0001477932-18-004319.txt : 20180828 0001477932-18-004319.hdr.sgml : 20180828 20180827214226 ACCESSION NUMBER: 0001477932-18-004319 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 32 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180828 DATE AS OF CHANGE: 20180827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MANHATTAN SCIENTIFICS INC CENTRAL INDEX KEY: 0001099132 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 850460639 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-28411 FILM NUMBER: 181040045 BUSINESS ADDRESS: STREET 1: THE CHRYSLER BUILDING STREET 2: 405 LEXINGTON AVENUE, 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10174 BUSINESS PHONE: 212-541-2405 MAIL ADDRESS: STREET 1: THE CHRYSLER BUILDING STREET 2: 405 LEXINGTON AVENUE, 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10174 10-Q/A 1 mhtx_10qa.htm FORM 10-Q/A mhtx_10qa.htm

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q/A

 

(Mark One)

 

x

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

 

For the fiscal quarter ended June 30, 2018

 

¨

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from ____________to____________

 

Commission file number 000-28411

 

MANHATTAN SCIENTIFICS, INC.

(Exact name of small business issuer as specified in its charter)

 

Delaware

 

000-28411

 

85-0460639

(State of Incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

The Chrysler Building

405 Lexington Avenue, 26th Floor

New York, New York, 10174

(Address of principal executive offices) (Zip code)

 

Issuer’s telephone number: (212) 541-2405

 

Securities registered under Section 12(b) of the Exchange Act: None

 

Securities registered under Section 12(g) of the Exchange Act:

 

Common Stock, $0.001 par value

(Title of Class)

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

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

 

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

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

 

Emerging growth company

¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

There were 533,781,064 shares outstanding of registrant’s common stock, par value $0.001 per share, as of August 27, 2018.

 

 
 
 
 

 

EXPLANATORY NOTE

 

After filing, on August 20, 2018, the Company’s Form 10-Q for the second quarter ended June 30, 2018 (the “Quarterly Report”), the Company was informed that it had incorrectly published the Quarterly Report without the auditor review and related adjustments. Our financial statements have thus been modified to recognize the related adjustments and review comments from the independent auditor. Please see Note 5 of the Condensed Consolidated Notes to the Unaudited Financial Statements for more information.

 

 
2
 
 

   

TABLE OF CONTENTS

 

PART I

 

Item 1.

Condensed Financial Statements

 

4

 

Condensed Consolidated Balance Sheets as of June 30, 2018 (unaudited)(restated) and December 31, 2017

 

4

 

Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017 (restated)

 

5

 

Unaudited Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2018 and 2017 (restated)

 

6

 

Condensed Notes to Consolidated Financial Statements (Unaudited)

 

7

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

 

14

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

17

 

Item 4.

Controls and Procedures

 

17

 

PART II

 

Item 1.

Legal Proceedings

 

19

 

Item 1A.

Risk Factors

 

19

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

22

 

Item 3.

Defaults Upon Senior Securities

 

22

 

Item 4.

Mine Safety Disclosure

 

22

 

Item 5.

Other Information

 

22

 

Item 6.

Exhibits

 

23

 

SIGNATURES

 

24

 

 
3
 
 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

MANHATTAN SCIENTIFICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

 

(UNAUDITED)

 

 

 

 

 

(RESTATED)

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$ 130,000

 

 

$ 269,000

 

Prepaid expenses

 

 

6,000

 

 

 

9,000

 

Total current assets

 

 

136,000

 

 

 

278,000

 

 

 

 

 

 

 

 

 

 

Investments

 

 

2,132,000

 

 

 

5,505,000

 

Property and equipment, net

 

 

7,000

 

 

 

8,000

 

Assets received in settlement agreement

 

 

3,342,000

 

 

 

5,030,000

 

Assets held for sale

 

 

500,000

 

 

 

-

 

Intellectual property, net

 

 

5,000

 

 

 

23,000

 

Other assets

 

 

2,000

 

 

 

2,000

 

Total assets

 

$ 6,124,000

 

 

$ 10,846,000

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$ 251,000

 

 

$ 209,000

 

Accrued expenses — related parties

 

 

1,445,000

 

 

 

1,418,000

 

Customer deposits

 

 

250,000

 

 

 

-

 

Total current liabilities

 

 

1,946,000

 

 

 

1,627,000

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

1,946,000

 

 

 

1,627,000

 

 

 

 

 

 

 

 

 

 

Mezzanine equity Series D convertible preferred, authorized 105,671 shares, 105,671 and 105,671 shares issued and outstanding, respectively

 

 

1,058,000

 

 

 

1,058,000

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Capital stock $.001 par value

 

 

 

 

 

 

 

 

Preferred, authorized 1,000,000 shares

 

 

 

 

 

 

 

 

Common, authorized 950,000,000 shares, 533,781,064 and 533,781,064 shares issued, and outstanding, respectively

 

 

534,000

 

 

 

534,000

 

Additional paid-in-capital

 

 

67,289,000

 

 

 

67,289,000

 

Accumulated deficit

 

 

(64,703,000 )

 

 

(59,662,000 )

Total stockholders' equity (deficit)

 

 

3,120,000

 

 

 

8,161,000

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

$ 6,124,000

 

 

$ 10,846,000

 

 

 

 

 

 

 

 

 

 

The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.

 

 
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Table of Contents

 

 MANHATTAN SCIENTIFICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(RESTATED)

 

 

 

 

 

 

 

 

 

 

 

THREE MONTHS ENDED

 

 

SIX MONTHS ENDED

 

 

 

JUNE 30,

 

 

JUNE 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$ -

 

 

$ 41,000

 

 

$ -

 

 

$ 83,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct cost of revenue

 

 

4,000

 

 

 

65,000

 

 

 

7,000

 

 

 

127,000

 

General and administrative expenses

 

 

372,000

 

 

 

467,000

 

 

 

767,000

 

 

 

1,181,000

 

Research and development

 

 

21,000

 

 

 

46,000

 

 

 

52,000

 

 

 

870,000

 

Asset impairment

 

 

842,000

 

 

 

-

 

 

 

842,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

 

1,239,000

 

 

 

578,000

 

 

 

1,668,000

 

 

 

2,178,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations before other income and expenses

 

 

(1,239,000 )

 

 

(537,000 )

 

 

(1,668,000 )

 

 

(2,095,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income and (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) on fair value adjustment of investments

 

 

(974,000 )

 

 

203,000

 

 

 

(3,373,000 )

 

 

203,000

 

Gain on deconsolidation of subsidiary

 

 

-

 

 

 

8,908,000

 

 

 

-

 

 

 

8,908,000

 

Loss on forgiveness of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Interest and other expenses

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(96,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) INCLUDING NONCONTROLLABLE INTEREST

 

 

(2,213,000 )

 

 

8,574,000

 

 

 

(5,041,000 )

 

 

6,920,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling interest

 

 

-

 

 

 

472,000

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO MANHATTAN SCIENTIFICS, INC.

