[X]
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE FISCAL YEAR ENDED DECEMBER 31,
2008
|
[_]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE TRANSITION PERIOD FROM _________ TO
___________
|
Canada
|
1-12497
|
33-1084375
|
||
(State
or other jurisdiction of incorporation)
|
(Commission
File No.)
|
(IRS
Employer Identification
No.)
|
Common Shares, no par value
(Title
of Class)
|
NASDAQ Capital Market
(Name
of each exchange on which
registered)
|
[_]
Large Accelerated Filer
|
[X]
Accelerated Filer
|
[_]
Non-accelerated Filer
(Do
not check if a smaller reporting company)
|
[_]
Smaller reporting Company
|
PART
I
|
1
|
|
Item
1.
|
Business
|
1
|
Item
1A.
|
Risk
Factors
|
19
|
Item
1B.
|
Unresolved
Staff Comments
|
28
|
Item
2.
|
Description
of Property
|
28
|
Item
3.
|
Legal
Proceedings
|
29
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
29
|
PART
II
|
30
|
|
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
30
|
Item
6.
|
Selected
Financial Data
|
32
|
Item
7.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations.
|
32
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
42
|
Item
8.
|
Financial
Statements and Supplementary Data.
|
42
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure.
|
43
|
Item
9A.
|
Controls
and Procedures
|
43
|
Item
9B.
|
Other
Information
|
44
|
PART
III
|
44
|
|
Item
10.
|
Directors
and Executive Officers of the Registrant
|
44
|
Item
11.
|
Executive
Compensation
|
44
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters………
|
44
|
Item
13.
|
Certain
Relationships and Related Transactions
|
44
|
Item
14.
|
Principal
Accountant Fees and Services
|
45
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PART
IV
|
45
|
|
Item
15.
|
Exhibits,
Financial Statement Schedules and Reports on Form 8–K
|
45
|
·
|
Power
and Energy Group
|
o
|
The
design, development, and production of our nano lithium titanate battery
cells, batteries, and battery packs as well as related design and test
services.
|
o
|
The
development, production and sale for testing purposes of electrode
materials for use in a new class of high performance lithium ion batteries
called nano lithium titanate
batteries.
|
·
|
Performance
Materials Division
|
o
|
Through
AlSher Titania, the development and production of high quality titanium
dioxide pigment for use in paint and coatings and nano titanium dioxide
materials for use in a variety of applications including those related to
removing contaminants from air and
water.
|
o
|
The
testing, development, marketing and/or licensing of
nano-structured ceramic powders for use in various application, such as
advanced performance coatings, air and water purification systems, and
nano-sensor applications.
|
·
|
Life
Sciences Division
|
o
|
The
co-development of RenaZorb, a test-stage active pharmaceutical ingredient,
which is designed to be useful in the treatment of elevated serum
phosphate levels in human patients undergoing kidney
dialysis.
|
o
|
The
development of a manufacturing process related to a test-stage active
pharmaceutical ingredient, designed to be useful in the treatment of
companion animals.
|
·
|
Power: A battery’s power rating is its
ability to deliver current while maintaining its
voltage.
|
·
|
Discharge: Discharge refers to the
dissipation of a battery’s stored energy as a result of intended transfer
of that energy (either gradually or in one or more large bursts) or as a
result of the unintended leakage of that energy. This latter
type of leakage is referred to as “self discharge” and is a natural
tendency of all batteries at a rate that is proportional to
temperature. A “deep discharge”
refers to the discharge of substantially all of the stored energy in a
battery between recharges. In general, deep discharges reduce
the cycle life of batteries.
|
·
|
Energy density: A battery’s
energy density is normally described as watt-hours/kilogram or
watt-hours/liter and refers to the available energy per unit weight or per
unit volume. A battery with high energy density will deliver
more energy per unit weight or volume than a battery with lower energy
density.
|
·
|
Cycle life: The ability of a
rechargeable battery to store energy tends to diminish as a result of
repeated charge/discharge cycles. A battery’s “cycle life” is
the number of times it can be charged and discharged without a significant
reduction in its energy storage
capacity.
|
·
|
Calendar
life: A battery’s calendar life relates to the period of time
that a battery will preserve its capability to deliver a significant
portion of its original energy storage
capacity.
|
·
|
Recharge
time: Recharge time is the amount of time it takes to replenish
a battery’s energy.
|
·
|
Lower
dosage requirements because of better phosphate binding per gram of drug
compared with existing or currently proposed
drugs;
|
·
|
Fewer
and less severe side effects because of less gassing and lower dosage;
and
|
·
|
Better
patient compliance because of fewer and smaller
tablets.
|
·
|
purchases
of a specified dollar amount of common shares of the Company at a premium
above market price upon the reaching of various milestones representing
progress in the testing and obtaining of regulatory approval for
RenaZorb;
|
·
|
milestone
payments upon obtaining approval from the FDA and similar regulatory
agencies in Europe and Japan to market
RenaZorb;
|
·
|
milestone
payments as certain annual net sales targets are
reached;
|
·
|
royalty
payments based upon a percentage of net revenue from sales of RenaZorb in
each country (subject to adjustment for combined products and in other
circumstances) as long as patents applicable to that country remain valid;
and
|
·
|
technology
usage payments thereafter until generic competition
emerges.
|
·
|
Specifically
targeted to address chronic kidney disease in companion
animals
|
·
|
Palatable
with normal food intake regime
|
·
|
Can
be administered in powder form which can be mixed with the pet’s
food.
|
·
|
fluctuations
in the size and timing of customer orders from one quarter to the
next;
|
·
|
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 our key
customers;
|
·
|
our
ability to commercialize and obtain orders for products we are
developing;
|
·
|
costs
associated with developing our manufacturing
capabilities;
|
·
|
new
product announcements or introductions by our competitors or potential
competitors;
|
·
|
the
effect of variations in the market price of our common shares on our
equity-based compensation expenses;
|
·
|
technology
and intellectual property issues associated with our products;
and
|
·
|
general
political, social, geopolitical and economic trends and
events.
|
·
|
Our
pending patent applications may not be granted for various reasons,
including the existence of conflicting patents or defects in our
applications;
|
·
|
The
patents we have been granted may be challenged, invalidated or
circumvented because of the pre-existence of similar patented or
unpatented intellectual property rights or for other
reasons;
|
·
|
Parties
to the confidentiality and invention agreements may have such agreements
declared unenforceable or, even if the agreements are enforceable, may
breach such agreements;
|
·
|
The
costs associated with enforcing patents, confidentiality and invention
agreements or other intellectual property rights may make aggressive
enforcement cost prohibitive;
|
·
|
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 our patented or
unpatented proprietary
rights.
|
·
|
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;
|
·
|
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.
|
·
|
economic
conditions and capital financing and liquidity
constraints;
|
·
|
short-term
and long-term trends in the supply and price of 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
anticipated or actual funding, or elimination of funding for, programs
that support renewable energy programs, electric grid improvements,
certain military electric vehicle initiatives and related
programs;
|
·
|
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.
|
·
|
we
may find that the acquired company or technology does not further our
business strategy, that we overpaid for the company or technology or that
the economic conditions underlying our acquisition decision have
changed;
|
·
|
we
may have difficulty integrating the assets, technologies, operations or
personnel of an acquired company, or retaining the key personnel of the
acquired company;
|
·
|
our
ongoing business and management's attention may be disrupted or diverted
by transition or integration issues and the complexity of managing
geographically or culturally diverse
enterprises;
|
·
|
we
may encounter difficulty entering and competing in new product or
geographic markets or increased competition, including price competition
or intellectual property litigation;
and
|
·
|
we
may experience significant problems or liabilities associated with product
quality, technology and legal contingencies relating to the acquired
business or technology, such as intellectual property or employment
matters.
|
·
|
Further
testing of potential life science products using our technology may
indicate that such products are less effective than existing products,
unsafe, have significant side effects or are otherwise not
viable;
|
·
|
The
licensees may be unable to obtain FDA or other regulatory approval for
technical, political or other reasons or, even if it obtains such
approval, may not obtain such approval on a timely basis; in this regard,
we note that Spectrum Pharmaceuticals, Inc., the license of RenaZorb, has
been significantly delayed in testing on RenaZorb;
and
|
·
|
End
products for which FDA approval is obtained, if any, may fail to obtain
significant market share for various reasons, including questions about
efficacy, need, safety and side effects or because of poor marketing by
the licensee.
|
·
|
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
may 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.
|
·
|
market
factors affecting the availability and cost of capital generally,
including recent 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 common
shares;
|
·
|
our
financial results, particularly the amount of revenue we are generating
from operations;
|
·
|
the
amount of our capital needs;
|
·
|
the
market's perception of companies in one or more of our lines of
business;
|
·
|
the
economics of projects being pursued;
and
|
·
|
the
market's perception of our ability to execute our business plan and any
specific projects identified as uses of
proceeds.
|
·
|
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.
