UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C.
20549




FORM
10-K




[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934




For the
fiscal year ended December 31, 2007




[
] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934




For the
transition period from _______ to _______.




MANHATTAN SCIENTIFICS,
INC.


(Name
of small business issuer in its charter)




Delaware
                                            000-28411
                                            85-0460639(State
      of Incorporation)
                                            (Commission
      File Number)
                                            (IRS
      Employer Identification
No.)





405 Lexington Avenue, 32nd
Floor, New York, New York, 10174


(Address
of principal executive offices) (Zip code)





Issuer's
telephone number: (212) 551-0577




Securities
registered pursuant to Section 12(b) of the Act: None




Securities
registered pursuant to Section 12(g) of the Act:




Common
Stock, $0.001 par value


(Title
of Class)




Indicate
by check mark if the issuer is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act.  Yes o   No x


Indicate by check mark if the issuer is not required to
file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes
o No x




Indicate by check mark whether the issuer (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 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 oNo
x




Indicate by check mark if disclosure of delinquent
filers in response to Item 405 of Regulation S-B (§229.405) is not contained
herein, and will not be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. o




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




Large accelerated filer o
              Accelerated filer oNon-accelerated
      filer o
              Smaller-reporting company x




Indicate by check mark whether the issuer is a shell
company (a defined in Rule 12b-2 of the Act)   Yes oNo
x




The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the issuer as of December 31, 2007 was
$9,061,083.  For purposes of this computation, all executive officers,
directors and 10% shareholders were deemed affiliates. Such a determination
should not be construed as an admission that such 10% shareholders are
affiliates.




As of
March 31, 2008 there were 319,670,926 shares of common stock of the issuer
issued and outstanding.






Table of Contents





TABLEOF
CONTENTS







PART
      I
                PAGEITEM
      1.
                DESCRIPTION
      OF BUSINESS
                1ITEM
      1A.
                RISK
      FACTORS
                6ITEM
      1B.
                UNRESOLVED
      STAFF COMMENTS
                9ITEM
      2.
                DESCRIPTION
      OF PROPERTIES
                9ITEM
      3.
                LEGAL
      PROCEEDINGS
                9ITEM
      4.
                SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
                9PART
      IIITEM
      5.
                MARKET
      FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
                10ITEM
      6
                SELECTED
      FINANCIAL DATA
                13ITEM
      7
                MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                14ITEM7A
                QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                17ITEM
      8.
                FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
                F-1ITEM
      9.
                CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
                18ITEM
      9A.
                CONTROLS
      AND PROCEDURES
                18ITEM
      9B.
                OTHER
      INFORMATION
                18PART
      IIIITEM
      10.
                DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTORS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
      16(a) OF THE EXCHANGE ACT
                19ITEM
      11.
                EXECUTIVE
      COMPENSATION
                21ITEM
      12.
                SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS.
                23ITEM
      13.
                CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
                24ITEM
      14.
                PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                24ITEM
      15.
                EXHIBITS,
      FINANCIAL STATEMENT SCHEDULES
                25SIGNATURESEXHIBIT
      INDEX






Table of Contents


PART
I




Forward
Looking Statements




This
Form 10-K contains "forward-looking" statements including statements regarding
our expectations of our future operations. For this purpose, any statements
contained in this Form 10-K 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, competition within our chosen industry, including
competition from much larger competitors, technological advances, and the
failure by us to successfully develop business relationships. 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 and mass production of, among other things, the micro fuel
cell, mid-range fuel cell, and haptics Internet applications; 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. All written and oral forward-looking statements made
subsequent to the date of this report and attributable to us or persons acting
on our behalf are expressly qualified in their entirety by this
section.




ITEM
1. DESCRIPTION OF BUSINESS




COMPANY
HISTORY




Manhattan
Scientifics, Inc., a Delaware
corporation, was formed through a reverse merger involving a public company in
January 1998. The public company was incorporated in Delaware on August 1, 1995
under the name Grand Enterprises, Inc. ("Grand"). Grand was initially organized
to market an unrelated patented product, but subsequently determined that its
business plan was not feasible. In January 1998, Grand effected the reverse
merger in a transaction involving Projectavision, Inc., another public company
that was founded by Marvin Maslow, our former Chief Executive Officer.
Projectavision was the owner of approximately 98% of Tamarack Storage Devices,
Inc., a privately-held Texas corporation formed in 1992 to develop and market
products based on the holographic data storage technology.  We are no
longer engaged in development and commercialization of Holographic data storage
technologies (technologies for the storage and retrieval of data in the form of
holographically stored light patterns, rather than magnetic). We sold
this portfolio of approximately 21 patents surrounding these inventions
during 2002.  In January 1998, Grand formed a wholly-owned subsidiary
named Grand Subsidiary, Inc. Grand Subsidiary and Tamarack merged, Tamarack
being the surviving corporation, and via the merger, Tamarack became a
subsidiary of Grand. As consideration for merging Tamarack with Grand
Subsidiary, Grand gave Projectavision and the other stockholders of Tamarack
44,000,000 shares of our common stock. In addition, in exchange for a note
payable of $1.5 million plus accrued interest of $330,000 due to Projectavision
from Tamarack, Grand gave Projectavision 182,525 shares of its Series A
Preferred Stock and a warrant to purchase 750,000 shares of our common stock at
an exercise price of $0.10 per share, which expired on January 7,
2008.  Mr. Maslow, our former Chief Executive Officer, purchased the
warrant from Projectavision for $25,000. The Series A Preferred Stock was
subsequently converted into 9,435,405 shares of our common stock. In connection
with this transaction, new personnel assumed the management of Grand, former
management resigned, and Grand changed its name to Manhattan Scientifics,
Inc.




Manhattan
Scientifics, Inc., a development stage company, previously operated as a
technology incubator that sought to acquire, develop and commercialize
life-enhancing technologies in various fields, with emphasis in the areas of
alternative energy, and consumer and commercial electronics. In that capacity,
we have previously identified emerging technologies through strategic alliances
with scientific laboratories, educational institutions, and scientists and
leaders in industry and government.




We have
worked to develop and commercialize three technologies:




·
            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,emergencyhomegenerators,militaryfieldcommunicationsandlaptopcomputers.






1
 Table of Contents




·
            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.”




In 2008,
we purchased, in exchange for our common stock, Metallicum, Inc. and its
licensed patented technology.  Through Metallicum, we hope to take
advantage of a unique processing methodology for producing nanostructures in a
wide range of ductile metals and alloys and we are now attempting to
commercialize this new and revolutionary technology.  Nanostructured
metals and alloys possess significantly enhanced mechanical properties that
include, for example, increased strength without concurrent losses in ductility,
and significantly increased resistance to fatigue fracture. Nanostructured
commercially pure grades of titanium have proven to also possess excellent
machinability as well as high toughness and strength.




We are
also seeking to develop corporate opportunities to benefit our shareholders;
however, other than as set forth in this document, we have not executed
agreements or finalized arrangements for any other technologies or opportunities
as of the date of this Form 10-K.




OUR
DEVELOPMENT MODEL




Our goal
has been to influence the future through the development of potentially
disruptive or sea-change technologies. Our business model has previously been
to: (i) identify significant technologies, (ii) acquire them or the rights to
them, (iii) secure the services of inventors, engineers or other staff who were
instrumental in their creation, (iv) provide or contract for suitable work
facilities, laboratories, and other aids where appropriate, (v) prototype the
technologies to demonstrate "proof of principle" feasibility, (vi) secure patent
and or other intellectual property protection, (vii) secure early customers for
product trials where feasible and appropriate, and (viii) commercialize through
licenses, sales or cooperative efforts with other manufacturing and distribution
firms.




Presently, our business model is
concentrated in the area of commercialization of our technologies in the
alternative energy field, with emphasis on potential opportunities in Asia, and
we have essentially become a single purpose company in this
regard.  In
addition to technology commercialization, we have sought to develop appropriate
corporate opportunities from time to time for the benefit of our
stockholders.




Since our
technologies are still in their development phase, we have generated only
limited revenues. As such, the need for operating and acquisition capital is a
continuous concern requiring the ongoing efforts of our management. We are not a
large capital-user but have raised since our reverse merger in January
1998 approximately $10.8 million in capital from notes payable to
stockholders, proceeds from convertible notes and net proceeds from common stock
and preferred stock.  Our management intends to work diligently to
raise capital on an as needed basis through private placements, registered
public offerings, debt, and/or other financing vehicles.  During April
2008 through January 2009, we sold approximately $1,100,000 from a private
placement offering.  The private placement originally
provided for the offer and sale of up to 50,000,000 unregistered shares of
our common stock at a price of $0.02 per share, for an aggregate offering price
of $1,000,000, and allowed us to accept or reject any
oversubscription.




One of
our most significant assets is the shares of common stock we own in Novint
Technologies, Inc. (“Novint”).  We have used our Novint common stock
to help raise capital and to fund operations.  During the year ended
December 31, 2006, we sold 100,000 shares of Novint for $66,000 and issued
210,335 shares in lieu of payment of a note payable for $200,000 and interest of
$4,000.  During the year ended December 31, 2007, we distributed
92,216 shares of Novint as payment of $77,000 of a note payable due to a former
officer, and issued 530,000 shares of Novint related to the issuance of
convertible debt.  As of December 31, 2007, we owned 1,128,859 shares
of Novint common stock.




We utilize the intellectual property sale/licensing
model, and not a production model, though management is opportunistic and is
open to explore all methods leading to commercializing our technologies. We
intend to consider all appropriate avenues for the commercialization of our
technologies.




OUR
TECHNOLOGIES




1.
FUEL CELL TECHNOLOGIES




We have
conducted research to develop both micro and mid-range fuel cell technologies. A
micro fuel cell is a high-energy miniature power source that converts alcohol or
hydrogen into electricity. A mid-range fuel cell is a high power density medium
sized power source that converts hydrogen into electricity. Fuel cells create
electricity not by burning fuel, but by the process of electrochemically
arranging the fuel's atoms to produce an electric current. Water or water vapor
and in some cases carbon dioxide are the only emissions. In addition to
producing harmless emissions, certain fuel cells have the potential to be an
alternative to traditional energy sources because they use methanol and other
sources of hydrogen as fuels. Methanol can be produced inexpensively from a
variety of plant sources and is considered a renewable resource. Generally,
methanol is regarded to be stable and safe although it is considered to be toxic
in certain countries.




We have acquired technologies in the
fields of both micro fuel cell and mid-range fuel cells.




2
 Table of Contents




MICRO
FUEL CELL TECHNOLOGY




We believe that micro fuel cell-based power sources have
the potential to replace and/or supplement conventional batteries as a charger
to provide portable power sources. If perfected, we believe micro fuel cell
technology could supply energy to consumer electronic products such as cellular
phones, pagers, and other microelectronic devices more efficiently than
conventional batteries. We believe micro fuel cells would be re-fuelable with
insignificant amounts of methanol and water or other fuels and would
significantly increase available energy over current state-of-the-art battery
technology which has a fixed fuel supply. Until recently, fuel cell technology
had not been practical for consumer electronics because of the size of the
devices necessary to produce electrical energy. We believe that new materials
and miniaturization technology have the potential to make micro fuel cell
technology commercially feasible. As a result of our shortage of capital,
no additional investment or further resulting progress was made with micro-fuel
cell technology during
2007.




We have
not kept pace with the steady growth of the solar photovoltaic industry during
the past six years as we have chosen to focus our limited resources on the fuel
cell inventions and patents which we are pursuing. As a result of the shortage
of available capital, no additional investment or further resulting progress was
made in the micro fuel cell technology during 2007.




MID RANGE
FUEL CELL TECHNOLOGY




In
addition to micro fuel cells, we have made significant progress in our
continuing efforts to develop and commercialize mid-range fuel cell
technologies. Mid-range fuel cell technologies are directed toward higher power
applications, including consumer electronics (such as laptop computers),
personal transportation devices (such as bicycles and scooters), power tools and
appliances (such as vacuum cleaners and lawnmowers), and portable military
electronics (such as military field radios). In contrast, micro fuel cell
technologies address lower power applications such as cellular phones, pagers
and other microelectronics devices.




In 2003,
we granted a non-exclusive worldwide license of the mid range fuel cell
technology to Ballard Power Systems where we received an initial payment of
$300,000 upon execution of the license agreement and the right to receive an
additional $200,000 upon commercial launch by Ballard Power Systems of a product
using the technology.


In
January 2004, we licensed our mid-range fuel cell technology to a Singapore
company with manufacturing in China as part of our efforts to provide low cost
fuel cell systems to Asian and other worldwide markets. Among other things, the
contract gave the licensee non-exclusive rights to produce and sell fuel cell
engines based on the NovArs technology. The agreement included an upfront
payment of $150,000, royalties and 17.5% equity interest in the Singapore
company.  In December 2005, we sold our equity interest in the
licensee back to the licensee for $885,000.




In 2005,
we shifted our focus from licensing our mid range fuel cell technology to trying
to find a joint venture partner to build product in China. As of December 31,
2007, these efforts have not resulted in our obtaining a joint venture partner
for this technology although we will continue to utilize this
strategy.  We intend to explore other potential applications for
the solar cell technology, as well as potential strategic relationships
with third parties relating to investment, mass manufacturing, and mass
marketing of the technology.




2.
HAPTICS "TOUCH AND FEEL" INTERNET APPLICATIONS AND INVESTMENT IN NOVINT
TECHNOLOGIES, INC.




Haptics
is an emerging technology that allows computer users to have the physical
sensation of manipulating and touching objects on a computer screen as if they
were three-dimensional, using a special mouse. Detailed texture and viscosity
can be sensed, among many other aspects of touch.  We believe that
haptics technology has the potential to significantly change the way computers
are utilized, and that there are many promising applications. These include
3-dimensional, touch-enabled online shopping and computer gaming.




During
2000, we acquired exclusive licenses and sublicenses to certain haptics Internet
applications from Novint.  We also acquired 36,606 shares of Novint
common stock, and contracted with the developer of the licensed technology to
perform research and development of the licensed applications for contract
payments of $1,500,000. In May 2001, we acquired Teneo Computing, Inc., a
private corporation with rights to certain haptics applications for dental
simulation and oil and gas exploration. We licensed these rights exclusively to
Novint in exchange for various enhanced and amended license rights with Novint
in the areas of Internet applications and interactive applications. We also
acquired an additional 4,066 shares of Novint common stock, increasing our
ownership in Novint to 40,672 shares, subsequently split into 4,067,200 shares.
For accounting purposes, we have treated the acquisition of the Novint common
stock as one transaction.




3
 Table of Contents




During
the year ended December 31, 2006, we sold 100,000 shares of Novint for $66,000
and issued 210,335 shares in lieu of payment of a note payable for $200,000 and
interest of $4,000.  During the year ended December 31, 2007, we
distributed 92,216 shares of Novint as payment of $77,000 of a note payable due
to a former officer, and issued 530,000 shares of Novint related to the issuance
of convertible debt.  As of December 31, 2007, we owned 1,128,859
shares of Novint common stock.  Novint’s common stock is traded on the
over-the-counter market on the OTC Bulletin Board under the symbol
NVNT.




Although
we have sold and distributed shares of Novint stock to fund our operations, we
believe that our ownership of Novint stock will benefit our shareholders as
Novint develops these and other promising haptics applications. We intend to
work with Novint in the future to explore available opportunities to develop and
exploit this technology.




3.
NANO-STRUCTURED METALS (METALLICUM, INC.)




In June
2008, we acquired Metallicum, Inc. and its licensed patented
technology.  We entered into a stock purchase agreement with
Metallicum, Inc. to acquire all of the outstanding capital in exchange for
15,000,000 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.




The
transaction includes all of Metallicum's licensed intellectual property related
to the design and high-volume nano-fabrication of nano-structuring metals for
medical components as well as for transportation applications. We intend to
establish manufacturing partner relationships with major Fortune 500 metals
companies.  Our business plan includes strategic partnering with
significant customers in the medical device & prosthetics industries as well
as in auto, truck, and aircraft manufacturing industries




The
Metallicum division will produce and license the super strong metals using
nano-technology developed by scientists at Los Alamos National Laboratory in
conjunction with their colleagues in Russia.  The technology is
expected to trim thousands of pounds from airplanes and hundreds of pounds from
cars without sacrificing structural strength or adding significant
cost.




The
nanostructured metals have wide implications for use in the medical device and
prosthetics industries including dental implants, replacements for hips,
shoulders, knees and cardio vascular stents.  In December 2008, a
manufacturing joint venture partner in Albuquerque, N.M. received U.S. Food and
Drug Administration 510(k) clearance to market nano-structued titanium metal
dental implants using our technology. This clearance positions us closer to our
goal of commercializing our technology for nanostructured metals. We are in
talks with many of the key manufacturers of dental implants and have signed
material testing agreements with several manufacturers.




COMPETITION




The
markets in which we compete are highly competitive and constantly evolving. We
face competition from leading researchers and manufacturers
worldwide.   Many of our competitors have longer operating
histories and significantly greater financial, marketing and other resources
than we have. Furthermore, our competitors may introduce new products that
address our potential markets. Competition could have a material adverse effect
on our business, financial condition and results of our operations.




We
believe that the principal competitive factors in our technology markets include
without limitation:




·
            capitalization;


·
            cost
      of product;


·
            type
      of fuel (hydrogen, methanol);


·
            first
      to market with product in market
segment;


·
            strong
      intellectual portfolio;


·
            product
      life/reliability;


·
            strong
      customer base;


·
            strong
      manufacturing and supplier relationships;
and


·
            benchmark
      power density and energy
efficiency.




4
 Table of Contents




FUEL
CELLS




In the
last few years there has been a much greater interest in using fuel cells as an
energy source for practical, lower powered applications such as automobiles and
portable electronic devices. In addition, many automotive companies
have indicated they will contribute several hundred million dollars as part
of a global alliance with other entities to develop automotive engines powered
by fuel cells.By
reason of the innovative nature of the technologies we are developing, and the
yet unproven markets for such technologies, the markets in which we compete may
have barriers to entry. These include the perception of fuel cell technologies
in general by the investment community, the costs associated with creating the
infrastructure necessary for delivery of hydrogen and other fuels, and the
general condition of the economy. There are others working toward similar
objectives in order to penetrate these markets and we anticipate additional
companies will pursue the same goals. Those whose efforts we are aware of
include, without limitation, Medis Technologies, MTI Micro, Samsung,
Toshiba, and Smart Fuel Cells in the area of micro fuel cells; and Ballard (now
our licensee), Prononex Technologies and Plug Power, Inc., in the area of
mid-range fuel cells.




HAPTICS
"TOUCH AND FEEL" INTERNET APPLICATIONS





With
respect to touch-enabled products, we are aware of several companies that claim
to possess touch and feel technology. In addition, we are aware of several
companies that currently market unlicensed touch and feel
products.  Many potential competitors, including Microsoft, LG
Electronics, Logitech, Nokia, Samsung, Intel and others have greater financial
and technical resources upon which to draw in attempting to develop
products.




INTELLECTUAL
PROPERTY / RESEARCH AND DEVELOPMENT




Our
ability to compete depends in part on the protection of and our ability to
defend our proprietary technology and on the goodwill associated with our trade
names, service marks and other proprietary rights. However, we do not know if
current laws will provide us with sufficient enough protection that others will
not develop technologies similar or superior to ours, or that third parties will
not copy or otherwise obtain or use our technologies without our
authorization.




The
success of our business will depend, in part, to identify technology, obtain
patents, protect and enforce patents once issued and operate without infringing
on the proprietary rights of others. Our success will also depend on our ability
to maintain exclusive rights to trade secrets and proprietary technology we own,
are currently developing and will develop. We can give no assurance that any
issued patents will provide us with competitive advantages or will not be
challenged by others, or that the patents of others will not restrict our
ability to conduct business.




In
addition, we rely on certain technology licensed from third parties, including
Sandia National Laboratory and may be required to license additional
technologies in the future. We do not know if these third-party licenses will be
available or will continue to be available to us on acceptable commercial terms
or at all. The inability to enter into and maintain any of these licenses could
have a material adverse effect on our business, financial condition or results
of our operations.




Policing
unauthorized use of our proprietary technology and other intellectual property
rights could entail significant expense. In addition, we do not know if third
parties will bring claims of copyright or trademark infringement against us or
claim that our use of certain technologies violates a patent or other
intellectual property. Any claims of infringement, with or without merit, could
be time consuming and expensive to defend, result in costly litigation, divert
management attention, require us to enter into costly royalty or licensing
arrangements or prevent us from using important technologies or methods, any of
which could have a material adverse effect on our business, financial condition
or results of our operations.





We
reviewed our patents and technology licenses for impairment and determined that
our solar fuel cell patents became impaired during 2002 and recorded a charge of
approximately $189,000 in the fourth quarter of 2002 to reduce the carrying
value of these patents to zero. For the years ended December 31, 2007 and 2006,
there were no impairment charges related to our patents and technology
licenses.  The patents will be fully amortized by the end of the
fiscal year ending December 31, 2008.




Patents
are recorded at cost of $2,080,000. Amortization is charged against results of
operations using the straight-line method over the estimated economic useful
life. Patents related to the mid-range fuel cell and the micro fuel cell
technologies are estimated to have an economic useful life of 10
years.  Amortization expenses were $208,000 for each of the years
ended December 31, 2007 and 2006 and approximately $1,886,000 for the period
from July 31, 1992 (inception) through December 31,
2007.  Amortization Expense recorded for our patents is shown as
Research and Development Expense within the Consolidated Statement of
Operations.




Research and development costs are expensed as incurred
and amounted to $2,000 and $13,000 for the years ended December 31, 2007 and
2006, respectively.




5
 Table of Contents




SALES AND
MARKETING




Although
our technologies presently are in the development stage, we are engaged in an
early commercialization program intended to facilitate the transition from
development to licensing, manufacturing and/or sale. This program consists of
preliminary dialogues with potential strategic partners, investors,
manufacturers, potential licensees and/or purchasers.