 

 

(2,213,000 )

 

 

9,046,000

 

 

 

(5,041,000 )

 

 

6,920,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding (Basic)

 

 

533,781,064

 

 

 

533,781,064

 

 

 

533,781,064

 

 

 

533,781,064

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per common share

 

$ (0.00 )

 

$ 0.02

 

 

$ (0.01 )

 

$ 0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding (Diluted)

 

 

533,781,064

 

 

 

530,163,579

 

 

 

533,781,064

 

 

 

581,036,064

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) per common share

 

$ (0.00 )

 

$ 0.02

 

 

$ (0.01 )

 

$ 0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
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Table of Contents

 

MANHATTAN SCIENTIFICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(RESTATED)

 

 

 

 

 

 

 

FOR THE SIX MONTHS ENDED

 

 

 

JUNE 30,

 

 

 

2018

 

 

2017

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income (loss) attributable to Manhattan Scientifics, Inc.

 

$ (5,041,000 )

 

$ 6,920,000

 

Net income (loss) attributable to noncontrolling interest

 

 

-

 

 

 

-

 

Adjustments to reconcile net income/(loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

365,000

 

 

 

428,000

 

Asset impairment

 

 

842,000

 

 

 

-

 

Gain on FV of Investments

 

 

3,373,000

 

 

 

(203,000 )

Gain on deconsolidation of subsidiary

 

 

-

 

 

 

(8,908,000 )

Changes in:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

-

 

 

 

30,000

 

Prepaid expenses

 

 

3,000

 

 

 

(3,000 )

Accounts payable and accrued expenses

 

 

69,000

 

 

 

300,000

 

Deferred revenue

 

 

250,000

 

 

 

(1,000 )

 

 

 

 

 

 

 

 

 

Net cash provided by/(used in) operating activities

 

 

(139,000 )

 

 

(1,437,000 )

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Reduction of cash due to deconsolidation

 

 

-

 

 

 

968,000

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

-

 

 

 

968,000

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(139,000 )

 

 

(469,000 )

Cash and cash equivalents, beginning of year

 

 

269,000

 

 

 

1,068,000

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF YEAR

 

$ 130,000

 

 

$ 599,000

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Interest paid

 

$ -

 

 

$ -

 

Income taxes paid

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.

 

 
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Table of Contents

 

MANHATTAN SCIENTIFICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 1 – BASIS OF PRESENTATION

 

The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2017. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

 

The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumption are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.

 

Operating results for the six month period ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018.

 

As of June 30, 2018, the Company has cumulative losses totaling $(64,703,000) and negative working capital of $1,810,000. The Company incurred a net loss of $5,041,000 for the six months ended June 30, 2018. Because of these conditions, the Company will require additional working capital to develop business operations. The Company intends to raise additional working capital through the continued licensing of its technology as well as to generate revenues for other services. There are no assurances that the Company will be able to achieve the level of revenues adequate to generate sufficient cash flow from operations to support the Company’s working capital requirements. To the extent that funds generated are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not continue its operations.

 

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

 

BASIS OF CONSOLIDATION:

 

The consolidated financial statements include the accounts of Manhattan Scientific, Inc., its wholly owned subsidiary Metallicum. All significant intercompany balances and transactions have been eliminated.

 

USE OF ESTIMATES:

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. A significant estimate includes the carrying value of the Company’s patents, fair value of the Company’s common stock, assumptions used in calculating the value of stock options, depreciation and amortization.

 
 
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MANHATTAN SCIENTIFICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(UNAUDITED)

 

CASH CONCENTRATION:

 

The Company’s cash accounts are federally insured up to $250,000 for each financial institution we hold our accounts in. As of June 30, 2018 and December 31, 2017, we had cash balances of $0 and $0 exceeding the federally insured limits.

 

INTANGIBLE ASSETS:

 

License Agreements

 

In 2008, the Company obtained licenses to the rights of certain patents regarding nanostructured materials developed by another company as a result of the acquisition of Metallicum. The purchase price paid for these licenses was $305,000, which represented its fair value. The Company obtained an exclusive license on two patents and a non-exclusive license on the third patent. The value attributable to license agreements is being amortized over the period of its estimated benefit period of 10 years. At June 30, 2018 and December 31, 2017, accumulated amortization was $300,000 and $285,000, respectively. Under the terms of the agreement, the Company may be required to pay royalties, as defined, to the licensors.

 

In 2009, the Company entered into a patent license agreement with Los Alamos National Security LLC for the exclusive use of certain technology relating to the manufacture and application of nanostructuring metals and alloys. The purchase price paid for this license agreement was $33,000 based on the fair market value of 2,000,000 shares of common stock issued. The value attributable to license agreements is being amortized over the period of its estimated benefit period of 10 years. At June 30, 2018 and December 31, 2017, accumulated amortization was $31,000 and $29,000, respectively. Under the terms of the agreement, the Company is required to pay an annual license fee of $10,000 starting in February 2010 and, may be required to pay royalties, as defined, to the licensors.

 

ASSETS HELD FOR SALE:

 

Non-current assets are classified as held for sale if it is highly probably that they will be recovered primarily through sale rather than through continuing use.

 

Immediately before classification as held for sale, the assets are remeasured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on initial classification as held for sale and subsequent gains and losses on reameasurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss.

 

REVENUE RECOGNITION:

 

Revenue is recognized when the four basic criteria of revenue recognition are met: (i) a contractual agreement exists; (ii) transfer of technology (intellectual property) has been completed or services have been rendered; (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Service revenue is recognized when specific milestones are reached or as service is provided if there are no discernible milestones.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

Effective January 1, 2008, the Company adopted FASB ASC 820, Fair Value Measurements and Disclosures, Pre Codification SFAS No. 157, “Fair Value Measurements”, which provides a framework for measuring fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

 
 
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MANHATTAN SCIENTIFICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(UNAUDITED)

 

FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

 

Level 1 — Quoted prices for identical assets and liabilities in active markets;

Level 2 — Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

 

The Company designates cash equivalents (consisting of money market funds) and investments in securities of publicly traded companies as Level 1. The total amount of the Company’s investment classified as Level 3 is de minimis.