|
Fiscal
Year Ended December 31, 2007
|
Low
|
High
|
|
1st
Quarter
|
$2.48
|
$4.10
|
|
2nd
Quarter
|
$2.92
|
$3.75
|
|
3rd
Quarter
|
$2.80
|
$4.09
|
|
4th
Quarter
|
$3.23
|
$5.45
|
|
|
|||
Fiscal
Year Ended December 31, 2008
|
Low
|
High
|
|
1st
Quarter
|
$1.97
|
$4.81
|
|
2nd
Quarter
|
$1.63
|
$2.73
|
|
3rd
Quarter
|
$1.45
|
$2.94
|
|
4th
Quarter
|
$0.75
|
$2.40
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
Plan
Category
|
(a)
|
(b)
|
(c)
|
Equity
compensation plans approved by security holders
|
3,956,507
|
$3.028
|
5,420,419
|
Equity
compensation plans not approved by security holders
|
None
|
N/A
|
None
|
Total
|
3,956,507
|
$3.028
|
5,420,419
|
For
the Year Ended December 31,
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
STATEMENTS OF OPERATIONS
|
||||||||||||||||||||
Revenues
|
$ | 5,726,310 | $ | 9,108,483 | $ | 4,323,960 | $ | 2,806,535 | $ | 1,151,892 | ||||||||||
Operating
expenses
|
$ | (35,852,320 | ) | $ | (42,175,957 | ) | $ | (22,005,375 | ) | $ | (13,288,388 | ) | $ | (8,056,847 | ) | |||||
Interest
expense
|
$ | (97,091 | ) | $ | (134,254 | ) | $ | (171,500 | ) | $ | (207,189 | ) | $ | (194,180 | ) | |||||
Interest
income
|
$ | 981,891 | $ | 1,101,682 | $ | 654,182 | $ | 750,306 | $ | 96,229 | ||||||||||
(Loss)
Gain on foreign exchange
|
$ | (9,820 | ) | $ | (1,292 | ) | $ | (1,550 | ) | $ | 1,524 | $ | 626 | |||||||
Realized
loss on investment
|
$ | (88,701 | ) | $ | - | $ | - | $ | - | $ | - | |||||||||
Loss
from continuing operations before minority interests’
share
|
$ | (29,339,731 | ) | $ | (32,101,338 | ) | $ | (17,200,283 | ) | $ | (9,937,212 | ) | $ | (7,002,280 | ) | |||||
Minority
interests’ share
|
$ | 271,566 | $ | 630,717 | $ | - | $ | - | $ | - | ||||||||||
Net
Loss
|
$ | (29,068,165 | ) | $ | (31,470,621 | ) | $ | (17,200,283 | ) | $ | (9,937,212 | ) | $ | (7,002,280 | ) | |||||
Basic
and diluted net loss percommon share
|
$ | (0.34 | ) | $ | (0.45 | ) | $ | (0.29 | ) | $ | (0.17 | ) | $ | (0.14 | ) | |||||
Cash
dividends declared per common share
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
BALANCE SHEET DATA
|
||||||||||||||||||||
Working
capital
|
$ | 26,066,847 | $ | 39,573,052 | $ | 25,928,376 | $ | 21,482,766 | $ | 7,663,264 | ||||||||||
Total
assets
|
$ | 48,071,036 | $ | 73,858,635 | $ | 43,120,573 | $ | 33,464,016 | $ | 15,547,021 | ||||||||||
Current
liabilities
|
$ | ( 3,646,646 | ) | $ | (14,328,781 | ) | $ | (3,499,862 | ) | $ | (2,427,543 | ) | $ | (376,773 | ) | |||||
Long-term
obligations
|
$ | (608,299 | ) | $ | (1,200,000 | ) | $ | (1,800,000 | ) | $ | (2,400,000 | ) | $ | (2,880,311 | ) | |||||
Minority
Interest in Subsidiary
|
$ | (1,097,717 | ) | $ | (1,369,283 | ) | $ | - | $ | - | $ | - | ||||||||
Net
shareholders' equity
|
$ | (42,718,374 | ) | $ | (56,960,571 | ) | $ | (37,820,711 | ) | $ | (28,636,473 | ) | $ | (12,289,937 | ) |
·
|
Power
and Energy Group
|
o
|
The
design, development, and production of our nano lithium titanate battery
cells, batteries, and battery packs as well as related design and test
services.
|
o
|
The
development, production and sale for testing purposes of electrode
materials for use in a new class of high performance lithium ion batteries
called nano lithium titanate
batteries.
|
·
|
Performance
Materials Division
|
o
|
Through
AlSher Titania, the development and production of high quality titanium
dioxide pigment for use in paint and coatings, and nano titanium dioxide
materials for use in a variety of applications including those related to
removing contaminants from air and
water.
|
o
|
The
testing, development, marketing and/or licensing of
nano-structured ceramic powders for use in various application, such as
advanced performance coatings, air and water purification systems, and
nano-sensor applications.
|
·
|
Life
Sciences Division
|
o
|
The
co-development of RenaZorb, a test-stage active pharmaceutical ingredient,
which is designed to be useful in the treatment of elevated serum
phosphate levels in patients undergoing kidney
dialysis.
|
o
|
The
development of a manufacturing process related to a test-stage active
pharmaceutical ingredient, which is designed to be useful in the treatment
of companion animals.
|
·
|
In
May 2008, we successfully completed the trial of a 2 megawatt battery
system with AES Energy Storage, LLC, a subsidiary of global power leader
The AES Corporation. Under the terms of the Agreement, KEMA (an
independent third party) designed and oversaw the system testing and then
prepared a final report assessing the battery system’s
performance. The system performed well and according to KEMA
the battery system “successfully demonstrated the potential of using the
new battery technology for utility applications. There were no
inherent design limitations identified in its application within the
designed 1-MW power handling range.” Based on the success of
this trial we are continuing to develop our relationship with AES and have
generated a substantial amount of interest in the product from other
entities.
|
·
|
In
July 2008, we terminated our contractual relationship with Phoenix to
provide them with lithium titanate battery packs and resolved all
outstanding issues with them. The transportation market in
general for lithium ion batteries has been slower to develop than we
initially anticipated. As a consequence, we have shifted more
of our focus to stationary power and military applications that are
evolving more rapidly.
|
·
|
Our
efforts with the U.S. military and the British Ministry of Defense (“MoD”)
continue to move forward positively on a number of different
projects. Initial testing phases on each project with the U.S.
Army, U.S. Navy and MoD have all progressed impressively and ongoing
government funding for 2009 is in
place.
|
·
|
Spectrum
must begin the testing and application processes necessary to receive FDA
approval of RenaZorb and related products. Spectrum is currently
doing an in-vivo competitive study to determine the efficacy of the
alternate high surface area product they requested from us compared to
Fosrenol. This will take approximately two months to
complete. Then, if RenaZorb performs well against Fosrenol,
Spectrum has indicated that it will begin the pre-clinical work which
originally was expected to take about one year to
complete. Consequently, we now do not expect the application to
be filed until mid 2010.
|
·
|
We
previously had formed the AlSher Titania joint venture with The
Sherwin-Williams Company to develop and produce titanium dioxide pigment
for use in paint and coatings. During 2008, the 100 ton per
annum pilot plant was commissioned and operated producing pigment material
for evaluation and to provide engineering data to complete a cost study
relating to the anticipated scale up to a 5,000 ton per annum
demonstration plant. Engineering data was produced and
delivered to The Sherwin-Williams Company in the first week of January
2009. At this time, neither Sherwin-Williams nor Altair is
willing to commit the resources necessary to build the 5,000 ton per annum
demonstration plant. AlSher continues to look for a third party
interested in this technology.
|
Less
Than
|
After
|
|||||||||||||||||||
Contractual
Obligations
|
Total
|
1
Year
|
1-3
Years
|
4-5
Years
|
5
Years
|
|||||||||||||||
Notes
Payable
|
$ | 1,332,133 | $ | 732,133 | $ | 600,000 | $ | - | $ | - | ||||||||||
Interest
on Notes Payable
|
126,000 | 84,000 | 42,000 | - | - | |||||||||||||||
Contractual
Service Agreements
|
1,526,707 | 1,526,707 | - | - | - | |||||||||||||||
Facilities
and Property Operating Leases
|
1,012,614 | 277,608 | 586,254 | 148,752 | - | |||||||||||||||
Property
and Capital Leases
|
79,078 | 70,779 | 8,299 | - | - | |||||||||||||||
Unfulfilled
Purchase Orders
|
534,299 | 534,299 | - | - | - | |||||||||||||||
Total
Contractual Obligations
|
$ | 4,610,831 | $ | 3,225,526 | $ | 1,236,553 | $ | 148,752 | $ | - |
·
|
Long-Lived
Assets. Our long-lived assets consist principally of the
nanomaterials and titanium dioxide pigment assets, the intellectual
property (patents and patent applications) associated with them, and a
building. Included in these long-lived assets are those that
relate to our research and development process. These assets are
initially evaluated for capitalization based on Statement of Financial
Accounting Standards (“SFAS”) No. 2, Accounting for Research and
Development Costs. If the assets have alternative future uses
(in research and development projects or otherwise), they are capitalized
when acquired or constructed; if they do not have alternative future uses,
they are expensed as incurred. At December 31, 2008, the carrying
value of these assets was $14,649,822, or 30% of total
assets. We evaluate the carrying value of long-lived assets
when events or circumstances indicate that impairment may
exist. In our evaluation, we estimate the net undiscounted cash
flows expected to be generated by the assets, and recognize impairment
when such cash flows will be less than the carrying
values. Events or circumstances that could indicate the
existence of a possible impairment include obsolescence of the
technology, an absence of market demand for the product, and/or the
partial or complete lapse of technology rights
protection.
