 2013 were as follows:

In thousands of dollars

Customer	Revenue Nine Months Ended September 30, 2013		Accounts Receivable Balance at September 30, 2013
Power and Energy Group:
Hawaiian Electric Light Company	$	2,082
Proterra, LLC		1,529	$	676
Vestas		1,291		62

For the nine months ended September 30, 2012, we had revenue to four major customers, each of which accounted for 10% or more of revenues. Total revenue from these customers for the nine months ended September 30, 2012 and the balance of their accounts receivable at September 30, 2012 were as follows:

In thousands of dollars

Customer	Revenue Nine Months Ended September 30, 2012		Accounts Receivable Balance at September 30, 2012
Power and Energy Group:
Emrol	$	139
Hybricon		131
Proterra		121	$	121
ABB Secheron		111		2

Revenues for the nine-month period ended September 30, 2013, and 2012 by geographic area were as follows:

In thousands of dollars  

	Revenue Nine Months Ended		Sales Nine Months Ended
Geographic information (a)	2013		2012
United States	$	4,542	$	251
Denmark		1,291
Belgium		137		139
Germany				145
Sweden		43		131
Switzerland				111
Other foreign countries		125		294
Total	$	6,138	$	1,071

(a) Revenues are attributed to countries based on location of customer.

Geographic information for long-lived assets was as follows (based on physical location of the assets):

In thousands of dollars

Long-lived assets:	Balance at September 30, 2013		Balance at December 31, 2012
United States	$	4,841	$	6,207
China		29,436		13,625
Total	$	34,277	$	19,832

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Note 9 - Warrants (Details) - Information About Warrants Outstanding (USD $)	9 Months Ended
	Sep. 30, 2013
Note 9 - Warrants (Details) - Information About Warrants Outstanding [Line Items]
Warrants (in Shares)	412,776
Weighted Average Remaining Contractual Life (Years)	2 years 292 days
Weighted Average Exercise Price	$ 14.93
Range 1 [Member]
Note 9 - Warrants (Details) - Information About Warrants Outstanding [Line Items]
Exercise Price	$ 13.80
Warrants (in Shares)	112,776
Weighted Average Remaining Contractual Life (Years)	2 years 219 days
Weighted Average Exercise Price	$ 13.80
Range 2 [Member]
Note 9 - Warrants (Details) - Information About Warrants Outstanding [Line Items]
Minimum Exercise Price	$ 13.86
Maximum Exercise Price	$ 24.00
Warrants (in Shares)	300,000
Weighted Average Remaining Contractual Life (Years)	3 years
Weighted Average Exercise Price	$ 15.36

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Note 12 - Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended	9 Months Ended
	Oct. 31, 2012	Dec. 31, 2013	Sep. 30, 2013	May 16, 2013
Note 12 - Commitments and Contingencies (Details) [Line Items]
Agreed Fixed Asset Investments	$ 167.0			$ 99.1
Finite-Lived Intangible Asset, Useful Life	50 years
Cost of Initial Phase of New Project			4.3
AnticipatedRemainingCostOfProject		1.4
Fixed Asset Investment, Percent Complete		25.00%	25.00%
Percent of Project Complete		25.00%
Construction and Development Costs			$ 4
Land Use Right [Member]
Note 12 - Commitments and Contingencies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life	50 years		50 years

XML

Note 5 - Prepaid Expenses and Other Current Assets (Details) - Prepaid Expenses and Other Current Assets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Note 5 - Prepaid Expenses and Other Current Assets (Details) - Prepaid Expenses and Other Current Assets [Line Items]
Deferred contract costs	$ 1,831	$ 4,532
Total prepaid expenses and other current assets	1,846	937
Deposits	342	342
Prepaid insurance	395	258
Related Party [Member]
Note 5 - Prepaid Expenses and Other Current Assets (Details) - Prepaid Expenses and Other Current Assets [Line Items]
Other assets	1,791	1,754
Total prepaid expenses and other current assets	1,791	1,754
Prepaid Equipment Purchase [Member]
Note 5 - Prepaid Expenses and Other Current Assets (Details) - Prepaid Expenses and Other Current Assets [Line Items]
Other prepaid assets	1,351
Prepaid Inventory Purchases [Member]
Note 5 - Prepaid Expenses and Other Current Assets (Details) - Prepaid Expenses and Other Current Assets [Line Items]
Other prepaid assets	1,039	159
Excluding Related Party [Member]
Note 5 - Prepaid Expenses and Other Current Assets (Details) - Prepaid Expenses and Other Current Assets [Line Items]
Other assets	70	178
Total prepaid expenses and other current assets	$ 1,846	$ 937

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Note 10 - Note Payable (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

	September 30, 2013		December 31, 2012
Note payable Mortgage	$	975	$	1,000
Note payable Bank of China		1,980		1,980
Note payable ICBC		3,700		3,700
Note payable Handan Bank		4,878
Total	$	11,533	$	6,680

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Note 9 - Warrants (Tables)

9 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

Fair Value Inputs, Liabilities, Quantitative Information [Table Text Block]

	September 30, 2013			September 30, 2012
Stock Price	$	2.57		$	4.44
Exercise Price	$	14.93		$	14.93
Expected Volatility		77	%		112	%
Expected Dividend Yield	None			None
Expected Term (in years)		2.8			4.0
Risk-free Interest Rate		0.66	%		0.37	%

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	2013				2012
	Warrants		Weighted Average Exercise Price		Warrants		Weighted Average Exercise Price
Outstanding at January 1,		412,776	$	14.93		412,776	$	14.93
Issued
Expired
Warrant redemption Exercised
Outstanding at September 30,		412,776	$	14.93		412,776	$	14.93
Currently exercisable		412,776	$	14.93		412,776	$	14.93

Schedule of Stockholders Equity [Table Text Block]

		Warrants Outstanding and Exercisable
Range of Exercise Prices			Warrants		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
	$13.80			112,776		2.6	$	13.80
$13.86	to	$24.00		300,000		3.0		15.36
				412,776		2.8	$	14.93

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Note 9 - Warrants (Details) - Warrants - Fair Value Weighted Average Assumptions (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Warrants - Fair Value Weighted Average Assumptions [Abstract]
Stock Price (in Dollars per share)	$ 2.57	$ 4.44
Exercise Price (in Dollars per share)	$ 14.93	$ 14.93
Expected Volatility	77.00%	112.00%
Expected Dividend Yield	0.00%	0.00%
Expected Term (in years)	2 years 292 days	4 years
Risk-free Interest Rate	0.66%	0.37%