 

Fair value of financial instruments: The carrying amounts of financial instruments, including cash and cash equivalents, short-term investments, accounts payable, accrued expenses and notes payables approximated fair value as of June 30, 2018 and December 31, 2017 because of the relative short term nature of these instruments.

 

STOCK-BASED COMPENSATION

 

The Company accounts for stock-based compensation based on the fair value of all option grants or stock issuances made to employees or directors on or after its implementation date (the beginning of fiscal 2006), as well as a portion of the fair value of each option and stock grant made to employees or directors prior to the implementation date that represents the unvested portion of these share-based awards as of such implementation date, to be recognized as an expense, as codified in ASC 718. The Company calculates stock option-based compensation by estimating the fair value of each option as of its date of grant using the Black-Scholes option pricing model. These amounts are expensed over the respective vesting periods of each award using the straight-line attribution method. Compensation expense is recognized only for those awards that are expected to vest, and as such, amounts have been reduced by estimated forfeitures. The Company has historically issued stock options and vested and non-vested stock grants to employees and outside directors whose only condition for vesting has been continued employment or service during the related vesting or restriction period. The estimated fair value of grants of stock options and warrants to nonemployees of the Company is charged to expense, if applicable, in the financial statements.

 

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

 

INCOME TAXES

 

The Company accounts for income taxes under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Company’s consolidated balance sheets in accordance with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The Company must assess the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent the Company believes that recovery is not likely, the Company must establish a valuation allowance. Changes in the Company’s valuation allowance in a period are recorded through the income tax provision on the consolidated statements of operations.

 

ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return.

 
 
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MANHATTAN SCIENTIFICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(UNAUDITED)

 

INCOME TAXES (CONTINUED)

 

Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the implementation of ASC 740-10, the Company recognized no material adjustment in the liability for unrecognized income tax benefits.

 

BASIC AND DILUTED LOSS PER SHARE

 

In accordance with FASB ASC 260, “Earnings Per Share,” the basic loss per share is computed by dividing the loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Basic net loss per share excludes the dilutive effect of stock options or warrants and convertible notes. Diluted net earnings (loss) per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and warrants. In periods where losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

 

SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to June 30, 2018 to the date these financial statements were issued, and there were no material subsequent events to disclose in these financial statements.

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

 

There are no other recent accounting pronouncements that are expected to have a material impact on the condensed consolidated financial statements.

 

NOTE 3 – INVESTMENT IN IMAGION BIOSYSTEMS

 

As of June 30, 2018, the Company owns 64,099,476 shares of Imagion Biosystems (“Imagion”), resulting in a noncontrolling interest of approximately 31% of Imagion’s issued and outstanding common stock. Based upon Imagion’s trading price on June 30, 2018, approximately US$0.033233 per share, the fair value of the Imagion shares was approximately US$2,130,000. During the six months ended June 30, 2018, the Company recorded unrealized losses in its investment of US$3,372,000.

 

NOTE 4 – LEASE AGREEMENT

 

On April 30, 2018, the Company entered into a lease extension for its wholly owned subsidiary for three additional years ending on April 30, 2021. The monthly rent for the next twelve months is $2,420 and the lease may be cancelled with three months written notice before April 30, 2019.

 

Rent expense for the six months ended June 30, 2018 was $15,000.

 

NOTE 5 – RESTATEMENT OF FINANCIAL STATEMENTS

 

During the year end audit for December 31, 2017, the Company’s Board of Directors, after consultation with management, determined that the Company’s financial statements, as included in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2017 (the “Fiscal Quarter” or the “Restatement Period”) should no longer be relied upon and should be restated in order to characterize the deconsolidation of certain Imagion Biosystems, Inc. during the second quarter ended June 30, 2017.

 
 
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Below are adjustments to financial statements for the three and six months ended June 30, 2017:

 

 

 

Three Months

June 30, 2017

(Original

 

 

 

 

 

Three Months

June 30, 2017

(Restated

 

 

 

Amount)

 

 

(Adjustments)

 

 

 

Amount)

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$ 41,000

 

 

 

 

 

 

$ 41,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs:

 

 

 

 

 

 

 

 

 

 

 

 

Direct cost of revenue

 

 

-

 

 

 

65,000

 

(A)

 

 

65,000

 

General and administrative expenses

 

 

367,000

 

 

 

100,000

 

(A)

 

 

467,000

 

Research and development

 

 

(658,000 )

 

 

704,000

 

(A)(B)

 

 

46,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

 

(291,000 )

 

 

 

 

 

 

 

578,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations before other income and expenses

 

 

332,000

 

 

 

 

 

 

 

 

(537,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income and (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from change in accounting treatment of investment

 

 

8,758,000

 

 

 

(8,758,000

)

(B)

 

 

-

 

Loss attributed to noncontrolling interest

 

 

(330,000 )

 

 

330,000

 

(B)

 

 

-

 

Gain/(loss) on forgiveness of debt

 

 

(6,739,000 )

 

 

6,739,000

 

(B)

 

 

-

 

(Loss) on fair value adjustment of investments

 

 

-

 

 

 

203,000

 

(B)

 

 

203,000

 

Gain on deconsolidation of subsidiary

 

 

-

 

 

 

8,908,000

 

(B)

 

 

8,908,000

 

Interest and other expenses

 

 

96,000

 

 

 

(96,000

)

(B)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) INCLUDING NONCONTROLLABLE INTEREST

 

 

2,117,000

 

 

 

 

 

 

 

 

8,574,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) attributable to noncontrolling interest

 

 

-

 

 

 

472,000

 

(B)

 

 

472,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO MANHATTAN SCIENTIFICS, INC.