|
·
|
Share-Based
Compensation. We have a stock incentive plan that provides for
the issuance of stock options, restricted stock and other awards to
employees and service providers. We calculate compensation
expense under SFAS 123R using a Black-Scholes Merton option pricing
model. In so doing, we estimate certain key assumptions used in
the model. We believe the estimates we use, which are presented
in Note 11 of Notes to the Consolidated Financial Statements, are
appropriate and reasonable.
|
·
|
Revenue
Recognition. We recognize revenue when persuasive evidence of
an arrangement exists, delivery has occurred or service has been
performed, the fee is fixed and determinable, and collectability is
probable. During 2008, our revenues were derived from three sources:
product sales, commercial collaborations, and contract research and
development. License fees are recognized when the agreement is
signed, we have performed all material obligations related to the
particular milestone payment or other revenue component and the earnings
process is complete. Revenue for product sales is recognized
upon delivery of the product, unless specific contractual terms dictate
otherwise. Based on the specific terms and conditions of each
contract/grant, revenues are recognized on a time and materials basis, a
percentage of completion basis and/or a completed contract
basis. Revenue under contracts based on time and materials is
recognized at contractually billable rates as labor hours and expenses are
incurred. Revenue under contracts based on a fixed fee
arrangement is recognized based on various performance measures, such as
stipulated milestones. As these milestones are achieved, revenue is
recognized. From time to time, facts develop that may require us to
revise our estimated total costs or revenues expected. The
cumulative effect of revised estimates is recorded in the period in which
the facts requiring revisions become known. The full amount of
anticipated losses on any type of contract is recognized in the period in
which it becomes known. Payments received in advance relating
to future performance of services or delivery of products are deferred
until the performance of the service is complete or the product is
shipped. Upfront payments received in connection with certain
rights granted in contractual arrangements are deferred and amortized over
the related time period over which the benefits are
received. Based on specific customer bill and hold agreements,
revenue is recognized when the inventory is shipped to a third party
storage warehouse, the inventory is segregated and marked as sold, the
customer takes the full rights of ownership and title to the inventory
upon shipment to the warehouse per the bill and hold
agreement. When contract terms include multiple components that
are considered separate units of accounting, the revenue is attributed to
each component and revenue recognition may occur at different points in
time for product shipment, installation, and service contracts based on
substantial completion of the earnings
process.
|
·
|
Accrued
Warranty. We
provide a limited warranty for battery packs and energy storage
systems. A liability is recorded for estimated warranty
obligations at the date products are sold. Since these are new
products, the estimated cost of warranty coverage is based on cell and
module life cycle testing and compared for reasonableness to warranty
rates on competing battery products. As sufficient actual
historical data is collected on the new product, the estimated cost of
warranty coverage will be adjusted accordingly. The liability
for estimated warranty obligations may also be adjusted based on specific
warranty issues identified.
|
·
|
Overhead
Allocation. Facilities overheads, which are comprised primarily
of occupancy and related expenses, and fringe benefit expenses, are
initially recorded in general and administrative expenses and then
allocated monthly to research and development expense based on labor
costs. Facilities overheads and fringe benefits allocated to
research and development projects may be chargeable when invoicing
customers under certain research and development
contracts.
|
·
|
Allowance
for Doubtful Accounts. The allowance for doubtful accounts is
based on our assessment of the collectability of specific customer
accounts and the aging of accounts receivable. We analyze historical
bad debts, the aging of customer accounts, customer concentrations,
customer credit-worthiness, current economic trends and changes in our
customer payment patterns when evaluating the adequacy of the allowance
for doubtful accounts. From period to period, differences in
judgments or estimates utilized may result in material differences in the
amount and timing of our bad debt
expenses.
|
·
|
Inventory. The
Company values its inventories generally at the lower of cost (first-in,
first-out method) or market. We employ a full absorption
procedure using standard cost techniques. The standards are
customarily reviewed and adjusted annually. Overhead rates are
recorded to inventory based on normal capacity. Any idle
facility costs or excessive spoilage are recorded as current period
charges.
|
·
|
Deferred
Income Tax. Income taxes are accounted for using the asset and
liability method. Deferred income tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax
credit carry forwards. Deferred income tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred income tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. Future tax benefits are subject to
a valuation allowance when management is unable to conclude that its
deferred income tax assets will more likely than not be realized from the
results of operations. We have recorded a valuation allowance to
reflect the estimated amount of deferred income tax assets that may not be
realized. The ultimate realization of deferred income tax assets is
dependent upon generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers
projected future taxable income and tax planning strategies in making this
assessment. Based on the historical taxable income and projections for
future taxable income over the periods in which the deferred income tax
assets become deductible, management believes it more likely than not
that the Company will not realize benefits of these deductible differences
as of December 31, 2008. Management has, therefore, established a
full valuation allowance against its net deferred income tax assets as of
December 31, 2008. Due to the significant increase in common
shares issued and outstanding from 2005 through 2008, Section 382 of the
Internal Revenue Code may provide significant limitations on the
utilization of our net operating loss carry forwards. As a
result of these limitations, a portion of these loss and credit carryovers
may expire without being utilized.
|
Supplementary
Financial Information by Quarter, 2008 and 2007
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Quarter
Ended
|
Quarter
Ended
|
Quarter
Ended
|
Quarter
Ended
|
|||||||||||||
March
31
|
June
30
|
September
30
|
December
31
|
|||||||||||||
Year
Ended December 31, 2008:
|
||||||||||||||||
Revenues
|
$ | 1,069,337 | $ | 1,902,659 | $ | 1,801,615 | $ | 952,699 | ||||||||
Operating
Expenses
|
$ | 9,818,532 | $ | 7,838,878 | $ | 11,124,480 | $ | 7,070,430 | ||||||||
Net
Loss
|
$ | (8,288,436 | ) | $ | (5,660,322 | ) | $ | (9,110,966 | ) | $ | (6,008,441 | ) | ||||
Loss
per Common Share: (1)
|
||||||||||||||||
Basic
and Diluted
|
$ | (0.10 | ) | $ | (0.07 | ) | $ | (0.11 | ) | $ | (0.08 | ) | ||||
Year
Ended December 31, 2007:
|
||||||||||||||||
Revenues
|
$ | 1,140,932 | $ | 3,065,868 | $ | 3,370,134 | $ | 1,531,549 | ||||||||
Operating
Expenses
|
$ | 6,630,398 | $ | 8,915,384 | $ | 9,619,193 | $ | 16,710,982 | ||||||||
Net
Loss
|
$ | (5,181,467 | ) | $ | (5,430,583 | ) | $ | (6,130,210 | ) | $ | (14,728,362 | ) | ||||
Loss
per Common Share: (1)
|
||||||||||||||||
Basic
and Diluted
|
$ | (0.07 | ) | $ | (0.08 | ) | $ | (0.09 | ) | $ | (0.20 | ) | ||||
(1) Loss
per common share is computed independently for each of the quarters
presented. Therefore, the sum of the quarterly loss per common share
amounts does not necessarily equal the total for the year.
|
·
|
pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of our
assets;
|
·
|
provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting
principles generally accepted in the United States of
America;
|
·
|
provide
reasonable assurance that our receipts and expenditures are being made
only in accordance with authorization of our management;
and
|
·
|
provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of assets that could have a
material effect on our consolidated financial
statements.
|
·
|
Report
of Independent Registered Public Accounting
Firm
|
·
|
Report
of Independent Registered Public Accounting Firm on Internal Control over
Financial Reporting
|
·
|
Consolidated
Balance Sheets, December 31, 2008 and
2007
|
·
|
Consolidated
Statements of Operations for Each of the Three Years in the Period Ended
December 31, 2008
|
·
|
Consolidated
Statements of Shareholders’ Equity and Comprehensive Loss for Each of the
Three Years in the Period Ended December 31,
2008
|
·
|
Consolidated
Statements of Cash Flows for Each of the Three Years in the Period Ended
December 31, 2008
|
·
|
Notes
to Consolidated Financial
Statements
|
ALTAIR NANOTECHNOLOGIES INC. | |||
|
By:
|
/s/ Terry Copeland | |
Terry Copeland, | |||
President and Chief Executive Officer | |||
Date: March 16, 2009 |
Signature
|
Title
|
Date
|
||
/s/ Terry Copeland
Terry
Copeland
|
President
and Chief Executive Officer (Principal Executive Officer)
|
March
16, 2009
|
||
/s/ John Fallini
John
Fallini
|
Chief
Financial Officer and Corporate Secretary (Principal Financial and
Accounting Officer)
|
March
16, 2009
|
||
/s/ Terry Copeland
Terry
Copeland
|
Director
|
March
16, 2009
|
||
/s/ Michel
Bazinet
Michel
Bazinet
|
Director
|
March
16, 2009
|
||
/s/ Jon N. Bengtson
Jon
N. Bengtson
|
Director
|
March
16, 2009
|
||
/s/ George E.
