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Proc-Type: 2001,MIC-CLEAR
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[X] |
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934 |
[ ] |
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
Delaware |
000-28411 |
85-0460639 |
||||||||
(State of
Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
Large accelerated
filer |
[ ] |
Accelerated filer |
[ ] |
|||||||||||
Non-accelerated
filer |
[ ] |
Smaller reporting company |
[X] |
Page |
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PART I |
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Item
1. |
Financial Statements |
|||||||||
Consolidated Balance Sheets as of September 30, 2009 (unaudited) and December 31, 2008 |
1 | |||||||||
Unaudited Consolidated Statements of Operations and Other Comprehensive Income for the three months and nine months ended September 30, 2009
and September 30, 2008 |
2 | |||||||||
Unaudited Consolidated Statements of Cash Flows for the three months ended September 30, 2009 and 2008 |
3 | |||||||||
Notes
to Unaudited Consolidated Financial Statements |
4 | |||||||||
Item
2. |
Managements Discussion and Analysis of Financial Condition and Results of Operation |
12 | ||||||||
Item
3 |
Quantitative and Qualitative Disclosures About Market Risk |
16 | ||||||||
Item
4 |
Controls and Procedures |
16 | ||||||||
PART II |
||||||||||
Item
1. |
Legal
Proceedings |
17 | ||||||||
Item
2 |
Unregistered Sales of Equity Securities and Use of Proceeds |
17 | ||||||||
Item
3 |
Defaults Upon Senior Securities |
17 | ||||||||
Item
4. |
Submission of Matters to a Vote of Security Holders |
17 | ||||||||
Item
5. |
Other
Information |
17 | ||||||||
Item
6. |
Exhibits |
17 | ||||||||
SIGNATURES |
18 |
SEPTEMBER 30, 2009 |
DECEMBER 31, 2008 |
|||||||||
(Unaudited) | (Audited) | |||||||||
ASSETS |
||||||||||
Current
assets: |
||||||||||
Cash and cash
equivalents |
$ | 626,000 | $ | 567,000 | ||||||
Investments-available for sale |
215,000 | 129,000 | ||||||||
Total current
assets |
841,000 | 696,000 | ||||||||
Investments |
2,000 | 2,000 | ||||||||
Intellectual
property, net |
268,000 | 290,000 | ||||||||
Other
asset |
30,000 | 31,000 | ||||||||
Total
assets |
$ | 1,141,000 | $ | 1,019,000 | ||||||
LIABILITIES |
||||||||||
Current
liabilities |
||||||||||
Accounts
payable and accrued expenses |
$ | 260,000 | $ | 281,000 | ||||||
Accrued
interest and expenses related parties |
545,000 | 552,000 | ||||||||
Note payable
to related party |
545,000 | 545,000 | ||||||||
Note payable
to former officers |
450,000 | 450,000 | ||||||||
Convertible
note payable other |
33,000 | 33,000 | ||||||||
Total current
liabilities |
1,833,000 | 1,861,000 | ||||||||
STOCKHOLDERS DEFICIT |
||||||||||
Capital stock
$.001 par value |
||||||||||
Preferred,
authorized 1,000,000 shares |
||||||||||
Series A
convertible, redeemable, 10 percent cumulative, authorized 182,525, shares; issued and outstanding none |
| | ||||||||
Series B
convertible, authorized 250,000 shares; 49,999 shares issued and outstanding |
| | ||||||||
Series C
convertible, redeemable, authorized 14,000 shares; issued and outstanding none |
| | ||||||||
Common,
authorized 500,000,000 shares, 396,252,926 and 378,977,926 shares issued, and outstanding, respectively |
396,000 | 379,000 | ||||||||
Additional
paid-in-capital |
51,528,000 | 51,293,000 | ||||||||
Other
accumulated comprehensive income |
215,000 | 129,000 | ||||||||
Accumulated
deficit |
(52,831,000 | ) | (52,643,000 | ) | ||||||
Total
Stockholders deficit |
(692,000 | ) | (842,000 | ) | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS DEFICIT |
$ | 1,141,000 | $ | 1,019,000 |
THREE MONTHS ENDED SEPTEMBER 30, |
NINE MONTHS ENDED SEPTEMBER 30, |
||||||||||||||||||
2009 |
2008 |
2009 |
2008 |
||||||||||||||||
Revenue |
$ | 607,000 | $ | | $ | 607,000 | $ | | |||||||||||
Operating
costs and expenses: |
|||||||||||||||||||
General and
administrative |
215,000 | 238,000 | 215,000 | 238,000 | |||||||||||||||