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Note 3 - Fair Value Measurements and Other Financial Measurements (Details) - Other Financial Instruments (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Note 3 - Fair Value Measurements and Other Financial Measurements (Details) - Other Financial Instruments [Line Items]
Accounts receivable, net	$ 1,473	$ 1,498
Trade accounts payable	2,860	2,599
Capital lease obligation	6	5
Note payable	11,533	6,680
Fair Value, Inputs, Level 2 [Member]
Note 3 - Fair Value Measurements and Other Financial Measurements (Details) - Other Financial Instruments [Line Items]
Accounts receivable, net	1,473	1,498
Trade accounts payable	2,860	2,599
Capital lease obligation	6	9
Note payable	$ 11,533	$ 6,680

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Note 6 - Property, Plant and Equipment (Details) - Property, Plant and Equipment (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 11,702	$ 4,076
Held and Used [Member]
Property, Plant and Equipment [Line Items]
Machinery and equipment	11,241	6,643
Building and improvements	4,324	4,324
Furniture, office equipment & other	1,669	1,930
Leased assets	1,593
Construction in progress	4,345
	23,172	12,897
Less accumulated depreciation	(11,470)	(8,821)
Total property, plant and equipment	11,702	4,076
Held and Not Used [Member]
Property, Plant and Equipment [Line Items]
Machinery and equipment		4,249
Less accumulated depreciation		(2,392)
Total property, plant and equipment		$ 1,857

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Note 10 - Note Payable (Details) (USD $)	9 Months Ended				3 Months Ended		1 Months Ended	0 Months Ended			1 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Nov. 30, 2013 Subsequent Event [Member] Industrial and Commercial Bank of China [Member]	Oct. 31, 2013 Subsequent Event [Member] Industrial and Commercial Bank of China [Member]	Sep. 30, 2013 Subsequent Event [Member]	Nov. 30, 2013 Subsequent Event [Member]	Sep. 27, 2013 Proceeds From Loan - 1st Advance [Member] Northern Altair Nanotechnologies [Member] Handan Bank [Member]	Oct. 15, 2013 Proceeds From Loan - 2nd Advance [Member] Northern Altair Nanotechnologies [Member] Handan Bank [Member]	Aug. 08, 2012 Secured Note Payable [Member]	Sep. 30, 2013 Northern Altair Nanotechnologies [Member] Handan Bank [Member]	Oct. 31, 2012 Bank of China [Member]	Nov. 30, 2012 Industrial and Commercial Bank of China [Member]	Nov. 30, 2012 Daily Interest Rate [Member]	Oct. 31, 2012 Daily Interest Rate [Member]
Note 10 - Note Payable (Details) [Line Items]
Debt Instrument, Face Amount			$ 3,800,000	$ 2,700,000					$ 1,000,000
Debt Instrument, Interest Rate, Stated Percentage						53.00%			11.00%				56.00%	53.00%
Debt Instrument, Prepaid Interest, Duration									5 months
Payments of Debt Restructuring Costs					19,750
Repayments of Secured Debt					12,500
Debt Instrument, Periodic Payment, Principal					12,500
Secured Debt	975,000
Increase (Decrease) in Restricted Cash	(3,007,000)	293,000									2,057,900	3,894,180
Proceeds from Loans											1,980,000	3,700,000
Loans Payable to Bank										8,130,000
Proceeds from Notes Payable	$ 5,893,000	$ 1,000,000					$ 4,878,000	$ 3,252,000

XML

Note 3 - Fair Value Measurements and Other Financial Measurements (Details) - Level 3 Fair Values (USD $)	Sep. 30, 2013
Level 3 Fair Values [Abstract]
Warrant liabilities	$ 120,000

XML

Note 7 - Land Use Right and Patents (Details) - Patents (Patents [Member], USD $)	Sep. 30, 2013	Dec. 31, 2012
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Patents and patent applications	$ 1,366,000	$ 1,366,000
Less accumulated amortization	(1,149,000)	(1,092,000)
Total patents and patent applications	$ 217,000	$ 274,000

XML

Note 7 - Land Use Right and Patents (Tables)

9 Months Ended

Sep. 30, 2013

Land Use Right [Member]

Note 7 - Land Use Right and Patents (Tables) [Line Items]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

In thousands of dollars
	September 30, 2013			December 31, 2012
Land use right	$	22,689		$	13,670
Less accumulated amortization		(330	)		(45	)
Total land use right, net	$	22,359		$	13,625

Patents [Member]

Note 7 - Land Use Right and Patents (Tables) [Line Items]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

In thousands of dollars
	September 30, 2013			December 31, 2012
Patents and patent applications	$	1,366		$	1,366
Less accumulated amortization		(1,149	)		(1,092	)
Total patents and patent applications	$	217		$	274

XML

Consolidated Statements of Stockholders' Equity (Unaudited) (USD $) In Thousands, except Share data	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Begining Balance at Jun. 30, 2012	$ 12	$ 257,881	$ (214,157)	$ (132)	$ 43,604
Begining Balance (shares) (in Shares) at Jun. 30, 2012	11,590,067
Net loss			(4,671)		(4,671)
Other comprehensive loss				(61)	(61)
Reduction in issuance costs from legal claims settlement		1,050			1,050
Share-based compensation		73			73
Ending Balance at Sep. 30, 2012	12	259,004	(218,828)	(193)	39,995
Ending Balance (shares) (in Shares) at Sep. 30, 2012	11,590,067
Begining Balance at Dec. 31, 2011	12	257,884	(204,423)		53,473
Begining Balance (shares) (in Shares) at Dec. 31, 2011	11,590,067
Net loss			(14,405)		(14,405)
Other comprehensive loss				(193)	(193)
Reduction in issuance costs from legal claims settlement		1,050			1,050
Share-based compensation		70			70
Ending Balance at Sep. 30, 2012	12	259,004	(218,828)	(193)	39,995
Ending Balance (shares) (in Shares) at Sep. 30, 2012	11,590,067
Begining Balance at Dec. 31, 2012	12	259,065	(222,409)	(112)	36,556
Begining Balance (shares) (in Shares) at Dec. 31, 2012	11,590,067
Net loss			(10,149)		(10,149)
Other comprehensive loss				596	596
Share-based compensation		133			133
Ending Balance at Sep. 30, 2013	12	259,198	(232,558)	484	27,136
Ending Balance (shares) (in Shares) at Sep. 30, 2013	11,590,067
Begining Balance at Jun. 30, 2013	12	259,154	(228,815)	501	30,852
Begining Balance (shares) (in Shares) at Jun. 30, 2013	11,590,067
Net loss			(3,743)		(3,743)
Other comprehensive loss				(17)	(17)
Share-based compensation		44			44
Ending Balance at Sep. 30, 2013	$ 12	$ 259,198	$ (232,558)	$ 484	$ 27,136
Ending Balance (shares) (in Shares) at Sep. 30, 2013	11,590,067