Hartman
George
E. Hartman
|
Director
|
March
16, 2009
|
||
/s/ Robert F.
Hemphill, Jr.
Robert
F. Hemphill, Jr.
|
Director
|
March
16, 2009
|
||
/s/ Pierre Lortie
Pierre
Lortie
|
Director
|
March
16, 2009
|
||
/s/ Robert G. van Schoonenberg
Robert
G. van Schoonenberg
|
Director
|
March
16, 2009
|
||
/s/ Eqbal Al Yousuf
Eqbal
Al Yousuf
|
Director
|
March
16, 2009
|
Exhibit
No.
|
Description
|
Incorporated
by Reference/
Filed
Herewith (and Sequential Page #)
|
||
3.1
|
Articles
of Continuance
|
Incorporated
by reference to the Current Report on Form 8-K filed with the SEC on July
18, 2002.**
|
||
3.2
|
Bylaws
|
Incorporated
by reference to the Amendment No. 1 to Annual Report on Form 10-K/A filed
with the SEC on March 10, 2005. **
|
||
4.1
|
Form
of Common Stock Certificate
|
Incorporated
by reference to Registration Statement on Form 10–SB filed with the SEC on
November 25, 1996. **
|
||
4.2
|
Amended
and Restated Shareholder Rights Plan dated
October 15, 1999, with Equity Transfer
Services, Inc.
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed with the
SEC on November 19, 1999. **
|
||
10.1
|
Altair
International Inc. Stock Option Plan (1996)
|
Incorporated
by reference to the Company's Registration Statement on Form S-8, File No.
333-33481 filed with the SEC on July 11, 1997.
|
||
10.2
|
1998
Altair International Inc. Stock Option Plan
|
Incorporated
by reference to the Company’s Definitive Proxy Statement on Form 14A filed
with the SEC on May 12, 1998. **
|
||
10.3
|
Altair
Nanotechnologies Inc. 2005 Stock Incentive Plan (Amended and
Restated)
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed with the
SEC on March 13, 2007.**
|
||
10.4
|
Standard
Form of Stock Option Agreement under 2005 Stock Incentive
Plan
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed with the
SEC on March 13, 2007.**
|
||
10.5
|
Standard
Form of Restricted Stock Agreement under 2005 Stock Incentive
Plan
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed with the
SEC on March 13, 2007.**
|
||
10.6
|
Installment
Note dated August 8, 2002 (re Edison Way property) in favor of BHP
Minerals International, Inc.
|
Incorporated
by reference to the Company’s Amendment No. 1 to Registration Statement on
Form S-2, File No. 333-102592, filed with the SEC on February 7,
2003.
|
||
10.7
|
Trust
Deed dated August 8, 2002 (re Edison Way property) with BHP Minerals
International, Inc.
|
Incorporated
by reference to the Company’s Amendment No. 1 to Registration Statement on
Form S-2, File No. 333-102592, filed with the SEC on February 7,
2003.
|
||
10.8
|
Flagship
Business Accelerator Tenant Lease dated July 1, 2007 with the Flagship
Enterprise Center, Inc.
|
Incorporated
by reference to the Company’s Quarterly Report on Form 10-Q
filed with the SEC August 9, 2007.
**
|
Exhibit
No.
|
Description
|
Incorporated
by Reference/
Filed
Herewith (and Sequential Page #)
|
||
10.9
|
Amendment
to the Flagship Business Accelerator Tenant Lease dated March 1, 2008 with
the Flagship Enterprise Center, Inc.
|
Incorporated
by reference to the Company’s Quarterly Report on Form 10-Q filed with the
SEC on May 8, 2008.**
|
||
10.10
|
License
Agreement dated January 28, 2005 with Spectrum Pharmaceuticals,
Inc.*
|
Incorporated
by reference from the Company’s Current Report on Form 8-K filed with the
SEC on February 4, 2005.**
|
||
10.11
|
Purchase
and Supply Agreement dated January 8, 2007 with Phoenix Motorcars,
Inc.*
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on January 12, 2007. **
|
||
10.12
|
Letter
agreement dated July 20, 2008 with Phoenix Motorcars, Inc.
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on July 24, 2008. **
|
||
10.13
|
Department
of Energy Grant Agreement dated September 9, 2006 with the U.S. Department
of Energy
|
Incorporated
by reference to the Annual Report on Form 10-K filed with the SEC on March
13, 2007.**
|
||
10.14
|
Subcontract
dated March 6, 2007 with U.N.L.V.
|
Incorporated
by reference to the Company’s Quarterly Report on Form 10-Q
filed with the SEC May 10, 2007. **
|
||
10.15
|
Contribution
Agreement dated April 24, 2007 with the Sherwin-Williams Company and
AlSher Titania*
|
Incorporated
by reference to the Current Report on Form 8-K filed with the SEC on April
30, 2007. **
|
||
10.16
|
License
Agreement dated April 24, 2007 with the Sherwin-Williams Company and
AlSher Titania
|
Incorporated
by reference to the Current Report on Form 8-K filed with the SEC on April
30, 2007. **
|
||
10.17
|
Development
Services Agreement executed on September 25, 2007 between the Company and
Elanco Animal Health*
|
Incorporated
by reference to the Current Report on Form 8-K filed with the SEC on
September 27, 2007, File No. 001-12497
|
||
10.18
|
Letter
agreement dated April 21, 2006 with JP Morgan Securities,
Inc.
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on November 30, 2007.**
|
||
10.19
|
Letter
agreement dated September 24, 2007 with JPMorgan Securities,
Inc.
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on November 30, 2007.**
|
||
10.20
|
Subcontract
dated January 29, 2008 with the Office of Naval Research
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed with the
SEC on March 13, 2007.**
|
Exhibit
No.
|
Description
|
Incorporated
by Reference/
Filed
Herewith (and Sequential Page #)
|
||
10.21
|
Service
Agreement dated February 11, 2008 with Melpar BVBP
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed with the
SEC on March 13, 2007.**
|
||
10.22
|
Mandate
& Contractorship Agreement dated February 11, 2008 with Rik
Dobbelaere
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed with the
SEC on March 13, 2007.**
|
||
10.23
|
Employment
Agreement dated December 17, 2006 with Alan J. Gotcher,
Ph.D.
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on February 21, 2006.**
|
||
10.24
|
Amendment
dated August 17, 2007 to Altair Executive Employment Agreement between the
Company and Alan Gotcher
|
Incorporated
by reference to the Current Report on Form 8-K filed with the SEC on
August 17, 2007, File No. 001-12497
|
||
10.25
|
Separation
Agreement and Release of All Claims dated April 18, 2008 with Alan
Gotcher**
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed with the
SEC on April 27, 2008.**
|
||
10.26
|
Employment
Agreement dated December 17, 2006 with Edward Dickinson
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on February 21, 2006. **
|
||
10.27
|
Amendment
dated August 17, 2007 to Altair Executive Employment Agreement between the
Company and Edward Dickinson
|
Incorporated
by reference to the Current Report on Form 8-K filed with the SEC on
August 17, 2007, File No. 001-12497
|
||
10.28
|
Employment
Agreement dated December 7, 2007 with Bruce Sabacky
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on December 7, 2007.**
|
||
10.29
|
Amendment
dated August 17, 2007 to Altair Executive Employment Agreement between the
Company and Bruce Sabacky
|
Incorporated
by reference to the Current Report on Form 8-K filed with the SEC on
August 17, 2007, File No. 001-12497
|
||
10.30
|
Employment
Agreement dated June 26, 2008 with Terry Copeland
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on July 1, 2008.**
|
||
10.31
|
Employment
Agreement dated March 10, 2008 with Jeffrey A. McKinney
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed with the
SEC on March 13, 2007.**
|
||
10.32
|
Separation
Agreement and Release of All Claims dated September 5, 2008 with Jeffrey
McKinney
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed with the
SEC on September 5, 2008.**
|
||
10.33
|
Employment
Agreement dated March 10, 2008 with Stephen Balogh
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed with the
SEC on March 13,
2007.**
|
Exhibit
No.
|
Description
|
Incorporated
by Reference/
Filed
Herewith (and Sequential Page #)
|
||
10.34
|
Employment
Agreement dated April 7, 2008 with John Fallini
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on April 9, 2008.**
|
||
10.35
|
Employment
Agreement dated June 16, 2008 with C. Robert Pedraza
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on June 20, 2008.**
|
||
10.36
|
Employment
Agreement dated November 24, 2008 with Dan Voelker
|
Incorporated
by reference to the Current Report on Form 8-K filed with the SEC on
November 24, 2008, File No. 001-12497**
|
||
10.37
|
2007
Annual Executive Incentive Bonus Plan*
|
Incorporated
by reference to the Annual Report on Form 10-K filed with the SEC on March
13, 2007. **
|
||
10.38
|
2008
Annual Incentive Bonus Plan*
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on July 2, 2008.**
|
||
10.39
|
Registration
Rights Agreement dated November 29, 2007 with Al Yousuf
LLC
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on November 30, 2007.**
|
||
10.40
|
Stock
Purchase and Settlement Agreement with Al Yousuf, LLC dated October 6,
2008
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed
with the SEC on October 6, 2008.**
|
||
21
|
List
of Subsidiaries
|
Incorporated
by reference from Item 1 of this report.