EMPLOYEES




As of
December 31, 2007, we had one full-time employee in general management. We do
not expect any significant change in the total number of employees in the near
future. Most of our research and development work has been performed by
employees of our various research and development independent contractors (see
below). We have historically indirectly funded the salaries of these individuals
through our contract research and development payments to their employers.
Although not technically our employees, we have considered these individuals to
be an integral part of our research and development
team.  None of
our employees or contractors is members of any union or collective bargaining
organization. We consider our relationships with our employee and our
independent contractor employees to be
good.




As noted
above, a significant portion of our research and development has been performed
by independent contractors from whom we acquired or licensed certain
technologies, and their various employees.  Our independent
contractors utilize a number of their own various employees to satisfy their
research and development obligations to us, and their employees are considered
to be part of our research and development team.




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 TECHNOLOGIES WHICH WOULD RESULT IN
CONTINUED LOSSES.




We are
currently developing our technology and a commercial product. We have not
generated any revenues and we are unable to project when we will achieve
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 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 successfully commercialize the technologies. The failure to
successfully develop and commercialize the technologies would result in
continued losses and may require us to curtail operations.




BECAUSE
WE HAVE EARNED VERY LITTLE IN REVENUES, THE SUCCESS OF OUR BUSINESS REQUIRES
CONTINUED FUNDING. IF WE CANNONT 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 2001, 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.




6
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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 haptics and fuel cell 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.




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 29% of the outstanding shares of common stock, excluding stock
options. 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;




7
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·
            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.




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 500,000,000 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.




WE
MAY RUN OUT OF AUTHORIZED CAPITAL PRIOR TO RECEIVING SHAREHOLDER APPROVAL TO
AMEND OUR CERTIFICATE OF INCORPORATION TO INCREASE OUR AUTHORIZED
CAPITAL.




As of
December 31, 2007, our certificate of incorporation, as amended, authorizes us
to issue 500,000,000 shares of common stock. If we are not able to increase our
authorized capital, we may not be able to raise additional funds or pay service
providers which could be harmful to our business or cause us to cease operations
altogether.




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




Our
Common Stock currently was traded on NASDAQ's Over-The-Counter Bulletin Board
through May 2007.  Our Common Stock is currently traded on the Over
the Counter Pink Sheets, 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.




8
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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 MAREKT PRICE OF OUR COMMON
STOCK.




A penny
stock is generally a stock that is not listed on a national securities exchange
or NASDAQ, is listed in the "pink sheets" or on the NASD 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 effect 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
1B. UNRESOLVED STAFF COMMENTS




N/A




ITEM
2. DESCRIPTION OF PROPERTIES




Our principal executive office is at 405
Lexington Avenue, 32nd Floor,
New York, New York, 10174. We lease approximately 300 square feet of office
space on a month-to-month basis. The aggregate annual rent for this office space
was $6,000 in 2007.  We believe our facilities are adequate for our
current and planned business operations.




ITEM
3. LEGAL PROCEEDINGS














ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS




Our Board
of Directors has adopted and approved an amendment to our Certificate of
Incorporation to increase the authorized common stock from 250,000,000 shares to
500,000,000 shares (the “Authorized Shares Amendment”). A majority of the
stockholders entitled to vote on the Authorized Shares Amendment voted in favor
of the Amendment by written consent dated May 25, 2007.





9
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PART II




ITEM 5. MARKET FOR
REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY
SECURITIES




Starting
on May 8, 2007, our Common Stock began trading and, currently trades, on the
Over the Counter Pink Sheets under the symbol “MHTX.PK” after being removed from
trading on NASDAQ's Over-The-Counter Bulletin Board under the symbol
"MHTX.OB".  The following table sets forth for the periods indicated,
the high and low per share bid information for our common stock for the fiscal
years ended December 31, 2006 and December 31, 2007 and the period to December
11, 2008, as reported by www.nasdaq.com. Such high and low bid information
reflects inter-dealer quotes, without retail mark-ups, mark-downs or commissions
and may not represent actual transactions.





2006
                            High
                            LowFirst
      Quarter
                            $
      0.065
                            $
      0.050Second
      Quarter
                            $
      0.075
                            $
      0.047Third
      Quarter
                            $
      0.060
                            $
      0.027Fourth
      Quarter
                            $
      0.044
                            $
      0.0122007
                            High
                            LowFirst
      Quarter.
                            $
      0.039
                            $
      0.012Second
      Quarter
                            $
      0.029
                            $
      0.014Third
      Quarter
                            $
      0.030
                            $
      0.010Fourth
      Quarter
                            $
      0.090
                            $
      0.0112008
                            High
                            LowFirst
      Quarter.
                            $
      0.064
                            $
      0.030Second
      Quarter
                            $
      0.053
                            $
      0.030Third
      Quarter
                            $
      0.090
                            $
      0.022Fourth
      Quarter
                            $
      0.063
                            $
      0.025


As of
December 31, 2007, we had 658 registered shareholders and 318,545,000 shares of
Common Stock issued and outstanding.




DIVIDENDS.




We have
never paid any cash dividends. We presently intend to reinvest earnings, if any,
to fund the development and expansion of our business and, therefore, do not
anticipate paying cash dividends on our common stock in the foreseeable future.
The declaration of cash dividends will be at the discretion of our board of
directors and will depend upon our earnings, capital requirements, financial
position, general economic conditions and other pertinent factors.




RECENT
SALES OF UNREGISTERED SECURITIES




During
the past three years, we have issued unregistered securities in the following
transactions in reliance on an exemption from registration pursuant to Section
4(2) of the Securities Act of 1933:




2007




In May
2007, we issued 35,350,317 shares of common stock to various individuals
for services with values totaling $707,006 based upon the fair value of the
shares issued.




In May
2007, we issued 14,200,106 shares of common stock for settlement of debts
totaling $71,000.




In
October 2007, we issued 4,200,000 shares of common stock for services to an
individual with a value of $60,900 based upon the fair value of the shares
issued.




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 Table of Contents




In
October 2007, we issued 106,000,000 shares of common stock related to the
conversion of convertible debt previously issued during 2007.  The
convertible debt converted totaled $1,060,000 at which time the entire debt
discount of $1,361,000 had been expensed.




In
November 2007, we issued 1,000,000 shares of common stock to an individual
for services with a value of $30,000 based upon the fair value of the shares
issued.




In
November 2007, we also issued 1,000,000 shares of common stock to an
individual for services to be provided with a value of $30,000 based upon the
fair value of the shares issued.




2006




In
September 2006, we issued 400,000 shares of common stock for consulting and
legal services rendered at $.044 per share or approximately
$18,000.




In August
2006, we issued 1,184,220 shares of common stock for settlement of accrued
legal services previously rendered of approximately $59,000.




In July
2006, we issued 585,000 shares of common stock for consulting services
rendered at $.06 per share or approximately $35,000.




In May
2006, we issued 13,000,000 shares for services rendered by its Board of
Directors valued at $.06 per share or $780,000.




In March
2006, we  issued 150,000 shares for services rendered valued at $.058 per
share or approximately $9,000.




In
February 2006, we issued 505,000 shares for services rendered by
consultants and our single employee valued at $.051 per share or approximately
$26,000.  In February 2006, we also issued 795,324 shares in
satisfaction of note payable of approximately $43,000 and interest of
approximately $2,000.




2005




In March
2005, we issued 250,000 shares for consulting services valued at
$16,750.




In
January 2005, we issued 100,000 shares for consulting services valued at
$6,200.




In
January 2005, we also issued 500,000 shares for legal services valued
at $31,000.




Securities
Authorized for Issuance under Equity Incentive Plans





Our 1998
Stock Option Plan (the "1998 Plan"), authorizes the issuance of options and
Common Stock to officers, employees and directors. We reserved 30,000,000 shares
of our Common Stock for awards to be made under the 1998 Plan. The 1998 Plan
allows for the issuance of either incentive stock options (which, pursuant to
Section 422 of the Internal Revenue Code, can only be granted to employees) or
non-qualified stock options. The 1998 Plan is administered by a committee of two
or more members of the Board of Directors or, if no committee is appointed, then
by the Board of Directors. The committee, or the Board of Directors if there is
no committee, determines the type of option granted, the exercise price, the
option term, which may be no more than ten years, terms and conditions of
exercisability and methods of exercise. Options must vest within ten years.
Under the 1998 Plan, the exercise price may not be less than fair market value
on the date of grant for both incentive stock options and non-qualified stock
options. The number of options under the 1998 Plan available for grant at
December 31, 2007 was 30,000,000.




In 2000,
our Board of Directors adopted the 2000 Equity Incentive Plan (the "2000 Plan").
The 2000 Plan authorizes the issuance of options, right to purchase Common Stock
and stock bonuses to officers, employees, directors and consultants. We reserved
30,000,000 shares of our Common Stock for awards to be made under the 2000 Plan.
On September 14, 2001, we filed a registration statement on Form S-8 to register
900,000 of these shares. On November 19, 2001, we registered an additional
550,000 shares of our common stock for issuance under the 2000 Plan. On January
30, 2002, we registered an additional 975,000 shares of our common stock for
issuance under the 2000 Plan. On March 22, 2002, we registered an additional
925,000 shares of our common stock for issuance under the 2000 Plan. On July 12,
2002, we registered an additional 990,000 shares of our common stock for
issuance under the 2000 Plan.




11
 Table of Contents




On
January 17, 2003, we registered an additional 8,000,000 of our common stock for
issuance under the 2000 Plan. The 2000 Plan is administered by a committee of
two or more members of the Board of Directors or, if no committee is appointed,
then by the Board of Directors. The 2000 Plan allows for the issuance of
incentive stock options (which, pursuant to Section 422 of the Internal Revenue
Code, can only be granted to employees), non-qualified stock options, stock
appreciation rights, stock awards, or stock bonuses. The committee, or the Board
of Directors if there is no committee, determines the type of option granted,
the exercise price, the option term, which may be no more than ten years, terms
and conditions of exercisability and methods of exercise. Options must vest
within ten-years. Under the 2000 Plan, the exercise price may not be less than
fair market value on the date of grant for the incentive stock options. The 2000
Plan also allows for the granting of Stock Appreciation Rights. No Stock
Appreciation Rights have been granted. The number of shares under the 2000 Plan
available for grant at December 31, 2007 was 25,281,000.




In
November 2004, our Board of Directors adopted the 2004 Consultant Stock Plan
(the "2004 Plan"). The purpose of this 2004 Consultant Stock Plan is to advance
our interests by helping us obtain and retain the services of persons providing
consulting services upon whose judgment, initiative, efforts and/or services we
are substantially dependent, by offering to or providing those persons with
incentives or inducements affording such persons an opportunity to become owners
of our capital stock. We reserved 2,000,000 shares of our Common Stock for
awards to be made under the 2004 Plan. We filed a registration statement on Form
S-8 with the SEC on November 26, 2004 to register the shares underlying the 2004
plan. The 2004 Plan is administered by a committee of two or more members of the
Board of Directors or, if no committee is appointed, then by the Board of
Directors. The committee, or the Board of Directors if there is no committee,
determines who is eligible to receive awards under the plan, grant awards and
interpret the 2004 Plan. The number of shares under the 2004 Plan available for
grant at December 31, 2007 was 500,000.




On May 9,
2005, our Board of Directors adopted the 2005 Equity Compensation Plan (the
"2005 Plan"). The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to our success, by offering them an opportunity to participate in
the our future performance through awards of Options, the right to purchase
Common Stock and Stock Bonuses. We reserved 10,000,000 shares of our Common
Stock for awards to be made under the 2005 Plan. The 2005 Plan is administered
by a committee of two or more members of the Board of Directors or, if no
committee is appointed, then by the Board of Directors. The committee, or the
Board of Directors if there is no committee, determines who is eligible to
receive awards under the plan, grant awards and interpret the 2005 Plan. We
filed a registration statement on Form S-8 with the SEC on June 8, 2005 to
register the shares underlying the 2005 plan. The number of shares under the
2005 Plan available for grant at December 31, 2007 was 4,868,763.




Set forth
in the table below is information regarding awards made through compensation
plans or arrangements through December 31, 2006, the most recently completed
fiscal year.





Equity
      Compensation Plan InformationPlan
      category
                                        Number of
      securities to be issued upon exercise of outstanding options, warrants and
      rights
                                          (a)
                                        Weighted-average exercise price of outstanding options, warrants
      and rights
                                        Number of
      securities remaining available for future issuance under equity
      compensation plans (excluding securitiesreflectedincolumn(a))Equity
      compensation plans approved by security holders
                                        -
                                        -
                                        -Equity
      compensation plans not approved by security holders
                                        –
                                        –
                                        60,649,763Total
                                        -
                                        -
                                        60,649,763








12
 Table of Contents




Exercise
prices and weighted-average contractual lives of the 38,245,000 stock options
outstanding as of December 31, 2007 are as follows:





Options
      Outstanding
                      
                      Options
      ExercisableExercise
      Price
                      Number
      Outstanding
                      Weighted
      Average Remaining Contractual Life
                      Weighted
      Average Exercise Price
                      
                      Number
      Exercisable
                      Weighted
      Average Exercise Price$0.014
                      10,000,000
                      9.18
                      0.013
                      
                      10,000,000
                      0.0140.02
                      1,800,000
                      5.58
                      0.020
                      
                      1,800,000
                      0.020.05
                      18,625,000
                      2.65
                      0.050
                      
                      18,625,000
                      0.050.055
                      1,000,000
                      7.58
                      0.055
                      
                      1,000,000
                      0.0550.20
                      5,760,000
                      1.71
                      0.200
                      
                      5,760,000
                      0.200.39
                      250,000
                      4.98
                      0.390
                      
                      250,000
                      0.391.25
                      200,000
                      4.98
                      1.250
                      
                      200,000
                      1.252.25
                      110,000
                      3.46
                      2.250
                      
                      110,000
                      2.252.40
                      500,000
                      3.33
                      2.400
                      
                      500,000
                      2.40





All
options we issued through December 31, 2007 vested within ninety days from the
date of grant and expire at various dates during 2008 through 2017.





We issued
the following warrants at the corresponding weighted average exercise price as
of December 31, 2007.





Warrants
                          Weighted
      average Exercise PriceOutstanding
      as of December 31, 2005
                          19,250,000
                          $0.12Issued
                          0Outstanding
      as of December 31, 2006
                          19,250,000Issued
                          4,000,000
                          0.01Cancelled
                          (10,000,000)
                          0.05Outstanding
      as of December 31, 2007
                          13,250,000
                          0.15











Date
                    Number
      of Warrants
                    Exercise
      Price
                    Contractual
      Life
                    Number
      of Shares ExercisableJanuary
      8, 1998
                    750,000
                    $.100
                    10
      years
                    750,000July
      28, 1998
                    2,500,000
                    .050
                    10
      years
                    2,500,000February
      10, 1998
                    2,000,000
                    .750
                    10
      years
                    2,000,000November
      9, 2004
                    4,000,000
                    .050
                    4
      years
                    4,000,000October
      11, 2007
                    3,200,000
                    .013
                    10
      years
                    3,200,000November
      9, 2007
                    800,000
                    .013
                    10
      years
                    800,00013,250,000
                    
                    
                    13,250,000







ITEM
6. SELECTED FINANCIAL DATA




N/A




13
 Table of Contents




ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.





The
following discussion and analysis should be read in conjunction with our
financial statements and accompanying notes appearing elsewhere in this Form
10-K.





OVERVIEW





We have
been acquiring and licensing technologies, directing, supervising and
coordinating our research and development efforts, raising capital, and
initiating commercialization activities and dialogue with potential
customers.





As of
December 31, 2007, we had an accumulated deficit since inception, from July 31,
1992, of $50,501,000. Included in this accumulated loss are charges amounting to
approximately $21,240,000 relating to the issuance of equity instruments for
services and approximately $6,700,000 from Tamarack prior to our acquisition of
Tamarack. We expect operating losses to continue for the foreseeable future
because we will be continuing to fund research and development efforts as well
as general and administrative expenses.





We do not
know if our research and development and marketing efforts will be successful,
that we will ever have commercially acceptable products, or that we will achieve
significant sales of any such products. We operate in an environment of rapid
change in technology and we are dependent upon the services of our employees,
consultants and independent contractors. If we are unable to successfully bring
our technologies to commercialization, we would likely have to significantly
alter our business plan and may cease operations.





COMPARISON
OF YEAR ENDED DECEMBER 31, 2007 TO YEAR ENDED DECEMBER 31, 2006.





NET LOSS.
We reported a net loss of $3,014,000, or $(0.01) per common share, basic and
diluted, for the year ended December 31, 2007, versus a net loss of $1,694,000,
or $(0.01) per common share, basic and diluted, for the year ended December 31,
2006.  The 78% increase in our net loss from the year ended December
31, 2006 equaled $1,320,000, resulting from a $1,516,000 increase in general and
administrative costs, primarily as a result of $1,361,000 of debt discount
charges related to our convertible notes issued in 2007, partially offset by an
increase in other income from $244,000 for the year ended December 31, 2006 to
$429,000 for the year ended December 31, 2007, primarily as a result of an
increase in income from the sale and distribution of our shares of Novint
stock.  During the year ended December 31, 2007, we distributed
622,216 shares of Novint stock and recorded a gain of $470,000 compared to the
310,335 shares of Novint stock we distributed during the year ended December 31,
2006 for which we recorded a gain of $270,000.





REVENUES.
We had no revenues for the years ended December 31, 2007 and 2006.





OPERATING
COSTS AND EXPENSES. Operating costs and expenses for the year ended December 31,
2007 totaled $3,443,000, an increase of $1,505,000, or 78%, versus costs and
expenses of $1,938,000 for the year ended December 31, 2006.  These
costs and expenses are detailed below.





GENERAL
AND ADMINISTRATIVE. General and administrative expenses were $3,233,000 for the
year ended December 31, 2007, which consisted of consultants, contractors,
accounting, legal, travel, rent, telephone and other day to day operating
expenses, versus general and administrative expenses of $1,717,000 for the year
ended December 31, 2006. This increase of $1,516,000, or 88%, is primarily a
result of debt discount charges related to our convertible notes in 2007 of
approximately $1,361,000 which no such charges were incurred in the prior
year.





RESEARCH
AND DEVELOPMENT. Research and development expenses were $210,000 for year ended
December 31, 2007 compared to $221,000 for the year ended December 31, 2006, a
marginal decrease of $11,000.





LIQUIDITY
AND PLAN OF OPERATIONS





We are a
development stage company and are in the technology acquisition and development
phase of our operations. Accordingly, we have relied primarily upon private
placements and subscription sales of stock to fund our continuing activities and
acquisitions. To a limited extent, and as described below, we have also relied
upon borrowing from two of our former senior officers, Marvin Maslow and Jack
Harrod, and through a bank guarantee made by Mr. Maslow of a traditional loan
which we recently retired. Until we generate revenue from sales and licensing of
technology, or receive a large infusion of cash from a potential strategic
partner or through the efforts of an investment banker, we intend to continue to
rely upon these methods and the limited sales of our shares or other assets,
which has become increasingly difficult with our low share price, to fund
operations during the next year.





14
 Table of Contents




Our
significant assets include our portfolio of intellectual property relating to
the various technologies, our contracts with third parties pertaining to
technology development, acquisition, and licensing, and 1,128,859 shares of
common stock of Novint Technologies, Inc.; our cash on hand; and our strategic
alliances with various scientific laboratories, educational institutions,
scientists and leaders in industry and government.





We had an
increase of $303,000 in cash and cash equivalents for the year ended December
31, 2007, as a result of financing activities from the proceeds of $1,060,000
from the issuance of convertible promissory notes partially offset by the
purchase of treasury stock, compared to a decrease in cash and cash equivalents
equal to $215,000 for the comparable period in 2006.  For the year
ended December 31, 2007, cash used by operating activities was $537,000 compared
to $331,000 used by operating activities for the year ended December 31, 2006 as
a result of a greater net loss in 2007 partially offset by higher non-cash
operating items, including the financing costs related to beneficial conversion
feature of convertible notes.  Common stock and options issued for
services equaled $1,025,000 for the year ended December 31, 2007 and common
stock issued for services valued at $868,000 for the year ended December 31,
2006.





Stockholders'
equity totaled a deficit of $1,073,000 on December 31, 2007 and the working
capital was a deficit of $1,299,000 on such date.





In 2008,
we purchased, in exchange for our common stock, Metallicum, Inc. and its
licensed patented technology.  We intend to continue to identify and
target appropriate technologies for possible acquisition or licensing over the
next 12 months, although we have no agreements, other than the agreement to
acquire Metallicum, Inc., regarding any such technologies as of the date of this
Report.





Based
upon current projections, our principal cash requirements for the next 12 months
consists of (1) fixed expenses, including rent, payroll, investor relations
services, public relations services, bookkeeping services, graphic design
services, consultant services, and reimbursed expenses; and (2) variable
expenses, including technology research and development, milestone payments,
intellectual property protection, utilities and telephone, office supplies,
additional consultants, legal and accounting. As of December 31, 2007, we had
$452,000 in cash and cash equivalents. We intend to satisfy our capital
requirements for the next 12 months by continuing to pursue private placements
to raise capital, using our common stock as payment for services in lieu of cash
where appropriate, borrowing as appropriate, and our cash on hand. However, we
do not know if those resources will be adequate to cover our capital
requirements.   Accordingly, our management will seek to raise
capital financing either through debt or equity financing.  We issued
$1,060,000 of convertible debt during fiscal year 2007 which was then converted
in 2007 for a total of 106,000,000 shares of our common stock.  See
the footnotes to the financial statement for a further discussion.





RECENTLY
ISSUED ACCOUNTING STANDARDS





In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. This
statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles, and expands disclosure about fair
value measurements. The statement does not require any new fair value
measurements, but for some entities, the application of the statement will
change current practice. This statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. We are currently evaluating the effect of this
pronouncement on its financial statements.