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Note 1 - Basis of Presentation and Going Concern

9 Months Ended

Sep. 30, 2013

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1.   Basis of Presentation and Going Concern

The interim consolidated financial statements of Altair Nanotechnologies Inc. and its subsidiaries (the “Company”) are unaudited. These consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The 2012 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). This Form 10-Q (this “Report”) should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, which includes all disclosures required by GAAP.

The Company incurred net losses of $10.1 million for the nine months ended September 30, 2013 and has an accumulated deficit of $232.6 million as of September 30, 2013. The Company used $7.4 million in its operations for the nine months ended September 30, 2013 and working capital levels have decreased from $16.7 million at December 31, 2012 to $9.1 million at September 30, 2013. The Company has substantial debt coming due in the next 12 months. We expect to continue to have negative cash flows from operations as we ramp up production at our new manufacturing facilities. If we are not able to refinance this debt or obtain additional capital, we will not be able to pay off our current debt obligations. This matter raises substantial doubt about the Company’s ability to continue as a going concern. To address this matter, management is taking actions to refinance existing loans, obtain additional loans collateralized by the land use rights and to obtain approval for the remaining grant incentives from the Government of Wu’an, China. Restricted cash is available to fund development of operations (both capital and non-capital) in China subject to meeting certain guidelines agreed upon by the Wu’an government and the Company.   Based on our current forecast, we expect to use the existing restricted cash to support the non-capital development of our China operations.  If the non-capital needs are met, excess restricted cash or additional grant funds received will be used for capital needs. The consolidated financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments if the Company were unable to do so.

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Note 4 - Product Inventories

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 4.   Product Inventories

Product inventories consist of the following:

In thousands of dollars

	September 30, 2013		December 31, 2012
Raw materials	$	1,359	$	2,337
Work in process		1,614		3,666
Finished goods		2,256		1,413
Total product inventories	$	5,229	$	7,416

As of September 30, 2013 and December 31, 2012, inventory relates to the production of battery systems targeted at the electric grid, transportation, and industrial markets.

Inventory valuation allowances, totaled $250,000 and $331,000 at September 30, 2013 and December 31, 2012, respectively.

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Note 2 - Recently Adopted and Recently Issued Accounting Guidance

9 Months Ended

Sep. 30, 2013

Disclosure Text Block [Abstract]

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

Note 2.   Recently Adopted and Recently Issued Accounting Guidance

Adopted  

On January 1, 2013, the Company adopted changes to the disclosure of offsetting assets and liabilities. These changes require an entity to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The enhanced disclosures will enable users of an entity’s financial statements to understand and evaluate the effect or potential effect of master netting arrangements on an entity’s financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. The adoption of these changes had no impact on the Consolidated Financial Statements or related disclosures.

On January 1, 2013, the Company adopted changes to the information provided about the amounts reclassified out of accumulated other comprehensive income by component. These changes require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The adoption of these changes had no impact on the Consolidated Financial Statements or related disclosures.

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Note 7 - Land Use Right and Patents (Details) (USD $)	1 Months Ended						1 Months Ended	9 Months Ended				9 Months Ended	12 Months Ended
	May 30, 2013	Oct. 31, 2012	Apr. 30, 2012	May 30, 2013 City of Wuan China [Member]	May 30, 2013 Land Transfer Taxes and Fees [Member] Land Use Right [Member]	Apr. 30, 2012 Land Transfer Taxes and Fees [Member] Land Use Right [Member]	Oct. 31, 2012 Land Use Right [Member]	Sep. 30, 2013 Land Use Right [Member]	May 30, 2013 Land Use Right [Member] acre	Dec. 31, 2012 Land Use Right [Member]	Apr. 30, 2012 Land Use Right [Member] acre	Sep. 30, 2013 Patents [Member]	Dec. 31, 2012 Patents [Member]
Note 7 - Land Use Right and Patents (Details) [Line Items]
Land Use Right Term	50 years		50 years
Area of Land (in Acres)									40		66
Finite-Lived Intangible Assets, Gross					$ 1,200,000	$ 1,670,000		$ 22,689,000	$ 8,600,000	$ 13,670,000	$ 13,670,000	$ 1,366,000	$ 1,366,000
Cash Incentives From Municipality				8,600,000
Finite-Lived Intangible Asset, Useful Life		50 years					50 years	50 years				2 years 328 days
Finite-Lived Intangible Assets, Amortization Expense, Annual Amortization								445,000
Amortization of Intangible Assets								285,000				57,000	57,000
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months												76,000
Finite-Lived Intangible Assets, Amortization Expense, Year Two												76,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three												$ 65,000

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Note 11 - Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2013

Sep. 30, 2012

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

In thousands of dollars:
Three Months	Net Revenue		Loss (Income) From Operations			Depreciation and Amortization		Assets
September 30, 2013
Power & Energy Group	$	1,072	$	3,796			425	$	66,330
All Other		60		(41	)		19		277
Consolidated Total	$	1,132	$	3,755		$	444	$	66,607
September 30, 2012
Power & Energy Group	$	296	$	4,483		$	233	$	54,087
All Other		64		(44	)		19		353
Consolidated Total	$	360	$	4,439		$	252	$	54,440

Nine Months	Net Revenue		Loss (Income) From Operations			Depreciation and Amortization		Assets
September 30, 2013
Power & Energy Group	$	5,958	$	10,515			1,006	$	66,330
All Other		180		(123	)		57		277
Consolidated Total	$	6,138	$	10,392		$	1,063	$	66,607
September 30, 2012
Power & Energy Group	$	886	$	14,507		$	714	$	54,087
All Other		185		(125	)		57		353
Consolidated Total	$	1,071	$	14,382		$	771	$	54,440