|
||
23.1
|
Consent
of Perry-Smith LLP
|
Filed
herewith.
|
||
24
|
Powers
of Attorney
|
Included
in the Signature Page hereof.
|
||
31.1
|
Rule
13-14(a)/15d-14a Certification of Chief Executive Officer
|
Filed
herewith
|
||
31.2
|
Rule
13-14(a)/15d-15a Certification of Chief Financial Officer
|
Filed
herewith
|
||
32.1
|
Section
1350 Certification of Chief Executive Officer
|
Filed
herewith
|
||
32.2
|
Section
1350 Certification of Chief Financial Officer
|
Filed
herewith
|
Altair Nanotechnologies
Inc.
and
Subsidiaries
Consolidated
Financial Statements as of December 31, 2008 and 2007 and for Each of the
Three Years in the Period Ended December 31, 2008 and Reports of the
Independent Registered Public Accounting Firm
|
Page
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F-1
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
|
F-2
|
FINANCIAL
STATEMENTS:
|
|
Consolidated
Balance Sheets, December 31, 2008 and 2007
|
F-4
|
Consolidated
Statements of Operations for Each of the Three Years in the Period Ended
December 31, 2008
|
F-5 |
Consolidated
Statements of Stockholders’ Equity and Comprehensive Loss for Each of the
Three Years in the Period Ended December 31, 2008
|
F-6
|
Consolidated
Statements of Cash Flows for Each of the Three Years in the Period
Ended December 31, 2008
|
F-7
|
Notes
to Consolidated Financial Statements
|
F-9
|
/s/
Perry-Smith LLP
|
/s/
Perry-Smith LLP
|
Item
1. Financial Statements
|
||||||||
ALTAIR
NANOTECHNOLOGIES INC. AND SUBSIDIARIES
|
||||||||
CONSOLIDATED
BALANCE SHEETS
|
||||||||
(Expressed
in United States Dollars)
|
||||||||
December
31,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 28,088,454 | $ | 50,146,117 | ||||
Accounts
receivable, net
|
954,881 | 1,317,819 | ||||||
Notes
receivable from related party, current portion
|
- | 1,638,510 | ||||||
Product
inventories
|
98,112 | - | ||||||
Prepaid
expenses and other current assets
|
572,046 | 799,387 | ||||||
Total
current assets
|
29,713,494 | 53,901,833 | ||||||
Investment
in available for sale securities
|
3,173,703 | 4,564,814 | ||||||
Property,
plant and equipment, net held and used
|
11,636,732 | 14,548,837 | ||||||
Property,
plant and equipment, net held and not used
|
2,377,472 | - | ||||||
Patents,
net
|
635,618 | 720,433 | ||||||
Other
assets
|
534,018 | 122,718 | ||||||
Total
Assets
|
$ | 48,071,036 | $ | 73,858,635 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Trade
accounts payable
|
$ | 749,063 | $ | 7,814,037 | ||||
Accrued
salaries and benefits
|
1,360,828 | 2,239,110 | ||||||
Accrued
warranty
|
36,470 | 2,915,990 | ||||||
Accrued
liabilities
|
764,545 | 759,664 | ||||||
Current
portion of long-term debt
|
735,740 | 600,000 | ||||||
Total
current liabilities
|
3,646,646 | 14,328,781 | ||||||
Long-term
debt, less current portion
|
608,299 | 1,200,000 | ||||||
Minority
interest in subsidiary
|
1,097,717 | 1,369,283 | ||||||
Total
Liabilities
|
5,352,662 | 16,898,064 | ||||||
Commitments
and Contingencies
|
||||||||
Stockholders'
Equity
|
||||||||
Common
stock, no par value, unlimited shares authorized;
93,143,271 and
84,068,377 shares issued and outstanding
at
December 31, 2008 and December 31, 2007
|
180,105,301 | 163,780,176 | ||||||
Additional
paid in capital
|
5,377,647 | 5,489,604 | ||||||
Accumulated
deficit
|
(140,891,974 | ) | (111,823,809 | ) | ||||
Accumulated
other comprehensive loss
|
(1,872,600 | ) | (485,400 | ) | ||||
Total
Stockholders' equity
|
42,718,374 | 56,960,571 | ||||||
Total
Liabilities and Stockholders' Equity
|
$ | 48,071,036 | $ | 73,858,635 |
ALTAIR
NANOTECHNOLOGIES INC. AND SUBSIDIARIES
|
||||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||||
(Expressed
in United States Dollars)
|
||||||||||||
Year
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Revenues
|
||||||||||||
Product
sales
|
$ | 756,949 | $ | 4,058,281 | $ | 961,380 | ||||||
License
fees
|
- | - | 464,720 | |||||||||
Commercial
collaborations
|
2,007,072 | 2,909,650 | 1,420,151 | |||||||||
Contracts
and grants
|
2,962,289 | 2,140,552 | 1,477,709 | |||||||||
Total
revenues
|
5,726,310 | 9,108,483 | 4,323,960 | |||||||||
Operating
Expenses
|
||||||||||||
Cost
of sales – product
|
182,607 | 5,163,987 | 1,034,431 | |||||||||
Cost
of sales – warranty and inventory reserves
|
(2,864,837 | ) | 6,843,343 | - | ||||||||
Research
and development
|
16,908,447 | 15,443,703 | 10,077,231 | |||||||||
Sales
and marketing
|
2,950,371 | 2,000,799 | 1,878,783 | |||||||||
Notes
receivable extinguishment
|
1,721,919 | - | - | |||||||||
Settlement
and release
|
3,605,294 | - | - | |||||||||
General
and administrative
|
10,589,816 | 10,770,249 | 7,495,180 | |||||||||
Depreciation
and amortization
|
2,758,703 | 1,953,876 | 1,519,750 | |||||||||
Total
operating expenses
|
35,852,320 | 42,175,957 | 22,005,375 | |||||||||
Loss
from Operations
|
(30,126,010 | ) | (33,067,474 | ) | (17,681,415 | ) | ||||||
Other
Income (Expense)
|
||||||||||||
Interest
expense
|
(97,091 | ) | (134,254 | ) | (171,500 | ) | ||||||
Interest
income
|
981,891 | 1,101,682 | 654,182 | |||||||||
Loss
on foreign exchange
|
(9,820 | ) | (1,292 | ) | (1,550 | ) | ||||||
Total
other income, net
|
874,980 | 966,136 | 481,132 | |||||||||
Impairment
of Investment
|
(88,701 | ) | - | - | ||||||||
Loss
from continuing operations before minority interests’ share
|
(29,339,731 | ) | (32,101,338 | ) | (17,200,283 | ) | ||||||
Less: Minority
interests’ share
|
271,566 | 630,717 | - | |||||||||
Net
Loss
|
$ | (29,068,165 | ) | $ | (31,470,621 | ) | $ | (17,200,283 | ) | |||
Loss
per common share - Basic and diluted
|
$ | (0.34 | ) | $ | (0.45 | ) | $ | (0.29 | ) | |||
Weighted
average shares - Basic and diluted
|
85,903,712 | 71,008,505 | 59,709,487 |
ALTAIR
NANOTECHNOLOGIES INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE LOSS
|
||||||||||||||||||||||||||||
(Expressed
in United States Dollars)
|
||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||
Deferred
|
Other
|
|||||||||||||||||||||||||||
Additional
|
Compen-
|
Compre-
|
||||||||||||||||||||||||||
Common
Stock
|
Paid
In
|
Accumulated
|
sation
|
hensive
|
||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Expense
|
Gain
(Loss)
|
Total
|
||||||||||||||||||||||
Balance
at December 31, 2005
|
59,316,519 | $ | 92,126,714 | $ | - | $ | (63,152,905 | ) | $ | (165,336 | ) | $ | (172,000 | ) | $ | 28,636,473 | ||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||
Net
loss
|
- | - | - | (17,200,283 | ) | - | - | (17,200,283 | ) | |||||||||||||||||||
Other
comprehensive income, net of taxes of $0
|
- | - | - | - | - | 353,800 | 353,800 | |||||||||||||||||||||
Comprehensive
loss
|
(16,846,483 | ) | ||||||||||||||||||||||||||
Share-based
compensation
|
- | 281,514 | 2,002,220 | - | - | - | 2,283,734 | |||||||||||||||||||||
Exercise
of stock options
|
189,449 | 347,653 | - | - | - | - | 347,653 | |||||||||||||||||||||
Exercise
of warrants
|
236,168 | 455,670 | - | - | - | - | 455,670 | |||||||||||||||||||||
Issuance
of restricted stock
|
77,875 | - | - | - | - | - | - | |||||||||||||||||||||
Elimination of deferred
compensation expense (upon adoption of new accounting standard)
|
- | (165,336 | ) | - | - | 165,336 | - | - | ||||||||||||||||||||
Common
stock issued, net of
|
||||||||||||||||||||||||||||
issuance
costs of $2,056,336
|
9,259,259 | 22,943,664 | - | - | - | - | 22,943,664 | |||||||||||||||||||||