In
February 2007, the FASB issued SFAS No. 159, the “Fair Value Option for
Financial Assets and Financial Liabilities”. SFAS 159 provides entities with an
option to report selected financial assets and liabilities at fair value and
establishes presentation and disclosure requirements designed to facilitate
comparisons between companies that select different measurement attributes. SFAS
159 is effective for fiscal years beginning after November 15, 2007. We are
currently evaluating the effect of this pronouncement on its financial
statements.





In June
2007, the Emerging Issues Task Force (“EITF”) issued Issue No. 07-3, “Accounting
for Nonrefundable Advance Payments for Goods or Services To Be Used in Future
Research and Development Activities” (“EITF 07-3”) which concluded that
nonrefundable advance payments for goods or services to be received in the
future for use in research and development activities should be deferred and
capitalized. The capitalized amounts should be expensed as the related goods are
delivered or services are performed. Such capitalized amounts should be charged
to expense if expectations change such that the goods will not be delivered or
services will not be performed. The provisions of EITF 07-3 are effective for
new contracts entered into during fiscal years beginning after December 15,
2007. The consensus on EITF 07-3 may not be applied to earlier periods and early
adoption is not permitted.  We are currently evaluating the effect of
this pronouncement on its financial statements.





15
 Table of Contents




In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business
Combinations - Revised 2007”. SFAS 141 (R) provides guidance on improving the
relevance, representational faithfulness, and comparability of information that
a reporting entity provides in its financial reports about a business
combination and its effects. SFAS 141R applies to business combinations where is
the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. We do not expect the adoption of
SFAS No. 141 to have a material impact on its financial
statements.





In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans, an amendment of PASS Statements No. 87, 106, and 132(R)” (SFAS No. 158).
 SFAS No. 158 requires companies to recognize a net liability or asset and
an offsetting adjustment to accumulate other comprehensive income to report the
funded status of defined benefit pension and other postretirement benefit plans.
SFAS No. 158 requires prospective application, recognition and disclosure
requirements effective for our fiscal year ending December 31, 2007.
Additionally, SFAS No. 158 requires companies to measure plan assets and
obligations at their year-end balance sheet date. This requirement is effective
for our fiscal year ending December 31, 2009. We are currently evaluating the
impact of the adoption of SFAS No. 258 and do not expect that it will have a
material impact on its financial statements.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements - an Amendment of Accounting Research Bulletin
No. 51” (“SFAS No. 160”), which establishes accounting and reporting standards
for ownership interests in subsidiaries held by parties other than the parent,
the amount of consolidated net income attributable to the parent and to the
noncontrolling interest, changes in a parent’s ownership interest and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS No. 160 also establishes reporting requirements that
provide sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling owners. SFAS
No. 160 is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008.  We are currently
evaluating the effect of this pronouncement on its financial
statements.





In March
2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments
and Hedging Activities", an amendment of SFAS No. 133. SFAS 161 applies to all
derivative instruments and non-derivative instruments that are designated and
qualify as hedging instruments pursuant to paragraphs 37 and 42 of SFAS 133 and
related hedged items accounted for under SFAS 133. SFAS 161 requires entities to
provide greater transparency through additional disclosures about how and why an
entity uses derivative instruments, how derivative instruments and related
hedged items are accounted  for under SFAS 133 and its related
interpretations, and how derivative instruments and related hedged items affect
an entity's financial position, results of operations, and cash flows. SFAS 161
is effective as of the beginning of an entity's first fiscal year that begins
after November 15, 2008. We do not expect the adoption of SFAS 161 will have a
material impact on its financial condition or results of operation.





In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – an interpretation of FASB Statement No. 60.”  SFAS
163 requires that an insurance enterprise recognize a claim liability prior to
an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation.  This
Statement also clarifies how Statement 60 applies to financial guarantee
insurance contracts, including the recognition and measurement to be used to
account for premium revenue and claim liabilities. Those clarifications will
increase comparability in financial reporting of financial guarantee insurance
contracts by insurance enterprises. This Statement requires expanded disclosures
about financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements.  SFAS 163 will be effective for financial
statements issued for fiscal years beginning after December 15, 2008.  We
do not expect the adoption of SFAS 163 will have a material impact on its
financial condition or results of operation.





In September 2006,
the United States Securities and Exchange Commission (“SEC”) adopted SAB No.
108, “Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements.” This SAB provides guidance
on the consideration of the effects to prior year misstatements in quantifying
current year misstatements for the purpose of a materiality assessment.SAB108 establishes an
approach that requires quantification of financial statement errors based on the
effects of each of our balance sheet and statement of operations financial
statements and the related financial statement disclosures. The SAB permits
existing public companies to record the cumulative effect of initially applying
this approach in the first year ending after November 15, 2006 by recording the
necessary correcting adjustments to the carrying values of assets and
liabilities as of the beginning of that year with the offsetting adjustment
recorded to the opening balance of retained earnings. Additionally, the use of
the cumulative effect transition method requires detailed disclosure of the
nature and amount of each individual error being corrected through the
cumulative adjustment and how and when it arose. We are currently evaluating the
impact, if any, thatSAB108 may have on our results of operations or financial
position.





16
 Table of Contents




GOING
CONCERN





Our
independent registered public accounting firm has stated in their audit report
on our December 31, 2007 and 2006 consolidated financial statements, that we
have experienced recurring losses and have working capital deficit. The
conditions, among others, raise substantial doubt about our ability to continue
as a going concern.





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. Actual results could differ from those estimates.  Significant
estimates includes the carrying value of our patents, fair value of our common
stock, assumptions used in calculating the value of stock options, accounting
for income taxes and uncertainty in income taxes and depreciation and
amortization.





Investments





We record
our investment in Novint Technologies, Inc. (“Novint”) at cost and use the
equity method of accounting to record our proportionate share of Novint's net
income or loss. During 2003, we recorded an impairment of the investment to $0
due to Novint’s inactivity.  Subsequently, during 2004, Novint issued
common stock pursuant to a private placement, as a result, we have recorded a
gain on issuance of investee common stock of $531,000. In addition for the year
ended December 31, 2004, we have recorded an equity in loss of investee of
$492,000, representing our share of Novint’s current losses.  The loss
exceeded our basis in Novint during the year ended December 31, 2004 and the
investment balance is carried at $0.  As a result of this, we did not
record our proportionate share of equity in loss of investee for the years ended
December 31, 2005, 2006 and 2007.  Our share of loss not recorded
amounted to approximately $287,000 and $379,000, respectively for the years
ended December 31, 2007 and 2006. We will continue to account for our investment
under the equity method of accounting, however, it will record our proportionate
share of net income only after it has recovered all losses in excess of our
basis.  For the years ended December 31, 2007 and 2006, we sold
certain shares in Novint and have recorded a gain on sale of those shares
of  $470,000 and $270,000, respectively.  As of December 31,
2007, we owned 1,128,859 shares of Novint common stock or approximately
4%.  We continue to account for our investment in Novint using the
equity method since we still exercise significant influence over
Novint.





Stock-Based
Compensation





On
January 1, 2006, we adopted SFAS No. 123 (R) “Share-Based Payment” which
requires the measurement and recognition of compensation expense for all
share-based payment awards made to employees and directors including employee
stock options and employee stock purchases related to a Employee Stock Purchase
Plan based on the estimated fair values.





We
adopted SFAS No. 123(R) using the modified prospective transition method, which
required the application of the accounting standard as of January 1, 2006. The
accompanying consolidated financial statements as of and for the year ended
December 31, 2006 reflects the impact of SFAS No. 123(R). In accordance with the
modified prospective transition method, our accompanying consolidated financial
statements for the prior periods have not been restated, and do not include the
impact of SFAS No. 123(R). Stock based compensation expense recognized under
SFAS No. 123(R) for the year ended December 31, 2007 and December 31, 2006
totaled $197,000 and $0, respectively.





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 7A.QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET
RISK




N/A







17
 Table of Contents





ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA







FINANCIAL
STATEMENTS


REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  F-2CONSOLIDATED
      BALANCE SHEETS AS OF DECEMBER 31, 2007 AND 2006
                  F-3CONSOLIDATED
      STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
                    DECEMBER
      31, 2007 AND 2006 AND FOR THE PERIOD FROM
                    JULY
      31, 1992 (INCEPTION) THROUGH DECEMBER 31, 2007
                  F-4CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY (CAPITAL DEFICIT)
                    FOR
      THE PERIODS FROM JULY  31, 1992 (INCEPTION) THROUGH DECEMBER 31,
      2007
                  F-5CONSOLIDATED
      STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
                    DECEMBER
      31, 2007 AND 2006 AND FOR THE PERIOD FROM
                    JULY
      31, 1992 (INCEPTION) THROUGH DECEMBER 31, 2007
                  F-14NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
                  F-16








F-1
 Table of Contents




AJ.
ROBBINS, P.C.




CERTIFIED
PUBLIC ACCOUNTANTS


216
SIXTEENTH STREET


SUITE
600


DENVER,
COLORADO 80202





REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM





To the
Board of Directors and Stockholders


Manhattan
Scientifics, Inc.


New York,
New York




We have
audited the accompanying consolidated balance sheets of Manhattan Scientifics,
Inc. (a development stage enterprise) (the “Company”) as of December 31, 2007
and 2006, and the related consolidated statements of operations, changes in
stockholders' equity (capital deficit), and cash flows for each of the years
then ended. The financial statements for the period from inception (July 31,
1992) to December 31, 2003, were audited by other auditors whose report included
an explanatory paragraph that expressed substantial doubt about the Company’s
ability to continue as a going concern.  The financial statements for
the period from inception (July 31, 1992) to December 31, 2003 include total
revenues and net loss of $706,000 and $39,052,000, respectively.  Our
opinion on the statements of operations, stockholders’ equity (deficit) and cash
flows for the period from inception (July 31, 1992) to December 31, 2007,
insofar as it relates to amounts for prior periods through December 31, 2003, is
based solely on the report of the other auditors.  These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion.  An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.




In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Manhattan Scientifics, Inc.
as of December 31, 2007 and 2006, and the results of its operations and its cash
flows for each of the years then ended and for the period from inception (July
31, 1992) to December 31, 2007, in conformity with generally accepted accounting
principles in the United States of America.




The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note B to the financial
statements, the Company has experienced recurring losses and negative cash flows
from operations and has both a working capital and a capital deficit at December
31, 2007, that raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note B. The financial statements do not include any adjustments that might
results from the outcome of this uncertainty.




AJ.
ROBBINS, P.C.
 CERTIFIED
PUBLIC ACCOUNTANTS




Denver,
Colorado




January
29, 2009




F-2
 Table of Contents





MANHATTAN
      SCIENTIFICS, INC. AND SUBSIDIARIES(A
      Development Stage Enterprise)CONSOLIDATED BALANCE
  SHEETS





ASSETS
                
                December
      31,
                  2007
                
                
                December
      31,
                  2006Current
      assets:Cash
      and cash equivalents
                
                $
                452,000
                
                
                
                149,000Prepaid
      expenses and other assets
                
                
                44,000
                
                
                
                9,000Total
      current assets
                
                
                496,000
                
                
                
                158,000Property
      and equipment, net
                
                
                28,000
                
                
                
                30,000Investments
                
                
                2,000
                
                
                
                2,000Patents,
      net of accumulated amortization of $1,886,000 and $1,678,000,
      respectively
                
                
                194,000
                
                
                
                402,000Other
      asset
                
                
                2,000
                
                
                
                2,000Total
      assets
                
                $
                722,000
                
                
                
                594,000LIABILITIESCurrent
      liabilitiesAccounts
      payable and accrued expenses
                
                $
                547,000
                
                
                
                1,522,000Accrued
      interest and expenses - related parties
                
                
                220,000
                
                
                
                324,000Notes
      payable to former officers
                
                
                995,000
                
                
                
                1,100,000Notes
      payable - other
                
                
                33,000
                
                
                
                32,000Total
      current liabilities
                
                
                1,795,000
                
                
                
                2,978,000Commitments
      and Contingencies:CAPITAL
      DEFICITCapital
      stock $.001 par valuePreferred,
      authorized 1,000,000 sharesSeries
      A convertible, redeemable, 10 percent cumulative, authorized
                  182,525,
      shares; issued and outstanding - none
                
                
                -
                
                
                
                -Series
      B convertible,  authorized 250,000 shares; 49,999 shares
      issuedand outstanding
                
                
                -
                
                
                
                -Series
      C convertible, redeemable, authorized 14,000 shares;issued and
      outstanding - none
                
                
                -
                
                
                
                -Common,
      authorized 500,000,000 shares, 318,545,000 and 200,449,577 shares
      issued,  and outstanding, respectively
                
                
                319,000
                
                
                
                201,000Additional
      paid-in-capital
                
                
                49,109,000
                
                
                
                44,902,000Deficit
      accumulated during the development stage
                
                
                (50,501,000
                )
                
                
                (47,487,000
                )Total
      capital deficit
                
                
                (1,073,000
                )
                
                
                (2,384,000
                )$
                722,000
                
                
                
                594,000





F-3


MANHATTAN
      SCIENTIFICS, INC. AND SUBSIDIARIES(A
      Development Stage Enterprise)CONSOLIDATED STATEMENTS OF
      OPERATIONS





PERIOD
      FROMJULY
      31, 1992YEAR
      ENDED
                  
                  
                  (INCEPTION)DECEMBER
      31,
                  
                  
                  THROUGH2007
                  
                  
                  2006
                  
                  
                  December
      31, 2007Revenue
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  856,000Operating
      costs and expenses:General
      and administrative
                  
                  
                  3,233,000
                  
                  
                  
                  1,717,000
                  
                  
                  
                  42,735,000Research
      and development
                  
                  
                  210,000
                  
                  
                  
                  221,000
                  
                  
                  
                  8,822,000Impairment
      charge of certain patents
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  189,000Total
      operating costs and expenses
                  
                  
                  3,443,000
                  
                  
                  
                  1,938,000
                  
                  
                  
                  51,746,000Loss
      from operations before other income and expenses
                  
                  
                  (3,443,000
                  )
                  
                  
                  (1,938,000
                  )
                  
                  
                  (50,890,000
                  )Other
      income and expenses:Gain
      from sale of equity interest
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  885,000Gain
      on settlement of NMXS.com option
                  
                  
                  -
                  
                  
                  
                  50,000
                  
                  
                  
                  50,000Gain on legal settlement
                  
                  
                  14,000
                  
                  
                  
                  -
                  
                  
                  
                  14,000Proceeds
      from sale of NMXS.com common stock
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  393,000Gain
      from sale of Novint Technologies Inc. common stock
                  
                  
                  470,000
                  
                  
                  
                  270,000
                  
                  
                  
                  1,934,000Gain
      on issuance of investor common stock
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  531,000Contract
      revenue
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,741,000Interest
      and other expenses
                  
                  
                  (61,000
                  )
                  
                  
                  (80,000
                  )
                  
                  
                  (1,082,000
                  )Interest
      income
                  
                  
                  6,000
                  
                  
                  
                  6,000
                  
                  
                  
                  184,000Equity
      in losses of investees
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,243,000
                  )Gain
      / (loss) on disposal of equipment
                  
                  
                  -
                  
                  
                  
                  (2,000
                  )
                  
                  
                  (13,000
                  )NET
      LOSS
                  
                  $
                  (3,014,000
                  )
                  
                  $
                  (1,694,000
                  )
                  
                  
                  (45,496,000
                  )BASIC
      AND DILUTED LOSS PER COMMON SHARE:Weighted
      average number of common shares outstanding
                  
                  
                  249,567,399
                  
                  
                  
                  194,582,629Basic
      and diluted loss per common share
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.01
                  )
  See notes
to consolidated financial statements
 F-4
 Table of Contents
  MANHATTAN
SCIENTIFICS, INC. AND SUBSIDARIES
 (A
Development Stage
Enterprise)
 ConsolidatedStatements of Stockholders’ Equity (Capital
Deficit)
 (Notes
A and F)
 For
the Cumulative Period from July 31, 1992 (Inception) Through December 31,
2007
 Series
      A Preferred Stock
                                                                                                                        Preferred
      Stock
                                                                                                                          $.001
      Par Value
                                                                                                                          Series
      B
                                                                                                                          Shares        Amount
                                                                                                                        Preferred
      Stock
                                                                                                                          $.001
      Par Value
                                                                                                                          Series
      C
                                                                                                                          Shares        
      Amount
                                                                                                                        Common
      Stock
                                                                                                                          $.001
      Par Value
                                                                                                                          Shares         Amount
                                                                                                                        Additional
      Paid-in
                                                                                                                          Capital
                                                                                                                        Deferred
                                                                                                                          Comp.
                                                                                                                        Amounts
      Receivable From
                                                                                                                          Stockholders
                                                                                                                        Deficit
      Accumulated
                                                                                                                          During
      the Develop.
                                                                                                                          Stage
                                                                                                                        Treasury
                                                                                                                          Stock
                                                                                                                        TotalInitial
      issuance of shares to founders on contribution of intangible assets at
      historic cost basis
                                                                                                                        $
                                                                                                                        -
                                                                                                                        -
                                                                                                                        $
                                                                                                                        -
                                                                                                                        -
                                                                                                                        $
                                                                                                                        -
                                                                                                                        14,391,627
                                                                                                                        $
                                                                                                                        14,500
                                                                                                                        $
                                                                                                                        500
                                                                                                                        $
                                                                                                                        -
                                                                                                                        $
                                                                                                                        -
                                                                                                                        $
                                                                                                                        -
                                                                                                                        $
                                                                                                                        -
                                                                                                                        $
                                                                                                                        15,000Additional
      founders' contribution
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        40,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (40,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -Issuance
      of 1,037,000 shares of Series A preferred stock, net of issuance
      costs
                                                                                                                        
                                                                                                                        10,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        1,020,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (286,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        744,000Net
      loss
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        $
                                                                                                                        (543,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (543,000)Balance,
      March 31, 1993
                                                                                                                        
                                                                                                                        10,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        14,391,627
                                                                                                                        
                                                                                                                        14,500
                                                                                                                        
                                                                                                                        1,060,500
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (326,000)
                                                                                                                        
                                                                                                                        (543,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        216,000Issuance
      of shares to investor at approximately $.21 per share
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        14,391,627
                                                                                                                        
                                                                                                                        14,500
                                                                                                                        
                                                                                                                        2,985,500
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        3,000,000Issuance
      of shares on exercise of options
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        479,720
                                                                                                                        
                                                                                                                        1,000
                                                                                                                        
                                                                                                                        49,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        50,000Services
      performed in exchange for Series A preferred stock issued in fiscal
      1993
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        127,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        127,000Net
      loss
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (2,292,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (2,292,000)Balance,
      March 31, 1994
                                                                                                                        
                                                                                                                        10,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        29,262,974
                                                                                                                        
                                                                                                                        30,000
                                                                                                                        
                                                                                                                        4,095,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (199,000)
                                                                                                                        
                                                                                                                        (2,835,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        1,101,000Services
      performed for Series A preferred stock issued in fiscal
    1993
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        159,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        159,000Issuance
      of shares at approximately $.52 per share
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        345,399
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        182,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        182,000Net
      loss
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (2,250,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (2,250,000)Balance,
      December 31, 1994
                                                                                                                        
                                                                                                                        10,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        29,608,373
                                                                                                                        
                                                                                                                        30,000
                                                                                                                        
                                                                                                                        4,277,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (40,000)
                                                                                                                        
                                                                                                                        (5,085,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (808,000)Issuance
      of 163,000 shares of Series A preferred stock
                                                                                                                        
                                                                                                                        2,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        161,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        163,000Write-off
      of amounts receivable from stockholders
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (40,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        40,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -Net
      loss
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (972,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (972,000)Balance,
      December 31, 1995
                                                                                                                        
                                                                                                                        12,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        29,608,373
                                                                                                                        
                                                                                                                        30,000
                                                                                                                        
                                                                                                                        4,398,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        (6,057,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (1,617,000)Issuance
      of shares upon exercise of option for $15,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        14,391,627
                                                                                                                        
                                                                                                                        14,000
                                                                                                                        
                                                                                                                        1,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        15,000Net
      loss
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (284,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (284,000)Balance,
      December 31, 1996
                                                                                                                        
                                                                                                                        12,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        44,000,000
                                                                                                                        
                                                                                                                        44,000
                                                                                                                        
                                                                                                                        4,399,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        (6,341,000)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (1,886,000)
  See notes
to consolidated financial statements
 F-5
 Table of Contents
 MANHATTAN
SCIENTIFICS, INC. AND SUBSIDARIES
 (A
Development Stage Enterprise)
 Consolidated
Statements of Stockholders’ Equity (Capital Deficit)
 (Notes
A and F)
 For
the Cumulative Period from July 31, 1992 (Inception) Through December 31,
2006
  Series
      A Preferred Stock
                                                                                                                                                                  Preferred
      Stock
                                                                                                                                                                    $.001
      Par Value
                                                                                                                                                                    Series
      B
                                                                                                                                                                    Shares      
         Amount
                                                                                                                                                                  Preferred
      Stock
                                                                                                                                                                    $.001
      Par Value
                                                                                                                                                                    Series
      C
                                                                                                                                                                    Shares   
      Amount
                                                                                                                                                                  Common
      Stock
                                                                                                                                                                    $.001
      Par Value
                                                                                                                                                                    Shares     
        Amount
                                                                                                                                                                  Additional
      Paid-in
                                                                                                                                                                    Capital
                                                                                                                                                                  Deferred
                                                                                                                                                                    Comp.
                                                                                                                                                                  Amounts
      Receivable From
                                                                                                                                                                    Stockholders
                                                                                                                                                                  Deficit
      Accumulated
                                                                                                                                                                    During
      the Develop.
                                                                                                                                                                    Stage
                                                                                                                                                                  Treasury
                                                                                                                                                                    Stock
                                                                                                                                                                  