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]

Customer	Revenue Nine Months Ended September 30, 2013		Accounts Receivable Balance at September 30, 2013
Power and Energy Group:
Hawaiian Electric Light Company	$	2,082
Proterra, LLC		1,529	$	676
Vestas		1,291		62

Customer	Revenue Nine Months Ended September 30, 2012		Accounts Receivable Balance at September 30, 2012
Power and Energy Group:
Emrol	$	139
Hybricon		131
Proterra		121	$	121
ABB Secheron		111		2

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	Revenue Nine Months Ended		Sales Nine Months Ended
Geographic information (a)	2013		2012
United States	$	4,542	$	251
Denmark		1,291
Belgium		137		139
Germany				145
Sweden		43		131
Switzerland				111
Other foreign countries		125		294
Total	$	6,138	$	1,071

Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]

Long-lived assets:	Balance at September 30, 2013		Balance at December 31, 2012
United States	$	4,841	$	6,207
China		29,436		13,625
Total	$	34,277	$	19,832

XML

Note 3 - Fair Value Measurements and Other Financial Measurements (Details) - Current Warrant Liabilities (USD $)	Sep. 30, 2013
Current Warrant Liabilities [Abstract]
Fair Value	$ 120,000
Carrying Value	$ 120,000

XML

Note 5 - Prepaid Expenses and Other Current Assets (Details)	Sep. 30, 2013
Prepaid Expenses And Other Current Assets [Abstract]
Inventory, Finished Goods, Number	50

XML

Note 11 - Business Segment Information (Details) - Revenues by Geographic Area (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Note 11 - Business Segment Information (Details) - Revenues by Geographic Area [Line Items]
Sales	$ 1,132	$ 360	$ 6,138	[1]	$ 1,071	[1]
United States [Member]
Note 11 - Business Segment Information (Details) - Revenues by Geographic Area [Line Items]
Sales			4,542	[1]	251	[1]
Denmark [Member]
Note 11 - Business Segment Information (Details) - Revenues by Geographic Area [Line Items]
Sales			1,291	[1]
Belgium [Member]
Note 11 - Business Segment Information (Details) - Revenues by Geographic Area [Line Items]
Sales			137	[1]	139	[1]
Germany [Member]
Note 11 - Business Segment Information (Details) - Revenues by Geographic Area [Line Items]
Sales					145	[1]
Sweden [Member]
Note 11 - Business Segment Information (Details) - Revenues by Geographic Area [Line Items]
Sales			43	[1]	131	[1]
Switzerland [Member]
Note 11 - Business Segment Information (Details) - Revenues by Geographic Area [Line Items]
Sales					111	[1]
Other Foreign Countries [Member]
Note 11 - Business Segment Information (Details) - Revenues by Geographic Area [Line Items]
Sales			$ 125	[1]	$ 294	[1]

[1] Revenues are attributed to countries based on location of customer.

XML

Note 10 - Note Payable (Details) - Notes Payable (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Note 10 - Note Payable (Details) - Notes Payable [Line Items]
Note payable	$ 11,533	$ 6,680
Mortgage [Member]
Note 10 - Note Payable (Details) - Notes Payable [Line Items]
Note payable	975	1,000
Bank of China [Member]
Note 10 - Note Payable (Details) - Notes Payable [Line Items]
Note payable	1,980	1,980
Industrial and Commercial Bank of China [Member]
Note 10 - Note Payable (Details) - Notes Payable [Line Items]
Note payable	3,700	3,700
Handan Bank [Member]
Note 10 - Note Payable (Details) - Notes Payable [Line Items]
Note payable	$ 4,878

XML

Note 9 - Warrants (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Stockholders' Equity Note [Abstract]
Warrants Not Settleable in Cash, Fair Value Disclosure	$ 120,000
Liabilities, Fair Value Adjustment	$ (30,000)

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	11,590,067	11,590,067
Common stock, shares outstanding	11,590,067	11,590,067

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Note 7 - Land Use Right and Patents

9 Months Ended

Sep. 30, 2013

Disclosure Text Block [Abstract]

Intangible Assets Disclosure [Text Block]

Note 7.   Land Use Right and Patents

Northern Altair signed an agreement in April 2012 to receive a Land Use Right for a period of 50 years with respect to approximately 66 acres of industrial land in Wu’an, China from Heibei Wu’an Municipal People’s Government. Northern Altair was required to bid for the Land Use Right. Northern Altair completed the bidding process and paid approximately $13,670,000 which included various land transfer taxes and fees of approximately $1,670,000. Closing occurred on November 9, 2012 and Northern Altair received the Land Use Right (Wu State-Used, State-Owned Land Use) on this date. This Land will be used for the Company’s nLTO and energy storage system manufacturing operations in China.

Northern Altair signed an agreement in May 2013 to receive a second Land Use Right for a period of 50 years with respect to approximately 40 acres of industrial land in Wu’an, China from Heibei Wu’an Municipal People’s Government. Northern Altair was required to bid for the Land Use Right. Northern Altair completed the bidding process and paid approximately $8,600,000 which included various land transfer taxes and fees of approximately $1,200,000. Closing occurred on May 27, 2013 and Northern Altair received the Land Use Right (Wu State-Used, State-Owned Land Use) on this date. This Land will be used for the Company’s nLTO and energy storage system manufacturing operations in China. Shortly after closing, Northern Altair applied for approximately $8.6 million in cash incentives from the City of Wu’an, China. The amortized land use right’s balances as of September 30, 2013 and December 31, 2012 were:

In thousands of dollars
	September 30, 2013			December 31, 2012
Land use right	$	22,689		$	13,670
Less accumulated amortization		(330	)		(45	)
Total land use right, net	$	22,359		$	13,625

The land use rights were recorded at cost and will be amortized on a straight-line basis over their 50 year useful life at approximately $445,000 per year. Amortization expense for the nine months ended September 30, 2013 totaled $285,000.