 

 

2,117,000

 

 

 

 

 

 

 

 

9,046,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding (Basic)

 

 

533,781,064

 

 

 

 

 

 

 

 

533,781,064

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per common share

 

$ 0.00

 

 

 

 

 

 

 

$ 0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding (Diluted)

 

 

530,163,579

 

 

 

 

 

 

 

 

530,163,579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) per common share

 

$ 0.00

 

 

 

 

 

 

 

$ 0.02

 

 

(A) Reclassification from general and admininstrative and research and development to direct cost of revenue

(B) Deconsolidation of Imagion Biosystems, Inc. and recording investment at fair value

 

 
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Six Months

June 30, 2017 (Original

 

 

 

 

 

Six Months

June 30, 2017

(Restated

 

 

 

Amount)

 

 

(Adjustments)

 

 

 

Amount)

 

  

 

 

 

 

 

 

 

 

 

 

Revenue

 

$ 83,000

 

 

 

 

 

 

$ 83,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs:

 

 

 

 

 

 

 

 

 

 

 

 

Direct cost of revenue

 

 

-

 

 

 

127,000

 

(A)

 

 

127,000

 

General and administrative expenses

 

 

1,143,000

 

 

 

38,000

 

(A)

 

 

1,181,000

 

Research and development

 

 

166,000

 

 

 

704,000

 

(A)(B)

 

 

870,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

 

1,309,000

 

 

 

 

 

 

 

 

2,178,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations before other income and expenses

 

 

(1,226,000 )

 

 

 

 

 

 

 

(2,095,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income and (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from change in accounting treatment of investment

 

 

8,758,000

 

 

 

(8,758,000

)

(B)

 

 

-

 

Loss attributed to noncontrolling interest

 

 

(330,000 )

 

 

330,000

 

(B)

 

 

-

 

Gain/(loss) on forgiveness of debt

 

 

(6,739,000 )

 

 

6,739,000

 

(B)

 

 

-

 

(Loss) on fair value adjustment of investments

 

 

-

 

 

 

203,000

 

(B)

 

 

203,000

 

Gain on deconsolidation of subsidiary

 

 

-

 

 

 

8,908,000

 

(B)

 

 

8,908,000

 

Interest and other expenses

 

 

-

 

 

 

(96,000

(B)

 

 

(96,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) INCLUDING NONCONTROLLABLE INTEREST

 

 

463,000

 

 

 

 

 

 

 

 

6,920,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding (Basic)

 

 

533,781,064

 

 

 

 

 

 

 

 

533,781,064

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per common share

 

$ 0.00

 

 

 

 

 

 

 

$ 0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding (Diluted)

 

 

581,036,064

 

 

 

 

 

 

 

 

581,036,064

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) per common share

 

$ 0.00

 

 

 

 

 

 

 

$ 0.01

 

 

(A) Reclassification from general and admininstrative and research and development to direct cost of revenue

(B) Deconsolidation of Imagion Biosystems, Inc. and recording investment at fair value

 

 
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Six Months

 

 

 

 

 

 

Six Months

 

 

 

June 30, 2017

 

 

 

 

 

 

June 30, 2017

 

 

 

(Original

 

 

 

 

 

 

(Restated

 

 

 

Amount)

 

 

(Adjustments)

 

 

 

Amount)

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Manhattan Scientifics, Inc.

 

$ 463,000

 

 

 

6,457,000

 

(A)

 

$ 6,920,000

 

Adjustments to reconcile net income/(loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options issued/vested for services

 

 

-

 

 

 

-

 

 

 

 

-

 

Depreciation and amortization

 

 

428,000

 

 

 

-

 

 

 

 

428,000

 

Treasury stock cancelled and returned to authorized

 

 

-

 

 

 

-

 

 

 

 

-

 

(Gain)/Loss on forgiveness of debt

 

 

6,739,000

 

 

 

(6,739,000

)

(A)

 

 

-

 

Gain on FV of Investments

 

 

-

 

 

 

(203,000

)

(A)

 

 

(203,000 )

Gain on deconsolidation of subsidiary

 

 

-

 

 

 

(8,908,000

(A)

 

 

(8,908,000 )

Changes in:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

30,000

 

 

 

-

 

 

 

 

30,000

 

Prepaid expenses

 

 

(3,000 )

 

 

-

 

 

 

 

(3,000 )

Accounts payable and accrued expenses

 

 

(40,000 )

 

 

340,000

 

(A)

 

 

300,000

 

Accrued interest and expenses, related parties

 

 

(1,000 )

 

 

-

 

 

 

 

(1,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by/(used in) operating activities

 

 

7,616,000

 

 

 

 

 

 

 

 

(1,437,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustment for noncontrolling interest

 

 

(8,758,000 )

 

 

8,758,000

 

(A)

 

 

-

 

Reduction of assets due to deconsolidation of noncontrolling interest

 

 

696,000

 

 

 

(696,000

)

(A)

 

 

-

 

Reduction of cash due to deconsolidation

 

 

-

 

 

 

968,000

 

(A)

 

 

968,000

 

Purchase of fixed assets

 

 

(23,000 )

 

 

23,000

 

(A)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

(8,085,000 )

 

 

 

 

 

 

 

968,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from note payable - related party

 

 

-

 

 

 

-

 

 

 

 

-

 

Payments on notes payable other

 

 

-

 

 

 

-

 

 

 

 

-

 

Proceeds from issuance of common stock

 

 

-

 

 

 

-

 

 

 

 

-

 

Repurchase of common stock for treasury

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net cash (used in)/provided by financing activities

 

 

-

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(469,000 )

 

 

 

 

 

 

 

(469,000 )

Cash and cash equivalents, beginning of year

 

 

1,068,000

 

 

 

 

 

 

 

 

1,068,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF YEAR

 

$ 599,000

 

 

 

 

 

 

 

$ 599,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest paid

 

$ -

 

 

 

 

 

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of debt to preferred stock by shareholder

 

$ -

 

 

 

 

 

 

 

$ -

 

Loss on forgiveness of debt

 

$ -

 

 

 

 

 

 

 

$ -

 

Gain in change in accounting treatment

 

$ -

 

 

 

 

 

 

 

$ (8,908,000 )

 

(A) Deconsolidation of Imagion Biosystems, Inc. and recording investment at fair value

 

 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

Forward Looking Statements

 

This Form 10-Q contains “forward-looking” statements including statements regarding our expectations of our future operations. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include, but are not limited to, economic conditions generally and in the industries in which we may participate. In addition, these forward-looking statements are subject, among other things, to our successful completion of the research and development of our technologies; successful commercialization of our technologies; successful protection of our patents; and effective significant industry competition from various entities whose research and development, financial, sales and marketing and other capabilities far exceeds ours. In light of these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to announce publicly revisions we make to these forward-looking statements to reflect the effect of events or circumstances that may arise after the date of this report.