                                                                                                                                                                  TotalBalance,
      December 31, 1996
                                                                                                                                                                  12,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  44,000,000
                                                                                                                                                                  44,000
                                                                                                                                                                  4,399,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (6,341,000)
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (1,886,000
                                                                                                                                                                  )Purchase
      and retirement of 1,200,000 shares of Series A preferred
    stock
                                                                                                                                                                  (12,000)
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (58,000)
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (70,000
                                                                                                                                                                  )Purchase
      of 7,195,814 treasury shares of common stock for $15,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (15,000
                                                                                                                                                                  )
                                                                                                                                                                  (15,000
                                                                                                                                                                  )Net
      loss/comprehensive loss
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (335,000)
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (335,000
                                                                                                                                                                  )Balance,
      December 31, 1997
                                                                                                                                                                  -
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  44,000,000
                                                                                                                                                                  44,000
                                                                                                                                                                  4,341,000
                                                                                                                                                                  
                                                                                                                                                                  -
                                                                                                                                                                  (6,676,000)
                                                                                                                                                                  (15,000
                                                                                                                                                                  )
                                                                                                                                                                  (2,306,000
                                                                                                                                                                  )Purchase
      of 7,195,813 treasury shares of common stock for $15,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (15,000
                                                                                                                                                                  )
                                                                                                                                                                  (15,000
                                                                                                                                                                  )Special
      distribution of 14,391,627 shares of common stock to Projectavision,
      Inc.
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  346,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  30,000
                                                                                                                                                                  
                                                                                                                                                                  376,000Shares
      deemed issued in connection with reverse merger
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  11,000,000
                                                                                                                                                                  11,000
                                                                                                                                                                  (11,000)Issuance
      of 182,525 shares of Series A preferred stock and warrants exercisable
      into 750,000 shares of common stock at an exercise price of $.10 per share
      in exchange for note payable of $1,500,000 and accrued interest of
      $330,000 including deemed dividend in connection with beneficial
      conversion feature of preferred stock
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  2,850,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (1,020,000)
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  1,830,000Issuance
      of shares at $.20 per share, net of issuance costs
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  5,000,000
                                                                                                                                                                  5,000
                                                                                                                                                                  970,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  975,000Issuance
      of shares to purchase intangible assets
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  7,200,000
                                                                                                                                                                  7,000
                                                                                                                                                                  1,433,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  1,440,000Issuance
      of shares at $.58 per share for consulting services
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  1,000,000
                                                                                                                                                                  1,000
                                                                                                                                                                  579,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  580,000Issuance
      of warrants on February 10, 1998 to purchase 2,000,000 shares of common
      stock exercisable at $.75 per share at fair value for services resulting
      from cashless exercise feature
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  660,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  660,000Issuance
      of shares at $.18 per share
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  275,000
                                                                                                                                                                  
                                                                                                                                                                  50,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  50,000Issuance
      of shares on conversion of 182,525 shares of Series A preferred
      stock
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  9,435,405
                                                                                                                                                                  10,000
                                                                                                                                                                  (10,000)Issuance
      of shares at $.05 per share
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  20,340,000
                                                                                                                                                                  20,000
                                                                                                                                                                  997,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  1,017,000Issuance
      of stock options and warrants at fair value for services
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  2,165,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  2,165,000Net
      loss/comprehensive loss
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (4,580,000)
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (4,580,000
                                                                                                                                                                  )Balance,
      December 31, 1998
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  98,250,405
                                                                                                                                                                  98,000
                                                                                                                                                                  14,370,000
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (12,276,000)
                                                                                                                                                                  -
                                                                                                                                                                  
                                                                                                                                                                  2,192,000
  See notes
to consolidated financial statements
 F-6
 Table of Contents
 MANHATTAN
SCIENTIFICS, INC. AND SUBSIDARIES
 (A
Development Stage Enterprise)
 Consolidated
Statements of Stockholders’ Equity (Capital Deficit)
 (Notes
A and F)
 For
the Cumulative Period from July 31, 1992 (Inception) Through December 31,
2006
  Series
      A Preferred Stock
                                                                                Preferred
      Stock
                                                                                  $.001
      Par Value
                                                                                  Series
      B
                                                                                  Shares   Amount
                                                                                Preferred
      Stock
                                                                                  $.001
      Par Value
                                                                                  Series
      C
                                                                                  Shares   
       Amount
                                                                                Common
      Stock
                                                                                  $.001
      Par Value
                                                                                  Shares     Amount
                                                                                Additional
      Paid-in
                                                                                  Capital
                                                                                Deferred
                                                                                  Comp.
                                                                                Amounts
      Receivable From
                                                                                  Stockholders
                                                                                Deficit
      Accumulated
                                                                                  During
      the Develop.
                                                                                  Stage
                                                                                Treasury
                                                                                  Stock
                                                                                TotalBalance,
      December 31, 1998
                                                                                
                                                                                
                                                                                
                                                                                98,250,405
                                                                                $
      98,000
                                                                                $
      14,370,000
                                                                                
                                                                                
                                                                                $
      (12,276,000)
                                                                                
                                                                                $2,192,000Issuance
      of shares in satisfaction of accrued expenses
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                78,000
                                                                                
                                                                                15,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                15,000Issuance
      of shares at $.49 per share for consulting services
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                10,000
                                                                                
                                                                                5,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                5,000Issuance
      of shares at $.49 per share to purchase furniture and
    fixtures
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                100,000
                                                                                
                                                                                49,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                49,000Issuance
      of shares at market prices as consulting services were
      performed
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                17,269
                                                                                
                                                                                15,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                15,000Issuance
      of shares to purchase intangible assets
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                1,000,000
                                                                                1,000
                                                                                999,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                1,000,000Issuance
      of shares at $1.25 per share for services
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                1,600
                                                                                
                                                                                2,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                2,000Issuance
      of stock options Immediately exercisable at fair value for
      services
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                6,572,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                6,572,000Issuance
      of warrants on February 10, 1998 to purchase 2,000,000 shares of
      common stock exercisable at $.75 per share for consulting services
      resulting from notification of warrant holder of intent to
      exercise
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                1,090,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                1,090,000Shares
      issuable at $1.27 per share in connection with note
payable
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                191,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                191,000Issuance
      of shares on exercise of 100,000 options at $.20 per share
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                100,000
                                                                                
                                                                                20,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                20,000Issuance
      of Series B convertible preferred shares at $6.00 per share including
      deemed dividend in connection with beneficial conversion feature of
      preferred stock
                                                                                
                                                                                245,165
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                2,942,000
                                                                                
                                                                                
                                                                                (1,471,000)
                                                                                
                                                                                1,471,000Issuance
      of shares at $.75 per share
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                533,000
                                                                                1,000
                                                                                399,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                400,000Issuance
      of shares at $.75 per share
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                515,000
                                                                                1,000
                                                                                385,000
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                386,000Issuance
      of shares at market price for service
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                4,942Issuance
      of common stock to Equilink, LLC on exercise of cashless
      warrants
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                1,076,923
                                                                                1,000
                                                                                (1,000)Net
      loss/comprehensive loss
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                (9,800,000)
                                                                                
                                                                                (9,800,000)Balance,
      December 31, 1999
                                                                                
                                                                                245,165
                                                                                
                                                                                
                                                                                101,687,139
                                                                                102,000
                                                                                27,053,000
                                                                                
                                                                                
                                                                                (23,547,000)
                                                                                
                                                                                3,608,000
  See notes
to consolidated financial statements
 F-7
 Table of Contents
 MANHATTAN
SCIENTIFICS, INC. AND SUBSIDARIES
 (A
Development Stage Enterprise)
 Consolidated
Statements of Stockholders’ Equity (Capital Deficit)
 (Notes
A and F)
 For
the Cumulative Period from July 31, 1992 (Inception) Through December 31,
2006
 
 Series
      A Preferred Stock
                                                                                                                                                                                                                          Preferred
      Stock $.001 Par Value Series B
                                                                                                                                                                                                                          Preferred
      Stock $.001 Par Value Series C
                                                                                                                                                                                                                          Common
      Stock $.001 Par Value
                                                                                                                                                                                                                          Additional
      Paid-in Capital
                                                                                                                                                                                                                          Deferred
      Comp.
                                                                                                                                                                                                                          Amounts Receivable From
      Stockholders
                                                                                                                                                                                                                          Deficit
      Accumulated
                                                                                                                                                                                                                            During the Develop  Stage
                                                                                                                                                                                                                          Treasury
                                                                                                                                                                                                                            Stock
                                                                                                                                                                                                                          TotalShares
                                                                                                                                                                                                                          Amount
                                                                                                                                                                                                                          Shares
                                                                                                                                                                                                                          Amount
                                                                                                                                                                                                                          Shares
                                                                                                                                                                                                                          AmountBalance,
      December 31, 1999
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          245,165
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          101,687,139
                                                                                                                                                                                                                          $     
      102,000
                                                                                                                                                                                                                          $ 
      27,053,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          $(23,547,000)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          $ 
      3,608,000Shares
      issued of Series preferred shares at $100.00 per share including deemed
      dividend in connection with beneficial conversion feature of preferred
      stock
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          14,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          2,199,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (1,400,000)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          799,000Issuance
      of shares in connection with Series C preferred stock private placement
      investment
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          700,000
                                                                                                                                                                                                                          1,000
                                                                                                                                                                                                                          600,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          601,000Shares
      issuable at $2.23 per share in connection with research and development
      license agreement
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          1,115,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (1,115,000)Issuance
      of shares at market price for services
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          11,083
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          24,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          24,000Issuance
      of options at market value for services
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          229,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          229,000Issuance
      of options for 100,000 shares @$.40 per share for services/amortization of
      deferred comp.
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          113,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          113,000Issuance
      of stock options in connection with deferred compensation
      agreement
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          425,000
                                                                                                                                                                                                                          (425,000)Issuance
      shares to purchase furniture and fixtures
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          10,500
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          40,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          40,000Issuance
      of shares in connection with Series C preferred stock private
      placement
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          10,000Issuance
      of shares at $1.25 per share
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          1,600,050
                                                                                                                                                                                                                          2,000
                                                                                                                                                                                                                          1,998,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          2,000,000Conversion
      of Series B preferred stock to common
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (60,000)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          600,000Issuance
      of shares at market price for services
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          51,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          102,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          102,000Shares
      issuable at market price for services
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          88,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          88,000Net
      loss/comprehensive loss
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (4,736,000)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (4,736,000)Balance,
      December 31, 2000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          185,165
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          14,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          104,669,772
                                                                                                                                                                                                                          105,000
                                                                                                                                                                                                                          33,873,000
                                                                                                                                                                                                                          (312,000)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (30,798,000)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          2,868,000Issuance
      of shares in connection with private placement offerings
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          1,097,500
                                                                                                                                                                                                                          1,098
                                                                                                                                                                                                                          694,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          695,098Issuance
      of shares upon conversion of Series B preferred stock
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (100,166)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          1,001,660
                                                                                                                                                                                                                          1,002
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          1,002Issuance
      of shares upon conversion of Series C preferred stock
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (14,000)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          2,800,000
                                                                                                                                                                                                                          2,800
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          2,800Issuance
      of shares upon exercise of stock options
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          15,000
                                                                                                                                                                                                                          15
                                                                                                                                                                                                                          3,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          3,015Issuance
      of shares to acquire Teneo Computing Inc.
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          1,400,000
                                                                                                                                                                                                                          1,400
                                                                                                                                                                                                                          784,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          785,400Issuance
      of shares to purchase 42% of Novint Technologies, Inc.
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          1,000,000
                                                                                                                                                                                                                          1,000
                                                                                                                                                                                                                          560,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          561,000Issuance
      of shares for services at fair market value
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          3,388,097
                                                                                                                                                                                                                          1,743
                                                                                                                                                                                                                          2,138,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          2,139,743Exercise
      of warrants issued for services
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          942,281
                                                                                                                                                                                                                          942
                                                                                                                                                                                                                          782,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          782,942Issuance
      of stock options for services
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          250,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          250,000Amortization
      of deferred compensation
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          85,000
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          85,000Net
      loss/comprehensive loss
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (6,662,000)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (6,662,000)Balance,
      December 31, 2001
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          84,999
                                                                                                                                                                                                                          -
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          116,314,310
                                                                                                                                                                                                                          115,000
                                                                                                                                                                                                                          39,084,000
                                                                                                                                                                                                                          (227,000)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          (37,460,000)
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          1,512,000
  See notes
to consolidated financial statements
 F-8
 Table of Contents
 MANHATTAN
SCIENTIFICS, INC. AND SUBSIDARIES
 (A
Development Stage Enterprise)
 Consolidated
Statements of Stockholders’ Equity (Capital Deficit)
 (Notes
A and F)
 For
the Cumulative Period from July 31, 1992 (Inception) Through December 31,
2006
  Series
      A Preferred Stock
                                                                                                                                                                                    Preferred
      Stock $.001 Par Value Series B
                                                                                                                                                                                    Preferred
      Stock $.001 Par Value Series C
                                                                                                                                                                                    Common
      Stock $.001 Par Value
                                                                                                                                                                                    Additional
      Paid-in Capital
                                                                                                                                                                                    Deferred
      Comp.
                                                                                                                                                                                    Accounts
      Receivable From Stockholders
                                                                                                                                                                                    Deficit
      Accumulated During the Develop. Stage
                                                                                                                                                                                    Treasury
      Stock
                                                                                                                                                                                    TotalShares
                                                                                                                                                                                    Amount
                                                                                                                                                                                    Shares
                                                                                                                                                                                    Amount
                                                                                                                                                                                    Shares
                                                                                                                                                                                    AmountBalance,
      December 31, 2001
                                                                                                                                                                                    
                                                                                                                                                                                    84,999
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    116,314,310
                                                                                                                                                                                    $115,000
                                                                                                                                                                                    $39,084,000
                                                                                                                                                                                    (227,000)
                                                                                                                                                                                    
                                                                                                                                                                                    $(37,460,000)
                                                                                                                                                                                    
                                                                                                                                                                                    $1,512,000Issuance
      of shares in connection with private placement offering
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    850,000
                                                                                                                                                                                    1,000
                                                                                                                                                                                    253,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    254,000Issuance
      of shares for the payment of research and development
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    75,000
                                                                                                                                                                                    
                                                                                                                                                                                    30,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    30,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    5,000
                                                                                                                                                                                    
                                                                                                                                                                                    2,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    2,000Issuance
      of shares in connection with private placement offering
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    285,700
                                                                                                                                                                                    
                                                                                                                                                                                    100,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    100,000Issuance
      of shares for the payment of research and development
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    975,000
                                                                                                                                                                                    1,000
                                                                                                                                                                                    360,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    361,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    620,000
                                                                                                                                                                                    1,000
                                                                                                                                                                                    203,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    204,000Issuance
      of shares in connection with private placement offering
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    400,000
                                                                                                                                                                                    
                                                                                                                                                                                    100,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    100,000Issuance
      of shares upon conversion of Series B preferred stock
                                                                                                                                                                                    
                                                                                                                                                                                    (10,000)
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    100,000Issuance
      of shares  at  market for services
      rendered
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    500,000
                                                                                                                                                                                    1,000
                                                                                                                                                                                    135,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    136,000Issuance
      of shares for the payment of research and development
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    150,000
                                                                                                                                                                                    
                                                                                                                                                                                    40,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    40,000Issuance
      of shares in connection with private placement offering
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    600,000
                                                                                                                                                                                    1,000
                                                                                                                                                                                    149,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    150,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    25,277
                                                                                                                                                                                    
                                                                                                                                                                                    8,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    8,000Issuance
      of shares in connection with private placement offering
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    1,000,000
                                                                                                                                                                                    1,000
                                                                                                                                                                                    99,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    100,000Issuance
      of shares in connection with private placement offering
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    300,000
                                                                                                                                                                                    
                                                                                                                                                                                    30,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    30,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    247,934
                                                                                                                                                                                    
                                                                                                                                                                                    59,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    59,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    1,285,301
                                                                                                                                                                                    1,000
                                                                                                                                                                                    169,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    170,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    394,000
                                                                                                                                                                                    
                                                                                                                                                                                    39,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    39,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    60,000
                                                                                                                                                                                    
                                                                                                                                                                                    8,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    8,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    75,000
                                                                                                                                                                                    
                                                                                                                                                                                    7,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    7,000Amortization
      of deferred compensation
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    85,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    85,000Net
      loss/comprehensive loss
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    (4,028,000)
                                                                                                                                                                                    
                                                                                                                                                                                    (4,028,000)Balance,
      December 31, 2002
                                                                                                                                                                                    
                                                                                                                                                                                    74,999
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    124,262,522
                                                                                                                                                                                    122,000
                                                                                                                                                                                    40,875,000
                                                                                                                                                                                    (142,000)
                                                                                                                                                                                    
                                                                                                                                                                                    (41,488,000)
                                                                                                                                                                                    
                                                                                                                                                                                    (633,000)
   See notes
to consolidated financial statements
 F-9
 Table of Contents
 MANHATTAN
SCIENTIFICS, INC. AND SUBSIDARIES
 (A
Development Stage Enterprise)
 Consolidated
Statements of Stockholders’ Equity (Capital Deficit)
 (Notes
A and F)
 For
the Cumulative Period from July 31, 1992 (Inception) Through December 31,
2006
  Series
      A Preferred Stock
                                                                                                                                                                                                                                                                                Preferred
      Stock $.001
                                                                                                                                                                                                                                                                                  Par
      Value
                                                                                                                                                                                                                                                                                  Series
      B
                                                                                                                                                                                                                                                                                Preferred
      Stock $.001 Par Value Series C
                                                                                                                                                                                                                                                                                Common
      Stock $.001
                                                                                                                                                                                                                                                                                  Par
      Value
                                                                                                                                                                                                                                                                                Additional
                                                                                                                                                                                                                                                                                  Paid-in
      Capital
                                                                                                                                                                                                                                                                                Deferred
      Comp.
                                                                                                                                                                                                                                                                                Accounts
      Receivable From Stockholders
                                                                                                                                                                                                                                                                                Deficit
      Accumulated During the Develop. Stage
                                                                                                                                                                                                                                                                                Treasury
      Stock
                                                                                                                                                                                                                                                                                TotalShares
                                                                                                                                                                                                                                                                                Amount
                                                                                                                                                                                                                                                                                Shares
                                                                                                                                                                                                                                                                                Amount
                                                                                                                                                                                                                                                                                Shares
                                                                                                                                                                                                                                                                                AmountBalance,
      December 31, 2002
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                74,999
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                124,262,522
                                                                                                                                                                                                                                                                                122,000
                                                                                                                                                                                                                                                                                40,875,000
                                                                                                                                                                                                                                                                                (142,000)
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                (41,488,000)
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                (633,000)Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                70,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                71,000Issuance
      of shares in connection with private placement offering
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                40,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                41,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                125,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                50,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                51,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                300,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                20,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                21,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                2,000,000
                                                                                                                                                                                                                                                                                2,000
                                                                                                                                                                                                                                                                                100,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                102,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                2,000,000
                                                                                                                                                                                                                                                                                2,000
                                                                                                                                                                                                                                                                                79,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                81,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                49,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                50,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                400,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                20,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                21,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                20,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                20,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                20,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                400,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                16,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                17,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                500,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                25,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                26,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,011,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                40,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                41,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                250,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                10,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                10,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                260,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                10,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                10,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                250,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                10,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                10,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                125,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                5,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                5,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                600,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                25,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                26,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                500,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                20,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                21,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                100,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                4,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                4,000Issuance
      of shares at market for director/officer services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                13,500,000
                                                                                                                                                                                                                                                                                14,000
                                                                                                                                                                                                                                                                                392,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                406,000Issuance
      of shares at market for director/officer services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                5,250,000
                                                                                                                                                                                                                                                                                5,000
                                                                                                                                                                                                                                                                                153,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                158,000Issuance
      of shares upon cancelation of stock options
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                2,750,000
                                                                                                                                                                                                                                                                                3,000
                                                                                                                                                                                                                                                                                82,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                85,000Issuance
      of shares at market for director/officer services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,750,000
                                                                                                                                                                                                                                                                                2,000
                                                                                                                                                                                                                                                                                52,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                54,000Issuance
      of shares upon cancelation of stock options
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                990,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                30,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                31,000Issuance
      of shares at market for director/officer services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                2,250,000
                                                                                                                                                                                                                                                                                2,000
                                                                                                                                                                                                                                                                                65,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                67,000Issuance
      of shares at market for director/officer services rendered
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                1,000,000
                                                                                                                                                                                                                                                                                1,000
                                                                                                                                                                                                                                                                                49,000
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                50,000
  F-10
 Table of Contents
 MANHATTAN
SCIENTIFICS, INC. AND SUBSIDARIES
 (A
Development Stage Enterprise)
 Consolidated
Statements of Stockholders’ Equity (Capital Deficit)
 (Notes
A and F)
 For
the Cumulative Period from July 31, 1992 (Inception) Through December 31,
2006
  Series
      A Preferred Stock
                                                                                                                            Preferred
      Stock $.001
                                                                                                                              Par
      Value
                                                                                                                              Series
      B
                                                                                                                            Preferred
      Stock
                                                                                                                              $.001
      Par Value
                                                                                                                              Series
      C
                                                                                                                            Common
      Stock $.001
                                                                                                                              Par
      Value
                                                                                                                            Additional
      Paid-in Capital
                                                                                                                            Deferred
      Comp.
                                                                                                                            Accounts
      Receivable From Stockholders
                                                                                                                            Deficit
      Accumulated During the Develop. Stage
                                                                                                                            Treasury
      Stock
                                                                                                                            TotalShares
                                                                                                                            Amount
                                                                                                                            Shares
                                                                                                                            Amount
                                                                                                                            Shares
                                                                                                                            AmountYear
      ended December 31, 2003 (continued)Issuance
      of shares at market for director/officer services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            250,000
                                                                                                                            
                                                                                                                            12,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            12,000Issuance
      of shares at market for director/officer services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            250,000
                                                                                                                            