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 September 30, 2013 and December 31, 2012 were:

In thousands of dollars
	September 30, 2013			December 31, 2012
Patents and patent applications	$	1,366		$	1,366
Less accumulated amortization		(1,149	)		(1,092	)
Total patents and patent applications	$	217		$	274

The weighted average amortization period for patents is approximately 2.9 years. Amortization expense, which represents the amortization relating to the identified amortizable patents, for the nine months ended September 30, 2013 and December 31, 2012, was $57,000. For each of the next two years, amortization expense relating to patents is expected to be approximately $76,000 per year. Amortization expense is expected to be approximately $65,000 in the third year.

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Consolidated Statements of Comprehensive Loss (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net loss	$ (3,743)	$ (4,671)	$ (10,149)	$ (14,405)
Other comprehensive loss, net of tax:
Foreign currency translation adjustment	(17)	(61)	596	(193)
Comprehensive loss	$ (3,760)	$ (4,732)	$ (9,553)	$ (14,598)

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Note 13 - Subsequent Events (Details) (USD $)	0 Months Ended			1 Months Ended			1 Months Ended			1 Months Ended		1 Months Ended		1 Months Ended
	Oct. 15, 2013 Subsequent Event [Member] Handan Bank [Member] Secured Debt [Member]	Nov. 30, 2013 Subsequent Event [Member] Industrial and Commercial Bank of China [Member]	Oct. 31, 2013 Subsequent Event [Member] Industrial and Commercial Bank of China [Member]	Oct. 31, 2013 Subsequent Event [Member] Bank of China [Member] Secured Debt [Member]	Nov. 30, 2013 Subsequent Event [Member] Bank of China [Member] Secured Debt [Member]	Oct. 31, 2013 Subsequent Event [Member] Bank of China [Member]	Oct. 31, 2013 Subsequent Event [Member] Rural Credit Cooperative [Member]	Nov. 30, 2013 Subsequent Event [Member] Industrial and Commercial Bank of China [Member]	Nov. 30, 2013 Subsequent Event [Member]	Sep. 27, 2013 Handan Bank [Member] Secured Debt [Member]	Sep. 30, 2013 Handan Bank [Member] Secured Debt [Member]	Nov. 30, 2012 Industrial and Commercial Bank of China [Member]	Sep. 30, 2013 Industrial and Commercial Bank of China [Member]	Oct. 31, 2012 Bank of China [Member]	Sep. 30, 2013 Daily Interest Rate [Member] Industrial and Commercial Bank of China [Member]	Nov. 30, 2012 Daily Interest Rate [Member]	Oct. 31, 2012 Daily Interest Rate [Member]
Note 13 - Subsequent Events (Details) [Line Items]
Long-term Debt											$ 8,100,000
Proceeds from Loans	3,300,000						12,200,000			4,900,000		3,700,000		1,980,000
Restricted Cash and Cash Equivalents		3,900,000			4,000,000	2,060,000							2,800,000
Debt Instrument, Face Amount		3,800,000	2,700,000				16,100,000
Escrow Deposit															0.53
Repayments of Bank Debt				$ 1,980,000				$ 3,700,000
Debt Instrument, Interest Rate, Stated Percentage									53.00%							56.00%	53.00%

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Consolidated Balance Sheets (Current Period Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 3,293	$ 12,372
Restricted cash	15,515	6,245
Accounts receivable, net	1,473	1,498
Product inventories, net	5,229	7,416
Prepaid expenses and other assets	1,846	937
Deferred contract costs	1,831	4,532
Total current assets	30,978	34,754
Restricted cash		11,803
Property, Plant, and Equipment	11,702	4,076
Total Assets	66,607	66,389
Current Liabilities
Trade accounts payable	2,860	2,599
Accrued salaries and benefits	676	632
Accrued warranty	634	418
Accrued liabilities	376	384
Deferred revenues	5,639	7,218
Warrant liabilities	120	90
Notes payable, current	11,533	6,680
Capital lease obligation	6	5
Total current liabilities	21,844	18,026
Deferred income	17,627	11,803
Capital lease obligation, less current portion		4
Total Liabilities	39,471	29,833
Stockholders' equity
Common stock, $.001 par value, 200,000,000 shares authorized; 11,590,067 shares issued and outstanding at September 30, 2013 and December 31, 2012	12	12
Additional paid in capital	259,198	259,065
Accumulated deficit	(232,558)	(222,409)
Accumulated other comprehensive income (loss)	484	(112)
Total stockholders' equity	27,136	36,556
Total Liabilities and Stockholders' Equity	66,607	66,389
Prepaid equipment purchases	1,351
Excluding Related Party [Member]
Current assets
Prepaid expenses and other assets	1,846	937
Related Party [Member]
Current assets
Prepaid expenses and other assets	1,791	1,754
Held and Not Used [Member]
Current assets
Property, Plant, and Equipment		1,857
Patents [Member]
Current assets
Intangible Assets	217	274
Land Use Right [Member]
Current assets
Intangible Assets	$ 22,359	$ 13,625

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Note 11 - Business Segment Information (Details) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Note 11 - Business Segment Information (Details) [Line Items]
Number of Operating Segments	2
Entity Wide Revenue, Major Customer, Number		4
Power And Energy Group [Member] | Utility-Scale Energy Storage System [Member]
Note 11 - Business Segment Information (Details) [Line Items]
Proceeds from Customers for Progress Payments (in Dollars)	$ 2,766,000
Power And Energy Group [Member]
Note 11 - Business Segment Information (Details) [Line Items]
Proceeds from Customers for Progress Payments (in Dollars)	$ 4,924,000
Minimum [Member]
Note 11 - Business Segment Information (Details) [Line Items]
Concentration Risk, Percentage	10.00%	10.00%

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Note 1 - Basis of Presentation and Going Concern (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Disclosure Text Block [Abstract]
Net Income (Loss) Attributable to Parent	$ (3,743,000)	$ (4,671,000)	$ (10,149,000)	$ (14,405,000)
Retained Earnings (Accumulated Deficit)	(232,558,000)		(232,558,000)		(222,409,000)
Net Cash Provided by (Used in) Operating Activities			(7,419,000)	(15,696,000)
Financial Benchmark, Working Capital	$ 9,100,000		$ 9,100,000		$ (16,700,000)

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Note 5 - Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2013

Prepaid Expenses And Other Current Assets [Abstract]

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block]

