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CORRESP
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filename1.htm

      Altair Corresp

    [Altair
      Nanotechnologies, Inc. letterhead]

    July
      19,
      2005

    FILED
      VIA
      EDGAR WITH FACSIMILE COPY

    Mr.
      Rufus
      Decker

    Accounting
      Branch Chief

    Scott
      Watkinson

    Staff
      Accountant

    Division
      of Corporation Finance

    Mail
      Stop
      0510

    100
      F
      Street, Northeast

    Securities
      and Exchange Commission

    Washington,
      D.C. 20549-0510

    Facsimile
      No. (202) 772-9368

    Dear
      Messrs. Decker and Watkinson,

    On
      behalf
      of Altair Nanotechnologies Inc. and its consolidated subsidiaries (collectively,
      “Altair” or the “Company”), I am writing in response to your letter to Altair
      dated June 17, 2005 (your “Letter”). For clarity, each of the responses is
      preceded by a bolded restatement of your request.

    Form
      10-K/A for the Year Ended December 31, 2004

    General

            1.

              Where
                a comment below requests additional disclosures or other revisions
                please
                show us your supplemental response what the revisions will look like.
                These revisions should be included in your future filings, including
                your
                interim filings where
                applicable.

    Management’s
      Discussion and Analysis, page 31

    Results
      of Operations - Fiscal Year 2004 vs. 2003, page 37

            2.

              Please
                revise your disclosure to clarify the nature of the issues underlying
                the
                issuance of $235,000 in common stock “in connection with an agreement
                resolving certain issues raised by [a] shareholder” in
                2004.

    Following
      is revised disclosure to clarify
      the nature of the issues underlying the issuance of $235,000 in common stock
      in
      connection with an agreement resolving certain issues raised by a shareholder
      in
      2004.

          Messrs.
            Rufus Decker and Scott Watkinson

          July
            19,
            2005  Page 2

    “Our
      general and administrative expenses increased by $2,036,346, from $3,015,829
      in
      2003 to $5,052,175 in 2004. G&A labor increased by $604,000 from $1,269,000
      in 2003 to $1,873,000 in 2004 due to salary increases, employee bonuses, an
      increase in the cost of employee benefit plans and the net addition of three
      new
      employees. Investor relations expenses increased by $305,000, from $225,000
      in
      2003 to $530,000 in 2004, as a result of increased investor relations programs
      aimed at increasing investor awareness of Altair. In 2004, we incurred an
      expense of $235,000 representing the value of common shares issued to a
      shareholder in connection with an
      agreement with a shareholder resolving various issues, including claims for
      reimbursement for payments allegedly made by the shareholder for and on behalf
      of the Company and a dispute over registration rights of certain common shares
      owned by the shareholder. Consulting
      fees increased by $270,000, from $93,000 in 2003 to $363,000 in 2004, primarily
      as a result of consultants hired to assist with marketing and product
      development in both the performance materials and life sciences divisions.
      Legal
      expenses increased by $257,000, from $293,000 in 2003 to $550,000 in the 2004,
      due to patent costs associated with performance materials and life sciences
      products, and a settlement agreement involving a shareholder. Accounting fees
      increased by $124,000, from $112,000 during 2003 to $236,000 in 2004, primarily
      as a result of costs associated with the Sarbanes-Oxley Act. General office
      expenses increased by $172,000, from $387,000 in 2003 to $559,000 in 2004,
      primarily as a result of additional purchases of office supplies and equipment
      as well as higher costs for utilities, telephone, postage and printing. Director
      fees and expenses increased by $108,000, from $16,000 in 2003 to $124,000 in
      2004, due to the addition of two non-employee directors and an increase in
      the
      fees paid to directors. Insurance expense increased by $65,000, from $154,000
      in
      2003 to $219,000 in 2004, as a result of increased premiums for liability
      insurance. Shareholder information expenses increased by $43,000, from $69,000
      in 2003 to $112,000 in 2004, due to annual report printing and mailing costs;
      the number of shareholders owning our stock increased substantially in 2004.
      These increases were partially offset by a decrease in stock option expense
      of
      $194,000 which occurred due to a reduction in value of repriced stock
      options.”