                                                                                                                            12,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            12,000Issuance
      of shares at market for director/officer services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            1,000,000
                                                                                                                            1,000
                                                                                                                            50,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            51,000Issuance
      of shares at market for director/officer services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            250,000
                                                                                                                            
                                                                                                                            12,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            12,000Issuance
      of shares at market for director/officer services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            250,000
                                                                                                                            
                                                                                                                            12,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            12,000Issuance
      of shares upon cancelation of stock options
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            500,000
                                                                                                                            1,000
                                                                                                                            30,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            31,000Issuance
      of shares at market for services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            50,000
                                                                                                                            
                                                                                                                            2,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            2,000Issuance
      of shares at market for services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            1,000,000
                                                                                                                            1,000
                                                                                                                            50,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            51,000Issuance
      of shares at market for services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            35,000
                                                                                                                            
                                                                                                                            2,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            2,000Issuance
      of shares at market for services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            500,000
                                                                                                                            1,000
                                                                                                                            25,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            26,000Issuance
      of shares upon cancelation of stock options
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            500,000
                                                                                                                            1,000
                                                                                                                            30,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            31,000Issuance
      of shares upon cancelation of stock options
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            675,000
                                                                                                                            1,000
                                                                                                                            40,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            41,000Issuance
      of shares for options exchanged
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            200,000Issuance
      of shares for options exchanged
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            100,000Issuance
      of shares for options exchanged
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            200,000Issuance
      of shares for options exchanged
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            250,000Issuance
      of shares for options exchanged
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            130,000Issuance
      of shares for options exchanged
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            100,000Issuance
      of shares for options exchanged
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            200,000Issuance
      of shares for options exchanged
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            100,000Conversion
      of series B preferred stock to common
                                                                                                                            
                                                                                                                            (25,000)
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            250,000Issuance
      of shares at market for services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            250,000
                                                                                                                            
                                                                                                                            21,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            21,000Issuance
      of shares at market for services rendered
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            335,000
                                                                                                                            1,000
                                                                                                                            20,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            21,000Stock
      options issued for services
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            113,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            113,000Amortization
      of deferred compensation
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            142,000
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            142,000Net
      loss/comprehensive loss
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            (2,569,000)
                                                                                                                            
                                                                                                                            (2,569,000)Balance,
      December 31, 2003
                                                                                                                            
                                                                                                                            49,999
                                                                                                                            
                                                                                                                            
                                                                                                                            
                                                                                                                            172,008,522
                                                                                                                            172,000
                                                                                                                            42,726,000
                                                                                                                            -
                                                                                                                            
                                                                                                                            (44,057,000)
                                                                                                                            
                                                                                                                            (1,159,000)
   F-11
 Table of Contents
  MANHATTAN
SCIENTIFICS, INC. AND SUBSIDARIES
 (A
Development Stage Enterprise)
 Consolidated
Statements of Stockholders’ Equity (Capital Deficit)
 (Notes
A and F)
 For
the Cumulative Period from July 31, 1992 (Inception) Through December 31,
2006
 
 Series
      A Preferred Stock
                                                                                                                                                                                          
                                                                                                                                                                                          Preferred
      Stock $.001 Par Value Series B
                                                                                                                                                                                          Preferred
      Stock $.001 Par Value Series C
                                                                                                                                                                                          
                                                                                                                                                                                          Common
      Stock $.001 Par Value
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          Additional
      Paid-in Capital
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          Deferred
      Comp.
                                                                                                                                                                                          
                                                                                                                                                                                          Accounts
      Receivable From Stockholders
                                                                                                                                                                                          
                                                                                                                                                                                          Deficit
      Accumulated During the Develop. Stage
                                                                                                                                                                                          
                                                                                                                                                                                          Treasury
      Stock
                                                                                                                                                                                          
                                                                                                                                                                                          TotalShares
                                                                                                                                                                                          
                                                                                                                                                                                          Amount
                                                                                                                                                                                          Shares
                                                                                                                                                                                          Amount
                                                                                                                                                                                          
                                                                                                                                                                                          Shares
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          AmountBalance,
      December 31, 2003
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          49,999
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          172,008,522
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          172,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          42,726,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          -
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          (44,057,000
                                                                                                                                                                                          )
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          (1,159,000
                                                                                                                                                                                          )Issuance
      of shares at market for services rendered
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          4,833,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          5,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          487,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          492,000Issuance
      of shares on exercise of options
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          866,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          126,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          126,000Issuance
      of shares for the payment of notes payable
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          641,274
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          1,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          47,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          48,000Issuance of warrants in connection with note payable
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          214,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          214,000Net
      loss/comprehensive loss
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (1,517,000
                                                                                                                                                                                          )
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (1,517,000
                                                                                                                                                                                          )Balance
      December 31, 2004
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          49,999
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          178,348,796
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          178,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          43,600,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (45,574,000
                                                                                                                                                                                          )
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (1,796,000
                                                                                                                                                                                          )Stock
      options issued in exchange for previously issued options
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          46,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          46,000Issuance
      of shares at market for services rendered
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          1,023,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          1,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          64,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          65,000Issuance
      of shares in satisfaction of accrued expenses
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          4,458,237
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          4,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          238,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          242,000Net
      loss/comprehensive loss
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (219,000
                                                                                                                                                                                          )
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (219,000
                                                                                                                                                                                          )Balance
      December 31, 2005
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          49,999
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          183,830,033
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          183,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          43,948,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (45,793,000
                                                                                                                                                                                          )
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (1,662,000
                                                                                                                                                                                          )Issuance
      of shares at market for services rendered
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          1,640,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          2,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          86,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          88,000Issuance
      of shares in satisfaction of note payable
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          795,324
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          1,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          44,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          45,000Issuance
      of shares for services rendered by Board of Directors
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          13,000,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          13,800
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          766,200
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          780,000Issuance
      of shares in satisfaction of accrued expenses
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          1,184,220
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          1,200
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          57,800
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          59,000Net
      loss/comprehensive loss
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (1,694,000
                                                                                                                                                                                          )
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (1,694,000
                                                                                                                                                                                          )Balance
      December 31, 2006
                                                                                                                                                                                          -
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          49,999
                                                                                                                                                                                          
                                                                                                                                                                                          $      
      -
                                                                                                                                                                                          -
                                                                                                                                                                                          $    -
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          200,449,577
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          201,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          44,902,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          -
                                                                                                                                                                                          
                                                                                                                                                                                          $             -
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          (47,487,000
                                                                                                                                                                                          )
                                                                                                                                                                                          $      
      -
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          (2,384,000
                                                                                                                                                                                          )Issuance of shares
      at market for services rendered
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          41,550,317
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          42,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          786,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          828,000Issuance of
      shares in satisfaction of note payable
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          14,200,106
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          14,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          57,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          71,000Issuance of shares related to conversion of
      convertible notes
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          106,000,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          106,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          954,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          1,060,000Purchase and retirement of common shares and
      warrants for 10,000,000 shares of common share
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (43,655,000
                                                                                                                                                                                          )
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (44,000
                                                                                                                                                                                          )
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (171,000
                                                                                                                                                                                          )
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (215,000
                                                                                                                                                                                          )Settlement of related party debt
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          1,416,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          1,416,000Beneficial conversion  feature related to
      convertible notes
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          968,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          968,000Issuance of stock options
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          197,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          197,000Net
      loss/comprehensive loss
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (3,014,000
                                                                                                                                                                                          )
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          (3,014,000
                                                                                                                                                                                          )Balance December
      31, 2007
                                                                                                                                                                                          -
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          49,999
                                                                                                                                                                                          
                                                                                                                                                                                          $      
      -
                                                                                                                                                                                          -
                                                                                                                                                                                          $    -
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          318,545,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          319,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          49,109,000
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          $      
      -
                                                                                                                                                                                          
                                                                                                                                                                                          $      
      -
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          (50,501,000
                                                                                                                                                                                          )
                                                                                                                                                                                          $      
      -
                                                                                                                                                                                          
                                                                                                                                                                                          $
                                                                                                                                                                                          (1,073,000
                                                                                                                                                                                          )
    See notes
to consolidated financial statements
 F-12
 Table of
Contents


MANHATTAN
      SCIENTIFICS, INC. AND SUBSIDIARIES(A
      Development Stage Enterprise)CONSOLIDATED
      STATEMENTS OF CASH FLOWSPERIOD
      FROMJULY
      31, 1992YEAR
      ENDED
                                                                                                                            DECEMBER
      31,
                                                                                                                          
                                                                                                                          (INCEPTION)
      THROUGH2007
                                                                                                                          
                                                                                                                          
                                                                                                                          2006
                                                                                                                          
                                                                                                                          December
      31, 2007CASH
      FLOWS FROM (TO) OPERATING ACTIVITIES:Net
      loss
                                                                                                                          
                                                                                                                          $
                                                                                                                          (3,014,000
                                                                                                                          )
                                                                                                                          
                                                                                                                          $
                                                                                                                          (1,694,000
                                                                                                                          )
                                                                                                                          $
                                                                                                                          (45,496,000)Adjustments
      to reconcile net loss to net cash used in operating
      activities:Gain
      on sale of investments
                                                                                                                          
                                                                                                                          
                                                                                                                          (470,000
                                                                                                                          )
                                                                                                                          
                                                                                                                          
                                                                                                                          (270,000
                                                                                                                          )
                                                                                                                          
                                                                                                                          (2,323,000)Gain
      on settlement of NMXS.com option
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          (50,000
                                                                                                                          )
                                                                                                                          
                                                                                                                          (50,000)Gain
      from sale of equity interest in Horizon
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          (885,000)Gain
      on issuance of investee common stock
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          (531,000)Common
      stock issued for services
                                                                                                                          
                                                                                                                          
                                                                                                                          828,000
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          868,000
                                                                                                                          
                                                                                                                          
                                                                                                                          7,941,000Preferred
      stock issued for services
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          598,000Stock
      options issued for services
                                                                                                                          
                                                                                                                          
                                                                                                                          197,000
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          10,038,000Cashless
      stock option exercise
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          126,000Warrants
      issued for services
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          2,556,000Convertible
      note issued for services
                                                                                                                          
                                                                                                                          
                                                                                                                          1,000
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          15,000
                                                                                                                          
                                                                                                                          
                                                                                                                          108,000Financing
      costs payable with common stock
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          191,000Financing
      costs related to beneficial conversion feature of
                                                                                                                            convertible
      notes
                                                                                                                          
                                                                                                                          
                                                                                                                          1,361,000
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          1,361,000Loss
      of equity investee
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          1,207,000Amortization
      of technology license
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          537,000Amortization
      of patents
                                                                                                                          
                                                                                                                          
                                                                                                                          208,000
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          208,000
                                                                                                                          
                                                                                                                          
                                                                                                                          1,886,000Loss
      on disposal of equipment
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          2,000
                                                                                                                          
                                                                                                                          
                                                                                                                          28,000Impairment
      charge of certain patents
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          189,000Impairment
      charge on property and equipment
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          8,000
                                                                                                                          
                                                                                                                          
                                                                                                                          8,000Depreciation
                                                                                                                          
                                                                                                                          
                                                                                                                          2,000
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          3,000
                                                                                                                          
                                                                                                                          
                                                                                                                          1,127,000Changes
      in:Prepaid
      expenses and other assets
                                                                                                                          
                                                                                                                          
                                                                                                                          (12,000
                                                                                                                          )
                                                                                                                          
                                                                                                                          
                                                                                                                          140,000
                                                                                                                          
                                                                                                                          
                                                                                                                          181,000Accounts
      payable and accrued expenses
                                                                                                                          
                                                                                                                          
                                                                                                                          466,000
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          370,000
                                                                                                                          
                                                                                                                          
                                                                                                                          3,541,000Accrued
      interest and expenses - related parties
                                                                                                                          
                                                                                                                          
                                                                                                                          (104,000
                                                                                                                          )
                                                                                                                          
                                                                                                                          
                                                                                                                          69,000
                                                                                                                          
                                                                                                                          
                                                                                                                          220,000Net
      cash provided by (used in) operating activities;
                                                                                                                          
                                                                                                                          
                                                                                                                          (537,000
                                                                                                                          )
                                                                                                                          
                                                                                                                          
                                                                                                                          (331,000
                                                                                                                          )
                                                                                                                          
                                                                                                                          (17,442,000)CASH
      FLOWS FROM (TO) INVESTING ACTIVITIES:Purchase
      of equipment
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          (432,000)Purchase
      of investment
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          (100,000)Proceeds
      from sale of equipment
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          18,000Proceeds
      from sale of equity interest
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          885,000Proceeds
      from settlement of NMXS.com
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          50,000
                                                                                                                          
                                                                                                                          
                                                                                                                          50,000Proceeds
      received from sale of investment
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          66,000
                                                                                                                          
                                                                                                                          
                                                                                                                          1690,000Net
      cash provided by (used in) investing activities
                                                                                                                          
                                                                                                                          
                                                                                                                          -
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          116,000
                                                                                                                          
                                                                                                                          
                                                                                                                          2,111,000





F-14
 Table of Contents


MANHATTAN
      SCIENTIFICS, INC. AND SUBSIDIARIES(A
      Development Stage Enterprise)CONSOLIDATED
      STATEMENTS OF CASH FLOWS (Continued)PERIOD
      FROMJULY
      31, 1992YEAR
      ENDED
                                          DECEMBER
      31,
                                        
                                        
                                        (INCEPTION)
      THROUGH2007
                                        
                                        
                                        2006
                                        
                                        
                                        December
      31, 2007CASH
      FLOWS FROM (TO) FINANCING ACTIVITIES:Repurchase
      of common stock
                                        
                                        
                                        (215,000
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (315,000)Note
      payable to stockholders
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        2,374,000Proceeds
      from convertible notes payable
                                        
                                        
                                        1,060,000
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        1,060,000Proceeds
      from note payable – other
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        634,000Repayment
      of note payable – other
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (435,000)Repayment
      of note payable to officers
                                        
                                        
                                        (5,000
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (530,000)Net
      proceeds from issuance of preferred stock
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        3,569,000Net
      proceeds from issuance of common stock
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        9,571,000Loan
      repayment to preferred stockholder
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (148,000)Capital
      lease payments
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (13,000)Return
      of security deposit
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        16,000Net
      cash provided by (used in) financing activities
                                        
                                        
                                        840,000
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        15,783,000NET
      (DECREASE)INCREASEINCASHANDCASHEQUIVALENTS
                                        
                                        
                                        303,000
                                        
                                        
                                        
                                        (215,000
                                        )
                                        
                                        
                                        452,000Cash
      and cash equivalents, beginning of period
                                        
                                        
                                        149,000
                                        
                                        
                                        
                                        364,000
                                        
                                        
                                        
                                        -CASH
      AND CASH EQUIVALENTS, END OF PERIOD
                                        
                                        $
                                        452,000
                                        
                                        
                                        $
                                        149,000
                                        
                                        
                                        $
                                        452,000SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Interest
      paid
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        111,000SUPPLEMENTAL
      DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:Fixed
      assets contributed to the company in exchange forSeries
      A preferred stock
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        45,000Issuance
      of 14,391,627 common shares to acquire intangible assets
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        15,000Special
      distribution of 14,391,627 shares of common stock tostockholder
      in settlement of stockholder advances
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        376,000Issuance
      of 7,200,000 common shares to acquire intangible assets
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        1,440,000Issuance
      of Series A preferred stock and warrants in settlementof
      note payable and accrued interest
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        1,830,000Issuance
      of 1,000,000 common shares to acquire intangible assets
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        1,000,000Issuance
      of 100,000 common shares to acquire furniture and fixtures
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        49,000Issuance
      of 78,000 common shares in satisfaction of accrued
expenses
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        15,000Issuance
      of 10,500 shares to acquire furniture and fixtures
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        40,000Issuance
      of 1,400,00 of common shares to acquire Teneo Computing
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        785,000Issuance
      of 1,000,000 of common shares to purchase 42% of NovintTechnologies
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        561,000Issuanceof
      641,274sharesofcommonstockinsettlementofnotepayable
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        48,000Issuance
      of 3,180,552 common shares in satisfaction of accrued
    expenses
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        159,000Issuance
      of 1,277,685 common shares in satisfaction of accrued
    expenses
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        83,000Issuance
      of 795,324 of common shares in settlement of note payable
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        45,000
                                        
                                        
                                        $
                                        45,000Issuance
      of 1,184,220 common shares in satisfaction of accrued
    expenses
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        59,000
                                        
                                        
                                        $
                                        59,000Issuance
      of 106,000,000 common shares for conversion of convertible
      notes
                                        
                                        $
                                        1,060,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        $
                                        1,060,000Issuance
      of 14,200,106 common shares in satisfaction of related party
                                          note
      payable
                                        
                                        $
                                        71,000
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        71,000







F-15
 Table of Contents




MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development Stage
Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE A –
ORGANIZATION AND OPERATIONS





Manhattan
Scientifics, Inc. (formerly Grand Enterprises, Inc. (“Grand”), and its
wholly-owned subsidiaries Tamarack Storage Devices, Inc. and Teneo Computing,
Inc. (“Teneo”) (collectively “the Company”), a development stage enterprise,
operates in a single business segment that seeks to commercialize technologies
with an emphasis on consumer and commercial electronics.  The Company
is in the development stage as defined in Financial Accounting Standards Board
Statement No. 7.  The fiscal year end is December 31.





The
Company has been engaged primarily in the commercialization of its
technology.  The Company conducts its operations primarily in
Asia.





NOTE B -
GOING CONCERN UNCERTAINTY





These
financial statements have been prepared on a going concern basis, which
contemplated the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has incurred recurring losses and at
December 31, 2007, had an accumulated capital deficit of $50,501,000. For the
year ended December 31, 2007, the Company sustained a net loss of $3,014,000.
These factors, among others, indicate that the Company may be unable to continue
as a going concern for a reasonable period of time. These financial statements
do not include any adjustments relating to the recoverability and classification
of recorded asset amounts or the amounts and classification of liabilities that
may be necessary should the Company be unable to continue as a going concern.
The Company's continuation as a going concern is contingent upon its ability to
obtain additional financing, and to generate revenue and cash flow to meet its
obligations on a timely basis. Accordingly, the Company’s management will seek
to raise capital financing either through debt or equity financing. During
April 2008 through January 2009, the Company sold approximately
$1,100,000 from a private placement offering. The private placement
originally provided for the offer and sale of up to 50,000,000 unregistered
shares of the Company’s common stock at a price of $0.02 per share, for an
aggregate offering price of $1,000,000, and
allowed the Company to accept or reject any
oversubscription.





NOTE C -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS




[1]
PRINCIPLES OF CONSOLIDATION:





The
consolidated financial statements include the accounts of the Company and its
two wholly-owned subsidiaries. All material intercompany accounts and
transactions have been eliminated.





[2] PROPERTY AND
EQUIPMENT1





Property
and equipment consists of Artwork ($29,000) and office equipment ($3,000) and is
recorded at cost less accumulated depreciation.  Depreciation is
provided for office equipment on the straight-line method over the estimated
useful lives of the assets, generally three years.  Total depreciation
expense was $2,000 and $3,000 for the years ended December 31, 2007 and 2006,
respectively.  As of December 31, 2007, accumulated depreciation was
$3,000.  During the year ended December 31, 2006, the Company recorded
an impairment charge as general and administrative expense on its property and
equipment of $8,000 and loss on disposal of equipment of $2,000.





F-16
 Table of Contents




MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development Stage
Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE C -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
(Continued)





[3]
INTANGIBLE ASSETS:





Patents
are recorded at cost of $2,080,000. Amortization is charged against results of
operations, as research and development expense, using the straight-line method
over the estimated economic useful life. Patents related to the mid-range fuel
cell and the micro fuel cell technologies are estimated to have an economic
useful life of 10 years.  Amortization expense was $208,000 for each
of the years ended December 31, 2007 and 2006 and $1,886,000 for the period from
July 31, 1992 (inception) through December 31, 2007.





Annual
amortization of intangible assets remaining at December 31, 2007, are as
follows:




Year
      ended December 31,
                                  2008$
                                194,000Total
                                
                                $
                                194,000


[4]
INCOME TAXES:





In
accordance with SFAS 109, Accounting for Income Taxes, the Company accounts for
income taxes under the asset and liability method. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax basis and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.





The
Company has adopted FASB Interpretation No. 48, Accounting for Uncertainty in
Income Taxes - an interpretation of FASB Statement No. 109 (“FIN 48”) as of
January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes
recognized in companies’ financial statements in accordance with FASB Statement
No. 109, Accounting for Income Taxes. As a result, the Company applies a
more-likely-than-not recognition threshold for all tax uncertainties. FIN 48
only allows the recognition of those tax benefits that have a greater than fifty
percent likelihood of being sustained upon examination by the taxing
authorities. As a result of implementing FIN 48, the Company’s management has
reviewed the Company’s tax positions and determined there were no outstanding,
or retroactive tax positions with less than a 50% likelihood of being sustained
upon examination by the taxing authorities, therefore the implementation of this
standard has not had a material affect on the Company.





Based on its evaluation, the Company has concluded that there are
no significant uncertain tax positions requiring recognition in its financial
statements. The Company’s evaluation was performed for the tax years ended
December 31, 2004 through 2007 for U.S. Federal Income Tax, for the tax years
ending December 31, 2004 through 2007 for the States of New Mexico and New York
 Income Tax, the tax years which remain subject to examination by major tax
jurisdictions as of December 31, 2007.





F-17
 Table of Contents




MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE C -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
(Continued)





[5] PER
SHARE DATA:





The basic
and diluted per share data has been computed on the basis of the net loss
available to common stockholders for the period divided by the historic weighted
average number of shares of common stock outstanding. All potentially dilutive
securities have been excluded from the computations since they would be
antidilutive.





[6]
RESEARCH AND DEVELOPMENT:





Research and development costs are expensed as incurred
and amounted to $2,000 and $13,000 for the years ended December 31, 2007 and
2006, respectively,and
$6,936,000 for the period from July 31, 1992 (inception) through December 31,
2007.