	September 30, 2013		December 31, 2012
Deferred contract costs	$	1,831	$	4,532
Other assets, related party	$	1,791	$	1,754
Prepaid equipment purchases	$	1,351	$	-
Prepaid inventory purchases		1,039		159
Deposits		342		342
Prepaid insurance		395		258
Other prepaid expenses and current assets		70		178
Total prepaid expenses and other current assets	$	1,846	$	937

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Note 8 - Stock-Based Compensation (Details)	0 Months Ended				9 Months Ended		9 Months Ended
	Jun. 23, 2011 The 2005 Plan [Member]	Jun. 21, 2011 The 2005 Plan [Member]	May 30, 2007 The 2005 Plan [Member]	May 29, 2007 The 2005 Plan [Member]	Sep. 30, 2013 Prior Plans [Member]	Sep. 30, 2013 Prior Plans [Member] Minimum [Member]	Sep. 30, 2013 Prior Plans [Member] Maximum [Member]
Note 8 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,208,333	375,000	375,000	125,000	275,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized	833,333
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures					127,667
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number					1,041
Share-based Compensation Arrangement by Share-based Payment Award, Options, Initial Term						5 years	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period							4 years

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Note 11 - Business Segment Information (Details) - Revenues and Accounts Receivable by Major Customers (Prior Period) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Power and Energy Group:
Sales	$ 1,132	$ 360	$ 6,138	[1]	$ 1,071	[1]
Emrol [Member]
Power and Energy Group:
Sales					139
Hybricon [Member]
Power and Energy Group:
Sales					131
Proterra, LLC [Member]
Power and Energy Group:
Sales			1,529		121
Accounts Receivable	676	121	676		121
ABB Secheron [Member]
Power and Energy Group:
Sales					111
Accounts Receivable		$ 2			$ 2

[1] Revenues are attributed to countries based on location of customer.

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Note 6 - Property, Plant and Equipment (Details) (USD $)	9 Months Ended		1 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Jan. 31, 2013 ALTI-ESS Advantage System [Member] Energy Storage Holding LLC [Member]
Note 6 - Property, Plant and Equipment (Details) [Line Items]
Lease Received			$ 20,000
Depreciation	$ 721,000	$ 714,000

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Note 4 - Product Inventories (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Inventory Valuation Reserves	$ 250,000	$ 331,000

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Note 4 - Product Inventories (Details) - Product Inventories (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Product Inventories [Abstract]
Raw materials	$ 1,359	$ 2,337
Work in process	1,614	3,666
Finished goods	2,256	1,413
Total product inventories	$ 5,229	$ 7,416

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Note 6 - Property, Plant and Equipment

9 Months Ended

Sep. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Note 6.   Property, Plant and Equipment

In thousands of dollars
	September 30, 2013			December 31, 2012
Machinery and equipment, held and used	$	11,241		$	6,643
Building and improvements		4,324			4,324
Furniture, office equipment & other		1,669			1,930
Leased assets		1,593
Construction in progress		4,345
		23,172			12,897
Less accumulated depreciation		(11,470	)		(8,821	)
Total property, plant and equipment held & used	$	11,702		$	4,076

Property, plant and equipment held and not used in operations consists of the following:

In thousands of dollars
	September 30, 2013		December 31, 2012
Machinery and equipment, held and not used	$	-	$	4,249
Less accumulated depreciation				(2,392	)
Total property, plant and equipment held and not used	$	-	$	1,857

The construction in progress relates to our new facilities under construction in Wu’an, China. Three new facilities are expected to be operational and fully accepted during the fourth quarter of 2013. Property, plant and equipment held and not used relates to machinery and equipment that was decommissioned at our Reno, Nevada facility and shipped to our China subsidiary. This machinery and equipment was received and installed during the third quarter by our China subsidiary for use in operations.

       The lease asset includes a 1.8 megawatt system for Energy Storage Holdings, LLC. (ESH), which is providing commercial frequency regulation services in the PJM market on the East Coast. This system went into operation in January 2013. We are leasing the ALTI-ESS Advantage™ system to ESH and receive lease payments of approximately $20,000 per month and a share of the revenue generated by the system under the agreed upon terms. The lease term ends February 2016, and ESH has an option to purchase the system during the lease term.

Depreciation expense, for the nine months ended September 30, 2013 and 2012, totaled $721,000 and $714,000, respectively.

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Note 3 - Fair Value Measurements and Other Financial Measurements (Details) - Fair Values (USD $)	Sep. 30, 2013	Dec. 31, 2012
Note 3 - Fair Value Measurements and Other Financial Measurements (Details) - Fair Values [Line Items]
Warrant liabilities:	$ 120,000
Fair Value, Inputs, Level 3 [Member]
Note 3 - Fair Value Measurements and Other Financial Measurements (Details) - Fair Values [Line Items]
Warrant liabilities:	$ 120,000	$ 90,000

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Note 7 - Land Use Right and Patents (Details) - Land Use Right (Land Use Right [Member], USD $)	Sep. 30, 2013	May 30, 2013	Dec. 31, 2012	Apr. 30, 2012
Land Use Right [Member]
Finite-Lived Intangible Assets [Line Items]
Land use right	$ 22,689,000	$ 8,600,000	$ 13,670,000	$ 13,670,000
Less accumulated amortization	(330,000)		(45,000)
Total land use right, net	$ 22,359,000		$ 13,625,000

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Note 9 - Warrants

9 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 9.  Warrants

Warrants Issued to Investors

The fair value of the warrants was determined using the Monte Carlo Simulation model and the following weighted average assumptions were used:

	September 30, 2013			September 30, 2012
Stock Price	$	2.57		$	4.44
Exercise Price	$	14.93		$	14.93
Expected Volatility		77	%		112	%
Expected Dividend Yield	None			None
Expected Term (in years)		2.8			4.0
Risk-free Interest Rate		0.66	%		0.37	%

As of September 30, 2013, the value of the warrant liabilities was $120,000 and the change in fair value during the first nine months of 2013 was a loss of $30,000. The loss was recorded as other expense in the statement of operations. 

Warrant activity for the nine months ended September 30, 2013 and 2012 is summarized as follows:

	2013				2012
	Warrants		Weighted Average Exercise Price		Warrants		Weighted Average Exercise Price
Outstanding at January 1,		412,776	$	14.93		412,776	$	14.93
Issued
Expired
Warrant redemption Exercised
Outstanding at September 30,		412,776	$	14.93		412,776	$	14.93
Currently exercisable		412,776	$	14.93		412,776	$	14.93

The following table summarizes information about warrants outstanding at September 30, 2013:

		Warrants Outstanding and Exercisable
Range of Exercise Prices			Warrants		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
	$13.80			112,776		2.6	$	13.80
$13.86	to	$24.00		300,000		3.0		15.36
				412,776		2.8	$	14.93

 The warrants expire on various dates ranging to September 2016.