Balance
at December 31, 2006
|
69,079,270 | 115,989,879 | 2,002,220 | (80,353,188 | ) | - | 181,800 | 37,820,711 | ||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||
Net
loss
|
- | - | - | (31,470,621 | ) | - | - | (31,470,621 | ) | |||||||||||||||||||
Other
comprehensive income, net of taxes of $0
|
- | - | - | - | - | (667,200 | ) | (667,200 | ) | |||||||||||||||||||
Comprehensive
loss
|
(32,137,821 | ) | ||||||||||||||||||||||||||
Share-based
compensation
|
- | 397,767 | 3,487,384 | - | - | - | 3,885,151 | |||||||||||||||||||||
Exercise
of stock options
|
280,914 | 625,603 | - | - | - | - | 625,603 | |||||||||||||||||||||
Exercise
of warrants
|
2,314,189 | 6,248,314 | - | - | - | - | 6,248,314 | |||||||||||||||||||||
Issuance
of restricted stock
|
69,909 | - | - | - | - | - | - | |||||||||||||||||||||
Common
stock issued, net of issuance costs of $2,504,558
|
12,324,095 | 40,518,612 | - | - | - | - | 40,518,612 | |||||||||||||||||||||
Balance
at December 31, 2007
|
84,068,377 | 163,780,176 | 5,489,604 | (111,823,809 | ) | - | (485,400 | ) | 56,960,571 | |||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||
Net
loss
|
- | - | - | (29,068,165 | ) | - | - | (29,068,165 | ) | |||||||||||||||||||
Other
comprehensive income, net of taxes of $0
|
- | - | - | - | - | (1,387,200 | ) | (1,387,200 | ) | |||||||||||||||||||
Comprehensive
loss
|
(30,455,365 | ) | ||||||||||||||||||||||||||
Share-based
compensation
|
- | 1,262,769 | (111,957 | ) | - | - | - | 1,150,812 | ||||||||||||||||||||
Exercise
of stock options
|
339,211 | 527,738 | - | - | - | - | 527,738 | |||||||||||||||||||||
Exercise
of warrants
|
400,224 | 752,114 | - | - | - | - | 752,114 | |||||||||||||||||||||
Issuance
of restricted stock
|
141,746 | - | - | - | - | - | - | |||||||||||||||||||||
Recovery
of short swing profits
|
- | 177,210 | - | - | - | - | 177,210 | |||||||||||||||||||||
Common
stock issued, net of issuance costs of $0
|
8,193,713 | 13,605,294 | - | - | - | - | 13,605,294 | |||||||||||||||||||||
Balance
at December 31, 2008
|
93,143,271 | $ | 180,105,301 | $ | 5,377,647 | $ | (140,891,974 | ) | $ | - | $ | (1,872,600 | ) | $ | 42,718,374 |
ALTAIR
NANOTECHNOLOGIES INC. AND SUBSIDIARIES
|
||||||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||||||
(Expressed
in United States Dollars)
|
||||||||||||
Year
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
loss
|
$ | (29,068,165 | ) | $ | (31,470,621 | ) | $ | (17,200,283 | ) | |||
Adjustments
to reconcile net loss to net cash
|
||||||||||||
used
in operating activities:
|
||||||||||||
Depreciation
and amortization
|
2,758,703 | 1,953,876 | 1,519,750 | |||||||||
Minority
interest in operations
|
(271,566 | ) | (630,717 | ) | - | |||||||
Securities
received in payment of license fees
|
- | (13,580 | ) | (529,620 | ) | |||||||
Share-based
compensation
|
1,150,812 | 3,885,151 | 2,283,734 | |||||||||
Loss
on disposal of fixed assets
|
382,018 | - | 107,276 | |||||||||
Settlement
and release
|
3,605,294 | - | - | |||||||||
Impairment
of investment
|
88,701 | - | - | |||||||||
Accrued
interest on notes receivable
|
(83,409 | ) | (89,435 | ) | - | |||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Accounts
receivable, net
|
362,938 | (187,994 | ) | (527,657 | ) | |||||||
Accounts
receivable from related party, net
|
- | 495,000 | (495,000 | ) | ||||||||
Notes
receivable from related party, net
|
1,721,919 | (1,219,075 | ) | (330,000 | ) | |||||||
Product
inventories
|
(98,112 | ) | 230,887 | (169,666 | ) | |||||||
Prepaid
expenses and other current assets
|
227,341 | (385,997 | ) | (159,323 | ) | |||||||
Other
assets
|
- | (101,457 | ) | 49,939 | ||||||||
Trade
accounts payable
|
(7,074,861 | ) | 5,097,665 | 664,890 | ||||||||
Accrued
salaries and benefits
|
(878,282 | ) | 1,398,891 | 130,870 | ||||||||
Accrued
warranty
|
(2,879,520 | ) | 2,915,990 | - | ||||||||
Accrued
liabilities
|
4,900 | 233,048 | 217,307 | |||||||||
Net
cash used in operating activities
|
(30,051,289 | ) | (17,888,368 | ) | (14,437,783 | ) | ||||||
Cash
flows from investing activities:
|
||||||||||||
Sale
of available for sale securities
|
- | 33,675,001 | 30,150,000 | |||||||||
Purchase
of available for sale securities
|
- | (23,049,840 | ) | (23,924,710 | ) | |||||||
Interest
on available for sale securities
|
3,911 | 3,928 | 23,264 | |||||||||
Purchase
of property and equipment
|
(3,046,386 | ) | (4,066,388 | ) | (4,542,921 | ) | ||||||
Proceeds
from sale of assets
|
35,000 | - | - | |||||||||
Net
cash (used in) provided by investing activities
|
(3,007,475 | ) | 6,562,701 | 1,705,633 |
ALTAIR
NANOTECHNOLOGIES INC. AND SUBSIDIARIES
|
||||||||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||||||||
(Expressed
in United States Dollars)
(continued)
|
||||||||||||||
Year
Ended December 31,
|
||||||||||||||
2008
|
2007
|
2006
|
||||||||||||
Cash
flows from financing activities:
|
||||||||||||||
Issuance
of common shares for cash, net of issuance
costs
|
$ | 10,000,000 | $ | 40,518,612 | $ | 22,943,663 | ||||||||
Proceeds
from exercise of stock options
|
527,738 | 625,603 | 347,653 | |||||||||||
Proceeds
from exercise of warrants
|
752,114 | 6,248,314 | 455,670 | |||||||||||
Proceeds
from recovery of short swing profits
|
177,210 | - | - | |||||||||||
Proceeds
from notes payable
|
345,599 | - | - | |||||||||||
Payment
of notes payable
|
(813,466 | ) | (600,000 | ) | (600,000 | ) | ||||||||
Proceeds
from long-term debt
|
12,385 | - | - | |||||||||||
Repayment
of long-term debt
|
(479 | ) | - | - | ||||||||||
Minority
interest
|
- | 2,000,000 | - | |||||||||||
Net
cash provided by financing activities
|
11,001,101 | 48,792,530 | 23,146,986 | |||||||||||
|
||||||||||||||
Net
(decrease) increase in cash and cash equivalents
|
(22,057,663 | ) | 37,466,863 | 10,414,836 | ||||||||||
Cash
and cash equivalents, beginning of period
|
50,146,117 | 12,679,254 | 2,264,418 | |||||||||||
Cash
and cash equivalents, end of period
|
$ | 28,088,454 | $ | 50,146,117 | $ | 12,679,254 | ||||||||
Supplemental
disclosures:
|
||||||||||||||
Cash
paid for interest
|
$ | 132,553 | $ | 168,000 | $ | 105,000 | ||||||||
Cash
paid for income taxes
|
None
|
None
|
None
|
Supplemental
schedule of non-cash investing and financing activities:
|
||||||||
For
the year ended December 31, 2008:
|
||||||||
-
We made property and equipment purchases of $9,887 which are included in
trade accounts payable at December 31, 2008.
|
||||||||
-
We had an unrealized loss on available for sale securities of
$1,387,200.
|
||||||||
-
We issued 141,746 shares of restricted stock to employees and directors
having a fair value of approximately $303,000 for which no cash will be
received.
|
||||||||
-
We issued 2,117,647 shares of stock as a settlement and release of all
known claims to Al Yousuf, LLC having a fair value of $3,605,294 for which
no cash will be received.
|
||||||||
For
the year ended December 31, 2007:
|
||||||||
-
We received 1,000,000 shares of common stock valued at $106,518 in
connection with the Phoenix Motorcar, Inc. January 2007 purchase
agreement. The investment was recorded with an offset to
deferred revenue.
|
||||||||
-
We issued 69,909 shares of restricted stock to employees and directors
having a fair value of approximately $236,538 for which no cash will be
received.