[7]
ADVERTISING EXPENSES:





The
Company expenses advertising costs, which consist primarily of promotional items
and print media, as incurred. Advertising expenses amounted to $0, $0, and
approximately $88,000 for the years ended December 31, 2007 and 2006 and for the
cumulative period July 31, 1992 (inception) through December 31, 2007,
respectively.





[8] 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. Actual results could differ from those estimates.  Significant
estimates 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, accounting for income taxes and uncertainty in income taxes and
depreciation and amortization.









F-18
 Table of Contents
  MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE C -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
(Continued)





[9]
INVESTMENTS:





The
Company records its investment in Novint Technologies, Inc. (“Novint”) at cost
and uses the equity method of accounting to record its proportionate share of
Novint's net income or loss. During 2003, the Company recorded an impairment of
the investment to $0 due to Novint’s inactivity.  Subsequently, during
2004, Novint issued common stock pursuant to a private placement, as a result,
the Company has recorded a gain on issuance of investee common stock of
$531,000. In addition for the year ended December 31, 2004, the Company has
recorded an equity in loss of investee of $492,000, representing the Company’s
share of Novint’s current losses.  The loss exceeded the Company’s
basis in Novint during the year ended December 31, 2004 and the investment
balance is carried at $0.  As a result of this, the Company did not
record its proportionate share of equity in loss of investee for the year ended
December 31, 2005, 2006, and 2007.  The Company’s share of loss not
recorded amounted to approximately$287,000, and
$379,000, respectively for the years ended December 31, 2007 and 2006. The
Company will continue to account for its investment under the
equity method of accounting, however, it will record its proportionate share of net
income only after it has recovered all losses in excess of its
basis.  For the years ended December 31, 2007 and 2006, the Company
sold certain shares in Novint and has recorded a gain on sale of those shares of
$470,000 and $270,000, respectively.  As of December 31, 2007, the
Company owned 1,128,859 shares of Novint common stock or approximately
4%.  The Company continued to account for its investment in Novint
using the equity method since the Company exercises significant influence over
Novint.





In
October of 2002 the Company's ownership interest in NMXS.com Inc. fell below 20%
and as a result the Company discontinued the equity method of accounting. The
Company has divested itself of all NMXS.com, Inc. common stock and as of
December 31, 2003 the Company no longer has any direct investment in NMXS.com,
Inc.





In 2004,
the Company commenced an action against NMXS.com, Inc. and its CEO based on
their failure to honor exercise of certain warrants.  In March 2006,
the Company received $50,000 as settlement to the litigation with the NMXS.com,
Inc.





[10]
REVENUE RECOGNITION:





When the
Company earns revenues from the sale of licensing of its products and such
revenue will be recognized in accordance with the terms of the underlying
agreements at the time such transactions are consummated.





In
January 2004, the Company licensed its mid-range fuel cell technology to a
Singapore company with manufacturing in China as part of its efforts to provide
low cost fuel cell systems to Asian and other worldwide markets. Among other
things, the contract gave the licensee non-exclusive rights to produce and sell
fuel cell engines based on the NovArs technology. The agreement included an up
front payment of $150,000, royalties and 17.5% equity interest in the Singapore
Company.  In December 2005, the Company sold its equity interest in
the licensee back to the licensee for $885,000.





In April
2003, the Company entered into a nonexclusive license agreement with a third
party for rights to its mid-range fuel cell technology. The Company received
$300,000 upon signing of the agreement and is entitled to receive an additional
$200,000 upon commercial launch (as defined) by the third
party.   To date, the licensee has not commenced its commercial
launch.





F-19
 Table of Contents
  MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE C -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
(Continued)





[11]
IMPAIRMENT OF LONG-LIVED ASSETS:





Long-lived
assets, including patents and technology licenses to be held and used are
reviewed for impairment whenever events or changes in circumstances indicate
that the related carrying amounts may not be recoverable using expected future
undiscounted cash flows. When required, impairment losses on assets to be held
and used are recognized based on the excess of the asset's carrying amount over
its fair value as determined by selling prices for similar assets or application
of other appropriate valuation techniques. Long-lived assets to be disposed of
are reported at the lower of their carrying amount or fair value less disposal
costs. The Company reviewed its patents and technology licenses for impairment
and determined that its solar fuel cell patents became impaired during 2002 and
recorded a charge of approximately $189,000 in the fourth quarter of 2002 to
reduce the carrying value of these patents to zero. For the years ended December
31, 2007 and 2006, there were no impairment charges related to the Company’s
patents and technology licenses.





[12]
STOCK-BASED COMPENSATION:





On
January 1, 2006, the Company adopted SFAS No. 123 (R) “Share-Based Payment”
which requires the measurement and recognition of compensation expense for all
share-based payment awards made to employees and directors including employee
stock options and employee stock purchases related to a Employee Stock Purchase
Plan based on the estimated fair values.





The
Company adopted SFAS No. 123(R) using the modified prospective transition
method, which required the application of the accounting standard as of January
1, 2006. The accompanying consolidated financial statements as of and for the
year ended December 31, 2006 reflect the impact of SFAS No. 123(R). In
accordance with the modified prospective transition method, the Company’s
accompanying consolidated financial statements for the prior periods have not
been restated, and do not include the impact of SFAS No. 123(R). Stock based
compensation expense recognized under SFAS No. 123(R) for the year ended
December 31, 2007 and 2006 totaled $197,000 and $0, respectively.





[13] CASH
EQUIVALENTS:





For
purposes of reporting cash flows, the Company considers all short term, interest
bearing deposits with original maturities of three months or less to be cash
equivalents.





[14]  FAIR
VALUE OF FINANCIAL INSTRUMENTS:





The
carrying amounts of cash, accounts payable, accrued expenses and notes payable
approximate fair value because of the short maturity of these
items.





[15]  CONCENTRATION
OF CREDIT RISK:





The
Company maintains all cash in bank accounts, which at times may exceed federally
insured limits.  The Company has not experienced a loss in such
accounts.





[16]  RECLASSIFICATION





Certain
reclassifications have been made to the 2006 balances to conform to the 2007
presentation.






F-20
 Table of Contents




MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006
  NOTE C - SUMMARY OF SIGNIFICANT
ACCOUTING POLICIES AND RELATED MATTERS (Continued)




[17]  RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS:




In September 2006, the
FASB issued SFAS No. 157, “Fair Value Measurements”. This statement defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosure about fair value measurements. The
statement does not require any new fair value measurements, but for some
entities, the application of the statement will change current practice. This
statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those
fiscal years. The Company is currently evaluating the effect of this
pronouncement on its financial
statements.





In
February 2007, the FASB issued SFAS No. 159, the “Fair Value Option for
Financial Assets and Financial Liabilities”. SFAS 159 provides entities with an
option to report selected financial assets and liabilities at fair value and
establishes presentation and disclosure requirements designed to facilitate
comparisons between companies that select different measurement attributes. SFAS
159 is effective for fiscal years beginning after November 15, 2007. The Company
is currently evaluating the effect of this pronouncement on its financial
statements.





In June
2007, the Emerging Issues Task Force (“EITF”) issued Issue No. 07-3, “Accounting
for Nonrefundable Advance Payments for Goods or Services To Be Used in Future
Research and Development Activities” (“EITF 07-3”) which concluded that
nonrefundable advance payments for goods or services to be received in the
future for use in research and development activities should be deferred and
capitalized. The capitalized amounts should be expensed as the related goods are
delivered or services are performed. Such capitalized amounts should be charged
to expense if expectations change such that the goods will not be delivered or
services will not be performed. The provisions of EITF 07-3 are effective for
new contracts entered into during fiscal years beginning after December 15,
2007. The consensus on EITF 07-3 may not be applied to earlier periods and early
adoption is not permitted.  The Company is currently evaluating the
effect of this pronouncement on its financial statements.





In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business
Combinations - Revised 2007”. SFAS 141 (R) provides guidance on improving the
relevance, representational faithfulness, and comparability of information that
a reporting entity provides in its financial reports about a business
combination and its effects. SFAS 141R applies to business combinations where is
the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. The Company does not expect the
adoption of SFAS No. 141 to have a material impact on its financial
statements.







F-21
 Table of Contents




MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE C -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
(Continued)





[17]  RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS (Continued):





In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans, an amendment of PASS Statements No. 87, 106, and 132(R)” (SFAS No. 158).
 SFAS No. 158 requires companies to recognize a net liability or asset and
an offsetting adjustment to accumulate other comprehensive income to report the
funded status of defined benefit pension and other postretirement benefit plans.
SFAS No. 158 requires prospective application, recognition and disclosure
requirements effective for the company’s fiscal year ending December 31, 2007.
Additionally, SFAS No. 158 requires companies to measure plan assets and
obligations at their year-end balance sheet date. This requirement is effective
for the company’s fiscal year ending December 31, 2009. The company is currently
evaluating the impact of the adoption of SFAS No. 258 and does not expect that
it will have a material impact on its financial statements.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements - an Amendment of Accounting Research Bulletin
No. 51” (“SFAS No. 160”), which establishes accounting and reporting standards
for ownership interests in subsidiaries held by parties other than the parent,
the amount of consolidated net income attributable to the parent and to the
noncontrolling interest, changes in a parent’s ownership interest and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS No. 160 also establishes reporting requirements that
provide sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling owners. SFAS
No. 160 is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008.  The Company is
currently evaluating the effect of this pronouncement on its financial
statements.





In March
2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments
and Hedging Activities", an amendment of SFAS No. 133. SFAS 161 applies to all
derivative instruments and non-derivative instruments that are designated and
qualify as hedging instruments pursuant to paragraphs 37 and 42 of SFAS 133 and
related hedged items accounted for under SFAS 133. SFAS 161 requires entities to
provide greater transparency through additional disclosures about how and why an
entity uses derivative instruments, how derivative instruments and related
hedged items are accounted  for under SFAS 133 and its related
interpretations, and how derivative instruments and related hedged items affect
an entity's financial position, results of operations, and cash flows. SFAS 161
is effective as of the beginning of an entity's first fiscal year that begins
after November 15, 2008. The Company does not expect the adoption of SFAS 161
will have a material impact on its financial condition or results of
operation.





F-22
 Table of Contents
  MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE C -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
(Continued)





[17]  RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)





In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – an interpretation of FASB Statement No. 60.”  SFAS
163 requires that an insurance enterprise recognize a claim liability prior to
an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation.  This
Statement also clarifies how Statement 60 applies to financial guarantee
insurance contracts, including the recognition and measurement to be used to
account for premium revenue and claim liabilities. Those clarifications will
increase comparability in financial reporting of financial guarantee insurance
contracts by insurance enterprises. This Statement requires expanded disclosures
about financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements.  SFAS 163 will be effective for financial
statements issued for fiscal years beginning after December 15, 2008.  The
Company does not expect the adoption of SFAS 163 will have a material impact on
its financial condition or results of operation.





In
September 2006, the United States Securities and Exchange Commission (“SEC”)
adopted SAB No. 108, “Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements.” This SAB
provides guidance on the consideration of the effects to prior year
misstatements in quantifying current year misstatements for the purpose of a
materiality assessment. SAB 108 establishes an approach that requires
quantification of financial statement errors based on the effects of each of the
company’s balance sheet and statement of operations financial statements and the
related financial statement disclosures. The SAB permits existing public
companies to record the cumulative effect of initially applying this approach in
the first year ending after November 15, 2006 by recording the necessary
correcting adjustments to the carrying values of assets and liabilities as of
the beginning of that year with the offsetting adjustment recorded to the
opening balance of retained earnings. Additionally, the use of the cumulative
effect transition method requires detailed disclosure of the nature and amount
of each individual error being corrected through the cumulative adjustment and
how and when it arose. The company is currently evaluating the impact, if any,
that SAB 108 may have on the company’s results of operations or financial
position.





F-23
 Table of Contents


MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006




NOTE D -
INVESTMENTS IN NOVINT





At
December 31, 2007, the Company owns less than 4% of Novint. The following
is a summary of financial data regarding the financial position and results
of operations derived from the December 31, 2007 financial statements of Novint
as of December 31, 2007.




Current assets
      (including cash of $255,000)
            
            $
            
            3,987,000Property and
      equipment
            
            
            
            444,000Other
    assets
            
            
            
            1,218,000$
            
            5,649,000Liabilities
            
            $
            
            732,000Equity
            
            
            
            4,917,000$
            
            5,649,000Revenue
            
            $
            
            415,000Net/ Loss
            
            $
            
            (8,096,000)




During
the year ended December 31, 2006, the Company sold 100,000 shares of Novint for
$66,000 and issued 210,335 shares in lieu of payment of a note payable for
$200,000 and interest of $4,000.





During
the year ended December 31, 2007, the Company distributed 92,216 shares of
Novint as payment of $77,000 of a note payable due to a former
officer.  As a result the Company recognized a gain on this
distribution of $77,000.





During
the year ended December 31, 2007, the Company distributed 530,000 shares of
Novint related to convertible promissory notes issued during 2007, as further
discussed in Note G.  As a result, the Company recognized a gain on
this distribution totaling $393,000 during the year ended December 31,
2007.





NOTE E -
BASIC AND DILUTED LOSS PER SHARE





Basic and
diluted net loss per common share is presented in accordance with SFAS 128,
"Earnings Per Share". Basic net loss per share is computed by dividing net loss
by the weighted average number of common shares outstanding during the
applicable reporting periods. The Company’s computation of dilutive net loss per
share for the year ended December 31, 2007 and 2006 does not assume any exercise
of options, warrants or shares issuable upon conversion of the series B
preferred stock and common shares, which totaled 38,245,000, 13,250,000 and
499,990 respectively, for the year ended December 31, 2007 and 28,245,000,
19,250,000 and 499,990 respectively for the year ended December 31, 2006, as
their effect is antidilutive.





NOTE F –
NOTES PAYABLE TO FORMER OFFICER AND SETTLEMENT





As of December 31, 2007, the Company has loans payable
of $450,000 and $545,000 payable to its former Chief Operating Officer and
former Chief Executive Officer.  The loans bore interest at 5.5% per
annum and were initially due December 31, 2002 and have been mutually extended
and settled.  Under the terms of the settlement dated December 12,
2007, the loans bear interest at 5% per annum and are now fully due on
demand.  The Company has recorded interest expense for notes payable
to officers of approximately $61,000 and $61,000 for the years ended December
31, 2007 and 2006,
respectively.





In May
2007, the Company issued 14,200,106 shares of common stock to its former Chief
Executive Officer for settlement of debt totaling $71,000.





As part
of the settlement in December 2007, the former Chief Operating Officer and
former Chief Executive Officer collectively forgave $1,416,500 of their
outstanding accrued salaries ($1,387,500) and note payable ($29,000)
balances.  The amount forgiven has been accounted for as contributed
capital.  Additionally, the Company repaid $5,000 of the former Chief
Executive Officer’s note payable balance.  The remaining unpaid note
payable balances totaling $995,000 at December 31, 2007 are due on demand,
unsecured and accrue interest at five percent (5%) per annum.







F-24
 Table of Contents





MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE G –
NOTES PAYABLE – OTHER





During
2004 the Company issued a number of convertible promissory notes totaling
$91,000 for services performed.  The notes have a one year maturity
date, are noninterest bearing and upon maturity will convert into shares of the
Company’s common stock at the then current per share price, unless the Company
prepays the outstanding amount.  In December 2004, the Company issued
641,274 shares of its common stock on the conversion of one of the
notes.  The remaining balance of these notes was $43,000 as of
December 31, 2004.  During 2005, the Company issued $19,000 of
additional convertible notes to the same third party under the same
terms.  In February 2006, the Company issued 795,324 shares of its
common stock on the conversion of the notes for $43,000 and interest of
$2,000.  During the years ended December 31, 2007 and 2006 the Company
issued convertible notes in the amount of $1,000 and $4,000 to the same third
party.  As of December 31, 2007, the Company owed $33,000 under these
notes.





In
November 2004, the Company obtained a loan from a third party in the amount of
$200,000.  The loan bears interest at a rate of 8% per annum and
matures in November of 2006.  The Company prepaid the two years of
interest using its shares of Novint Technologies, Inc. shares.  As part of the debt agreement, the
Company agreed to allow Oro Valley to hold 250,000 shares of Novint stock in
escrow until the due date and to sell the shares to pay off the note beginning
when the note became due in November 2006.In December 2006
the note was paid in full by selling 210,335 Novint Technologies
shares.  The remaining 39,665 shares were returned to the
Company.  In addition, the Company issued a warrant to purchase
4,000,000 shares of its common stock on a cashless basis with a $0.05 strike
price expiring November 8, 2008.  The warrant was valued at $224,000
using the Black-Scholes model for American options, with volatility of 108% and
a risk free interest rate of 4.5%.  The market price of the common
stock on the date of the grant was $0.071.  The value of the warrant
is being amortized over the life of the note.  Amortization of the
value of the warrants amounted to $14,000 and $98,000 for the years ended
December 31, 2007 and December 31, 2006, respectively.  As of December
31, 2007, the value of the warrant was fully amortized.






F-25
 Table of Contents




MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE H –
CONVERTIBLE PROMISSORY NOTES





During
2007 the Company issued a number of convertible promissory notes totaling
$1,060,000 through a private placement.  The notes had a maturity date
of December 2007, were noninterest bearing and convertible into shares of the
Company’s common stock at a conversion price of $0.01 per share, convertible
upon shareholder approval to amend our Certificate of Incorporation to increase
the authorized common stock from 250,000,000 shares to 500,000,000
shares.  The convertible debt was also entitled to half a share of
stock the Company held in Novint Technologies, Inc. for every $1 of principal
debt held for a total of 530,000 shares.  In October 2007, upon
shareholder approval of the amendment to the Certificate of Incorporation, the
Company issued 106,000,000 shares of its common stock on the conversion of all
the notes.  The Company has determined the convertible debenture
contains a beneficial conversion feature and qualifies for treatment under
Emerging Issues Task Force No. 00-27 and 00-19. The estimated fair value of the
530,000 shares of common stock in Novint Technologies, Inc. of $625,725 has been
determined based on the closing stock price of such stock on the date of each
respective note.  The face amount of the convertible debenture of
$1,060,000 was proportionately allocated to the debenture and the shares of
common stock in Novint Technologies, Inc. in the amount of $667,000 and
$393,000, respectively. The value of the Novint stock was accounted for as a
debt discount and was amortized to expense over the term of the
note.  Upon conversion of the note, the Company had amortized $301,000
of this discount.  The remaining discounted value of the convertible
debentures’ proportionate allocated value of $968,000 was then further allocated
between the debenture and the beneficial conversion feature, and the entire
remaining discounted value of $968,000 was allocated to the beneficial
conversion feature. The combined total value of the Novint stock and beneficial
conversion feature of $1,361,000 has been accounted for as a debt discount and
has been fully expensed as finance charge expense within General and
Administrative Expense on the accompanying consolidated statement of operations
for the year ended December 31, 2007.





NOTE I –
CAPITAL TRANSACTIONS





Series B preferred shares are
convertible at a rate of 1 Series B preferred shareto 10 common
shares.





In
February 2006, the Company issued 505,000 shares of common stock for services
rendered valued at $.051 per share or $26,000.





In
February 2006, the Company issued 795,324 shares of common stock in satisfaction
of note payable of $43,000 and interest of $2,000.





In March
the Company issued 150,000 shares of common stock for services rendered valued
at $.058 per share or $9,000.





In May
2006, the Company issued 13,000,000 shares of common stock for services rendered
by its Board of Directors valued at $.06 per share or $780,000.





In July
2006, the Company issued 585,000 shares of common stock for consulting services
rendered at $.06 per share or $35,000.





In August
2006, the Company issued 1,184,220 shares of common stock for settlement of
accrued legal services previously rendered at $0.05 per share or
$59,000.





In
September 2006, the Company issued 400,000 shares of common stock for consulting
and legal services rendered at $.044 per share or $18,000.







F-26
 Table of Contents




MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND
2006


NOTE I –
CAPITAL TRANSACTIONS (Continued)





In March
2007, the Company granted an option for 10,000,000 shares of common stock with
an exercise price of $0.014 to the Company’s former CEO and chairman for
services previously provided.  The value of this option totaled
$109,982 which was valued using the Black-Scholes option pricing model based
upon the following assumptions: stock price of $0.014 at grant date; 5 year
term; volatility of 107%; and discount rate of 4.50%.





In May
2007, the Company issued 35,350,317 shares of common stock to various
individuals for services with values totaling $707,006 based upon the fair value
of the shares issued.





In May
2007, the Company issued 14,200,106 shares of common stock for settlement of
debts totaling $71,000.





In
October 2007, the Company issued 4,200,000 shares of common stock for services
to an individual with a value of $60,900 based upon the fair value of the shares
issued.





In
October 2007, the Company granted warrants for 3,200,000 shares of common stock
with an exercise price of $0.013 to various individuals for past
services.  The value of these warrants totaled $36,444 which were
valued using the Black-Scholes option pricing model based upon the following
assumptions: stock price of $0.013 at grant date; 5 year term; volatility of
135%; and discount rate of 4.50%.





In
October 2007, the Company issued 106,000,000 shares of common stock related to
the conversion of convertible debt previously issued during 2007.  The
convertible debt converted totaled $1,060,000 at which time the entire debt
discount of $1,361,000 had been expensed, see Note G for further
discussion.





In
November 2007, the Company issued 1,000,000 shares of common stock to an
individual for services with a value of $30,000 based upon the fair value of the
shares issued.





In
November 2007, the Company issued 1,000,000 shares of common stock to an
individual for services to be provided with a value of $30,000 based upon the
fair value of the shares issued.





In
November 2007, the Company granted an officer a warrant for 800,000 shares of
common stock with an exercise price of $0.013.  The value of this
option totaled $49,768 which was valued using the Black-Scholes option pricing
model based upon the following assumptions: stock price of $0.065 at grant date;
5 year term; volatility of 142%; and discount rate of 4.50%.