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Note 5 - Prepaid Expenses and Other Current Assets

9 Months Ended

Sep. 30, 2013

Prepaid Expenses And Other Current Assets [Abstract]

Prepaid Expenses And Other Current Assets [Text Block]

Note 5.   Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

In thousands of dollars

	September 30, 2013		December 31, 2012
Deferred contract costs	$	1,831	$	4,532
Other assets, related party	$	1,791	$	1,754
Prepaid equipment purchases	$	1,351	$	-
Prepaid inventory purchases		1,039		159
Deposits		342		342
Prepaid insurance		395		258
Other prepaid expenses and current assets		70		178
Total prepaid expenses and other current assets	$	1,846	$	937

Other prepaid expenses and current assets consist primarily of prepaid property taxes, service contracts, marketing expenses and rent. Other assets, related party, relates to a payment made to Yintong Energy (YTE) (an affiliate of Canon) as the Company will be working with YTE to supply the initial order of fifty electric buses to Wu’an, China. The deferred contract costs were incurred, under the completed contract method, for multiple large scale projects for which revenue has not been recognized. Prepaid equipment purchases relate to payments made for production equipment to be used by our Northern Altair facilities.

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net loss	$ (10,149)	$ (14,405)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization	1,063	771
Share-based compensation	133	70
Change in fair value of warrants	30	88
Changes in operating assets and liabilities:
Accounts receivable, net	27	(616)
Product inventories	645	(1,211)
Prepaid expenses and other current assets	(858)	(356)
Deferred contract costs	2,701	(3,331)
Trade accounts payable	263	(203)
Accrued salaries and benefits	45	(280)
Accrued warranty	216	43
Deferred revenues	(1,527)	3,710
Accrued liabilities	(8)	24
Cash flows from operating activities	(7,419)	(15,696)
Cash flows from investing activities:
Decrease (increase) in restricted cash	3,007	(293)
Purchase of land use right	(8,591)
Purchase of property, plant and equipment	(6,268)	(170)
Cash flows from investing activities	(11,852)	(463)
Cash flows from financing activities:
Issuance of common shares for cash, net of issuance costs		1,050
Deferred income	6,162
Proceeds from notes payable	5,893	1,000
Repayment of notes payable	(1,025)
Repayment of capital lease obligation	(3)	(4)
Cash flows from financing activities	11,027	2,046
Effect of exchange rate changes on cash and cash equivalents	(835)	(193)
Decrease in cash and cash equivalents	(9,079)	(14,306)
Cash and cash equivalents, beginning of period	12,372	46,519
Cash and cash equivalents, end of period	3,293	32,213
Supplemental disclosures:
Cash paid for interest	221	28
Cash paid for income taxes	0	0
Non-cash transactions:
Transfer of inventory to property, plant and equipment	$ 1,593

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Note 11 - Business Segment Information (Details) - Reportable Segment Data Reconciled to the Consolidated Financial Statements (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012		Dec. 31, 2012
Segment Reporting Information [Line Items]
Sales	$ 1,132	$ 360	$ 6,138	[1]	$ 1,071	[1]
Loss (Income) From Operations	3,755	4,439	10,392		14,382
Depreciation and Amortization	444	252	1,063		771
Assets	66,607	54,440	66,607		54,440		66,389
Power And Energy Group [Member]
Segment Reporting Information [Line Items]
Sales	1,072	296	5,958		886
Loss (Income) From Operations	3,796	4,483	10,515		14,507
Depreciation and Amortization	425	233	1,006		714
Assets	66,330	54,087	66,330		54,087
Other Segments [Member]
Segment Reporting Information [Line Items]
Sales	60	64	180		185
Loss (Income) From Operations	(41)	(44)	(123)		(125)
Depreciation and Amortization	19	19	57		57
Assets	$ 277	$ 353	$ 277		$ 353

[1] Revenues are attributed to countries based on location of customer.

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Note 9 - Warrants (Details) - Warrant Activity (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Class of Warrant or Right [Line Items]
Outstanding at January 1, (in Dollars per share)	$ 14.93
Outstanding at September 30, (in Dollars per share)	$ 14.93
Warrant [Member]
Class of Warrant or Right [Line Items]
Outstanding at January 1,	412,776	412,776	412,776	412,776
Outstanding at January 1, (in Dollars per share)	$ 14.93	$ 14.93	$ 14.93	$ 14.93
Outstanding at September 30,	412,776	412,776	412,776	412,776
Outstanding at September 30, (in Dollars per share)	$ 14.93	$ 14.93	$ 14.93	$ 14.93
Currently exercisable	412,776		412,776
Currently exercisable (in Dollars per share)	$ 14.93		$ 14.93

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Note 3 - Fair Value Measurements and Other Financial Measurements (Details) - Reconciliation of Activity for Warrant Liabilities (USD $)	9 Months Ended
	Sep. 30, 2013
Reconciliation of Activity for Warrant Liabilities [Abstract]
Warrant liabilities	$ 90,000
Change in fair value	30,000
Warrant liabilities	$ 120,000

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Note 12 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 12. Commitments and Contingencies

On October 31, 2012, Northern Altair entered into a Contract on Assignment of State-owned Construction Land Use Right as described in Note 7. As consideration for the land use right, Northern Altair agreed to make fixed asset investments on the land of approximately $167 million, subject to loan guarantees and other incentives from Wu’an, China, over an unspecified period of time up to the 50 year life of the land use right, with initial construction being required to begin by March 31, 2013. In January 2013, initial construction on a manufacturing facility began on the Company’s land use right in China. The costs incurred to date by the Company total $4.3 million. The Company estimates the remaining costs of this project will cost approximately $1.4 million and will be completed in the fourth quarter of 2013. The remaining costs of this project are expected to be funded by loan guarantees or other incentives from Wu’an, China. Additional construction is contingent upon loan guarantees and other incentives from Wu’an, China as well as other market conditions. The total fixed asset investments shall include the cost of buildings, structures, auxiliary facilities, and equipment, as well as the land-use fee. Northern Altair may transfer and sublease portions of the granted land once it has invested 25% of the required fixed asset investments amount and completed 25% of the project. Closing occurred on November 9, 2012.