 

OVERVIEW

 

Manhattan Scientifics, Inc. (the “Company” or “Manhattan Scientifics”), a Delaware corporation, was established on July 31, 1992 and has one operating wholly-owned subsidiary: Metallicum, Inc., (“Metallicum”). The Company also holds a 31%, non-controlling interest in Imagion Biosystems, Inc. (f/k/a Senior Scientific LLC) (“Imagion”). Manhattan Scientifics is focused on technology transfer and commercialization of these transformative technologies.

 

The Company operates as a technology incubator that seeks to acquire, develop and commercialize life-enhancing technologies in various fields, with emphasis in the areas of nanotechnology. Nanotechnology is the use and manipulation of matter on an atomic and molecular scale. To achieve this goal, the Company continues to identify emerging technologies through strategic alliances with scientific laboratories, educational institutions, scientists and leaders in industry and government. The Company and its executives have a long-standing relationship with Los Alamos Laboratories in New Mexico.

 

In June 2008, we acquired Metallicum and its licensed patented technology. We entered into a stock purchase agreement with Metallicum to acquire all of the outstanding capital in exchange for 15,000,000 restricted shares of our common stock. An additional 15,000,000 shares of our common stock will be payable to Metallicum in the event of meeting certain milestones. At December 31, 2011, one milestone was met. Metallicum was granted an exclusive license by The Los Alamos National Laboratory on patents related to nanostructured metals. In September 2009, we entered into a technology transfer agreement and sale with Carpenter Technology Corporation, (“Carpenter”) wherein Carpenter was to fully develop, manufacture and market a new class of high strength metals. On February 11, 2015, the Company and Carpenter entered into a Settlement Agreement and Mutual Release pursuant to which the parties provided a full release of one another, Carpenter paid the Company $8,000,000, Carpenter transferred to the Company all intellectual and physical property that was part of the original agreement, Carpenter agreed to provide follow-on technical assistance and Carpenter provided a list of all customers and contacts.

 

On May 31, 2011, we entered into an Agreement and Plan of Reorganization to acquire Senior Scientific. The total purchase price was 21,668,000 restricted shares of our common stock (less 7,667,000 shares previously issued pursuant to an option agreement). As a result of this acquisition, Senior Scientific owned patented technologies that can use biosafe nanoparticles and sensitive magnetic sensors to detect and measure cancer cells in biopsies or in the human body with the potential to transform how cancer is detected and treated. On November 17, 2016, Senior Scientific merged with and into Imagion, a Nevada company. Following the merger, Imagion held all of the liabilities, obligations and assets of Senior Scientific and the Company continued as the sole equity holder of Imagion. On November 29, 2016, the Company announced a plan to have Imagion pursue an IPO and listing on the Australian Stock Exchange (ASX). As of June 30, 2018, Manhattan Scientifics presently owns approximately 31% of the issued and outstanding shares of Imagion, with a fair market value of approximately $2,130,000, based upon the closing price per share of Imagion common stock on the Australian Stock Exchange.

 

RESULTS OF OPERATIONS

 

THREE MONTHS ENDED JUNE 30, 2018 COMPARED TO THREE MONTHS ENDED JUNE 30, 2017

 

REVENUE. The Company recognized $0 revenue in the three months ended June 30, 2018. In comparison, the Company recorded $41,000 of revenue in the three months ended June 30, 2017. The reason for the decline in revenue in 2018 is due to the delayed progress on the current projects for its subsidiary.

 
 
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DIRECT COST OF REVENUE. During the three month period ended June 30, 2018, the Company incurred direct costs of revenue in the amount of $4,000, which consisted primarily of labor and materials. In the comparable period ended June 30, 2017, the Company incurred $65,000 of direct costs of revenue. The direct costs of revenue decrease as expected due to the delay on the projects under our subsidiary.

 

GENERAL AND ADMINISTRATIVE. General and administrative expenses consist of consultants, contractors, accounting, legal, travel, rent, telephone and other day-to-day operating expenses. General and administrative expenses were $372,000 for the three months ended June 30, 2018 compared with $467,000 for the three months ended June 30, 2017. The primary decrease in general and administrative expenses was the result of spin-out of subsidiary, Imagion. In the first quarter of 2017, the subsidiary was consolidated and was deconsolidated in the second quarter of 2017.

 

RESEARCH AND DEVELOPMENT. Research and Development was $21,000 for the three months ended June 30, 2018 compared with $46,000 for the three months ended June 30, 2017. The decrease in research and development was the result of spin-out of subsidiary, Imagion. In the first quarter of 2017, the subsidiary was consolidated and was deconsolidated in the second quarter of 2017.

 

OTHER INCOME AND (EXPENSES). Total other expenses for the three months ended June 30, 2018 totaled $974,000. This is primarily attributable to the spin-out of Imagion, on which the Company recognized a loss on fair value adjustments of its investment in Imagion in the amount of $974,000 during the period. Comparatively, the Company had total other income of $9,111,000 for the three months ended June 30, 2017, composed primarily of gain on deconsolidation of Imagion and a loss on the fair value of the shares of Imagion.

 

NET (LOSS). During the three months ended June 30, 2018, the Company incurred a net loss of $2,213,000, compared to a net income of $9,046,000 for the three months ended June 30, 2017. During the three months ended June 30, 2017, there was net income attributable to noncontrolling interest of $472,000. The reason for this is due to the deconsolidation of Imagion in the second quarter of 2017.

 

SIX MONTHS ENDED JUNE 30, 2018 COMPARED TO SIX MONTHS ENDED JUNE 30, 2017

 

REVENUE. The Company recognized $0 revenue in the six months ended June 30, 2018. In comparison, the Company recorded $83,000 of revenue in the six months ended June 30, 2017. The reason for the decline in revenue in 2018 is due to the delayed progress on the current projects for its subsidiary.

 

DIRECT COST OF REVENUE. During the three month period ended June 30, 2018, the Company incurred direct costs of revenue in the amount of $7,000, which consisted primarily of labor and materials. In the comparable period ended June 30, 2017, the Company incurred $127,000 of direct costs of revenue. The direct costs of revenue decrease as expected due to the delay on the projects under our subsidiary.