F-27
 Table of Contents


MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE I –
CAPITAL TRANSACTIONS (Continued)





A summary
of the Company’s stock option activity and related information is as
follows:





Number
      of Options
                        
                        
                        Exercise
      Price Per Share
                        
                        
                        Weighted
      Average Exercise Price
                        
                        
                        Number
      of Options ExercisableOutstanding
      as of December 31, 2005
                        
                        
                        28,245,000
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        27,245,000Granted/Vested
                        
                        
                        0
                        
                        
                        
                        0.05
                        
                        
                        
                        0.05
                        
                        
                        
                        1,000,000Canceled
                        
                        
                        0
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        0Outstanding
      as of December 31, 2006
                        
                        
                        28,245,000
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        28,245,000Granted
                        
                        
                        10,000,000
                        
                        
                        
                        0.014
                        
                        
                        
                        0.014
                        
                        
                        
                        10,000,000Canceled
                        
                        
                        0
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        0Outstanding
      as of December 31, 2007
                        
                        
                        38,245,000
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        38,245,000





All
options issued through December 31, 2006 vested within ninety days from the date
of grant and expire at various dates during 2008 through 2013.





All
options issued during 2007 vested immediately and have a life of ten
years.





Exercise
prices and weighted-average contractual lives of stock options outstanding as of
December 31, 2007 are as follows:





Options
      Outstanding
                    
                    
                    Options
      ExercisableExercise
      Price
                    
                    
                    Number
      Outstanding
                    
                    
                    Weighted
      Average Remaining Contractual Life
                    
                    
                    Weighted
      Average Exercise Price
                    
                    
                    Number
      Exercisable
                    
                    
                    Weighted
      Average Exercise Price$
                    0.014
                    
                    
                    
                    10,000,000
                    
                    
                    
                    9.18
                    
                    
                    
                    0.013
                    
                    
                    
                    10,000,000
                    
                    
                    
                    0.0140.02
                    
                    
                    
                    1,800,000
                    
                    
                    
                    5.58
                    
                    
                    
                    0.020
                    
                    
                    
                    1,800,000
                    
                    
                    
                    0.020.05
                    
                    
                    
                    18,625,000
                    
                    
                    
                    2.65
                    
                    
                    
                    0.050
                    
                    
                    
                    18,625,000
                    
                    
                    
                    0.050.055
                    
                    
                    
                    1,000,000
                    
                    
                    
                    7.58
                    
                    
                    
                    0.055
                    
                    
                    
                    1,000,000
                    
                    
                    
                    0.0550.20
                    
                    
                    
                    5,760,000
                    
                    
                    
                    1.71
                    
                    
                    
                    0.200
                    
                    
                    
                    5,760,000
                    
                    
                    
                    0.200.39
                    
                    
                    
                    250,000
                    
                    
                    
                    4.98
                    
                    
                    
                    0.390
                    
                    
                    
                    250,000
                    
                    
                    
                    0.391.25
                    
                    
                    
                    200,000
                    
                    
                    
                    4.98
                    
                    
                    
                    1.250
                    
                    
                    
                    200,000
                    
                    
                    
                    1.252.25
                    
                    
                    
                    110,000
                    
                    
                    
                    3.46
                    
                    
                    
                    2.250
                    
                    
                    
                    110,000
                    
                    
                    
                    2.252.40
                    
                    
                    
                    500,000
                    
                    
                    
                    3.33
                    
                    
                    
                    2.400
                    
                    
                    
                    500,000
                    
                    
                    
                    2.40








F-28
 Table of Contents




MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE I –
CAPITAL TRANSACTIONS (Continued)





[3]  Warrants:





The
Company issued the following warrants at the corresponding weighted average
exercise price as of December 31, 2007.





Warrants
                                  
                                  
                                  Weighted
      average Exercise PriceOutstanding
      as of December 31, 2005
                                  
                                  
                                  19,250,000
                                  
                                  
                                  $
                                  0.12Issued
                                  
                                  
                                  0Outstanding
      as of December 31, 2006
                                  
                                  
                                  19,250,000Issued
                                  
                                  
                                  4,000,000
                                  
                                  
                                  
                                  0.01Cancelled
                                  
                                  
                                  (10,000,000
                                  )
                                  
                                  
                                  0.05Outstanding
      as of December 31, 2007
                                  
                                  
                                  13,250,000
                                  
                                  
                                  
                                  0.15











Date
                          
                          Number
      of Warrants
                          
                          
                          Exercise
      Price
                          
                          Contractual
      Life
                          
                          Number
      of Shares ExercisableJanuary
      8, 1998
                          
                          
                          750,000
                          
                          
                          $
                          .10
                          
                          10
      years
                          
                          
                          750,000July
      28, 1998
                          
                          
                          2,500,000
                          
                          
                          
                          .05
                          
                          10
      years
                          
                          
                          2,500,000February
      10, 1998
                          
                          
                          2,000,000
                          
                          
                          
                          .75
                          
                          10
      years
                          
                          
                          2,000,000November
      9, 2004
                          
                          
                          4,000,000
                          
                          
                          
                          .05
                          
                          4
      years
                          
                          
                          4,000,000October
      11, 2007
                          
                          
                          3,200,000
                          
                          
                          
                          .01
                          
                          10
      years
                          
                          
                          3,200,000November
      9, 2007
                          
                          
                          800,000
                          
                          
                          
                          .01
                          
                          10
      years
                          
                          
                          800,00013,250,000
                          
                          
                          
                          
                          
                          
                          
                          
                          13,250,000








F-29
 Table of Contents




MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE J
–INCOME TAXES





There is
no provision for federal, state or local income taxes for the periods ended
December 31, 2007 and 2006 since the Company has incurred net operating
losses.





The
Company’s deferred tax asset as of December 31, 2007 represents benefits from
equity related compensation charges and net operating loss carryforwards of
approximately $4,441,000 and $8,287,000, respectively, which is reduced by a
valuation allowance of approximately $12,728,000 since the future realization of
such tax benefit is not presently determinable.  During 2007 the
Company recorded an increase to the valuation allowance of approximately
$708,000.





As of
December 31, 2007, the Company has a net operating loss carryforward of
approximately $31,834,000 expiring in 2008 through 2027 for federal income tax
purposes and 2017 for state income tax purposes.  As a result of
ownership changes, Internal Revenue Code Section 382 limits the amount of such
net operation loss carryforward available to offset future taxable income to
approximately $21,023,000 in the aggregate.





The
difference between the statutory federal income tax (rate) benefit applied to
the Company’s net loss and the Company’s effective income tax rate for the years
ended December 31, 2007 and 2006 is summarized as follows:





For
      the Year Ended December 31,2007
                    
                    
                    2006Statutory
      federal income tax rate
                    
                    
                    (35
                    )
      %
                    
                    
                    (35
                    )
      %Increase
      in valuation allowance
                    
                    
                    35
                    %
                    
                    
                    35
                    %0.00
                    %
                    
                    
                    0.00
                    %








NOTE
K  – RELATED PARTY TANSACTIONS





The
accounting firm of one of the Company’s directors received approximately $35,000
and $20,000 of compensation for accounting services rendered to the Company
during the years ended December 31, 2007 and 2006, respectively.





The
accounting firm of one of the Company’s former directors received approximately
$9,000 and $30,000 of compensation for accounting services rendered to the
Company during the year ended December 31, 2007 and
2006.





F-30
 Table of Contents





MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE L –
SUBSEQUENT EVENTS





In
January 2008, the Company issued 200,000 shares of common stock for past
services to consultantsfor a
total value of $12,000 or $0.06 per share.





In
January 2008, the Company issued 925,926 shares of common stock, $50,000 in
cash, and 53,191 shares of Novint Technologies, Inc. common stock in
satisfaction of past legal fees totaling $100,000.





In January 2008, the Company cancelled
previously granted options for 16,000,000 shares of common stock with an
exercise price of $0.05 per share and replaced them with new options for
18,000,000 shares of common stock with an exercise price of $0.013 per
share.  The value of these options totaled $921,246 which were valued
using the Black-Scholes option pricing model using the following assumptions:
discount rate of 4.5%; volatility rate of 144%; term of 5 years; and stock price
of $0.06.





In April 2008, the Company issued 700,000 shares of
common stock to various consultants for servicesfor a total value of $35,000 or $0.05
per
share.




In July
2008, the Company issued 300,000 shares of common stock to a consultant for
services for a total value of $21,000 or $0.07 per share.




In August 2008, the Company issued
250,000 shares of common stock for legal services for a total value of $15,000
or $0.06 per share.




In September 2008, the Company issued
750,000 shares of common stock for legal services for a total value of $30,000
or $0.04 per
share.




In October 2008, the Company issued
400,000 shares of common stock to a consultant for services for a total value of
$14,000 or $0.035 per
share.




In June 2008, the Company entered into
stock purchase agreement with Metallicum, Inc. to acquire all of the
outstanding capital in exchange for 15,000,000 shares of the Company’s common
stock.  An additional 15,000,000 shares of the Company’s common stock
will be payable to Metallicum in the event of meeting certain milestones.The stock purchase
agreement with Metallicum, Inc. will be accounted for as a purchase under SFAS
No. 141 Business Combinations.  The 15,000,000 shares of the Company’s
common stock valued at $562,500 will be allocated between the purchase price and
goodwill.  The additional 15,000,000 shares payable to Metallicum will
be accounted for as a performance based incentive which will be revalued at the
end of each reporting
period.




During
April 2008 through January 2009, the Company sold approximately $1,100,000
from a private placement offering.  The private placement
originally provided for the offer and sale of up to 50,000,000 unregistered
shares of the Company’s common stock at a price of $0.02 per share, for an
aggregate offering price of $1,000,000, and allowed the Company to
accept or reject any oversubscription.




In
October 2008, the Company issued 400,000 shares of the Company’s common stock to
a consultant for serving on the Company’s Science and Technology Committee for a
total value of $12,000.
  The
Company incurred offering costs totaling approximately $79,000 through December
31, 2008, of which $63,000 was paid in cash and $16,000 was paid with 750,000
shares of the Company’s common stock.
  In
December 2008, the Company entered into an agreement with a consultant for
$22,500 for research and development.
  In
January 2009, the Company entered into a patent license agreement with Los
Alamos National Security, LLC for the exclusive licensing use of certain
technology relating to the manufacture and application of nanostructuing metals
and alloys. Pursuant to such agreement, the Company provided a non-refundable
fee and 2,000,000 shares of the Company’s common stock. Additionally, the
Company is required to pay an annual license fee starting in February 2010
and royalties on future net sales.


F-31
 Table of Contents


MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006


NOTE L –
SUBSEQUENT EVENTS (Continued)





The unaudited balance sheets for
Metallicum, Inc. for December 31, 2007 and December 31, 2006 are as
follows:





ASSETS
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  December
      31, 2007
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  December
      31, 2006Current
      asset:Cash
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  $
                                                                                                                                                                                                                  1,282
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  $
                                                                                                                                                                                                                  1,318Property and
      equipment, net of accumulated depreciation
      of $4,320 and
      $5,400
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  600
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  1,680Total
      assets
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  $
                                                                                                                                                                                                                  1,882
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  $
                                                                                                                                                                                                                  2,998LIABILITIESAccounts
      payable
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  $
                                                                                                                                                                                                                  2,861
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  $
                                                                                                                                                                                                                  1,763Notes
      payable to officers
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  822
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  822Total
      liabilities
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  3,683
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  2,585STOCKHOLDERS'
      EQUITYCommon
      stock: no par value; authorized 2,000
      shares,2,000
      shares issued and outstanding
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  -Additional
      paid-in capital
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  159,633
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  159,633Deficit
      accumulated during the development
      stage
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  (161,434
                                                                                                                                                                                                                  )
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  (159,220
                                                                                                                                                                                                                  )Total
      stockholders' equity / (capital
      deficit)
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  (1,801
                                                                                                                                                                                                                  )
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  413Total
      liabilities and stockholders'
      equity
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  $
                                                                                                                                                                                                                  1,882
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
                                                                                                                                                                                                                  $
                                                                                                                                                                                                                  2,998








F-32
 Table of Contents




MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND
2006


NOTE L –
SUBSEQUENT EVENTS (Continued)





The unaudited statements of operations
for Metallicum, Inc. for the years ended December 31, 2007 and December 31, 2006
are as follows:





YEAR ENDED DECEMBER
      31,2007
                                                                                                                          
                                                                                                                          
                                                                                                                          2006Revenue
                                                                                                                          
                                                                                                                          $
                                                                                                                          4,433
                                                                                                                          
                                                                                                                          
                                                                                                                          $
                                                                                                                          5,406Operating costs and
      expenses:General and
      administrative
                                                                                                                          
                                                                                                                          
                                                                                                                          1,676
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          3,849Research and development
      costs
                                                                                                                          
                                                                                                                          
                                                                                                                          2,625
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          4,685Depreciation
                                                                                                                          
                                                                                                                          
                                                                                                                          1,080
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          1,080Total operating costs and
      expenses
                                                                                                                          
                                                                                                                          
                                                                                                                          5,381
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          9,614Loss from operations before other
      expenses
                                                                                                                          
                                                                                                                          
                                                                                                                          (948
                                                                                                                          )
                                                                                                                          
                                                                                                                          
                                                                                                                          (4,208
                                                                                                                          )Other
      expenses:Interest and other
      expenses
                                                                                                                          
                                                                                                                          
                                                                                                                          (1,266
                                                                                                                          )
                                                                                                                          
                                                                                                                          
                                                                                                                          (1,480
                                                                                                                          )NET
      LOSS
                                                                                                                          
                                                                                                                          $
                                                                                                                          (2,214
                                                                                                                          )
                                                                                                                          
                                                                                                                          $
                                                                                                                          (5,688
                                                                                                                          )BASIC AND DILUTED LOSS PER COMMON
      SHARE:Weighted average number of common
      shares
                                                                                                                          
                                                                                                                          
                                                                                                                          2,000
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          2,000Net loss per
      share
                                                                                                                          
                                                                                                                          $
                                                                                                                          (1.11
                                                                                                                          )
                                                                                                                          
                                                                                                                          $
                                                                                                                          (2.84
                                                                                                                          )











F-33
 Table of Contents





MANHATTAN
SCIENTIFICS, INC. AND SUBSIDIARIES
 (A Development
Stage Enterprise)
 NOTESTO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006
 The unaudited statements of cash flows
for Metallicum, Inc. for the years ended December 31, 2007 and December 31, 2006
are as follows:




CASH
      FLOWS FROM OPERATING
    ACTIVITIES:Net
      loss
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  (2,214
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  (5,688
                                                                                                                                                  )Adjustments
      to reconcile
      net loss to cash used in operating
      activities:Changes
      in operating assets and
      liabilities:Property
      and
      equipment
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  1,080
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  1,080Accounts
      Receivable
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  3,330Accounts
      payable
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  1,754Notes payable
      to
      officers
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  1,098
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  (1,000
                                                                                                                                                  )Net
      cash used in operating
    activities
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  (36
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  (524
                                                                                                                                                  )NET
      DECREASEINCASH
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  (36
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  (524
                                                                                                                                                  )Cash,
      beginning of year
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  1,318
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  1,842CASH,
      END OF YEAR
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  1,282
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  1,318SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW
      INFORMATION:Interest
      paid
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  204
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  233






F-34
 Table of Contents





ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS





Not
Applicable.





ITEM 9A.CONTROLSAND
PROCEDURES




(a)
Evaluation of Disclosure Controls and Procedures





Our
principal executive and principal financial officers have evaluated the
effectiveness of our disclosure controls and procedures, as defined in Rules 13a
– 15(e) and 15d – 15(e) under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), as of the end of the period covered by this annual report.
Our evaluation, which was not done using the COSO framework, immediately
revealed that there were material weaknesses primarily as a result of our lack
of personnel and management did not prepare a written report. With only one
full-time employee in general management, we realized that material weaknesses
were unavoidable and hired outside professionals to assist us where possible.
Without third-party specialists, our current disclosure controls and procedures
are not effective to provide reasonable assurance that material information
required to be included in our periodic SEC reports is recorded, processed,
summarized and reported within the time periods specified in the SEC rules and
forms, and accumulated and communicated to our senior management, including our
CEO, to allow timely decisions regarding required disclosures.





Internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
refers to the process designed by, or under the supervision of, our principal
executive officer and principal financial officer, and effected by our board of
directors, management and other personnel, 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.


Internal control over financial reporting cannot provide
absolute assurance of achieving financial reporting objectives because of its
inherent limitations. Internal control over financial reporting is a process
that involves human diligence and compliance and is subject to lapses in
judgment and breakdowns resulting from human failures. Internal control over
financial reporting also can be circumvented by collusion or improper management
override. Because of such limitations, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, it is possible to design into the
process safeguards to reduce, though not eliminate, this risk.




Management
is responsible for establishing and maintaining adequate internal controls over
financial reporting for the company. In 2007, management outsourced its
accounting function including the financial reporting aspects to a CPA firm We
did not, however, file any annual or periodic reports with the Securities and
Exchange Commission in 2007. Concerning these outsourced services, management
did not receive a  SAS 70 (type 1 nor type 2) audit report covering the
internal controls over the services provided by the CPA firm.  Absent this
report, and based upon management's knowledge of the company's operations and
accounting functions, management's assessment concerning the effectiveness of
the Company's internal controls and disclosure controls and procedures is that
those are not effective to provide reasonable assurance that material
information required to be included in our periodic SEC reports is recorded,
processed, summarized, and reported within the time periods specified in the SEC
reules and forms, and accumulated and communicated to our senior management,
including our CEO, to allow timely decisions regarding required
disclosures.




The company's known material
weaknesses include:




Resources: As of December 31,
2007, 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 tranactions, 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.




Given the existence of these material weaknesses, management believes
that other, non-identified material weaknesses may have existed and continue to
exist. These material weaknesses will be remedied as described
below.




Management
is committed to improving its internal controls and will (1) perform an
assessment of its internal control using the COSO framework or other framework
as deemed appropriate (2) continue to use third party specialists to address
shortfalls in staffing and to assist us with accounting and finance
responsibilities, (3) increase the frequency of independent reconciliations of
significant accounts which will mitigate the lack of segregation of duties until
there are sufficient personnel and (4) prepare and implement sufficient written
policies and checklists for financial reporting and closing processes and (5)
may consider appointing an audit committee comprised of independent board
members in the future.


This annual report does not include an
attestation report by the Company's registered public accounting firm regarding
the Company's internal controls over financial reporting.




(b)
Changes in Internal Controls




There
were no significant changes in our internal controls or, to our knowledge, in
other factors that could significantly affect our internal controls subsequent
to the evaluation date.





ITEM 9B.OTHERINFORMATION





None.






18
 Table of Contents




PART III




ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT










NAME
            
            AGE
            
            POSITIONEmmanuel
      Tsoupanarias*
            
            55
            
            Chairman
      of the Board, President and Chief Executive OfficerDavid
      A. Teich**
            
            51
            
            Treasurer
      and DirectorLeonard
      Friedman
            
            70
            
            Secretary
      and DirectorFrank
      Georgiou
            
            57
            
            DirectorChris
      Theoharis
            
            55
            
            DirectorMarvin
      Maslow
            
            70
            
            Chairman
      Emeritus




*Emmanuel
Tsoupanarias was appointed Chairman of tbe Board and Chief Executive Officer of
Manhattan Scientifics, Inc. on November 1, 2007 replacing Marvin
Maslow.




**David A. Teich resigned as
Treasurer and Director on December 31, 2008. Chris Theoharis was appointed as
Treasurer and Principal Financial Officer on January 19, 2009.




There are
no family relationships among any of our directors or officers.




As of
December 31, 2007, the size of our Board of Directors is currently fixed at five
members. Members of the Board serve until the next annual meeting of
stockholders and until their successors are elected and qualified. Officers are
appointed by and serve at the discretion of the Board.




None of
our directors or executive officers has, during the past five
years:




·
            been
      convicted in a criminal proceeding and none of our directors or executive
      officers is subject to a pending criminal
  proceeding,




·
            been
      subject to any order, judgment, or decree not subsequently reversed,
      suspended or vacated of any court of competent jurisdiction, permanently
      or temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities, futures, commodities or
      banking activities, or




·
            been
      found by a court of competent jurisdiction (in a civil action), the
      Securities and Exchange Commission or the Commodity Futures Trading
      Commission to have violated a federal or state securities or commodities
      law, and the judgment has not been reversed, suspended, or
      vacated.




EMMANUEL
TSOUPANARIAShas served as our chief executive officer and chairman of
the Board since November 1, 2007.  Mr. Tsoupanarias is the president,
founder and editor of FuelCellsWorks.com, a weekly trade publication that has
become the voice of the fuel cell industry. He is internationally recognized as
an expert in fuel cell development.  Prior to his tenure at
FuelCellsWorks.com. Mr. Tsoupanarias was an executive in the power generation
manufacturing sector. From 1992 to 2007 Mr. Tsoupanarias has served as a Project
Manager in the power generation sector and from 2000 has served as a consultant
in the fuel cell
industry.




DAVID
A. TEICH has served as a director since May 1999 and Treasurer since
December 2000. Mr. Teich is the managing partner of Teich, Beim & Moro, P.C.
Since January 1999, Mr. Teich's accounting firm has acted as our internal
controller. Mr. Teich graduated with a B.B.A. degree from Pace University in
1979, became a certified public accountant in 1982, and has been employed by his
firm in various capacities, including accountant, manager, partner and managing
partner since
1977.




LEONARD
FRIEDMANhas served as a director since October 2007.  Mr.
Friedman is a honors graduate of Hunter College with a B.S. degree in economics
and a minor in accounting.  He is also a graduate of Brooklyn Law
School.  Mr. Friedman was a founder and partner in the law firm of
Anes, Friedman, Leventhal & Rubin from which he retired in
2000.  Until 2002, he was CEO of Fiasco of New York, Inc., a
restaurant and real estate corporation that owned and operated eight restaurants
in New York and
California.