    Financial
      Statements

    Note
      8 - Other Transactions, page F-17

            3.

              Please
                provide us with additional information to help us understand the
                appropriateness of reflecting the value of warrants issues and repriced
                during 2002 and 2003 as preferential warrant dividends and how you
                concluded these amounts should not be expensed. Your response should
                include references to authoritative literature supporting your accounting.
                Please also tell us who the shareholder is and describe any relationship
                you have with the shareholder, including business, employment or
                other
                relationship. Please tell us the number of shares this shareholder
                owned
                just before each of these transactions as
                well.

    During
      2002 and 2003, the Company reduced the exercise price of certain warrants held
      by selected shareholders as an inducement for them to exercise their warrants
      for financing purposes. These warrants were originally issued to investors
      at
      the same time these investors acquired common shares. In a separate transaction
      during 2003, the Company issued additional warrants to one shareholder as an
      inducement for the shareholder to exercise their existing warrants for financing
      purposes. None of these investors has any other relationship with the Company
      other than being shareholders, and all were issued the warrants as a “sweetener”
      in the equity transaction.

          Messrs.
            Rufus Decker and Scott Watkinson

          July
            19,
            2005  Page 3

    The
      warrants were detachable free-standing instruments and therefore, when the
      warrants were issued, the Company allocated the fair value of the common stock
      between the warrants and the common stock based on their relative fair
      values.

    The
      modification of the warrants and the amount of the dividend was calculated
      in
      accordance with FASB Statement No. 123, Accounting
      for Stock-Based Compensation (SFAS
      123), paragraph 35. We presented the cost of the modifications as a preferential
      warrant dividend because it was only offered to select shareholders and was
      not
      given to all shareholders therefore making it preferential.

    In
      addition, there is guidance in APB Opinion No. 29, Accounting
      for Nonmonetary Transactions (APB
      29),
      that supports recognition of nonmonetary distributions to owners at fair value.
      Paragraph 23 of APB 29 states, in part:

    “…Other
      nonreciprocal transfers of nonmonetary assets to owners should be accounted
      for
      at fair value if the fair value of the nonmonetary asset distributed is
      objectively measurable and would be clearly realizable to the distributing
      entity in an outright sale at or near the time of the
      distribution…”

    Because
      the modification of the warrants was offered to only two shareholders who
      rendered no other services to the Company or have any other relationships with
      the Company, we believe that the appropriate accounting treatment was to reflect
      the modification as a preferential dividend to these shareholders. That is,
      the
      Company transferred value to the investors by reducing the exercise price of
      their warrants (or issuing replacement warrants) and did not receive any form
      of
      compensation in return for this value transferred to the investors. Accordingly,
      the Company accounted for the additional value transferred to the investors
      as a
      distribution or dividend.

    We
      note
      that EITF Topic D-42, The
      Effect on the Calculation of Earnings per Share for the Redemption or Induced
      Conversion of Preferred Stock
      (EITF
      D-42), addresses the accounting for an inducement to shareholders to convert
      preferred stock, which we believe the accounting treatment would be similar
      for
      this inducement to convert the warrants. EITF Topic D-42 states in
      part:

    “...If
      convertible preferred stock is converted to other securities issued by the
      registrant pursuant to an inducement offer, the staff believes that the excess
      of (1) the fair value of all securities and other consideration transferred
      in
      the transaction by the registrant to the holders of the convertible preferred
      stock over (2) the fair value of securities issuable pursuant to the original
      conversion terms should be subtracted from net earnings to arrive at net
      earnings available to common shareholders in the calculation of earnings per
      share…”

    We
      believe the concept in EITF D-42 is very similar the modification of the
      warrants. EITF D-42 addresses a situation in which value is transferred to
      the
      holders of equity securities for which no compensation is received. Accordingly,
      the value transferred to the preferred shareholders is recognized as a
      distribution or dividend to preferred shareholders. Furthermore, we believe
      the
      value transferred to the investors by reducing the exercise price of their
      warrants or issuing replacement warrants meets the conceptual definition of
      a
      distribution in paragraph 67 of Statements of Financial Accounting Concepts
      No.
      6 which states, in part:

          Messrs.
            Rufus Decker and Scott Watkinson

          July
            19,
            2005  Page 4

      “…Distributions
        to owners are decreases in equity of a particular business enterprise resulting
        from transferring assets, rendering services, or incurring liabilities by
        the
        enterprise to owners. Distributions to owners decrease ownership interest
        (or
        equity) in an enterprise…”

Based on the above guidance, the Company believes that the
      charge
      was properly accounted for as a dividend rather than an expense.