 

GENERAL AND ADMINISTRATIVE. General and administrative expenses consist of consultants, contractors, accounting, legal, travel, rent, telephone and other day-to-day operating expenses. General and administrative expenses were $767,000 for the six months ended June 30, 2018 compared with $1,181,000 for the six months ended June 30, 2017. The primary decrease in general and administrative expenses was the result of spin-out of subsidiary, Imagion. In the first quarter of 2017, the subsidiary was consolidated and was deconsolidated in the second quarter of 2017.

 

RESEARCH AND DEVELOPMENT. Research and development was $52,000 for the six months ended June 30, 2018 compared with $870,000 for the six months ended June 30, 2017. The decrease in research and development was the result of spin-out of subsidiary, Imagion. In the first quarter of 2017, the subsidiary was consolidated and was deconsolidated in the second quarter of 2017.

 

OTHER INCOME AND (EXPENSES). Total other expenses for the six months ended June 30, 2018 totaled $3,373,000. This is primarily attributable to the spin-out of Imagion, on which the Company recognized a loss on fair value adjustments of its investment in Imagion in the amount of $3,373,000 during the period. Comparatively, the Company had total other income of $9,015,000 for the six months ended June 30, 2017, composed primarily of gain on deconsolidation of Imagion and a loss on the fair value of the shares of Imagion.

 

NET (LOSS). During the six months ended June 30, 2018, the Company incurred a net loss of $5,041,000, compared to a net income of $6,920,000 for the six months ended June 30, 2017.

 
 
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LIQUIDITY AND CAPITAL RESOURCES

 

Stockholders’ equity totaled $3,120,000 on June 30, 2018 and the working capital deficit was $1,810,000 on such date. We had a decrease of $(139,000) in cash and cash equivalents for the six months ended June 30, 2018.

 

Based upon current projections, our principal cash requirements for the next 12 months consists of (1) fixed expenses, including payroll, investor relations services, public relations services, bookkeeping services, consultant services, and rent; and (2) variable expenses, including technology research and development, milestone payments and intellectual property protection, and additional scientific consultants. As of June 30, 2018, we had $130,000 in cash. We believe our current cash position is not sufficient to maintain our operations for the next twelve months. Accordingly, we will need to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be impaired, and our business may be harmed.

 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

 

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. A significant estimate includes the carrying value of our patents, fair value of our common stock, assumptions used in calculating the value of stock options, depreciation and amortization.

 

Impairment of Long-Lived Assets:

 

We assess the impairment of our long-lived assets periodically in accordance with Financial Accounting Standards Board (“FAS”) Accounting Standard Codification (“ASC”) Topic 10. Whenever events or changes in circumstances indicate that the carrying amounts of long-lived assets may not be recoverable, we will compare undiscounted net cash flows estimated to be generated by those assets to the carrying amount of those assets. When these undiscounted cash flows are less than the carrying amounts of the assets, we will record impairment losses to write the asset down to fair value, measured by the discounted estimated net future cash flows expected to be generated from the assets. To date there has been no impairment.

 

License Agreements

 

In 2008, the Company obtained licenses to the rights of certain patents regarding nano-structured materials developed by another company as a result of the acquisition of Metallicum. The purchase price paid for these licenses was $305,000, which represents its fair value. The Company obtained an exclusive license on two patents and a non-exclusive license on the third patent. The value attributable to license agreements is being amortized over the period of its estimated benefit period of 10 years. Under the terms of the agreement, the Company may be required to pay royalties, as defined, to the licensors.

 

In 2009, the Company entered into a patent license agreement with Los Alamos National Security LLC for the exclusive use of certain technology relating to the manufacture and application of nanostructuring metals and alloys. The value attributable to license agreements is being amortized over the period of its estimated benefit period of 10 years. Under the terms of the agreement the Company is required to pay an annual license fee of $10,000 and, may be required to pay royalties, as defined, to the licensors.

 

Assets Held for Sale

 

Non-current assets are classified as held for sale if it is highly probably that they will be recovered primarily through sale rather than through continuing use.

 

Immediately before classification as held for sale, the assets are remeasured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on initial classification as held for sale and subsequent gains and losses on reameasurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss.

 
 
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Revenue Recognition

 

Revenue is recognized when the four basic criteria of revenue recognition are met: (i) a contractual agreement exists; (ii) transfer of technology (intellectual property) has been completed or services have been rendered; (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Service revenue is recognized when specific milestones are reached or as service is provided if there are no discernible milestones.

 

Stock-Based Compensation:

 

The Company follows the provision of FASB ASC Topic 718 for the measurement and recognition of compensation expense for all share-based payment awards to employees, directors and non-employees. Additionally, the Company follows the SEC’s Staff Accounting Bulletin No. 107 “Share-Based Payment” (“SAB 107”), as amended by Staff Accounting Bulletin No. 110 (“SAB 110”), which provides supplemental application guidance based on the views of the SEC. The Company estimates the expected term, which represents the period of time from the grant date that the Company expects its stock options to remain outstanding, using the simplified method as permitted by SAB 107 and SAB 110. Under this method, the expected term is estimated as the mid-point between the time the options vest and their contractual terms. The Company continues to apply the simplified method because it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected terms due to the limited period of time its equity shares have been publicly traded and the limited number of its options which have so far vested and become eligible for exercise.

 

The estimated fair value of grants of stock options and warrants to our nonemployees is charged to expense, if applicable, in the financial statements. These options vest in the same manner as the employee options granted under each of the option plans as described above.

 

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50

 

OFF BALANCE SHEET ARRANGEMENTS

 

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations liquidity, capital expenditures or capital resources and would be considered material to investors.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a smaller reporting company, we are not required to include disclosure under this item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

(a) Evaluation of Disclosure Controls and Procedures

 

We conducted an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive and principal financial officers concluded as of June 30, 2018 that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses in our internal controls over financial reporting discussed immediately below.

 
 
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Identified Material Weakness

 

A material weakness in our internal control over financial reporting is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected.

 

Management identified the following material weakness during its assessment of internal controls over financial reporting:

 

Resources: We had one full-time employee in general management and no full-time employees with the requisite expertise in the key functional areas of finance and accounting. As a result, there is a lack of proper segregation of duties necessary to insure that all transactions are accounted for accurately and in a timely manner.