|
||||||||
- We
made property and equipment purchases of $1,183,235 which are included in
trade accounts payable at December 31, 2007.
|
||||||||
- We
had an unrealized loss on available for sale securities of
$667,200.
|
||||||||
For
the year ended December 31, 2006:
|
||||||||
-
We issued 77,875 shares of restricted stock to employees and directors
having a fair value of approximately $281,000 for which no cash will be
received.
|
||||||||
-
We made property and equipment purchases of $59,252 which are included in
trade accounts payable at December 31, 2006.
|
||||||||
-
We had an unrealized gain on available for sale securities of
$353,800.
|
||||||||
See
notes to the consolidated financial statements.
|
1.
|
DESCRIPTION
OF BUSINESS AND BASIS OF
PRESENTATION
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Furniture
and office equipment
|
3–7
years
|
|
Vehicles
|
5
years
|
|
Nanoparticle
production equipment
|
5–10
years
|
|
Building
and improvements
|
30
years
|
Year
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Net
loss
|
$ | (29,068,165 | ) | $ | (31,470,621 | ) | $ | (17,200,283 | ) | |||
Unrealized
(loss) gain on investment in
available for sale securities, net of taxes of $0
|
(1,387,200 | ) | (667,200 | ) | 353,800 | |||||||
Comprehensive
loss
|
$ | (30,455,365 | ) | $ | (32,137,821 | ) | $ | (16,846,483 | ) |
3.
|
INVESTMENT
IN AVAILABLE FOR SALE
SECURITIES
|
4.
|
FAIR
VALUE MEASUREMENTS
|
Level 1
-
|
Quoted
prices for identical instruments in active
markets.
|
Level 2
-
|
Quoted
prices for similar instruments in active markets; quoted prices for
identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant
value drivers are observable.
|
Level 3
-
|
Significant
inputs to the valuation model are
unobservable.
|
Assets
at fair value:
|
Total
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Auction
rate corporate notes
|
|
$ | 2,816,103 | $ | - | $ | - | $ | 2,816,103 | ||||||||
Spectrum
Pharmaceuticals, Inc.
|
357,600 | 357,600 | - | - | |||||||||||||
Investment
in available for sale securities
|
$ | 3,173,703 | $ | - | $ | - | $ | 3,173,703 |
5.
|
PRODUCT
INVENTORIES
|
2008
|
2007
|
|||||||
Raw
materials
|
$ | 98,112 | $ | - | ||||
Work
in process
|
- | - | ||||||
Finished
goods
|
- | - | ||||||
Demonstration
units
|
- | - | ||||||
Total
product inventories
|
$ | 98,112 | $ | - |
6.
|
PROPERTY,
PLANT AND EQUIPMENT
|
2008
|
2007
|
|||||||
Machinery
and equipment
|
$ | 11,062,069 | $ | 14,265,125 | ||||
Building
and improvements
|
5,083,363 | 3,926,754 | ||||||
Furniture,
office equipment & other
|
838,258 | 560,215 | ||||||
Total
|
16,983,690 | 18,752,094 | ||||||
Less
accumulated depreciation
|
(5,346,958 | ) | (4,203,257 | ) | ||||
Total
property and equipment
|
$ | 11,636,732 | $ | 14,548,837 |
2008
|
2007
|
|||||||
Machinery
and equipment
|
$ | 3,385,082 | $ | - | ||||
Building
and improvements
|
- | - | ||||||
Furniture,
office equipment & other
|
- | - | ||||||
Total
|
3,385,082 | - | ||||||
Less
accumulated depreciation
|
(1,007,610 | ) | - | |||||
Total
property and equipment
|
$ | 2,377,472 | $ | - |
7.
|
PATENTS
|
2008
|
2007
|
|||||||
Patents
and patent applications
|
$ | 1,517,736 | $ | 1,517,736 | ||||
Less
accumulated amortization
|
(882,118 | ) | (797,303 | ) | ||||
Total
patents and patent applications
|
$ | 635,618 | $ | 720,433 |
8.
|
ACCRUED
WARRANTY
|
2008
|
2007
|
|||||||
Beginning
Balance – January
|
$ | 2,915,990 | $ | - | ||||
Additions
|
- | 2,915,990 | ||||||
Release
of obligation
|
(2,279,520 | ) | - | |||||
Ending
Balance – December
|
$ | 36,470 | $ | 2,915,990 |
9.
|
ACCRUED
LIABILITIES
|
2008
|
2007
|
|||||||
Accrued
interest
|
$ | 77,000 | $ | 115,500 | ||||
Accrued
use tax
|
10,525 | 48,630 | ||||||
Accrued
property tax
|
44,075 | 40,220 | ||||||
Accrued
mineral lease payments
|
67,172 | 66,022 | ||||||
Accrued
reclamation costs
|
7,810 | 11,166 | ||||||
Accrued
straight line rent
|
71,511 | 61,998 | ||||||
Deferred
revenue
|
365,052 | 413,270 | ||||||
Accrued
fee
|
121,400 | - | ||||||
Other
|
- | 2,838 | ||||||
$ | 764,545 | $ | 759,644 |
10.
|
NOTES
PAYABLE
|
2008
|
2007
|
|||||||
Note
payable to BHP Minerals International, Inc.
|
$ | 1,200,000 | $ | 1,800,000 | ||||
Note
payable to AICCO, Inc.
|
132,133 | - | ||||||
Capital
lease to Dell Financial Services
|
11,906 | - | ||||||
Less
current portion
|
(735,740 | ) | (600,000 | ) | ||||
Long-term
portion of notes payable
|
$ | 608,299 | $ | 1,200,000 |
11.
|
STOCK
BASED COMPENSATION
|
2008
|
2007
|
||
Dividend
yield
|
None
|
None
|
|
Expected
volatility
|
76%
|
85%
|
|
Risk-free
interest rate
|
3.00%
|
4.60%
|
|
Expected
life (years)
|
4.92
|
4.85
|
Weighted
|
|||||||||||||||||
Weighted
|
Average
|
||||||||||||||||
Average
|
Remaining
|
Aggregate
|
|||||||||||||||
Exercise
|
Contractual
|
Intrinsic
|
|||||||||||||||
Shares
|
Price
|
Term
(Years)
|
Value
|
||||||||||||||
Outstanding
at January 1, 2008
|
4,166,207 | $ | 2.81 | 7.0 | $ | 6,024,389 | |||||||||||
Granted
|
2,131,917 | 3.04 | |||||||||||||||
Exercised
|
(339,211 | ) | 1.56 | ||||||||||||||
Forfeited/Expired
|
(2,002,406 | ) | 2.83 | ||||||||||||||
Outstanding
at December 31, 2008
|
3,956,507 | $ | 3.03 | 7.4 | $ | 10,661 | |||||||||||
Exercisable
at December 31, 2008
|
1,905,605 | $ | 3.14 | 5.8 | $ | 900 |
Weighted
|
||||||||
Average
|
||||||||
Grant
Date
|
||||||||
Shares
|
Fair
Value
|
|||||||
Non-vested
shares at January 1, 2008
|
1,568,720 | $ | 2.96 | |||||
Granted
|
2,131,917 | 3.04 | ||||||
Vested
|
(707,598 | ) | 3.04 | |||||
Forfeited/Expired
|
(942,137 | ) | 3.18 | |||||
Non-vested
shares at December 31, 2008
|
2,050,902 | $ | 2.92 |
Weighted
|
||||||||
Average
|
||||||||
Grant
Date
|
||||||||
Shares
|
Fair
Value
|
|||||||
Non-vested
shares at January 1, 2008
|
87,857 | $ | 3.07 | |||||
Granted
|
143,079 | 2.11 | ||||||
Vested
|
(65,296 | ) | 2.93 | |||||
Forfeited/Expired
|
(1,333 | ) | 2.27 | |||||
Non-vested
shares at December 31, 2008
|
164,307 | $ | 2.27 |
12.
|
WARRANTS
|
2008
|
2007
|
2006
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
Average
|
Average
|
Average
|
||||||||||||||||||||||
Exercise
|
Exercise
|
Exercise
|
||||||||||||||||||||||
Warrants
|
Price
|
Warrants
|
Price
|
Warrants
|
Price
|
|||||||||||||||||||
Outstanding
at beginning of year
|
1,141,706 | $ | 3.26 | 3,256,525 | $ | 2.84 | 1,518,556 | $ | 3.17 | |||||||||||||||
Issued
|
- | - | 296,407 | 3.29 | 2,546,301 | 2.76 | ||||||||||||||||||
Expired
|
(60,000 | ) | 2.50 | (97,037 | ) | 2.58 | 572,164 | ) | 3.63 | |||||||||||||||
Exercised
|
(400,224 | ) | 1.88 | (2,314,189 | ) | 2.70 | 236,168 | ) | 1.93 | |||||||||||||||
Outstanding
at end of year
|
681,482 | $ | 4.15 | 1,141,706 | $ | 3.26 | 3,256,525 | $ | 2.84 | |||||||||||||||
Currently
exercisable
|
681,482 | $ | 4.15 | 1,141,706 | $ | 3.26 | 3,256,525 | $ | 2.84 |
Warrants
Outstanding and Exercisable
|
||||||||||||||
Weighted
|
||||||||||||||
Average
|
Weighted
|
|||||||||||||
Remaining
|
Average
|
|||||||||||||
Range
of
|
Contractual
|
Exercise
|
||||||||||||
Exercise
Prices
|
Warrants
|
Life
(Years)
|
Price
|
|||||||||||
$ |
2.50
to $3.49
|
231,482 | 3.0 | $ | 3.38 | |||||||||
$ | 3.50 to $5.265 | 450,000 | 1.2 | 4.54 | ||||||||||
681,482 | 1.8 | $ | 4.15 |
13.