    We
      believe that the dividend was accounted for and properly presented in the
      financial statements in accordance with SFAS 128, paragraph 9 and EITF D-82,
      which require that preferred dividends be shown separate from net income or
      loss
      regardless of the form of payment. As discussed above, we believe that the
      preferential warrant dividends are similar to preferred dividends and,
      therefore, would be presented similarly.

    The
      preferential warrant dividend of $48,666 in 2002 was provided to Louis Schnur,
      a
      major shareholder of the Company. As reported in the Company’s proxy statement
      filed on April 30, 2002, Louis Schnur beneficially owned 607,000 common shares
      of the Company at April 15, 2002, or 2.5% of the outstanding common stock.
      In
      addition, he owned 2,582,500 warrants to purchase common shares.

    Of
      the
      $592,486 preferential warrant dividend in 2003, $176,472 was provided to Louis
      Schnur and $416,014 was provided to Cranshire Capital, L.P., the two largest
      unaffiliated, individual shareholders of the Company. As reported in the
      Company’s proxy statement filed on May 7, 2003, Louis Schnur beneficially owned
      2,275,421 common shares of the Company at April 30, 2003, or 6.5% of the
      outstanding common stock. In addition, he owned 5,382,223 warrants to purchase
      common shares. Also as reported in the Company’s proxy statement filed on May 7,
      2003, Cranshire Capital L.P. beneficially owned 502,000 common shares of the
      Company at April 30, 2003, or 1.4% of the outstanding common stock. In addition,
      it owned 1,155,211 warrants to purchase common shares.

    Note
      11 - Commitments and Contingencies, page F19

            4.

              Please
                file the November 2004 agreement with the University of Nevada, Las
                Vegas
                Research Foundation as an
                exhibit.

    The
      November 2004 agreement with the University of Nevada, Las Vegas is attached
      hereto as Exhibit 1 and will be filed as an exhibit to the next filing by the
      Company.

    Note
      13 - Business Segment Information, page F-20

            5.

              Please
                disclose the significant types of costs included in the corporate
                and
                other expense reconciling line item.

    The
      significant types of costs included in the corporate and other expense
      reconciling line item are investor relations, business consulting, general
      legal
      expense, accounting and audit, general insurance expense, non-employee and
      employee variable accounting stock option compensation expense and shareholder
      information expense. This will be included in future disclosures.

          Messrs.
            Rufus Decker and Scott Watkinson

          July
            19,
            2005  Page 5

              6.

                Please
                  revise your segment disclosures to include your revenues from external
                  customers for each product and service or each group of similar
                  products
                  and services as required by paragraph 37 of SFAS 131, as well as
                  the
                  geographic disclosures required by paragraph 38.

During
      2004 Altair’s revenues were derived almost
      entirely (99.3%) from contract service activities. The Company expects contract
      services to continue to be the dominant revenue source during 2005 and,
      accordingly has grouped similar contracts for presentation on the income
      statement: license fees, contracts and grants, and commercial collaborations.
      Product sales are not expected to be significant, disclosure of product revenue
      based on product groupings will be made when product sales become
      significant.

    The
      following table shows the geographic segment disclosure for the three years
      ended December 31, 2004. Because Note 11 to the consolidated financial
      statements discloses the $314,359 sales in Canada, it was not duplicated in
      Note
      13 to the consolidated financial statements. The Company will summarize this
      disclosure in one table in future filings, as follows:

    Revenues
      from external customers were derived from the following geographic
      areas:

              Revenues
                -

              Revenues
                -

              Revenues
                -

              Year
                Ended

              Year
                Ended

              Year
                Ended

              Geographic
                information (a):

              December
                31, 200