The basic and diluted weighted average shares outstanding for the year-end 2008 were 85.9 million compared to 71.0 million reported in 2007.

The operating expenses of $35.9 million for 2008 was $6.3 million less than the operating expenses of $42.2 million for 2007. The decrease in operating expenses was primarily a result of the lower cost of product sales in 2008 associated with the lower volume of business. The company also disclosed that as a result of the company not achieving its 2008 financial targets, no bonuses were paid to middle and senior level managers. Additionally due to the overall adverse economic environment no general or cost of living salary increases were given to employees for 2009. The company’s normal practice is to provide cost of living increases at the beginning of each year.

The markets for clean energy storage systems for power-dependent applications within smart-grid, renewable integration, military, and transportation are developing, stated Terry Copeland, president and chief executive officer of Altair. However, there is no question that current economic conditions have delayed purchasing decisions. On a positive note, several sections of the 2009 American Recovery and Reinvestment Act are directed at those very markets and we anticipate those funds will help accelerate the adoption of advanced energy storage systems.

The company’s cash and cash equivalents decreased by $22.1 million, from $50.2 million at December 31, 2007 to $28.1 million at December 31, 2008. This is due primarily to net cash used in operations of about $30.1 million, purchases of property and equipment of about $3.0 million, and the payment of notes payable of $0.8 million. This decrease was partially offset by the receipt of proceeds resulting from the issuance of common shares to a single investor, the exercise of stock options and warrants, and recovery of short swing profits of about $11.8 million.

Net cash consumed by the company was $22.1 million in 2008. In the first quarter earnings call, management stated that the $14.6 million of cash consumed in the first quarter was unacceptable and that it would take immediate steps to lower that burn rate to a figure closer to $2.0 million per month by the second half of the year. Excluding the $10 million additional investment from Al Yousuf, LLC in the fourth quarter, the company’s second half burn rate averaged $1.62 million per month, considerably better than the target.

As previously announced, during the fourth quarter Altair entered into a purchase and settlement agreement with Al Yousuf, LLC for a $10 million private placement of its common stock and release of its potential breach of contract and other claims related to its 2007 $40 million investment. Under the 2007 purchase agreement, the company made certain representations and warranties related to its inventory, warranty reserve and similar matters that were affected by the write-offs and warranty offers announced in March 2008. Under the terms of this 2008 agreement, the company also expanded its board of directors and appointed Eqbal Al Yousuf as the eighth director. Following its 2009 annual meeting, the company intends to expand its board to nine directors and appoint a second nominee of Al Yousuf to that seat.

As a result of the substantially deteriorated economic environment during 2008, the company incurred impairment to various financial assets it owns. As of December 31, 2007 the company owns $3.9 million in notes purchased as Auction Rate Securities. During 2008 the market for these securities essentially shut down and the company is now faced with holding them until maturity unless the market recovers and resumes normal trading of these securities. Based on consideration of a number of factors including the strength of the underlying securities that comprise the notes, the bank holding the funds, and the company’s ability to hold the notes to maturity, a temporary impairment of $1.1 million has been recorded for these securities. As payment for achieving certain milestones as specified in its contract with Spectrum Pharmaceuticals, the company is also carrying shares of Spectrum stock with an acquisition price of $1.3 million on its balance sheet. As a result of ongoing analysis of the strength of this stock during 2008, a temporary impairment of $0.8 million has also been recorded against these securities as of December 31, 2008. Finally the company carried Phoenix MC common stock valued at $106,000 as of December 31, 2007 on its books, which has been written down to $18,000 due to an impairment that management believes is other than temporary.