19
 Table of Contents




FRANK
GEORGIOUhas served as a director since October 2007.  Since
1993, Mr. Georgiou has been the President of Three Diamond Diner Corp., a
private company that owns and operates the Mount Kisco Coach
Diner.  He is the former President of the Upper New York Pangregorian,
a consortium of restaurant
owners.




CHRIS
THEOHARIShas served as a director since October 2007.  Since
2003, Mr. Theoharis has worked as a consultant, both advising companies on small
business acquisitions and business practices in the retail industry. He
currently works as a consultant for Maximum Quality Foods Inc., a northeast
regional food distribution business which serves the independent retail industry
as well as the institutional portion of the food industry. Mr. Theoharis has
also served as a consultant to Vested Business Brokers. Prior to his work in the
consulting industry, he worked as a stockbroker and financial advisor for Morgan
Stanley from 1996 to 2003, leaving Morgan Stanley as an Associate Vice President
status. Mr. Theoharis has also worked for a public accounting firm and owned his
own food distribution business. He graduated from Adelphi University in 1970
with a Bachelors of Business Administration in Accounting
(B.B.A.).




MARVIN
MASLOW served as the CEO of Manhattan Scientifics from January 1998 until
November 2007. From June 1990 through September 1996, Mr. Maslow
served as chief executive officer of Projectavision, Inc., a company he
co-founded to develop and market video projection technology. Since
November 1996, Mr. Maslow has served as chief executive officer and
chairman of the board of Tamarack Storage Devices, Inc. From 1999 through 2002,
Mr. Maslow served as a director of NMXS.com, Inc. For more than
20 years, Mr. Maslow has been President of Normandie Capital Corp., a
private investment and consulting company. Mr. Maslow is credited with the
starting up and financing of more than 20 enterprises during his career.
Mr. Maslow received an A.A.S. degree from the Rochester Institute of
Technology in 1957 and an honorable discharge from the U.S. Army Signal Corps in
1963. Mr. Maslow is the special advisor to the Board of Directors of
Manhattan Scientifics, Inc., a publicly traded company which is also one of our
shareholders.  Mr. Maslow resigned in October 2007.  He now
serves the company as a non-executive
chairman.




SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE




Section
16(a) of the Securities Exchange Act of 1934 requires our executive officers and
directors, and persons who own more than ten percent of our common stock to file
reports of ownership and change in ownership with the Securities and Exchange
Commission and the exchange on which the common stock is listed for trading.
Executive officers, directors and more than ten percent stockholders are
required by regulations promulgated under the Exchange Act to furnish us with
copies of all Section 16(a) reports filed. Based solely on our review of copies
of the Section 16(a) reports filed for the fiscal year ended December 31, 2007,
we believe that our executive officers, directors and ten percent stockholders
complied with all reporting requirements applicable to them.




CODE
OF ETHICS




On March 31, 2005,
we adopted a code of ethics that applies to our principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions.




ITEM
11. EXECUTIVE COMPENSATION




The following
tables set forth all compensation awarded by us to our executive officers for
the fiscal years ended December 31, 2005, 2006 and 2007.We do
not have employment agreements with any of our officers.




Name
                            Year
                            Salary
      ($)
                            Bonus
      ($)
                            Stock
      Awards ($)
                            Option
      Awards($)
                            Non-Equity
      Incentive Plan Compensation ($)
                            Changes
      in Pension Value and Nonqualified Deferred Compensation Earnings($)
                            All
      Other Compensation ($)
                            Total
                              ($)Emmanuel
      Tsoupanarias CEO and Chairman2007
                            100,000
                            -
                            
                            (1) 49,768
                            
                            
                            (2) 284,002
                            433,770Marvin
      Maslow
                              Chairman
      Emeritus
                            2005
                            (3)
      300,000
                            -
                            -
                            -
                            -
                            -
                            71,500
                            371,5002006
                            (3)
      225,000
                            -
                            (4)
      600,000
                            -
                            -
                            -
                            48,000
                            873,0002007
                            (3)
      183,340
                            
                            
                            (5) 119,093
                            
                            
                            
                            302,433David
      Teich
                              Treasurer
                            2005
                            -
                            -
                            -
                            (6)
      200,000
                            -
                            -
                            -
                            200,0002006
                            -
                            -
                            (4)
      90,000
                            -
                            -
                            -
                            -
                            90,0002007
                            -
                            
                            (7) 125,000
                            
                            
                            
                            
                            125,000




(1) In
November 2207, a warrant for 800,000 shares of common stock with an exercise
price of $0.013 was granted. The value of this option totaled $49,768 which was
valued using the Black-Scholes option pricing model




(2) In
May 2007, 14,200,106 shares of common stock were issued for services rendered
before appointment as a director and officer.




(3) All
salary earned for these years by Marvin Maslow was deferred and accrued. The
deferred salary for the years ended December 31, 2005 and 2006 was settled and
written off.




(4) In May 2006, stock awards of 
10,000,000 shares was made to Marvin Maslow and 1,500,000 shares was made to
David A. Teich.




(5) In March 2007, an option for
10,000,000 shares of common stock with an exercise price of  $0.014 was
granted for services previously provided. The value of this option totaled
$109,982 which was valued using the Black-Scholes option pricing model. In
October 2007, warrants for 800,000 shares of common stock with an exercise price
fo $0.013 were issued. The value of these warrants totaled $9,111 which were
valued using the Black-Scholes option pricing model.




(6) Includes stock options to purchase
200,000 shares of common stock at an exercise price of $0.055 for accounting
services.




(7) In May 2007, 6,250,000 shares of
common stock were issued for services rendered.




20
 Table of Contents








Name
                                                Year
                                                Fees
      earned or
                                                  paid
      in cash ($)
                                                Stock
      Awards ($)
                                                Option
      Awards($)
                                                Non-Equity
                                                  Incentive
      Plan Compensation ($)
                                                Nonqualified
      Deffered Compensation Earnings ($)
                                                All
      Other Compensation ($)
                                                Total
                                                  ($)Leonard
      Friedman
                                                  Frank Georgiou
                                                  Chris Theoharis
                                                2007
                                                -
                                                -
                                                (1) 9,111
                                                
                                                
                                                (2) 60,900
                                                70,0112007
                                                -
                                                -
                                                (1) 9,111
                                                
                                                
                                                (3) 184,002
                                                193,1132007
                                                -
                                                -
                                                (1) 9,111
                                                
                                                
                                                (3) 84,002
                                                93,113
  (1) In October 2207, each director was granted a warrant for 800,000
shares of common stock with an exercise price of $0.013. The value to each
director totaled $9,111 which was valued using the Balck-Scholes option pricing
model.
  (2) In October 2007, Leonard Friedman was issued 4,200,000 shares of
common stock for services rendered.
  (3) In May 2007, Frank Georgiou was issued 9,200,106 shares of common
stock and Chris Theoharis was granted 4,200,105 shares of common stock for
services rendered.




Our
officers and directors do not presently receive any cash compensation from us
for their service as officers and/or directors, except for equity in the form of
stock options in lieu of cash, at the discretion of our Board of Directors. Our
former officers and/or directors who were uncompensated full time employees,
Messrs. Maslow and Harrod, have previously received a $2,000 to $4,000 per month
non-accountable expense allowance from time to time.




BOARD
OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS




None.





OUTSTANDING
EQUITY AWARDS





Option
      AwardsName
                                Grant
      Date
                                
                                Number
      of Securities Underlying Unexercised Options (#)
    Exercisable
                                
                                
                                Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Options (#)
                                
                                
                                Number
      of Securities Underlying Unexercised Options (#) Unexercisable
      (1)
                                
                                
                                Option
      Exercise Price
                                  ($)
                                
                                Option
      Expiration DateMarvin
      Maslow, Chairman Emeritus
                                5/6/1999
                                  9/15/1999
                                  3/7/2007
                                
                                
                                12,500,000
                                  2,500,000
                                  10,000,000
                                
                                
                                
                                -
                                  -
                                  -
                                
                                
                                
                                -
                                  -
                                  -
                                
                                
                                $
                                  $
                                  $
                                0.0500
                                  0.0500
                                  0.0135
                                
                                5/6/2009
                                  9/15/2009
                                  3/7/2017David
      Teich, Treasurer
                                5/6/1999
                                  4/30/2003
                                  5/20/2005
                                
                                
                                425,000
                                  1,000,000
                                  200,000
                                
                                
                                
                                -
                                  -
                                  -
                                
                                
                                
                                -
                                  -
                                  -
                                
                                
                                $
                                  $
                                  $
                                0.0500
                                  0.0200
                                  0.0550
                                
                                5/6/2009
                                  4/30/2013
                                  5/20/2015








Warrant
      AwardsName
                                                  Grant
      Date
                                                  
                                                  Number
      of Securities Underlying Unexercised Warrants (#)
    Exercisable
                                                  
                                                  
                                                  Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Warrants (#)
                                                  
                                                  
                                                  Number
      of Securities Underlying Unexercised Warrants (#) Unexercisable
      (1)
                                                  
                                                  
                                                  Warrant
      Exercise Price
                                                    ($)
                                                  
                                                  Warrant
      Expiration DateEmmanuel
      Tsoupanarias, Chairman and CEO
                                                  11/9/2007
                                                  
                                                  
                                                  800,000
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  $
                                                  0.013
                                                  
                                                  11/9/2017Marvin
      Maslow, Chairman Emeritus
                                                  1/8/1998
                                                    10/11/2007
                                                  
                                                  
                                                  750,000
                                                    800,000
                                                  
                                                  
                                                  
                                                  -
                                                    -
                                                  
                                                  
                                                  
                                                  -
                                                    -
                                                  
                                                  
                                                  $
                                                  0.050
                                                    0.013
                                                  
                                                  1/8/2008
                                                    10/11/2017Leonard
      Friedman, Director
                                                  10/11/2007
                                                  
                                                  
                                                  800,000
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  $
                                                  0.013
                                                  
                                                  10/11/2017Frank
      Georgiou, Director
                                                  10/11/2007
                                                  
                                                  
                                                  800,000
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  $
                                                  0.013
                                                  
                                                  10/11/2017Chris
      Theoharis, Director
                                                  10/11/2007
                                                  
                                                  
                                                  800,000
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  $
                                                  0.013
                                                  
                                                  10/11/2017






21
 Table of Contents


ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS




The following
table sets forth, as of December 31, 2007, the names, addresses and number of
shares of common stock beneficially owned by (i) all persons known to us to be
the beneficial owners of more than 5% of the outstanding shares of common stock,
(ii) each of our directors, (iii) each of our executive officers, and (iv) all
of our directors and executive officers as a group. Except as indicated, each
beneficial owner listed exercises sole voting power and sole dispositive power
over the shares beneficially owned. Share ownership in each case includes shares
issuable upon exercise of options exercisable within 60 days of the date of this
Annual Report that would be required to be reported pursuant to Rule 13d-3 of
the Securities Exchange Act of 1934 for purposes of computing the percentage of
common stock owned by such person but not for purposes of computing the
percentage owned by any other person.Unless
otherwise indicated, the address of the below-listed persons is the our address,
405 Lexington Avenue, 32nd Floor,
New York, New York 10174.





Name
      and Address of Beneficial Owner
              
              Number
      of Shares Beneficially Owned
              
              
              Percent
      of Class(1)Marvin
      Maslow (2)
              
              
              59,017,606
              
              
              
              17.1
              %Emmanuel
      Tsoupanarias (3)
              
              
              15,250,106
              
              
              
              4.8
              %David
      A. Teich (4)
                Teich,
      Beim & Moro, P.C.
                Two
      Executive Boulevard, Suite 103
                Suffern,
      New York 10901
              
              
              11,625,000
              
              
              
              3.6
              %Leonard
      C. Friedman (5)
              
              
              7,500,000
              
              
              
              2.3
              %Frank
      Georgiou (6)
              
              
              25,000,106
              
              
              
              7.8
              %Chris
      Theoharis (7)
              
              
              5,000,105
              
              
              
              1.6
              %Directors
      and Executive Officers as a group (6 persons)
              
              
              123,392,923
              
              
              
              35.3
              %





(1)
            This
      tabular information is intended to conform with Rule 13d-3 promulgated
      under the Securities Exchange Act of 1934 relating to the determination of
      beneficial ownership of securities.  The percent of class is
      based on 318,545,000 shares and, for each beneficial owner , gives effect
      to the exercise of warrants or options exercisable within 60 days of the
      date of this table owned, in each case, by the person or group whose
      percentage ownership is set forth
herein.





(2)
            Includes
      28,947,606 shares of Common Stock, options to purchase 15,000,000 shares
      of Common Stock at a price of $0.05 per share, options to purchase
      10,000,000 shares of Common Stock at a price of $0.0135 per share, a
      warrant to purchase 750,000 shares of Common Stock at a price of $0.10 per
      share, purchase 800,000 shares at a price of $0.013 per share, a warrant
      to 2,400,000 shares of Common Stock owned by his son and 1,120,000 shares
      of Common Stock owned by Mr. Maslow's wife and
  son.





(3)
            Includes
      14,200, 106 owned by Saraklis Inc, a corporation controlled by Mr.
      Tsoupanarias and a warrant to purchase 800,000 shares at a price of $0.013
      per share.





(4)
            Includes
      10,000,000 shares of Common Stock and options to purchase 1,000,000 shares
      of Common Stock at a price of $0.02 per share, 425,000 shares of Common
      Stock at a price of $0.05 per share and 200,000 shares of Common Stock at
      a price of $0.055 per share.





(5)
            Includes
      a warrant to purchase 800,000 shares at a price of $0.013 per
      share.





(6)
            Includes
      2,500,000 shares of Common Stock owned by his son and a warrant to
      purchase 800,000 shares at a price of $0.013 per
  share.





(7)
            Includes
      a warrant to purchase 800,000 shares at a price of $0.013 per
      share.








22
 Table of Contents




ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE




As of
December 31, 2007, we have loans payable of $450,000 and $545,000 payable to our
former Chief Operating Officer and former Chief Executive
Officer.  The loans bore interest at 5.5% per annum and were initially
due December 31, 2002 and have been mutually extended and
settled.  Under the terms of the settlement, dated December 12, 2007,
the loans bear interest at 5% per annum and are now fully due on
demand.  We have recorded interest expense for notes payable to
officers of approximately $61,000 and $61,000 for the years ended December 31,
2007 and 2006, respectively.  In May 2007, we issued 14,200,106
shares of common stock to its former Chief Executive Officer for settlement of
debt totaling $71,000.  As part of the settlement in December 2007,
the former Chief Operating Officer and former Chief Executive Officer
collectively forgave $1,416,500 of their outstanding accrued salaries
($1,387,500) and note payable ($29,000) balances.  The amount forgiven
has been accounted for as contributed capital.  Additionally, we
repaid $5,000 of the former Chief Executive Officer’s note payable
balance.  The remaining unpaid note payable balances totaling $995,000
at December 31, 2007 are due on demand, unsecured and accrue interest at five
percent (5%) per annum.




Teich, Beim &
Moro, P.C., an accounting firm in which Mr. Teich, our treasurer and a director,
is a principal, received approximately $35,000 and $20,000 of compensation for
accounting services rendered to us during the years ended December 31, 2007 and
2006, respectively.




Weisner
LLP, an accounting, professional services firm in which Mr. Anderson, our former
director, is a partner, received approximately $9,000 and $30,000 of
compensation for accounting services rendered to us during the year ended
December 31, 2007 and 2006.





ITEM 14.PRINCIPALACCOUNTANT FEES
AND SERVICES





INDEPENDENT
AUDITOR FEES





The
following is a summary of the fees billed to us by AJ Robbins PC for the fiscal
year ended December 31, 2007:




Fee
      Category
                      
                      Fiscal
      2007
                      
                      
                      Fiscal
      2006Audit
      fees
                      
                      $
                      89,750
                      
                      
                      $
                      53,000Tax
      fees
                      
                      
                      0
                      
                      
                      
                      0Other
      fees
                      
                      
                      0
                      
                      
                      
                      0Total
      fees
                      
                      $
                      89,750
                      
                      
                      $
                      53,000





Audit
Fees. Consists of aggregate fees billed for professional services rendered for
the audit of our consolidated financial statements and review of the interim
consolidated financial statements included in quarterly reports and services
that are normally provided by our auditors in connection with statutory and
regulatory filings or engagements.





Tax Fees.
Consists of aggregate fees billed for professional services for tax compliance,
tax advice and tax planning. These services include assistance regarding federal
and state tax compliance.





Other
Fees. Consists of fees for products and services other than the services
reported above. There were no management consulting services provided in fiscal
2007 or 2006.





We do not
currently have an Audit Committee. Our full Board of Directors considers whether
the provision of these services is compatible with maintaining the auditor's
independence, and has determined such services for fiscal 2005 and 2006 were
compatible.





BOARD OF
DIRECTORS POLICY ON PRE-APPROVAL OF SERVICES OF INDEPENDENT
AUDITORS





The Board
of Directors’ policy is to pre-approve all audit and permissible non-audit
services provided by the independent auditors on a case-by-case basis. These
services may include audit services, audit-related services, tax services and
other services.




23
 Table of Contents




ITEM 15.EXHIBITS





(a)
EXHIBITS




ExhibitNumber
            Description
      of Exhibit


2.1
                                                                                                                              Agreement and Plan of Reorganization
      (1)2.2
                                                                                                                              Agreement
      and Plan of Merger
      (1)3.1
                                                                                                                              Certificate
      of Incorporation
      (1)3.2
                                                                                                                              Amendment
      to Certificate of Incorporation
      (1)3.3
                                                                                                                              Bylaws
      (1)4.1
                                                                                                                              Amended
      Certificate of Designation, Preferences and Rights of Series C Preferred
      Stock
      (2)10.1
                                                                                                                              License/Assignment
      Agreement with Robert Glenn Hockaday, and DKY, Inc.
      (1)10.2
                                                                                                                              Research
      and Development Agreement with Energy Related Devices, Inc.
      (1)10.3
                                                                                                                              Letter
      Agreement with Energy Related Devices, Inc. and Robert Glenn Hockaday
      (1)10.4
                                                                                                                              Intellectual
      Property Assignment and Research and Development
      Agreement with Novars Gesellschaft fur neue Technologien GmbH
      (1)10.5
                                                                                                                              License
      Option Agreement with The Regents of the University of California
      (1)10.6
                                                                                                                              Manhattan
      Scientifics, Inc. 1998 Stock Option Plan
      (1)10.7
                                                                                                                              Employment
      Agreement with Robert Hermes
      (1)10.8
                                                                                                                              Agreement
      with Stanton Crenshaw Communications
      (1)10.9
                                                                                                                              Agreement
      with Equilink
      (1)10.10
                                                                                                                              Stock
      Purchase Agreement between Manhattan Scientifics, Inc., Projectavision,
      Inc., and Lancer Partners, L.P.
      (3)10.11
                                                                                                                              License
      Option Agreement with Mr. Edward Vanzo
      (4)10.12
                                                                                                                              Manhattan
      Scientifics, Inc. 2000 Equity Incentive Plan
      (5)10.13
                                                                                                                              2004
      Consultant Stock Plan
      (6)10.14
                                                                                                                              Loan
      Agreement with Oro Valley Associates, LLC
      (7)10.15
                                                                                                                              Warrant
      Agreement with Oro Valley Associates, LLC
      (7)10.16
                                                                                                                              Manhattan
      Scientifics 2005 Equity Incentive
      Plan  (8)21.1
                                                                                                                              List
      of Subsidiaries
      (3)23.1
                                                                                                                              Consent
      of AJ Robbins,
      PC(9)31.1
                                                                                                                              Certification
      of Principal Executive Officer Pursuant to Rule 13a-14(a) and 15d-
      14(a)(9)31.2
                                                                                                                              Certification
      of Principal Financial Officer Pursuant to Rule 13a-14(a) and 15d-
      14(a)(9)32.1
                                                                                                                              Certification
      Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of
      2002(9)




---------------


(1)           Incorporated
by reference to the registrant's Form 10-SB filed with theCommission on
December 8, 1999.


(2)
            Incorporated
      by reference to the registrant's Form 10-QSB filed with the Commission on
      August 14, 2000 for the period ended June 30,
  2000.


(3)
            Incorporated
      by reference as Amendment No. 2 to the registrant's Form 10-SB filed with
      Commission on February 9, 2000.


(4)
            Incorporated
      by reference to Amendment No. 3 to the registrant's Form 10-SB filed with
      the Commission on March 29, 2000.


(5)
            Incorporated
      by reference to the registrant's registration statement filed on Form S-8
      filed with the Commission on September 14,
2001.


(6)
            Incorporated
      by reference to the registrant's registration statement filed on Form S-8
      filed with the Commission on November 26,
2004.


(7)           Incorporated
by reference to the registrant's Form 10-KSB filed with the Commission on April
15, 2005.


(8)
            Incorporated
      by reference to the registrant's registration statement filed on Form S-8
      filed with the Commission on June 8,
2005.


(9)           Filed
herewith.










24
 Table of Contents







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 3rd day of
February, 2009.




MANHATTAN
      SCIENTIFIC, INC.By:
                /s/ Emmanuel
      TsoupanariasEmmanuel
      TsoupanariasChief
      Executive Officer




In
accordance with the Exchange Act, this report has been signed below by the
following persons on February 3rd, 2009, on
behalf of the registrant and in the capacities indicated.








Signature
                              Title/s/
      Emmanuel
      Tsoupanarias
                              Chief
      Executive Officer,Emmanuel
      Tsoupanarias
                              President,
      Chairman of the Board/s/
      Leonard
      Friedman
                              Secretary
      and DirectorLeonard
      Friedman/s/
      Frank
      Georgiou
                              DirectorFrank
      Georgiou/s/
      Chris
      Theoharis
                              Treasurer
      and DirectorChris
      Theoharis











25