 

Written Policies & Procedures: We need to prepare written policies and procedures for accounting and financial reporting to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity transactions, and prepare, review and submit SEC filings in a timely manner.

 

Audit Committee: We do not have, and are not required, to have an audit committee. An audit committee would improve oversight in the establishment and monitoring of required internal controls and procedures.

 

(b) Changes In Internal Control Over Financial Reporting

 

During the quarter ended June 30, 2018, the Company prepared written policies and procedures for accounting and financial reporting to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity transactions. There were no other changes in our internal controls over financial reporting during this fiscal quarter that materially affected, or is reasonably likely to have a materially affect, on our internal control over financial reporting.

 
 
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PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We are subject from time to time to litigation, claims and suits arising in the ordinary course of business. As of June 30, 2018, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements.

 

ITEM 1A. RISK FACTORS

 

An investment in the Common Stock involves a high degree of risk. In addition to the other information in this Report, the following risk factors should be considered carefully in evaluating the Company and our business. If you decide to buy our securities, you should be able to afford a complete loss of your investment.

 

WE MAY NOT BE ABLE TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE OUR NEW TECHNOLOGIES WHICH WOULD RESULT IN CONTINUED LOSSES.

 

We are currently developing new technologies and a commercial product. We have generated our first revenues but we are unable to project when we will again generate significant revenue or achieve regular profitability, if at all. As is the case with any new technology, we expect the development process to continue. We cannot assure that our resources will be able to develop and commercialize our technology fast enough to meet market requirements. We can also not assure that our technology will gain market acceptance and that we will be able to overcome obstacles, such as potential FDA approvals. The failure to successfully develop and commercialize the technologies would result in continued losses and may require us to curtail operations.

 

THE SUCCESS OF OUR BUSINESS MAY REQUIRE CONTINUED FUNDING. IF WE CANNOT RAISE THE MONEY WE NEED TO SUPPORT OUR OPERATIONS UNTIL WE EARN SIGNIFICANT REVENUES, WE MAY BE REQUIRED TO CURTAIL OR TO CEASE OUR OPERATIONS AND YOU COULD LOSE YOUR ENTIRE INVESTMENT.

 

Our ability to develop our business depends upon our receipt of money to continue our operations while we introduce our products and a market for them develops. If this funding is not received as needed, it is unlikely that we could continue our business, in which case you would lose your entire investment. Our ability to access the capital markets has been hindered generally by the general difficult economic climate, beginning in 2008, for small technology concept companies, without significant revenues or earnings.

 

To the extent that we need additional funding, we cannot assure you that such financing will be available to us when needed, on commercially reasonable terms, or at all. If we are unable to obtain additional financing, we may be required to curtail the commercialization of our products and possibly cease our operations.

 

OUR ABILITY TO EFFECTUATE OUR BUSINESS MODEL MAY BE LIMITED, WHICH WOULD ADVERSELY EFFECT OUR BUSINESS AND FINANCIAL CONDITIONS.

 

Our future performance will depend to a substantial degree upon our ability to effectuate and generate revenues from our licensing and royalty business model. As a result, we may continue to incur substantial operating losses until such time as we are able to generate revenues from the sale or license of our products. There can be no assurance that businesses and customers will adopt our technology and products, or that businesses and prospective customers will agree to pay for or license our products. In the event that we are not able to significantly increase the number of customers that purchase or license our products, or if we are unable to charge the necessary prices or license fees, our financial condition and results of operations will be materially and adversely affected.

 

WE MAY FACE STRONG COMPETITION FROM LARGER, ESTABLISHED COMPANIES.

 

We likely will face intense competition from other companies, both globally and within the United States, in the development of our cancer detection technology and nano-metal technologies, virtually all of which can be expected to have longer operating histories, greater name recognition, larger installed customer bases and significantly more financial resources and research and development facilities than Manhattan Scientifics. There can be no assurance that developments by our current or potential competitors will not render our proposed products obsolete.

 
 
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WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY OR WE COULD BECOME INVOLVED IN LITIGATION WITH OTHERS REGARDING OUR INTELLECTUAL PROPERTY. EITHER OF THESE EVENTS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.

 

We rely on a combination of intellectual property law, nondisclosure, trade secret and other contractual and technical measures to protect our proprietary right. Our success will depend, in part, on our technology’s commercial viability and on the strength of our intellectual property rights. However, we cannot assure you that these provisions will be adequate to protect our intellectual property. In addition, the laws of certain foreign countries do not protect intellectual property rights to the same extent as the laws of the United States.

 

Although we believe that our intellectual property does not infringe upon the proprietary rights of third parties, competitors may claim that we have infringed on their products.

 

We could incur substantial costs in defending ourselves in suits brought against us for alleged infringement of another party’s intellectual property rights as well as in enforcing our rights against others, and if we are found to infringe, the manufacture, sale and use of our or our customers’ or partners’ products could be enjoined. Any claims against us, with or without merit, would likely be time-consuming, requiring our management team to dedicate substantial time to addressing the issues presented. Furthermore, the parties bringing claims may have greater resources than we do.

 

OUR MANAGEMENT IS ABLE TO EXERCISE SIGNIFICANT INFLUENCE OVER ALL MATTERS REQUIRING SHAREHOLDER APPROVAL.

 

Our existing directors and executive officers are the beneficial owners of approximately 18% of the outstanding shares of common stock, excluding stock options and warrants. As a result, our existing directors, executive officers, principal shareholders and their respective affiliates, if acting together, would be able to exercise significant influence over all matters requiring shareholder approval, including the election of directors and the approval of significant corporate transactions. Such concentration of ownership may also have the effect of delaying or preventing a change in control of our company.

 

THE TRADING PRICE OF OUR COMMON STOCK MAY DECREASE DUE TO FACTORS BEYOND OUR CONTROL.

 

The trading price of our common stock is subject to significant fluctuations in response to numerous factors, including without limitation:

 

 

·

variations in anticipated or actual results of operations;

 

·

announcements of new products or technological innovations by us or our competitors;

 

·

changes in earnings estimates of operational results by analysts;

 

·

inability of market makers to combat short positions on the stock;

 

·

an overall downturn in the financial markets and stock markets;

 

·

the use of stock to pay employees and consultants if sufficient working capital is not available;

 

·

inability of the market to absorb large blocks of stock sold into the market; and

 

·

developments or disputes concerning our intellectual property.