Research and
development |
25,000 | 52,000 | 25,000 | 52,000 | |||||||||||||||
Total
operating costs and expenses |
240,000 | 290,000 | 240,000 | 290,000 | |||||||||||||||
Income (loss)
from operations before other income and expenses |
(290,000 | 367,000 | ) | 367,000 | (290,000 | ) | |||||||||||||
Other income
and expenses: |
|||||||||||||||||||
Interest and
other expenses |
(13,000 | ) | (13,000 | ) | (13,000 | ) | (13,000 | ) | |||||||||||
Interest
income |
| 1,000 | | 1,000 | |||||||||||||||
NET INCOME
(LOSS) |
354,000 | (302,000 | ) | 354,000 | (302,000 | ) | |||||||||||||
Other
comprehensive income |
|||||||||||||||||||
Unrealized
gain (loss) on available for sale investments |
(161,000 | ) | | (161,000 | ) | | |||||||||||||
OTHER
COMPREHENSIVE INCOME (LOSS) |
$ | 193,000 | $ | (302,000 | ) | $ | 193,000 | $ | (302,000 | ) | |||||||||
BASIC AND
DILUTED LOSS PER COMMON SHARE: |
|||||||||||||||||||
Weighted
average number of common shares outstanding |
396,252,926 | 335,161,687 | 396,252,926 | 335,161,687 | |||||||||||||||
Basic and
diluted loss per common share |
$ | 0.00 | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) |
NINE MONTHS ENDED SEPTEMBER 30, |
|||||||||||
2009 | 2008 | ||||||||||
CASH FLOWS
(TO) FROM OPERATING ACTIVITIES: |
|||||||||||
Net
loss |
$ | (188,000 | ) | $ | (1,861,000 | ) | |||||
Adjustments to
reconcile net loss to net cash used in operating activities: |
|||||||||||
Gain on sale
of investments |
| (50,000 | ) | ||||||||
Common stock
issued for services |
30,000 | | |||||||||
Stock options
issued for services |
19,000 | 1,034,000 | |||||||||
Amortization
of patents and intellectual property |
22,000 | 156,000 | |||||||||
Writedown of
acquisition price of Metallicum |
| 5,000 | |||||||||
Changes
in: |
|||||||||||
Prepaid
expenses and other assets |
1,000 | 37,000 | |||||||||
Accounts
payable and accrued expenses |
(21,000 | ) | 62,000 | ||||||||
Accrued
interest and expenses related parties |
(7,000 | ) | 27,000 | ||||||||
Net cash (used
in) provided by operating activities: |
(144,000 | ) | (567,000 | ) | |||||||
CASH FLOWS
(TO) FROM INVESTING ACTIVITIES: |
|||||||||||
Proceeds
acquired from purchase of Metallicum, Inc. |
| 7,000 | |||||||||
Net cash
provided by investing activities |
| 7,000 | |||||||||
CASH FLOWS
(TO) FROM FINANCING ACTIVITIES: |
|||||||||||
Net proceeds
from issuance of common stock |
203,000 | 770,000 | |||||||||
Net cash
provided by (used in) financing activities |
203,000 | 770,000 | |||||||||
NET (DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS |
59,000 | 210,000 | |||||||||
Cash and cash
equivalents, beginning of period |
567,000 | 452,000 | |||||||||
CASH AND CASH
EQUIVALENTS, END OF PERIOD |
$ | 626,000 | $ | 662,000 | |||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION: |
|||||||||||
Interest
paid |
| | |||||||||
Taxes
paid |
| | |||||||||
SUPPLEMENTAL
DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: |
|||||||||||
Issuance of
15,000,000 common shares for acquisition of Metallicum, Inc. |
| 563,000 | |||||||||
Issuance of
1,125,926 common shares in satisfaction of accrued expenses |
| 45,000 | |||||||||
Issuance of
750,000 common shares in satisfaction of accrued expenses |
| $ | 16,000 |
|
Marketable equity securities The Company acquires these equity investments for the promotion of business and strategic objectives. The Company records the realized gains or losses on the sale or exchange of marketable equity securities in gains (losses) on other equity investments, net. |
|
Non-marketable cost method investments when the equity method does not apply. We record the realized gains or losses on the sale of non-marketable cost method investments in gains (losses) on other equity investments, net. |
Discount Rate
Bond Equivalent Yield |
2.50% | |||||
Dividend
yield |
0.0% | |||||
Volatility
factor |
137.0% | |||||
Weighted
average expected life |
5 years |
Discount Rate
Bond Equivalent Yield |