|
OTHER
TRANSACTIONS
|
14.
|
LEASES
|
2009
|
$ | 277,608 | ||
2010
|
288,750 | |||
2011
|
297,504 | |||
2012
|
148,752 | |||
Thereafter
|
- | |||
Total
|
$ | 1,012,614 |
2009
|
$ | 5,151 | ||
2010
|
5,151 | |||
2011
|
4,407 | |||
14,709 | ||||
Less
amount representing interest
|
(2,802 | ) | ||
Present
value of net minimum lease payments
|
11,907 | |||
Less
current maturity
|
(3,607 | ) | ||
Present
value of net minimum leases included in long-term debt
|
$ | 8,300 |
15.
|
INCOME
TAXES
|
Year
Ended December 31,
|
|||||||||||||
2008
|
2007
|
2006
|
|||||||||||
Federal
statutory income taxes (benefit)
|
$ | (10,173,858 | ) | $ | (10,958,655 | ) | $ | (6,020,099 | ) | ||||
Expiration
of net operating loss carryforwards
|
517,290 | 367,600 | 96,350 | ||||||||||
Other,
net
|
29,071 | (95,137 | ) | 259,940 | |||||||||
True
up to prior tax returns
|
(3,481,321 | ) | 1,558,238 | (1,771,202 | ) | ||||||||
Exercise
of incentive stock options
|
389,712 | 1,098,378 | 483,092 | ||||||||||
Valuation
allowance
|
12,719,106 | 8,029,576 | 6,951,919 | ||||||||||
Total
|
$ | - | $ | - | $ | - |
2008
|
2007
|
|||||||
Deferred
tax assets:
|
||||||||
Net
operating loss carry forwards
|
$ | 40,730,229 | $ | 25,150,494 | ||||
Basis
difference in intangible assets
|
999,299 | 1,079,580 | ||||||
Accruals
|
618,595 | 3,713,872 | ||||||
Tax
credits
|
464,884 | 715,207 | ||||||
Other,
net
|
585,282 | 133,673 | ||||||
Total
deferred tax assets
|
43,398,399 | 30,792,826 | ||||||
Deferred
tax liabilities:
|
||||||||
Basis
difference in property, plant, and equipment
|
(909,083 | ) | (394,091 | ) | ||||
Total
deferred tax liabilities
|
(909,083 | ) | (394,091 | ) | ||||
Valuation
allowance
|
(42,489,316 | ) | (30,398,735 | ) | ||||
Net
deferred tax assets
|
$ | - | $ | - |
2009
- 2012
|
$8,900,000
|
2013
- 2017
|
700,000
|
2018
- 2022
|
12,900,000
|
2023
- 2028
|
95,600,000
|
16.
|
COMMITMENTS
AND CONTINGENCIES
|
17.
|
RELATED
PARTY TRANSACTIONS
|
●
|
Altair
agreed to ship 47 Generation 1 prototype batteries back to Phoenix for
exclusive use in Phoenix demonstration vehicles. The batteries are
provided to Phoenix “as is” without explicit or implied
warranties.
|
|
●
|
A
commitment on the part of Phoenix to provide Altair with ten percent of
the monetized value of any California Air Resources Board ZEV credits for
each vehicle for which it receives them.
|
|
●
|
The
forgiveness of the Phoenix notes payable associated accrued interest and
remaining accounts receivable balance.
|
|
●
|
The
reversal of the warranty accrual associated with the 47 recalled
batteries.
|
18.
|
BUSINESS
SEGMENT INFORMATION
|
Loss/(Gain)
|
Depreciation
|
||||||||||||||||
From
|
and
|
||||||||||||||||
Net
Sales
|
Operations
|
Amortization
|
Assets
|
||||||||||||||
2008:
|
|||||||||||||||||
Performance
Materials
|
$ | 870,995 | $ | 2,187,399 | $ | 524,789 | $ | 4,207,485 | |||||||||
Power
and Energy Group
|
4,075,123 | 7,651,027 | 1,281,074 | 8,071,777 | |||||||||||||
Life
Sciences
|
780,192 | 589,310 | 103,100 | 1,714,035 | |||||||||||||
Corporate
|
- | 19,698,274 | 849,740 | 34,135,687 | |||||||||||||
Consolidated
Total
|
$ | 5,726,310 | $ | 30,126,010 | $ | 2,758,703 | $ | 48,071,036 | |||||||||
2007:
|
|||||||||||||||||
Performance
Materials
|
$ | 2,527,369 | $ | 2,786,661 | $ | 933,419 | $ | 6,055,345 | |||||||||
Power
and Energy Group
|
5,282,149 | 17,295,099 | 856,808 | 8,267,611 | |||||||||||||
Life
Sciences
|
1,298,965 | (192,311 | ) | 30,435 | 1,879,994 | ||||||||||||
Corporate
|
- | 13,178,025 | 133,214 | 57,655,685 | |||||||||||||
Consolidated
Total
|
$ | 9,108,483 | $ | 33,067,474 | $ | 1,953,876 | $ | 73,858,635 | |||||||||
2006:
|
|||||||||||||||||
Performance
Materials
|
$ | 2,195,470 | $ | 2,052,596 | $ | 1,083,207 | $ | 7,546,096 | |||||||||
Power
and Energy Group
|
1,513,650 | 5,324,403 | 305,743 | 3,651,917 | |||||||||||||
Life
Sciences
|
614,840 | (117,724 | ) | 11,691 | 1,473,793 | ||||||||||||
Corporate
|
- | 10,422,140 | 119,109 | 30,448,767 | |||||||||||||
Consolidated
Total
|
$ | 4,323,960 | $ | 17,681,415 | $ | 1,519,750 | $ | 43,120,573 |
Accounts
Receivable and
|
|||||||||||
Sales
- Year Ended
|
Notes
Receivable at
|
||||||||||
Customer
|
December
31, 2008
|
December
31, 2008
|
|||||||||
Power and Energy
Group:
|
|||||||||||
Office
of Naval Research
|
$ | 2,493,489 | $ | 300,883 | |||||||
Life Sciences
Division:
|
|||||||||||
Elanco
Animal Health/Eli Lilly
|
$ | 622,804 | $ | - |
Accounts
Receivable and
|
|||||||||||
Sales
- Year Ended
|
Notes
Receivable at
|
||||||||||
Customer
|
December
31, 2007
|
December
31, 2007
|
|||||||||
Performance Materials Division: | |||||||||||
Western
Oil Sands
|
$ | 1,198,525 | $ | 203,929 | |||||||
Department
of Energy
|
$ | 499,773 | $ | 8,872 | |||||||
Power and Energy
Group:
|
|||||||||||
Department
of Energy
|
$ | 706,865 | $ | 19,454 | |||||||
Phoenix
Motorcars, Inc.
|
$ | 3,047,687 | $ | 1,638,510 | |||||||
Life Sciences
Division:
|
|||||||||||
Department
of Energy
|
$ | 204,801 | $ | 26,866 | |||||||
Elanco
Animal Health/Eli Lilly
|
$ | 1,088,829 | $ | 361,200 |
Accounts
Receivable and
|
|||||||||||
Sales
- Year Ended
|
Notes
Receivable at
|
||||||||||
Customer
|
December
31, 2006
|
December
31, 2006
|
|||||||||
Performance Materials
Division:
|
|||||||||||
Western
Oil Sands
|
$ | 1,111,697 | $ | 313,415 | |||||||
UNLV
Research Foundation
|
$ | 416,687 | $ | 28,369 | |||||||
Department
of Energy
|
$ | 398,533 | $ | 284,049 | |||||||
Power and Energy
Group:
|
|||||||||||
Phoenix
Motorcars, Inc.
|
$ | 825,000 | $ | 495,000 | |||||||
Department
of Energy
|
$ | 347,904 | $ | 270,692 | |||||||
Life Sciences
Division:
|
|||||||||||
Spectrum
Pharmaceuticals, Inc.
|
$ | 514,840 | $ | - |
Geographic
information (a):
|
2008
|
2007
|
2006
|
||||||||||
United
States
|
$ | 5,261,497 | $ | 7,274,960 | $ | 3,101,481 | |||||||
Canada
|
245,193 | 1,240,671 | 1,114,869 | ||||||||||
Other
foreign countries
|
219,620 | 592,852 | 107,610 | ||||||||||
Total
|
$ | 5,726,310 | $ | 9,108,483 | $ | 4,323,960 |