 
 
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Moreover, the stock market from time-to-time has experienced extreme price and volume fluctuations, which have particularly affected the market prices for small technology companies without significant revenues. These broad market fluctuations may adversely affect the market price of our Common Stock. If our shareholders sell substantial amounts of their common stock in the public market, the price of our common stock could fall. These sales also might make it more difficult for us to sell equity or equity-related securities in the future at a price we deem appropriate.

 

WE HAVE NOT PAID CASH DIVIDENDS AND IT IS UNLIKELY THAT WE WILL PAY CASH DIVIDENDS IN THE FORESEEABLE FUTURE.

 

We plan to use all of our earnings, to the extent we have significant earnings, to fund our operations. We do not plan to pay any cash dividends in the foreseeable future. We cannot guarantee that we will, at any time, generate sufficient surplus cash that would be available for distribution as a dividend to the holders of our Common Stock. You should not expect to receive cash dividends on our Common Stock.

 

WE MAY NOT HAVE SUFFICIENT CAPITAL TO RUN OUR OPERATIONS.

 

If we are unable to obtain further financing, it may jeopardize our ability to continue our operations. To the extent that additional capital is raised through the sale of equity and/or convertible debt securities, the issuance of such securities could result in dilution to our shareholders and/or increased debt service commitments. If adequate funds are not available, we may be unable to sufficiently develop or maintain our existing operations.

 

WE HAVE THE ABILITY TO ISSUE ADDITIONAL SHARES OF OUR COMMON STOCK WITHOUT ASKING FOR SHAREHOLDER APPROVAL, WHICH COULD CAUSE YOUR INVESTMENT TO BE DILUTED.

 

Our Certificate of Incorporation currently authorizes the Board of Directors to issue up to 950,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock. The power of the Board of Directors to issue shares of Common Stock or warrants or options to purchase shares of Common Stock is generally not subject to shareholder approval. Accordingly, any additional issuance of our Common Stock may have the effect of further diluting your investment.

 

We require substantial working capital to fund our business. If we raise additional funds through the issuance of equity, equity-related or convertible debt securities, those securities may have rights, preferences or privileges senior to those of the holders of our Common Stock. The issuance of additional Common Stock or securities convertible into Common Stock by our management will also have the effect of further diluting the proportionate equity interest and voting power of holders of our Common Stock.

 

LIMITED PUBLIC MARKET FOR OUR COMMON STOCK MAY AFFECT OUR SHAREHOLDERS’ ABILITY TO SELL OUR COMMON STOCK.

 

Our Common Stock currently is quoted on the OTCQB operated by OTC Markets, which is generally considered to be a less efficient market than national exchanges. Consequently, the liquidity of our securities could be impaired, not only in the number of securities which could be bought and sold, but also through SEC regulations, delays in the timing of transactions, difficulties in obtaining price quotations, reduction in security analysts’ and the new media’s coverage of us, if any, and lower prices for our securities than might otherwise be attained. This circumstance could have an adverse effect on the ability of an investor to sell any shares of our common stock as well as on the selling price for such shares. In addition, the market price of our common stock may be significantly affected by various additional factors, including, but not limited to, our business performance, industry dynamics or changes in general economic conditions.

 
 
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APPLICABILITY OF “PENNY STOCK RULES” TO BROKER-DEALER SALES OF OUR COMMON STOCK COULD HAVE A NEGATIVE EFFECT ON THE LIQUIDITY AND MARKET PRICE OF OUR COMMON STOCK.

 

A penny stock is generally a stock that is not listed on national securities exchange and is quoted on the “pink sheets” or on the OTC Bulletin Board, has a price per share of less than $5.00 and is issued by a company with net tangible assets less than $5 million.

 

The penny stock trading rules impose additional duties and responsibilities upon broker-dealers and salespersons effecting purchase and sale transactions in Common Stock and other equity securities, including determination of the purchaser’s investment suitability, delivery of certain information and disclosures to the purchaser, and receipt of a specific purchase agreement before effecting the purchase transaction.

 

Many broker-dealers will not affect transactions in penny stocks, except on an unsolicited basis, in order to avoid compliance with the penny stock trading rules. When our Common Stock is subject to the penny stock trading rules, such rules may materially limit or restrict the ability to resell our Common Stock, and the liquidity typically associated with other publicly traded equity securities may not exist.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

Not applicable.

 
 
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ITEM 6. EXHIBITS

 

Index to Exhibits

 

31.1

 

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

32.1

 

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

EX-101.INS**

 

XBRL Instance Document

 

 

EX-101.SCH**

 

XBRL Taxonomy Extension Schema Document

 

 

EX-101.CAL**

 

XBRL Taxonomy Extension Calculation Linkbase

 

 

EX-101.DEF**

 

XBRL Taxonomy Extension Definition Linkbase

 

 

EX-101.LAB**

 

XBRL Taxonomy Extension Labels Linkbase

 

 

EX-101.PRE**

 

XBRL Taxonomy Extension Presentation Linkbase

______________

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 
 
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SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 27th day of August, 2018.

 

 

MANHATTAN SCIENTIFICS, INC.

 

 

By:

/s/ Emmanuel Tsoupanarias

 

Name:

Emmanuel Tsoupanarias

 

Title:

Chief Executive Officer

(Principal Executive, Financial and Accounting Officer)

 

 

24

 

EX-31.1 2 mhtx_ex311.htm CERTIFICATION mhtx_ex311.htm

EXHIBIT 31.1

 

CERTIFICATIONS

 

I, Emmanuel Tsoupanarias, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2018 (the “report”) of Manhattan Scientifics, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: August 27, 2018

By:

/s/ Emmanuel Tsoupanarias

 

Emmanuel Tsoupanarias

 

Chief Executive Officer

 

(principal executive, financial and accounting officer)

 

EX-32.1 3 mhtx_ex321.htm CERTIFICATION mhtx_ex321.htm

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Manhattan Scientifics, Inc., a Delaware corporation (the “Company”), does hereby certify, to the best of his knowledge, that:

 

 

(1)

The Quarterly Report of Form 10-Q for the period ending June 30, 2018 (the “Report”) of the Company complies in all material respects with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

 

Date: August 27, 2018

By:

/s/ Emmanuel Tsoupanarias

 

Emmanuel Tsoupanarias

 

Chief Executive Officer

 

(principal executive, financial and accounting officer)

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