2.50% | |||||
Dividend
yield |
0.0% | |||||
Volatility
factor |
137.0% | |||||
Weighted
average expected life |
8 years |
For the three months ended September 30, 2008 | |||||||||||||||
Consolidated As Reported |
|
Pro Forma Adjustments |
|
Pro Forma Consolidated |
|||||||||||
Revenue |
$ | | $ | | $ | | |||||||||
Operating
costs and expenses: |
|||||||||||||||
General and
administrative |
238,000 | | 238,000 | ||||||||||||
Research and
development costs |
52,000 | | 52,000 | ||||||||||||
Total
operating costs and expenses |
290,000 | | 290,000 | ||||||||||||
Loss from
operations |
(290,000 | ) | | (290,000 | ) | ||||||||||
Other income
(expenses): |
(12,000 | ) | | (12,000 | ) | ||||||||||
Net
Loss |
$ | (302,000 | ) | $ | | $ | (302,000 | ) | |||||||
Loss per
share |
$ | 0.00 | $ | 0.00 | $ | 0.00 |
For the nine months ended September 30, 2008 | |||||||||||||||
Consolidated As Reported |
|
Pro Forma Adjustments |
|
Pro Forma Consolidated |
|||||||||||
Revenue |
$ | | $ | 2,000 | $ | 2,000 | |||||||||
Operating
costs and expenses: |
|||||||||||||||
General and
administrative |
1,722000 | 2,000 | 1,724,000 | ||||||||||||
Research and
development costs |
156,000 | 3,000 | 159,000 | ||||||||||||
Total
operating costs and expenses |
1,878,000 | 5,000 | 1,883,000 | ||||||||||||
Loss from
operations |
(1,878,000 | ) | | (1,881,000 | ) | ||||||||||
Other income
(expenses): |
17,000 | (1,000 | ) | 16,000 | |||||||||||
Net
Loss |
$ | (1,861,000 | ) | $ | (4,000 | ) | $ | (1,865,000 | ) | ||||||
Loss per
share |
$ | 0.00 | $ | 0.00 | $ | 0.00 |
|
Micro fuel cell technology, which is designed to become an ultra efficient miniature electricity generator that converts hydrogen into electricity by chemical means, for portable electronic devices, including cellular telephones, as a substitute for lithium ion and other batteries in common use today. |
|
Mid-range fuel cell technology, which is an ultra efficient medium-size electricity generating device that converts hydrogen into electricity, with potential applications including personal transportation, cordless appliances, power tools, wheelchairs, bicycles, boats, emergency home generators, military field communications and laptop computers. |
|
Haptics Touch and Feel computer applications, which is a technology that allows computer users to be able to touch and feel any objects they see on their computer screen with the aid of special mouse. Detailed texture, object-weight, stickiness, viscosity and object density can be felt or sensed. Management believes this haptics technology may positively impact the way computers are used everywhere by introducing the ability to touch. (Please see Haptics Touch and Feel Internet Applications and Investment in Novint Technologies, Inc. |
(a) |
Disclosure Controls and Procedures |
(b) |
Changes in Internal Controls |
31.1 |
Certification of Chief Executive Officer under Rule 13(a) 14(a) of the Exchange Act. |
|||||
31.2 |
Certification of Chief Financial Officer under Rule 13(a) 14(a) of the Exchange Act. |
|||||
32 |
Certification of CEO and CFO under 18 U.S.C. Section 1350 |
MANHATTAN SCIENTIFICS, INC. |
||||||
By:
/s/ Emmanuel Tsoupanarias |
||||||
Emmanuel Tsoupanarias Chief Executive Officer |
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
(a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By:
|
||||||
Name: Emmanuel Tsoupanarias |
||||||
Title: Chairman and Chief Executive Officer (Principal Executive Officer) |
||||||
November 13, 2009 |
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
(a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By:
|
||||||
Name: Chris Theoharis |
||||||
Title: Principal Financial Officer |
||||||
November 13, 2009 |
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Name: Emmanuel Tsoupanarias |
||||||||
Title: Chairman and Chief Executive Officer (Principal Executive Officer) |
||||||||
November 12,
2009 |
||||||||
Name: Chris
Theoharis |
||||||||
Title: Principal Financial Officer |