On May 16, 2013, Northern Altair entered into a second Contract on Assignment of State-owned Construction Land Use Right as described in Note 7. As consideration for the second land use right, Northern Altair agreed to make fixed asset investments on the land of approximately $99.1 million, subject to loan guarantees and other incentives from Wu’an, China, over an unspecified period of time up to the 50 year life of the land use right, with initial construction being required to begin by May 16, 2014.  In November 2013, initial construction on a manufacturing facility began on the Company’s second land use right in China. There are minimal costs incurred to date by the Company, although the expected total is approximately $4 million. The Company estimates this next phase will be completed in the first quarter 2014. The remaining costs of this project are expected to be funded by loan guarantees or other incentives from Wu’an, China. Additional construction is contingent upon loan guarantees and other incentives from Wu’an, China as well as other market conditions. The total fixed asset investments shall include the cost of buildings, structures, auxiliary facilities, and equipment, as well as the land-use fee. Northern Altair may transfer and sublease portions of the granted land once it has made 25% of the required investments. Closing occurred on May 27, 2013.

Contingencies — We are subject to claims in the normal course of business.  Except for the items noted below, management, after consultation with legal counsel, believes that liabilities, if any, resulting from such claims will not materially affect our financial position or results of operations.

Supplier Concentration — We rely on certain suppliers as the sole-source, or as a primary source, of certain services, raw materials and other components of our products.  We do not yet have long-term supply or service agreements engaged with any such suppliers, which are subject to claims in the normal course of business. 

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Note 8 - Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 8.   Stock-Based Compensation

As of September 30, 2013, we have the Altair Nanotechnologies Inc. 2005 Stock Incentive Plan (the “Plan”), administered by the Board of Directors, which provides for the granting of options and restricted shares to employees, officers, directors and other service providers of ours.  This Plan is described in more detail below.  

The total number of shares authorized to be granted under the Plan was increased from 125,000 to an aggregate of 375,000 based on the proposal approved at the annual and special meeting of shareholders on May 30, 2007. On June 23, 2011, we held an annual and special meeting of shareholders. The proposal to increase the number of authorized shares under the Plan from 375,000 to 1,208,333 shares was approved at this meeting. The additional 833,333 shares approved by the stockholders are not available for stock option issuance at this time, as the Board of Directors has not authorized the filing of the related Registration Statement on Form S-8.

Prior stock option plans, under which we may not make future grants, authorized a total of 275,000 shares, of which options for 127,667 shares of common stock were granted (net of expirations) and options for 1,041 shares of common stock are outstanding and unexercised at September 30, 2013. Options granted under the plans are granted with an exercise price equal to the fair value of a common share at the date of grant, have five-year or ten-year terms and typically vest over periods ranging from immediately to four years from the date of grant.  The estimated fair value of equity-based awards, less expected forfeitures, is amortized over the awards’ vesting period utilizing the graded vesting method.  Under this method, unvested amounts begin amortizing at the beginning of the month in which the options are granted.

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Note 4 - Product Inventories (Tables)

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	September 30, 2013		December 31, 2012
Raw materials	$	1,359	$	2,337
Work in process		1,614		3,666
Finished goods		2,256		1,413
Total product inventories	$	5,229	$	7,416

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Note 13 - Subsequent Events

9 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 13. Subsequent Events

In the third quarter, Northern Altair entered into a loan agreement for $8.1 million with the Bank of Handan. On September 27, 2013 Northern Altair received $4.9 million with the final balance of $3.3 million deposited on October 15, 2013. The due date of the loan is August 27, 2014 and is secured by the Company’s Land Use Right with respect to industrial land in Wu’an, China.

In September 2013, the Company and Northern Altair entered into a series of agreements, wherein, Northern Altair set aside restricted cash of $2.8 million with the ICBC. In return, the ICBC loaned the Company $2.7 million which was received in October 2013. The interest rate on this loan is .0053% daily and the maturity date is September 27, 2014. A portion of the loan proceeds was used to pay off the $1.98 million loan with the Bank of China in October 2013 and released restricted cash of $2.06 million.

On October 31, 2013, Northern Altair received approximately $12.2 million of a $16.1 million loan from the Rural Credit Cooperative. The due date of the loan is October 31, 2014 and is secured by the Company’s Land Use Right with respect to industrial land in Wu’an, China.

In November 2013, the Company and Northern Altair entered into a series of agreements, wherein, Northern Altair set aside restricted cash of approximately $4.0 million with the Bank of China. In return, the Bank of China loaned the Company $3.8 million which was received in November 2013. The interest rate on this loan is .0053% daily and the maturity date is November 7, 2014. A portion of the loan proceeds was used to pay off the $3.7 million loan with the ICBC in November 2013 and released restricted cash of $3.9 million.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 12, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	ALTAIR NANOTECHNOLOGIES INC
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		11,590,067
Amendment Flag	false
Entity Central Index Key	0001016546
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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Note 3 - Fair Value Measurements and Other Financial Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

	Level		September 30, 2013		December 31, 2012
Warrant liabilities:		3	$	120	$	90

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

	Fair value at September 30, 2013		Valuation technique	Unobservable input
Liabilities:
Warrant liabilities	$	120	Monte Carlo option simulation model	Prevailing interest rates, Company’s stock price volatility, expected warrant term

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

	Fair Value		Carrying Value
Warrant liabilities:	$	120	$	120
Total	$	120	$	120

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

Warrant liabilities
Opening balance – December 31, 2012	$	90
Purchases, sales, issuances, and settlements
Transfers into and (or) out of Level 3
Change in fair value		30
Unrealized gains / (losses)
Other adjustments
Closing balance – September 30, 2013	$	120

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

		September 30, 2013				December 31, 2012
		Carrying value		Fair value		Carrying value		Fair value
Accounts receivable, net	2	$	1,473	$	1,473	$	1,498	$	1,498
Trade accounts payable	2	$	2,860	$	2,860	$	2,599	$	2,599
Capital lease obligation	2	$	6	$	6	$	9	$	9
Note payable	2	$	11,533	$	11,533	$	6,680	$	6,680